Category Archives: Vendor Review

PrimeRevenue: Priming Your Financial Supply Chain for Success, Part II

In Part I, we discussed how PrimeRevenue, a provider of Supply Chain Finance solutions that provides supply chain finance solutions to over 12,000 customers, including a large number of Fortune 500 and Global 3000 companies, in 40 countries and that processes Billions of dollars of transactions each year, provides a supply chain financing solution that goes beyond just providing a platform to sell receivables and includes an analytics component that helps a buying organization figure out how to best meet its working capital needs.

In particular, as part of their platform, they provide a module by the name of SCiMap that provides a consolidated and classified analysis of your spend, enriched by insights from PrimeRevenue’s global database, based on detailed and updated market intelligence that allows you to make better buying decisions as well as negotiate optimized payment terms, putting the power to improve your working capital in your hands. It does this by analyzing all of your spend data, presenting you with potential opportunities for payment term extension, and providing you with a what-if analysis platform that allows you to tailor a plan to meet your needs in a manner that is consistent with your level of risk.

The potential opportunities for working capital improvement are summarized on the unique SCiMap dashboard that summarizes:

  • Commodity Standard Opportunities
    for which commodities are you paying faster than market average?
  • Vendor Standard Opportunities
    which vendors are you paying faster than your competitors?
  • Parent Standard Opportunities
    which vendors are you paying faster than the average time in which their parent or sibling organizations are paid?
  • Country Standard Opportunities
    which vendors are you paying faster than the average DPO for the country?
  • Cost Neutral Opportunities
    which vendors could be paid later with no impact to their finances? (e.g. they
    are cash rich while you are cash poor or they are financing at 90 days and you are
    paying at 60 days)
  • Discount Opportunities
    which vendors could you convert from early payment discount terms (that they are
    unable to effectively take advantage of) to standard terms?
  • Inventory Turnover Opportunities
    which terms could be extended to match inventory days and associated carrying costs?
  • Buyer Standard Opportunities
    which vendors are you paying faster than your average payment terms?
    (note that if your average payment terms are worse than market averages, these may
    not be real opportunities)

From this dashboard, that will typically identify hundreds of millions of working capital that could potentially be freed up in a typical multi-billion dollar company within a matter of weeks, a senior Supply Management analyst can dive into each pot of opportunities, identify the commodities and vendor in question, access the credit-rating and average finance rate for each vendor, and determine if the opportunity is real or not. SCiMap can even do program design to help procurement determine what suppliers will be targeted first based on different criteria to maximize the opportunity.   From here, the buyer can identify the real opportunities for working capital improvement that will not endanger the vendors or increase the overall supply chain cost to the end consumer. The Supply Management analyst can then create a term extension model that will benefit the organization without hurting the supply chain.  Then in SCiMap procurement can report what actually happened in execution to see where the model was successful or had challenges.

This is important because, despite the best efforts of your accounts receivables department, receivables collection will only take an organization so far, which means the organization will have to hang on to cash longer to improve working capital at some point. Inventory optimization will help, but if the Supply Management organization is mature, inventory will have been optimized long ago and there will be no more opportunities to improve working capital. Furthermore, during periods of prolonged recession, you know that Treasury is going to demand term extension as a way to improve the cash position of the company, and you have to be prepared for this because you know better than everyone that you can’t just increase payment terms from 60 to 90 and not negatively impact your supply chain. Not only will some suppliers be unable to bear the term extension, others will take back the benefits that you negotiated in exchange for faster payment. Preferred customer status and order fulfillment during a supply shortage? Forget it! Faster-than-guaranteed response times on service? Dream on! Marketing perks? Ha ha! And let’s not forget the fact that if you are already paying some vendors slower than market average for the commodity, vendor, or country, you might be paying more than you have to and speeding up those payment terms might decrease your overall costs – not having to pay at all improves working capital much more than paying late.

The SCiMap solution, which is unique, is a must-have for any organization that wants to truly optimize it’s working capital in a way that won’t come back to bite it in the @ss at contract renewal time, especially when you consider the fact that PrimeRevenue has analyzed trillions of dollars in spend and will only present you with opportunities for consideration that are real for at least one group of companies in the global supply chain. While all the opportunities may not be real for your organization, you won’t waste time analyzing commodities or vendors that obviously cannot handle a term extension. This gives you the ammunition to push back on Treasury or the C-Suite when they get the hair-brained idea that just because their competitor was able to increase payment terms by 30 days and get away with it that your organization can too.

PrimeRevenue – Priming Your Financial Supply Chain for Success

PrimeRevenue is a provider of Supply Chain Finance solutions that provides supply chain finance solutions to over 12,000 customers in 40 countries and that processes Billions of dollars of transactions each year. Like other providers of supply chain finance solutions, they provide a platform that helps suppliers access financing for their receivables when they need it. With over 40 leading financial institutions on their platform, it is a platform that every buyer and supplier should consider for their finance needs. But that’s not why we’re covering PrimeRevenue today. We’re covering PrimeRevenue because they go beyond just providing a funding platform to meet your cash needs – they also provide an analysis platform to help you figure out how best to meet your cash needs.

In particular, they provide a solution by the name of SciMap that provides a consolidated and classified analysis of your spend, enriched by insights from PrimeRevenue’s global database, based on detailed and updated market intelligence. This allows you to make better buying decisions as well as negotiate optimized payment terms, putting the power to improve your working capital in your hands.

In particular, this platform provides you information on:

  • average payment time for the commodities you buy,
  • average financing terms for suppliers with similar credit ratings, and
  • average financing terms for companies with a similar credit rating to you.

Based on this you can figure out

  • whether you are paying faster or slower than the market average,
  • what financing your supplier is able to get, and
  • what financing you are able to get

and then you can figure out whether you should be looking to

  • extend or reduce payment terms, depending on whether
  • the supplier can get better financing or
  • you can get better financing.

Then, if it is the case that the supplier can afford to be paid later and paying earlier threatens to increase the overall supply chain cost, then you have a valid reason to negotiate with (or, if necessary, mandate to) the supplier for a later payment, helping it to obtain the lower financing you know it can obtain if necessary.

When it comes to supply chain finance and working capital analysis, the PrimeRevenue SCiMap solution is unique in the supply chain finance space and a solution you should really be looking at if you want to get your supply chain working capital optimized.

iValua: Proving Their Mettle with Source to Settle, Part IV

In Parts I through III, we noted that when we last covered iValua in 2010, they were one of the few providers tackling end-to-end sourcing and procurement in a single suite of integrated modules built on one common platform. We noted in Tackling End-to-End Sourcing and Procurement, Part I that this French company had capabilities that, at least to some degree, addressed each of the core phases of the basic sourcing-and-procurement cycle except decision optimization and tax reclamation. Since then, they have added advanced tax tracking capability, and a boatload of other features that include SIM/SPM, Risk Management, Project Management, Enhanced Analytics, and Extensive UI customization. Today, we will continue our coverage of the platform, which includes modules for Supplier Management, Sourcing, Contract Management, Catalog Management Procurement, Invoice Management, Expense Management, and Reporting that were covered in Parts I through III; and Administration that will be covered today as we wrap up the series.

Administration

Administration is very extensive in the iValua platform. Administrative users can manage users, tables, workflows, reporting indicators, units of measure, currency, alerts, menu options, content, templates (for RFX and Auctions), import, scheduled processes, notifications, (re)assignments, and information sources (as the platform can pull in RSS and XML feeds from various web sources for display on the dashboard).

The ability to define arbitrary data tables and import the data for analysis into the system is quite powerful. It makes the built-in analytics capability much more useful as the data can be augmented and enriched to also include data from the payment platform, third party supplier assessments, and optimization events conducted external to the iValua system. A classic limitation of many Sourcing and Procurement systems was the inability to import arbitrary data not accounted for in the existing schema. The iValua platform took a best practice from leading spend analysis platforms and made sure a user could import whatever data she needed anywhere in the supported source-to-settle process. The ETL screen is comparable to an advanced version of Microsoft Excel import (familiar to every Microsoft Office User) that allows the user to define the first line index and last import row, column and line separators, text qualifiers, encodings, and field template (that defines the fields and their names). The user can also define how long the data should be kept (and throw-away one-time analysis data or archive payment data indefinitely), who can see it, and what modules, plans, or anomalies the data should be associated with.

Design Mode

Design Mode is a new capability in the iValua platform that allows a user to dynamically redesign the layout of their menus, screens, and dashboard widgets. Each user can customize the look and feel of the application in a way that makes them most productive using simple drag-and-drop and checklist-based / mouse-click component and option selection. It is quite slick. It also allows iValua to customize a configuration for a new client extremely rapidly based upon the particular needs of the different users of the application.

In summary, the iValua is a very extensive Source-To-Settle platform and an extremely viable option for a mid-size or large organization that is looking to update their sourcing and procurement capabilities in an integrated end-to-end source to settle platform. It is especially suited to a multi-national that has to operate in a significant number of countries and languages as iValua, which already supports 15 different languages, is used daily by more than 150K users and 500K suppliers in over 70 countries.

iValua: Proving Their Mettle with Source to Settle, Part III

In Parts I and II, we noted that when we last covered iValua in 2010, they were one of the few providers tackling end-to-end sourcing and procurement in a single suite of integrated modules built on one common platform. We noted in Tackling End-to-End Sourcing and Procurement, Part I that this French company had capabilities that, at least to some degree, addressed each of the core phases of the basic sourcing-and-procurement cycle except decision optimization and tax reclamation. Since then, they have added advanced tax tracking capability, and a boatload of other features that include SIM/SPM, Risk Management, Project Management, Enhanced Analytics, and Extensive UI customization. Today, we will continue our coverage of the platform, which includes modules for Supplier Management, Sourcing, Contract Management, and Catalog Management that were covered in Parts I and II; Procurement, Invoice Management, Expense Management, and Reporting that will be covered today; and Administration that will be covered tomorrow in the series finale.

Procurement

Procurement, in the iValua suite, is the process of creating requisitions (and having them approved), managing the resulting orders, managing budgets, managing receipts, and managing services deliverables. Requisition management, order management, and budget management are standard fare for Procurement platforms and work as you would expect, but the ability to create and mange receipts and manage service deliverables is a more unique offering for a Procurement platform. This allows for m-way matching in the platform, which is key to ensuring that not only are negotiated savings realized, but that overpayments, and more importantly, fraudulent payments, are not made.

Invoice Management

Invoice Management revolves around invoice creation, management, and reconciliation to receipts. It all works as you would expect, and there is nothing fancy here. Just a well-designed platform designed to make the process as smooth as possible.

Expense Management

Expense Management is the process of requesting cash advances, managing requests, creating expense reports, reviewing expense reports, rejecting lines or entire reports, and approving lines or entire reports. The expense management process is fully defined, and consists of creation, validation, accountant validation, threshold checking, finance or external department approval, (final) accounting approval, and settlement. As with invoice management, the process, and the application, works as you would expect.

Reporting

Reporting is the process of creating analysis reports, browsing them, creating queries, managing them, and then, as a result of the analyses, creating strategic action plans. The analysis capability is quite good. Users can create their own cross-tabs and pivot tables in the browser by dragging-and-dropping dimensions into chosen row and column positions. The analysis can be on any type of data stored in the system — surveys, questionnaires, RFX bid events, e-auctions, budgets, invoices, etc. But the most unique capability is the ability to create strategic action plans, which can serve as the foundation for future sourcing events. Like improvement plans, they can be quite detailed and are generally setup to support savings initiatives.

Each strategic action plan / savings project has a breakdown that allows a user to quickly access the definition data, the team and associated tasks, the financial overview, and detailed analysis through a sequence of tabs. The definition data will indicate the current status, related sourcing projects, and notes added by the team. The financial overview will capture the budgeted savings when the project was approved, the planned savings at project initiation, the current savings forecast, and the amount of savings captured to date. The actual savings (and forecast) will come from the data gathered during Procurement and be calculated using a user-defined formula (which could be as simple as $1 per unit, based upon negotiated rates).

Come back tomorrow when we’ll cover Administration and wrap-up the series!

iValua: Proving Their Mettle with Source to Settle, Part II

Yesterday, in Part I, we noted that when we last covered iValua in 2010, they were one of the few providers tackling end-to-end sourcing and procurement in a single suite of integrated modules built on one common platform. We noted in Tackling End-to-End Sourcing and Procurement, Part I that this French company had capabilities that, at least to some degree, addressed each of the core phases of the basic sourcing-and-procurement cycle except decision optimization and tax reclamation. Since then, they have added advanced tax tracking capability, and a boatload of other features that include SIM/SPM, Risk Management, Project Management, Enhanced Analytics, and Extensive UI customization. Today, we will continue our coverage of the platform, which includes a module for Supplier Management, that we covered in Part I; Sourcing, Contract Management, and Catalog Management, that we’ll cover today; and Procurement, Invoice Management, Expense Management, Reporting, and Administration that will be covered in the remainder of the series.

Sourcing

Sourcing consists of sourcing project creation, schedule and workflow creation, RFX, and e-Auctions. As noted above, there is no decision optimization, but that is literally all that is missing in their sourcing module.

Project creation in iValua is very powerful as you can not only define the project, but set up the end-to-end workflow, define a schedule, assign team members, and track every step. A project has an identity which captures basic project information, associated documents, a sequence of tasks or actions that will fulfill the project, an assigned team, a schedule, and a forum where team members can collaborate and discuss issues. The tasks and actions supported are quite extensive – and include all of the standard source-to-settle steps such as requirements gathering, supplier selection, RFX preparation, response tracking, proposal evaluation, response analysis, award, and contract. From each task, the users can jump off to the appropriate module in the iValua suite to complete the task. The workflow engine is quite fine-grained.

Contract Management

Contract Management is the creation and management of contract templates, contracts, and signature transactions for e-signing. The gem here is iValua’s online drag-and-drop contract creation capability (with complete audit trail functionality) that works in the browser and fully integrates with Microsoft Word. The view, which has the section index on the left, the section texts on the right (each in their own editable box), and Word-compatible editing options on the top, makes it really easy to construct a contract. The tabs allow for quick access of the header, the team involved in the process, deadline (and auto-renewal) dates, exhibits, main clauses, items and services, negotiated terms, the associated contract scorecard, and the current status of the contract with respect to the defined lifecycle.

Catalog Management

Catalog Management is the process of importing catalogs, creating and managing catalog items, and managing services procurement. Catalog management works as you would expect, and the hidden gem in here is the extensive services procurement management capability, including timesheet capability. The services procurement module allowed for the creation of services profiles (like templates for services requisitions), price structures, and requisitions — which could be fee-based or timesheet-based. The platform has extensive support for services requisitions, and the unique requirements for services requisitions, that require proposed delivery details, schedules, proposed team members, rates, payment schedules, and insurance requirements. It’s not quite as extensive as the capabilities in the Contingent Workforce Management platforms (like FieldGlass) or Agency Lifecycle Management platforms (like DecideWare), but is more than sufficient for the majority of services-based sourcing projects that a typical Supply Management organization will need to address. It is definitely the 80% solution.

We’ll cover the remaining parts of the platform in the remainder of this series. Come back tomorrow!