Some Screening Questions to ask Prospective Strategic Suppliers

Before you select a strategic supplier, no matter how good their RFI looks, be sure to ask them some point blank questions that are critical to your business and judge the answers they give you (as well as their openness and directness in giving you these answers). Remember, you’re depending on them to serve your strategic customers so you need to be sure they can get it right.

Can we have a copy of your Code of Ethics, CSR Practices, and Privacy Policies?

If the vendor doesn’t have any of these, or won’t give it to you, sound all the sirens and run for the hills. No organization can afford a publicity disaster these days, and a supplier without good ethics (that it is willing to follow), good social responsibility (that it is willing to enforce), and good privacy (that enable it to comply with legislation like GDPR) is YOUR publicity disaster waiting to happen — and we all know what that does to your brand value!

Can you provide 3rd party proof that you live up to it?

It’s one thing to say you have an ethics/CSR/privacy policy, it’s another to follow it — and another yet to have true third party proof that you do. Make sure the vendor has certified CSR and Privacy ratings from trusted, true, third parties (and not from a small consortium of vendors that fund the certification agency) and can point to at least one situation where it terminated a business relationship with a client or supplier that was unwilling to operate in an acceptable, ethical, fashion.

Can we have a copy of your Quality Assurance Process?

If the vendor doesn’t have one, or won’t give it to you, then you need to ask yourself what kind of quality you can expect. (The answer is obvious: low!) Note that you may need a document for each distinct type of product you purchase.

What certifications do you have with regards to your Quality Assurance Process? ISO? ASQ? etc.

If the vendor doesn’t have any certifications, how much faith can you put into the process the vendor is using?

Can you provide references from current AND former clients who did business with you for at least 2 years?

Just like your customers ask you for references, if this supplier is going to be strategic, you need its references. And remember that you don’t want references who have been with the vendor less than a year because the blush is still on the rose and they will be full of peace and love for the vendor. You need a real review from an experienced customer who can tell you what’s good and not so good. No vendor is perfect, and if the not so good is not relevant to your business, then their imperfection is irrelevant. Plus, if customers’ left, why? Was it due to a change in business? Or poor performance? If the customer left for due to a change in business, and they still have a good reference for the former supplier, then that speaks volumes. If the customer left due to continuously poor performance, that also speaks volumes.

What is your dispute resolution process?

Face it, at some point, something is going to go wrong. Sh!t happens. How do they deal with it? And is it a process that you can deal with?

Do you understand our business? Explain!

If the supplier has never supplied a customer in your vertical, and you have special needs, this could be an issue. It could also be an issue if they have never supplied a customer with special needs in your vertical or you have considerably different requirements than the average company in your vertical. Make sure the vendor has a good understanding of who you are as a company by asking this open ended question.

Who are your top competitors? Why are you better for us?

Everyone has competitors. If they don’t, then they are misguided or selling a product or service no one needs. There are no Blue Oceans any more, just open oceans that are only sparsely sailed (by a few companies who are eager explorers). Make sure they give you a few real competitors as well as a good reason as to why they are better, as this will serve to not only enforce their answer to the previous question (and let you know if they really understand your business) but let you know that they have attempted to be honest in their assessment.

Is this everything you need to ask to make sure the supplier can be a strategic partner? No. But it’s a good start!

What Elements Should You be Looking for In a Platform? Part II

That’s a very hard question and, to some extent the key elements will, at least in many views, revolve around what you are looking for the platform to support, but there are some elements that should be part of your S2P platform regardless of where your solution focus is.

What are they? Where can you find some hints? For starters, you can loo to the new version of Solution Maps, designed by the doctor, with initial results releasing in less than two months, which have refactored all of the maps to have a new Common *platform* section (as well as a new common section for Sourcing – SXM due to the large overlap between the requirements and today’s platforms) which focuses on areas that are critical to S2P success regardless of your focus.

This new Common section is broken down into five categories

Analytics
Configurability
Supplier Portal
Foundational SXM
Technology

And they key requirements for any platform can be found in these four categories

Analytics
Technology
Configurability
Supplier Portal

In our last post we analyzed analytics and technology. In today’s post we are going to look at configurability and the supplier portal, both of which are also vital to ANY S2P application, whether best of breed, mini suite, suite, or next generation platform.

Let’s start with configurability. It has five critical sub-categories:

Globalization

Sourcing is done over global supply chains so global support for languages, currencies, data exchange, and data protection is absolutely vital.

Organizational Modelling

The application needs to support accurate organizational modelling to allow for selection of proper delivery addresses, identification of appropriate personnel associated with a location, identification of the right accounting structures (for the local country), etc.

Personalization

When it comes to usability, there is no one size fits all view. The CPO needs to see summaries and critical issues when she logs in, the category buyer needs to see a snapshot of current category performance, current projects, related issues, and so on. The CFO only cares about the financial summaries and impacts. And so on. And no one wants to click around for 5 minutes to find the information they need – they want it in their face when they log in. A good measure of a modern application is not how long the user is in it, but how long they aren’t in it. From a user’s viewpoint, as Weird Al so eloquently put it two decades ago, “it does all my work without my even askin’”.

Project Management

These days, users don’t have tasks to do, they have projects to manage. RPA was built to do mindless, repetitive tasks. And that’s what the system should do, guiding the buyer through the project to allow her to focus on the strategic decisions and relationships.

Workflow

A modern S2P application needs some workflow support that allows it to adjust to the needs of the user and the senior administrators to pre-define common workflows to optimize user productivity.

Similarly, every application that collects or stores supplier data needs to provide great capabilities around

Document Management

Business is captured in documents of all shapes, sizes, and types … and these come from both parties, not just the buyer – it must be easy for the supplier to get and put these with ease

Profile Management

A supplier must be able to maintain, or at least easily submit updates and corrections to, their profile. The whole point of a portal is to enable the supplier and ease life on the buyer.

And, of course, as we dive into each of the main areas of S2P, there are other core features, but these foundational elements need to be addressed before any vendor can offer a great best-of-breed point based solution, mini-suite, suite, or platform.

What Elements Should You Be Looking For in a Platform (Part I)

That’s a very hard question and, to some extent the key elements will, at least in many views, revolve around what you are looking for the platform to support, but there are some elements that should be part of your S2P platform regardless of where your solution focus is.

What are they?  Where can you find some hints?  For starters, you can loo to the new version of Solution Maps, designed by the doctor, with initial results releasing in less than two months, which have refactored all of the maps to have a new Common platform section (as well as a new common section for Sourcing – SXM due to the large overlap between the requirements and today’s platforms) which focuses on areas that are critical to S2P success regardless of your focus. 

This new Common section is broken down into five categories

Analytics
Configurability
Supplier Portal
Foundational SXM
Technology

And they key requirements for any platform can be found in these four categories

Analytics
Technology
Configurability
Supplier Portal

Let’s start with analytics.  This has four sub-categories, all of which are vital:

Data Schema

  As today’s information economy runs on data.  Big data.

Data Management

  As this data is constantly expanding and changing.

Metric Management

  As you can’t manage what you can’t measure

Reporting

  As we need to extract the data we need to do our jobs.

Now let’s look at technology.  Each of the seven sub-categories it contains are vital:

Data Management Support

  Which looks at foundational technology requirements to handle the data needs of today and tomorrow

Document Management Support

  Which looks at the additional technology required for document management (as the business world runs on documents and contracts)

Core Platform 

  Which looks at the architecture and software stack designed to support an evolving system

Automation

  As efficiency is about automation, usually accomplished by RPA and, in some cases, assisted intelligence (the first level of AI, which is where most companies are)

Standards and Integration

  As one platform can’t do it all.  Just like the internet does not support the One Ping. 

Emerging Technology Support

  As platforms must keep up

UX Layer

  As the platform must be usable. By the average user, not just the PhD with years of esoteric knowledge. 

Tomorrow we’ll outline the other categories and then in future posts we’ll dive into some of these key areas and define what they might mean in plain English. 

Stay tuned. 

For Global Procurement You Need a Global Platform

As per our post from a couple years ago, Procurement is Global. Platforms should be Global. Truly Global. in order to be of use to a truly global organization.

And, furthermore, as we also pointed out, the platform is only of use if it is adopted. This latter point is key. And we’ll focus on this in our post today as our last point addressed the key steps of a global rollout.

So, what are the key steps for a global adoption?

6. True Multi-Lingual Support
While your key business managers will speak English as it is the global language of business, your average worker won’t, or at least won’t speak it well, and since the most successful platforms are used by more than just senior buyers, you want everyone — including the warehouse worker who accepts the stock or the maintenance worker who keeps the inventory or the AP clerk that makes the local payments — to be able to use it easily. So it needs to support every language used by your organization. We know that no S2P platform supports every language out-of-the-box, but the best ones make it easy to add new languages through auto-translations and easy overrides where the translations fail.

7. Localized Workflow Support
Just like languages differ, so do workflows. Sometimes it’s due to local operating practices (with regards to how a local buyer buys, or inventory manager choose to interact with the systems), and sometimes its due to local regulations (in terms of invoice acceptance, processing, and payment processing). Either way, it should be simple to tweak the workflow by locale for as many locales as you need.

8. Varying Levels of Automation
In some offices, senior buyers and other approved users can spend up to a threshold with no approvals required, so the requisition should auto flip to a PO which should be auto-flippable to an invoice when the supplier sends a shipping notice which should be auto flipped to a payment approval when the warehouse worker records all parts received. In other offices, approvals, or at least hold periods (where managers can choose to intervene or not) will be required. Some buyers will be comfortable with auto-buys to replenish MRO and tail-spend categories (from catalogs or automated auctions against approved suppliers), others will want to manually do everything. The system should support this.

9. Fully customizeable dashboards by user by screen/module
Everyone should be able to see what they want, how they want, when the want. And they should have lots of easily adjustable templates to start from.

This isn’t everything, but it’s a key start. We’ll be talking about platforms more in the months to come, as platforms are going to get us to full Procurement 3.0 and next generation platforms will bring about Procurement 4.0 in the latter part of the next decade.

Dear Procurement: You Aren’t Nearly As Advanced As You Think You Are

One of the best presentations at Ivalua Now Paris last week (which the doctor summarized in a post over on Spend Matters UK on how the conference was “A Huge Success and a Testament to their growth”) was Duncan Jones’ presentation on Successful Procurement Transformation that summarized a recent survey on enabling smarter procurement that clearly proved what the doctor and other leading analysts already know: most Procurement organizations believe they are considerably more advanced than they are.

The survey asked Procurement departments to rate themselves as beginner, intermediate, or advanced. The results, which, unfortunately were not unexpected, indicated that:

  • 65% of respondents said they were advanced,
  • 31% said they were intermediate, and
  • 4% said they were beginner

When the reality is that, according to Forrester

  • 16% of respondents are advanced
  • 24% of respondents are intermediate
  • 60% of respondents are beginne

On the Forrester scale which, by the way, is not as arduous as the scale used by the doctor (but we’ll get to that in another post). In other words, four times as many organizations said they were advanced as were actually at that level. So if you think you are advanced, there is at most a 1/4 chance you are advanced and at most a 2/3 chance you are intermediate or better.

This means that you as a Procurement organization need to take a step back, get a third party evaluation, and understand the reality of where you are. It’s totally okay if you’re not as advanced as you think you are because neither are your competitors. And, in fact, if you are willing to get an honest third party assessment and use it as the foundation for improvement, you are way ahead of your competition which still has their heads in the sand like an ostrich. Because, thanks to modern platforms and well understood best practices that can be efficiently experienced by efficient consultants who have been doing it for a decade, you can master intermediate levels of performance quite quickly, and that puts you in the top 40% in a very short time-frame. And it often doesn’t take a lot of improvement to see significant savings, process improvements, or value generation. (With many more tangible improvements to come as you embark on that first 3 to 5 year transformation journey.)

The key to advancement and tremendous success in Procurement is simple:

  • understand where you are
  • accept where you are
  • put a realistic plan in place for mid-term transformation (3-5 years) with well defined milestones along the way
  • commit to change
  • monitor, measure, and stay on track

Now that the best S2P suite providers can roll out enterprise implementations in a quarter, you can enable processes that lead to significant ROI in 6 to 12 months, and take it step wise from there. But it all starts with accepting the reality and committing to change. The system, the process, and your hard work will take care of the rest.

And a big thank you to Duncan to proving the reality!