Monthly Archives: May 2023

Source-to-Pay+ is Extensive (P14) … So Do Not Stop at Spend Analysis!

As we discussed in Part 8, once you have your eProcurement baseline, that’s just the beginning. The very beginning. Even though not all modules are equal, and not all modules will return equal results, you, and your organization, will need all of Source-to-Pay eventually. However, since you can’t implement it all at once, you take it one module at a time.

After eProcurement, if you aren’t 100% sure where the most value will come from, you go on to spend analysis and use it to help you identify the best opportunities, and those opportunities may indicate the next best module to implement (for your organization at the current time). After that, you may have a clear answer, or, you may not. Sometimes the analysis indicates almost equal opportunity between sourcing and contracting, between contracting and supplier management, or between sourcing and supplier management. (Or, you might not have the manpower or expertise to do the analysis you need to get the right answer.)

So if it’s unclear as to which solution to choose next, it’s back to arguments and logic in an effort to determine which of the three aforementioned solutions to choose.

How about Strategic Sourcing? It’s the one technology proclaimed to identify the most savings and deliver the best results. The truth is that while it almost always identifies the most savings, it doesn’t actually deliver those savings, or even guarantee them. The savings are guaranteed by the contract, delivered by the (new) supplier, and captured by the eProcurement system.

So how about a Contract Management System? In order to guarantee the cost reductions, you need the contract. Or it’s just a quote that’s given today, denied tomorrow. But, as we indicated in a prior post, you don’t need a contract management system for a contract. You need (e-)paper, (e-)ink, and a pair of (e-)signatures. The right contract management system makes it easy to author, negotiate, manage, track, and enforce a contract. But the contract itself is up to people, and if they don’t agree, there’s no contract, and, thus, no need for a contract management system.

This just leaves Supplier Management. But is this where we start? If we think about the value sourcing identifies, it’s generated by the supplier. So it’s critical that the supplier perform. If we have a good supplier management solution, it will track the supplier’s progress, alert us to issues, and assist us in managing the relationship if intervention is required. It will enable performance management, which is critical because if the supplier doesn’t perform and/or doesn’t adhere to the contract, then it doesn’t matter how great the sourcing event was or how good the contract inked was.

And so, because suppliers, and relationships with them, are key, when all things are about equal, or when it’s hard to identify where to go next, we go with supplier management.

Start the dive in Part 15.

Source-to-Pay+ Is Extensive (P13) … But I Can’t Touch The Sacred Cows!

In our last installment (Part 12) of this series here on Sourcing Innovation (SI), we provided you a list of forty-plus (40+) vendors that could potentially meet your spend analysis needs and help you identify the cost savings, reduction, and avoidance opportunities you have in your organization as well as the best modules to achieve those cost savings, reduction, and avoidance opportunities. The right spend analysis tool properly applied will generate returns that are many orders of magnitude greater than the cost of the tool and will surprise you.

However, some of those best opportunities will be in the “sacred cows” of Marketing, Legal, and SaaS subscriptions. And you probably think you can’t do anything because you don’t have the data, Marketing and Legal won’t let you touch their spend (or give you the detail you need to even analyze it, often because they didn’t collect it), and you have no idea on what SaaS is actually being used and how much you overspend.

the doctor knows this, and knows that you might need custom solutions to manage, and analyze, this spend, so, before we move on and tackle the next module in the Source-to-Pay queue, we’re going to take a brief sidebar and provide you with short lists of vendors that specialize in each area that will collect the data you need — and sometimes even provide you with deep, customized, integrated analytics that provide you with the insights that matter (including the insights that matter on your matter spend) — to enable deep spend analysis, benchmark creation, and opportunity identification.

But first, we have to repeat our disclaimer that, as per the lists of e-Procurement vendors provided in Part 7 and the list of Spend Analysis vendors provided in Part 12, this list is most definitely in no way complete (as no analyst is aware of every company, and neither Marketing nor Legal are the particular domains of expertise of SI), is only valid as of the date of posting (as companies get acquired and go out of business, often without notice), and does not include the broader range of offerings that are available for SaaS Management (including provisioning and cloud management), Marketing (including agency management pure-plays, although DecideWare, for example, does this), or Legal (including contract authoring, management, and clause analysis — although we will cover some of these players when we get to Contract Lifecycle Management [CLM]).

Again, and we can’t say this enough, not all vendors are equal and we’d venture to say that this most definitely applies to the lists below. The companies below are of all sizes (very small to very large), offer different functionality (focussing in on different aspects of Marketing, Legal, and/or SaaS Spend Management), different levels of customization and integration, different types of companion services, focus on different company sizes and/or company types, and integrate with different Source-to-Pay and Enterprise ecosystems.

Do your research, and reach out to an expert for help if you need it in compiling a starting short list of relevant, comparable, vendors for your organization and its specific needs. For a few of these vendors, you may find a write up in the Sourcing Innovation archives, Spend Matters Pro, or Gartner cool vendor write-ups, but for many of these vendors, you’ll have to look beyond your typical sources of information as they are highly specialized and don’t fall into the typical Source-to-Pay bucket. But if you have enough Marketing, Legal, or SaaS spend, they can be highly valuable.

Note that, due to the newness of SaaS spend management, the different marketing and legal needs of every organization, and the high degree of differentiation between many of the solutions below, we are not (yet) defining baseline functionality and instead advising you to do a detailed analysis of your spend, processes, and needs and judge potential solutions based on that. If you need help with that, seek out a pro who can do the (gap) analysis and RFI creation for you.

Finally, a second reminder that inclusion on this list DOES NOT imply Sourcing Innovation is recommending the vendor.

SaaS (Software-as-a-Service) Subscription Cost Management

Company LinkedIn
Employees		 HQ (State)
Country
Beamy 60 France
BetterCloud 305 New York, USA
Cledera 63 Colorado, USA
Flexera 1026 Illinois, USA
G2 Track 792 Illinois, USA
Hudled 8 Australia
NPI Financial 410 Georgia, USA
Productiv 139 California, USA
SaaSRooms 9 United Kingdom
SaaSTrax ?? North Carolina, USA
Sastrify 166 Germany
Setyl 14 United Kingdom
Spendflo 70 California, USA
Substly Sweden
Torii 114 New York, USA
Trelica 12 United Kingdom
TRG Screen 179 New York, USA
Tropic 240 New York, USA
Vendr 404 Massachusetts, USA
Viio 18 Columbia
Zluri 111 California, USA
Zylo 144 Indiana, USA

Legal Spend Management

Company LinkedIn
Employees		 HQ (State)
Country
Apperio 48 United Kingdom
Brightflag 150 New York, USA
(LexisNexis) CounselLink 28 Ohio, USA
Fulcrum GT 158 Illinois, USA
Mitratech TeamConnect 1119 Texas, USA
Onit 339 Texas, USA
Ontra 421 California, USA
Persuit 100 New York, USA
Thomson Reuters Legal Tracker ?? Ontario
Tonkean LegalWorks 76 California
Wolters Kluwer (TyMetrix 360) ??? Netherlands

Marketing (Procurement) Spend Management

Company LinkedIn
Employees		 HQ (State)
Country
DecideWare 27 Australia
HH Global ?? United Kingdom
Mtivity 15 United Kingdom
Promost 68 Poland
RightSpend 23 New York, USA
SourceIt Market 6 Australia

Onwards to Part 14.

Do You Have a Procurement FocalPoint?

Last month we asked where’s the procurement management platform primarily because we now have a plethora of procurement-centric applications but very little integration between them. However, once you tackle that issue, you have the secondary issue of all these applications, but often no clear starting point and, even worse, no way for an average organizational employee outside of Procurement to interact with Procurement beyond an inbound email to “please get this for me” and the eventual, possibly many months later, outbound email to “we got it, it’s finally here … it will be on your desk tomorrow“.

This is a big problem, even in organizations that supposedly have market leading source-to-pay suites. While all the modules are connected, and the integrated workflow will guide a buyer from project selection to sourcing to supplier selection to award to contracting to supplier onboarding to order creation to receipt creation to invoice confirmation and payment approval and loop back to the order creation until pending contract expiration when the contract can be renewed, renegotiated, or
revoked and the sourcing process started all over. This is great, but for predefined sourcing projects on encoded categories only!

It’s not great for any category not already encoded and typically strategically sourced, and it’s atrocious as new product and service needs arise within the organization, as new hires need new assets for onboarding, as customer requirements change and the organization needs to adapt rapidly and source new products or services to meet new, or one-off, needs. There’s no intake, and no collaboration with the organizational stakeholders Procurement is there to serve.

And that’s a huge problem. That’s why you’re seeing a few companies talking about “intake”, “orchestration”, or “PPM” (which stands for either Procurement Performance Management or Procurement Process Management, depending on who is talking about it) because, without this capability, a Procurement platform will never be complete or support the organization.

Following the introductory post on the procurement management platform, we lamented and celebrated that Per Angusta was going away and being integrated into SpendHQ as the foundations of a new PPM. It’s a great start, but today the focus of SpendHQ is on managing the existing workflows and creating visibility into existing projects — and savings tracking is limited to integrated projects. However, when it comes to intake support and project tracking for arbitrary organizational needs, that’s not there yet.

However, there are other players which are strong here, and one of those players is Focal Point, which was built from the ground up as an intake-to-orchestrate solution that is capable of

  • capturing all organizational requests for Procurement and Procurement-related activities,
  • assigning those requests to customizable workflows using either built in automation rules or manual (re-)assignment,
  • allowing an end-user to see exactly where any request is in the process at any time,
  • allowing for in-platform communication between the stakeholder and Procurement,
  • integrating with any external tool through jump-out/jump-in to support the process, and
  • supporting whatever approval chains are required, among other intake and orchestration functions.

The tool was built to solve the most significant problem the founders repeatedly saw as CPOs and implementers of various leading sourcing solutions — little to no intake management or general purpose procurement process orchestration. And it does it incredibly well. The visual workflow construction is extremely usable, and the wizards that power both the process, form construction, and form completion automatically extend and compress the form as needed based upon user selections and actual needs, making for a very smooth flow.

All of the workflow elements and steps support deep conditional logic, allowing the organization to create as many branches as possible but ensuring that the end user making a request, and the end buyer assigned to deal with that request, only see the relevant paths and only need to enter the relevant information to be guided by the platform.

There can be as many intake types, with associated branching workflows, as the organization needs, each can have the appropriate level of automation, and, most importantly, each can have as many milestones as needed to walk the process through at a high level, allowing the requester to easily see at a high level where the process is, and then, if interested, dive into the detailed workflow within the current milestone to get a more accurate picture of where the process is.

The only thing the platform doesn’t do is actual sourcing, supplier management, contract management, analytics, procurement, or payment management. It expects the organization to have tools for this already and integrates into the appropriate modules in those tools as needed to accomplish the workflow in progress.

In terms of getting up and running, Focal Point typically has a fully fleshed out, functioning, and integrated instance that captures all of the organization’s workflows up and running within 90 days, even if the organization is a multi-(multi-)billion dollar organization, which is Focal Point’s target market size. This is because it’s typically the 1B+ organizations that have a lot of tools, and a lot of stakeholders, but no way to manage those tools effectively or to give stakeholders any visibility into where their requests are and how their spending is being managed.

The reason it typically takes 90 days is that, unlike many sourcing suite providers, who just flip a virtual switch and drop an empty SaaS suite on you and say “good luck“, Focal Point fully configures the platform as part of their statement of work. This includes:

  • working with the organization to understand all of their requirements and current workflows
  • encoding all of those intake workflows with milestones, task-breakdowns, and existing platform jump-outs
  • integrating any existing procurement system you need to complete the workflow
  • creating a UAT instance and allowing for at least one iteration and approval before it goes live
  • training your team on how to use the system and maintain the workflows

So even though Focal Point has obviously achieved efficiency in terms of workflow creation and customization, external platform integration, and implementation project management, it takes time for an average organization to collect and document their existing processes and requirements and for FocalPoint (or a third party consulting organization if that is the customer’s preference) to fill in the gaps, so it’s not possible to get it much below 90 days. But when you think about the fact that they have fully implemented a 10B+ organization in that timeframe, when some major suite players will take 18 months working with a consulting partner to fully implement those solutions, that’s an incredible time to value, which is generated day one when every request flows into the tool; gets tracked, assigned, and executed; and stakeholders have full visibility into the process and can intervene if necessary.

Focal Point solves the problem it was built to solve, fills the hole the vast majority of sourcing and procurement solutions make, and does it incredibly well. If any part of this post resonates with you, the doctor encourages you to check them out.

Are You Effectively Using Your “Extended Enterprise”?

For many businesses, more than 50% of their workforce is employed by their suppliers. It is their suppliers who make and provide the crucial products and services upon which their own business depends. So, it makes sense to consider how they can best manage those suppliers as part of their ‘extended enterprise’.

Greater connection and collaboration with your extended enterprise can bring multiple benefits. Among them better access to specialised products or market knowledge; process efficiency improvements; a rise in innovation; reduced risk; improved quality control; boosted surety of supply; and additional flexibility.

The introduction to the 2023 Supplier Management Survey

How well do your run, or should I say orchestrate*, your supply base that constitutes your extended enterprise? Do you maximize their productivity? Capability? Innovation? Shouldn’t you know? Shouldn’t you find out?

The answer is, yes, you should be taking steps to better understand the capabilities of your supply base and use them to your advantage. The first step is to benchmark how well you are doing now. The best way to do this is with the State of Flux 15th annual 2023 Supplier Management Survey which will allow you to benchmark your organization’s maturity and performance against hundreds of your peers for free.

State of Flux is the global leading provider of supplier management research and benchmarks, as evidenced by the fact that this is their 15th year and they have been doing it longer than anyone else.

The survey is only open for a limited time, don’t miss your chance!

* keep reading the Source-to-Pay series!

Dear Vendor Rep, when you hear “We have trouble … ” You SHOULD NOT assume the individual wants you to sell them whatever your closest solution is. NEVER!

Another Friday. Another dozen topics to rant about. But one has to surface to the top, and this week, it’s the circulating documents and advice on LinkedIn on what a vendor sales rep should say when a potential customer says “X”. I don’t want to get to specific, and inadvertently call people out (although I may if I see a continued push for this nonsense), but needless to say, as this is a Friday, and another rant, the “advice” being given is entirely wrong and total BullSh!t! And I’m sick of it, and as a potential customer, you should be too.

As an example, and this is not necessarily a specific example, I’ve been seeing advice along the lines of:

If a potential customer says “we have trouble managing our inventory and/or raw materials”

Then a vendor rep should hear “our business could be stalled or halted if we don’t have what we need to satisfy our customer demand, produce our products, or run our production lines” and “therefore, I want inventory management, product tracking, and or storeroom/warehouse management software and I want it now“.

And then that vendor rep should identify their most appropriate software solution or platform and say “our Gruntmaster 6000 module is exactly what you are looking for as it tracks your inventory on-hand by quantity and location, as well as in process by lane and supplier, lets you assign it to builds and customers, and gives you an accurate picture of what you have on hand and when you will need to restock and even prompts to re-order” …

H3CK NO! ( Get lost, Phil. )

As another example, if a potential customer says “we are in immediate need of Procurement cost savings”

Then a vendor rep should hear “if we don’t get a cutting edge e-Sourcing or e-Procurement solution ASAP we are going to get fired so, please, find us one, no matter what it costs”

And then that vendor rep should identify their most appropriate software platform and say “our new Ovation Sourcing Suite, running on the new-and-improved Phantom operating system, is exactly what you need as it will save your organization at least 10% annually on your addressable spend, which we estimate to be 400M based on your current spend profile, so you can easily afford the low, low, annual license cost of 4M”

AGAIN, H3CK NO! (Phil, we’re warning you!)

In neither situation does the individual want a sale. They want a solution, but that’s not a sale, and not necessarily even a piece of software.

Specifically, they want to understand what their problem is, why they are having the problem, what processes could be changed to prevent the problem, and only then what a solution needs to be in order to help them (and they want to understand what they need before they are asked to judge a solution, and how valuable that solution really is). At least if they are an individual with independent thought who wants to remain that way. (the doctor does realize that there are apparently quite a few individuals [numbering in the thousands] who would rather just belong to a cult of savings and/or a cult of technology and that there is at least one predatory vendor out there that seeks these customers out and actively convinces them to repeat the “savings” mantra until they buy in and join the cult. But there are still quite a few individuals who may eventually want your technology who abhor cults and want to retain their individuality.)

Thus, when a customer says “we are in immediate need of Procurement cost savings”

What you should say is “we need to do something or our jobs are on the line, but we don’t know what and we need some guidance”

And before you give them a single word of guidance, you should ask, not say, ask “why, what’s your reasoning, and where do you think that savings could come from“.

If the reason is “the boss said if we don’t cut the costs he’ll cut our jobs“,

then you should say “okay, so your boss thinks you are overspending — that may or may not be the case in the current economic and supply chain environment; the first thing you should do is a category-based spend analysis against market benchmarks to identify where your spending is, and whether any savings is likely in each category with significant spend; then, based upon any identified opportunities, you need to determine the best way to capture those savings which could be renegotiating with contracted suppliers (in exchange for a longer term), putting spot-buy suppliers under contracts, or going to market with a (multi-round) RFP”

and only then should you say, “now, if you would like us to help, we offer a spend analysis tool if you can do the analysis yourself and/or [guided] spend analysis services and/or we partner with consultancy CCA who can help you with the analysis; then, if you determine that you need RFP technology, we have an advanced sourcing product that could be a perfect fit, and if you determine (re-)negotations are the big problem, we also have a contract management solution/integration with negotiation support that many of your peers have said works great in those situations; we’ll reach back out in x weeks, which is about how long the initial analysis should take, but if you get answers sooner we’re here to help”

Not only will the potential customer respect you, but you will be their first callback as soon as they know what they need, and if they can skip an open RFP process in their technology selection, it’s likely you will be their first choice because they want a vendor who will listen to them, understand their problems, help them identify the root cause and the necessary processes changes and improvement, and ensure that any solution they buy is one that’s actually appropriate to their situation and one they can use. And this will be true even if your solution costs more because they are looking first and foremost for a vendor that will help them achieve the promised ROI, not just promise them one (or insist they drink the kool-aid). (Please don’t sip the Kool Aid.)

The situation for the inventory example is similar. Almost every manufacturer has an MRP, and knows what they are buying/using, so it’s likely their inventory issue is a process issue, possibly exacerbated by a lack of integration between systems, or a lack of visibility into forthcoming production plans. Similarly, every organization knows what they buy, it’s on the PO, and they know what is shipped, it’s on the ASN, and if they have a no-receipt, no-pay policy, they know they should have received what was in the ASN. But chances are there is no counting, or ASN override, when receipt is verbally acknowledged (and a buyer keys in a single “Y” when the warehouse clerk says “yeah, we got it“), no connection between the procurement system and the inventory system, no identification of where the product is stored, and no indication of whom the product was intended for.

In other-words, they probably don’t need an inventory system, they probably need an integration solution/module that connects the systems, consulting on best practices to help them get the processes right, and auxiliary modules for sales tracking or integration into sales so the inventory is properly allocated.

They may still need your solutions, but they need your knowledge first, and if you offer the right services, possibly need your consulting, more.

Remember this before you take that bad advice to lay right into an inappropriate sales pitch. At least if you want them to want you. (They don’t want a Cheap Trick anymore.)