Category Archives: contract management

Don’t Kill ALL the Lawyers …

… but certainly think about how (much) and when you use them in Procurement and your organization as a whole.

Earlier this month, THE PROPHET asked a very important question regarding Lawyers, Contracts, Procurement, and Tech in 6 parts, which essentially boils down to:

When will advanced tech, especially the tech we have today, replace lawyers for most in-house and even on-retainer Legal services?
To which the doctor replied: Why hasn’t it already?

Right now we have legal-tech so good that you should NEVER use a lawyer to:

Write a contract.
In fact, if you have any contract writing skills at all, even without ANY tech whatsoever, odds are high in your favour that you will write a better contract without a lawyer, especially in tech and supply chain when you know your business, the risks, and the key agreements and protections you need in place and, frankly, the lawyer doesn’t.I can’t count the number of times I’ve been told this is a great contract and there’s nothing wrong with it as we paid XK (where X, depending on the contract type, starts at 5, 10, or even 15), when the contract is in fact mediocre at best, full of holes, and sometimes even worse than the contract the firm was using. But sunk cost fallacy takes full effect, and a slipshod effort by the paralegal, quickly reviewed by the counsel to make sure there is nothing glaringly wrong, and put before you with a big price tag becomes the greatest contract ever written.

And yes, a lawyer will know to look for the presence of key standard clauses that should be in every business contract and contract from your business but, guess what, so will any contract creation / analytics product on the market.

And yes, a lawyer can tell you the potential risks associated from veering away from a standard contract, standard terms & conditions, and standard mitigations, but, guess what, so will any contract creation / analytics product on the market.

There’s very little contract-related value a lawyer can offer that modern tech can’t do, especially in the hands of a tech-savvy contract manager who understands the purpose of a contract and writes the contract in plain English.

Locate the relevant statutes (laws), decisions, and regulations that affect your business.
There aren’t many valid uses for Gen-AI, but large document search and summarization is one valid use, and a use that usually works remarkably well (with a very low failure rate compared to other tasks wrongfully put to these LLMs). No need to pay thousands in hourly billables to dig up what these tools can dig up in minutes and you can review in hours.
Summarize your Financial and Legal (Reporting) Obligations with respect to all statutes and regulations that apply to you.
Again, this is one of the few valid uses for Gen-AI that works quite well as it’s just another type of document set summarization. So why pay a legal team dozens or hundreds of hours when you can get a highly accurate summary for next to nothing in comparison?
Summarize known incident response options, and known benefits/risks of each.
Again, this is one of the few valid uses for Gen-AI that works quite well as it’s just another form of document summarization. And while this won’t necessarily be 100% complete, or give you specific insight to your situation, it helps you get a handle on where you might start.

The reality is that you only need a lawyer to:

Do a final contract review.
To make sure you didn’t screw up a clause, miss a core enterprise requirement they have committed to memory, or address an upcoming risk or issue they happen to know about that you don’t. Considering this is all they really do anyway when you ask them to write a contract (as they are either sloughing it off to the paralegal or just pulling one from the file that is close to what they think you need and just making a few edits), just pay them for what they do that they are good at.
Review the list of statutes, regulations, and legal decisions you believe you are subject to.
Their in-depth knowledge of the law means that a good lawyer who practices in the relevant area will quickly be able to tell you whether or not each statute, regulation, and/or legal decision is relevant to you, key points you shouldn’t miss, and whether there are any statutes, regulations, and/or legal decisions they believe you should also be aware of because they are, or may be, relevant.
Review the financial and legal reporting you plan to do and advise you on completeness, correctness, and accuracy.
They know the law, and how to keep you in line with it.
Advise you on your incident response plan and best alternative options.
Again, these are legal experts who focus on mitigating risks and arguing for a living, unlike dumb algorithms which can just summarize which they are given. This is, or should be, the true value of your legal counsel and when you should really be paying the high hourly fees.

As to THE PROPHET‘s question as to:

When will it happen?
The answer is who knows?

Considering that good contract creation applications have been around for almost fifteen (15) years, where all you had to do was define clauses and variants by geography or category, standard templates by category, etc. and then rules for special situations, and it would assemble a custom template for you in minutes, the base technology should have been common a decade (10 years) ago. Now we have Gen-AI thrown into the mix which can analyze your contract repository, pre-populate your standard clauses and build starting templates, and then customize those based on the buy specifics, you can get a decent draft in minutes with very little manual effort.

We’ve had good semantic document summarization for well over a decade, and Gen-AI has taken that to a new level, most CLM vendors are integrating it, it’s easy to use, can be trained to be highly accurate for this task, and not expensive.

We’ve had good contract analytic solutions for about a decade, which can analyze all sorts of performance metrics, risk metrics, associated costs, and so on.

But yet these solutions have rarely been adopted, when they could save an organization a lot of money, help the organization get their risks under control, help the organization better manage their spend, and help the organization understand its supply chain.

This shouldn’t be surprising given that year after year, as per our recent myth-busting 2025 2015 trends, companies say they want strategic value but only focus on cost-cutting, but don’t even do that right. Only two technologies have been proven to support year-over-year cost reductions of 10% or more (adjusted for inflation), and those are

  1. (advanced) spend analysis
    (not the dinky projects some companies outsource to Big X who use second rate third party tools for poor results)
  2. (strategic sourcing decision) optimization

And how many companies have truly adopted these technologies AND use them in house? Our guess is less than 20% in the first case and we know it’s less than 10% in the second case. It’s like we said in our recent rant on You Don’t Need Gen-AI to Revolutionize Procurement and Supply Chain Management — Classic Analytics, Optimization, and Machine Learning that You Have Been Ignoring for Two Decades Will Do Just Fine!

Stop Wasting Your Time With Contract Management

The Mandarin (Yes, The Mandarin) recently posted a great article on why you should stop wasting your time with contract management

As the author clearly states, every department, state and federal, in which I have worked has a set of policies and directives on contracting and contract management. Almost every contract has a contract management plan. Yet we continue to get it badly wrong.

He quotes a recent review of Home Affairs which got a shellacking about their utter inability to reasonably prepare for the end of a contract (as well as other Procurement issues). It’s as he says, when it comes to preparation for contract termination, which should be part of a well formed contract management plan, it’s almost always “too little, too late”.

Contract Management isn’t working, and more importantly, neither are contract management platforms. (Making a colleague of mine who poo-poo’d them almost two decades ago as not worth your time, because they didn’t do any more than what a high schooler could do with some scripting and an access database, a visionary genius.)

So why do we get it so wrong? The author starts off by saying we think about contracts the wrong way, which we do (and there’ll be more on that later), especially since many approach it as a matter of performance and punishment since the contractor or vendor just needs to do what they promised and whatever performance or punishment framework included in the contract will encourage the contractor or vendor to deliver on time.

And, at the end of the day, most organizations just see it as a reporting and control framework, driven by compliance. When, as the author points out, it is supposed to be about outcomes, and, even more importantly, as the author points out, it should be a tool for managing the value chain.

The author then recommends that you fix things by:

  • owning the business outcomes
  • understanding and measuring mutual obligations
  • measuring, reporting, and managing the entire business, not just the odd contract
  • making what’s required visible and clear
  • not treating relationship management and contracting as mutually exclusive
  • using performance measures you understand

Which is all good advice, but not going to fix the fundamental problems. The fundamental problem is that it’s not contract management, it’s project fulfillment (even if you are just buying stuff).

This means that before you can do a contract you have to:

  • first develop a detailed project plan including requirements, desired outcomes, and timelines
  • identify what sub-plan you want to farm out to one (or more) vendor(s, but that requires a lot more planning and possibly subcontracting)
  • create the contract schedule with this plan as well as milestones, reporting requirements, and mutual obligations
  • decide what performance incentives or penalties you want to include to speed up performance and/or prevent late deliveries/completion
  • decide what matters (most) to you and what you are going to require around vendor geography, personnel, sustainability, etc. requirements
  • evaluate the risk and define appropriate mitigation (out) clauses
  • hand it off to legal to complete the Ts & Cs
  • then do a Procurement event
  • then complete it in negotiation, pushing the plan into your project management system once counter-signed

It’s project and relationship management at the end of the day, the rest is just document management, making CMS something that you can do with a high school student and an Access database, since its not where the contract is or how its indexed, but how it’s accessed and used on a daily basis, which should be through the project management system.

And that’s why Project Assurance is so critically important.

Don’t know what that is? Read my original and current series on Project Assurance:

SpendKey: Your Solution-Oriented Key to Spend Insights

Preamble:

As the doctor wrote on Spend Matters back in November of 2021, shortly after SpendKey‘s initial release, SpendKey was formed in 2020 by a senior team of Procurement and Spend Analysis professionals with experience at big consultancies (Deloitte, E&Y, etc.), big companies (Thomas Cook, Marks and Spencer, etc. ), big banks and Finance Institutions (Barclays, London Stock Exchange, etc.), and Managed Service Providers (Cloudaeon, Zensar Technologies, etc.) who identified a market need for faster, more accurate data processing and better analytics across the board as well as better expert advice and guidance to accompany those analytics to help companies make quick and optimal decisions to get on the right track the first time around.

After less than a year and a half of development, their initial service-based offering was already sufficient for turn-key consultant led projects and their roadmap had them on track for a completely stand-alone SaaS offering by 2023, which they delivered to the market last year.

So where are they now and what do they do? That’s what we’ll dive into in this article.

Introduction:

SpendKey has evolved from a dashboard driven spend analysis solution to a comprehensive spend, contract tracking and decision intelligence platform with a mission to provide deep insight for sourcing and procurement.

SpendKey‘s unique selling proposition is its ability to index every part, product, services and vendor with context. The product ontology and interoperability creates relationships with any attribute; providing end-to-end visibility; and a data foundation for autonomous workflows (on the roadmap), which can currently be used to power a client’s existing stack.

The SpendKey platform supports the creation of customized reports tailored to client-specific requirements. With a wide array of out-of-the-box dynamic dashboards, SpendKey offers standard insights into spend across categories and suppliers. These dashboards are augmented with advanced analysis tools like ABC analysis, trend analysis, Pareto analysis, Inside/Outside evaluations, order-to-actual correlations, and what-if scenarios, delivering a full-spectrum view of spending.

In addition to its customizable options, SpendKey provides a variety of standard reports to analyse spend, costs, goods, services, and information flows. The platform includes pre-defined reports that cover essential areas of spend analysis with customization for every client need.

SpendKey’s reporting suite has been expanded to include contract reports, budgeting reports, and dynamic MIS reports, offering a comprehensive toolkit for monitoring and optimising spend.
These tools were designed by procurement experts with decades of experience in spend analysis, ensuring that organizations can identify opportunities to not only reduce costs but also enhance overall efficiency and profitability.

SpendKey has an advanced spend-intake process that maps all of an organisation’s spend to any taxonomy (which can be theirs, yours, or a hybrid) using a multi-stage hybrid mapping process that uses known mappings, AI, human corrections, and overrides that feedback into the next mapping cycle. Once the client has worked with SpendKey to do the initial spend upload and mapping, the client can subscribe to incremental updates (that will be handled fully by SpendKey) or do self-serve via file-based incremental uploads.

So, if you read the initial analysis, what’s new?

  • improved data intake pipeline (which increases auto-mapping completeness and shortens the intake cycle)
  • project tracking
  • budget approvals
  • document analytics (and contract tracking)
  • commitments, budgets, and actuals comparison capability
  • ability to index parts, products, and services
  • line item auditability and more security controls
  • more spend sources
  • new dashboards

And what hasn’t changed (much)?

  • still no DIY (do-it-yourself) report builder
  • limited mapping audit access through the front end

And we’ll talk about each of these in turn.

Data Intake Pipeline

The data-intake pipeline is multi-step and works something like this:

1. Upload a raw data file in CSV or Excel or integrate via API

2. Validate the file against column descriptions, data formats, and language requirements (auto-translating to English if required) and apply any necessary transformations and cleansings to create records for classifications.

3. Run the current corpus of mapping rules.

3a. Push the mapped data into the live spend database.

3b. Package the unmapped transactions for web-processing.

4. Extract the supplier, product, and related information and use web-scraping (including Gen-AI models) to extract supplier and line of business information that can be used for classification.

5. Create suggested mappings where there is sufficient confidence for a human to review.

6. Push the verified mappings into the mapping rules and then retrain the machine learning on the new corpus of mapping rules to map the remaining unmapped spend and push through anything with sufficient confidence to the live system, having a human deal with the rest (or push it to an unclassified bucket).

By using multiple techniques, they are able to get to a high accuracy very quickly and turn around the client’s spend cube rather quickly compared to most consultancies using traditional methodologies. For even their largest clients, they are typically live with high mapping accuracy within 10 days.

Project Tracking

When an analyst or buyer identifies a potential savings project, they can record their find/proposal in the tool, get approval, track status, and keep stakeholders informed. All they need to do to define a project (for tracking) is to define the item or category, supplier(s), aggregated spend amount, project period, project type, and expected savings. They can add custom organizational tags or note key stakeholders if required, and then send it off for approval. Once approved, they just have to update the status and savings-to-date on a regular basis until the project is complete.

It’s not meant to be a project management tool, since most of the projects will be sourcing, procurement, contract, or other events or processes managed by other tools, just a tracking tool to track usage of the platform as well as approvals on projects before buyers or analysts go off on their own savings goose chases.

Budget and Forecasting Management

Budgeting and forecasting are pivotal components of financial management that empower businesses to plan, manage resources effectively, and navigate toward strategic goals. SpendKey platform offers advanced budgeting and forecasting tools for the financial year ahead. With predefined templates for easy budget setup, bulk data upload and download capabilities, and the option to assign specific budgets to each supplier.

SpendKey’s budget management module has specific processes for classification and mapping of the budget and spend data, aligning budget allocations with actual spend patterns. It empowers users with advanced budgeting and forecasting functionalities. With comprehensive reports, a user-friendly interface, and the ability to create, manage, and analyse budgets, users can make well-informed financial decisions. SpendKey enables users to optimise their budget allocations, monitor variances, and gain valuable insights for successful investment strategies.

Document Analytics

Spend Under Management is one of the ultimate keys to Procurement success, and this often requires a lot of Spend Under Contract to ensure supply and mitigate risk. This requires understanding the spend under contract, which requires that the contract meta data be stored in the system. As well as contract prices (to track agreed upon to invoiced to paid).

But no one wants to enter meta-data, so they built a machine learning and document analytics application that can automatically parse documents, identify key meta data, extract price tables, and present it to a human for final verification before the data is stored in the system.

The analytics can also be used on POs and invoices for verification purposes, and the user can decide whether or not to store that data in the system (or associated it with contracts).

More Spend Sources

Not only do they now support contract meta-data and contracted prices, but they also support the upload of asset-based data (for an organization to analyze the current and future value of organizational assets), payroll data (since that’s a significant amount of organizational spend), contingent workforce management data (to track services / contingent worker spend), and PO data in addition to AP data (which is the typical data source analyzed by simple “analytics” applications). In addition, if available, they will also load ESG Ranking data.

Their goal is to allow a complete understanding of organizational spend from budget to commitment to ordered to received to paid to projection using both standard cash views as well as amortization, accrual, and projected spend views.

New Dashboards

There are a slew of new dashboards, which include, but are not limited to:

  • Incliner/Decliner: highlights suppliers with increased or decreased spend compared to a user defined period
  • Contract Overview: provides analytics on different type of contract documents types, their expiry date, contract length
  • Contract Details: navigate and review the summary of data for each contract and the ability to view the respective contract
  • End-to-End Visibility: connects data from spend, contract, budget and other systems to provide end to end visibility e.g. spend vs budget vs contracted spend
  • ESG Summary: provides insights ESG score by suppliers and their relevant spend, including average ESG rating by industry and analytics on performance on each of the E, S and G areas
  • ESG Supplier Ranking: provides insights into ESG ranking for each individual supplier
  • Budget Overview: provides an overview of budget allocation and spending trends, highlighting key variances between actual spend and budget across different suppliers and categories.
  • Budget by Category: shows Budget by Category breakdown, displaying spend, budget, and variances across different levels of categories and suppliers
  • Budget by Suppliers: highlights spend, budget, and variance for key suppliers, along with an overall budget variance by category
  • Budget Distribution: shows the distribution of spend, budget, and variance across different transaction brackets, along with the corresponding transaction counts
  • Budget Detail: details supplier-specific budget, spend, and variance, including non-PO spend and transaction counts
  • Supplier Reclassification: allows you to reclassify supplier spend into a different taxonomy
  • Supplier Fragmentation: allows you to to track the number of suppliers in any category or subcategory
  • Key Insights: presents key spend insights, highlighting potential savings, category spend, new suppliers, and contract renewal dates

Add these to the existing dashboards that include, but are not limited to:

  • Main Dashboard : provides an overview of the spend across all categories of spend
  • Category Breakdown : enables the user to drill deep into any category and sub-category of spend to get deeper insights
  • Contract Kanban View : summarizes contract expiry in a kanban view to help identify contracts and suppliers to prioritise for renegotiations
  • MIS Dashboard: provides the user the ability to create their own pivot style report by connecting different data sets to generate views that were not available before
  • PO vs Non PO Analysis : provides an overview of spend compliant with purchase orders
  • Reseller Insights : provides insights to understand purchase of products from resellers
  • Savings Opportunity : provides ability to get a quick high level business case on potential savings based on certain user defined parameters.
  • Spend Summary : provides a narrative on the spend
  • Spend By Country : provides a summary of spend by different geographies and the ability to drill further by country
  • Spend Distribution : provides insights on spend by different transaction brackets to help identify low value low risk spend and suppliers
  • Spend Detail : provides view of the raw data and the enrichment from SpendKey to this raw data at the individual transaction level
  • Spend by Category : provides insights for each category and the relevant sub-categories based on the defined taxonomy tree
  • Supplier Hierarchy : provides insights at supplier level to help understand the parent and all the relevant child entities under that parent
  • Supplier Performance : provides a summary on the reduction in supplier count post data cleansing and supplier normalization
  • Supplier Segmentation : provides the ability to segment or tag a supplier based on user preferences
  • Tail Spend : provides insights and summary into tail spend (bottom 20% to 40% of the spend)
  • What-If : gives the user the ability to try different permutations and combinations of parts/products/services to understand potential savings opportunities
  • IT OPEX Budget : provides the user with the ability to view budget at supplier level or by category or cost centre, material code, etc.
  • Set Budget : provides ability to a user to set and define budget for a user-defined period
  • Forex Rate : gives the user option to set the FX rates for various currencies for a defined date range / period to enable the platform to convert all transactions into the base currency based on your company’s defined FX rates
  • Key Management : this provides the user with the ability to set distribution keys for spend allocation to business units, departments, functions etc. to help calculate recharge
  • Project Tracker : provides the ability to the user to create projects such as savings initiatives and track them in the tool. Also provides a workflow for approval of project milestones such as delivering on your savings targets.
  • User Management : allows the administrator to add new users and define their access control

And it’s a fairly extensive offering for an organization looking for a services-oriented solution to give them insights out of the box.

No DIY Report Builder

Now, companies looking for a services-oriented spend analysis solution aren’t looking for DIY initially, but as they mature in spend analysis, they will likely want the ability to modify the dashboards and reports on their own, which is baseline DIY. As they continue to mature, a few organizations will eventually want to start building their own reports and views, so it’s important that DIY is on the roadmap for an organization looking to mature in their analytics capability over time.

Limited Mapping Audit Access through the Front End

In the backend, they keep a complete audit trail of how and why every transaction was mapped where it was mapped. In the front end every single edit and amend that is made by a user is logged, along with supported commentary by the user. However, when a user goes to edit and amend a mapping in the front end, she doesn’t know if a transaction was initially mapped by rule, SpendKey‘s home-grown self-trained AI, or Gen-AI, and whether or not there was ever a human in the loop.

It’s critical that this data be pushed through to the front end because, among other things,

  1. there will always be someone who questions a mapping,
  2. when that happens, you need to know how it was mapped, and
  3. you need to know the ratio of human vs AI mapping in a category for confidence.

As of now, users can reclassify transactions within the tool, so if there is an error, they can push that to the admin or a “parking lot” for review, where, if the admin agrees, it can be pushed straight to the back end.

Showing who, or what, (initially) mapped the data, and why, in the front end is on the roadmap, and hopefully it appears sooner than later.

Summary

All-in-all, SpendKey is definitely a solution you should be looking at if you are a mid-market (plus) in the UK/Western Europe looking for a services-oriented spend analysis solution to help you analyze your spending and come up with strategies to get it under control.

MeRLIN Sourcing, A Platform With a Twist …

INTRODUCTION

When their founders were young men
they paced the fact’ry floors
from Vellore down to Chennai
they must have walked ’em all
cause they learned all of the problems
that plagued the Procurement side.
Those listen, look, and learn guys
sure made a lean platform.

The founders of MeRLIN, who started Rheinbrucke Consulting in 2013, started developing a stand-alone application for direct source-to-contract (and, for those who need it, source-to-pay) in 2018 using their decades of experience supporting direct manufacturing clients. MeRLIN was then frst released it to the market in 2022, after ensuring it actually solved the problems they were seeing and met the needs of the companies they were working with.

(While some companies might take it as a badge of honour to get a “minimally viable product” to market in a year, the reality is that when it comes to manufacturing enterprises, nothing you can develop in a year will actually solve more than a fraction of their problems, and unless what you deliver can integrate tightly into their existing enterprise software landscape, it won’t be adopted, or even bought. That’s why there are so many offerings in indirect [many of whom will succumb to the marketplace madness] and so few that offer true direct sourcing solutions, and fewer still that offer fully integrated source-to-contract / source-to-pay suites.)

PLATFORM SUMMARY

MeRLIN, which bills itself as a Source-to-Contract platform for Direct Material (primarily Discrete Manufacturing) Sourcing, is actually a Source-to-Pay platform where the Procure-to-Pay platform capabilities are baseline (and wouldn’t go head-to-head with best-in-class) and designed for the mid-market (and large enterprise) clients that don’t have a Procurement solution in place already (either through the ERP, AP, or a third party system). Since most larger enterprises have some form of decent P2P, MeRLIN decided to focus primarily on the critically underserved strategic sourcing marketplace in discrete manufacturing and direct sourcing and the capabilities all of the companies the founders worked with in manufacturing were universally missing.

MeRLIN was designed as a modular solution where

  • a client could license just the modules they wanted/needed,
  • common modules, and capabilities, were broken out into their own modules so their was no duplication of functionality, and
  • key modules could be augmented with additional value-added functionality not typically found in average products.

MeRLIN has all the standard modules you’d expect in a Source-to-Contract:

  • (Program &) BoM Management (Requirement for any Direct Solution)
  • Requisition Management (Intake)
  • Sourcing (Event) Management (Sourcing)
  • Supplier Management (SXM)
  • Contract Management & Contract Authoring (CLM)
  • Reports & Dashboard (Reporting & Analytics)

As well as basics for Procure-to-Pay:

  • Purchase Order Management
  • Invoice & Payment Management

But also has modules for:

  • Demand Management (Consolidation of Requirements from Requisitions, Manufacturing Programs, and MRPs)
  • Category Management (Part/BoM grouping & management)
  • Supply Chain Compliance (GSCA / LkSG)
  • Supply Management (Document & Shipment Management)

and the standard suite foundational modules of:

  • Master Data Management
  • Business Administration
  • Security Management
  • System Management

And even modules for:

  • Strategic Project Management (Project Management/Orchestration)
  • Finance Management (Budgets, Prices)

We’re not going to discuss all the modules and instead focus in on just the core Source-to-Contract modules, as they are the modules that are critical to direct sourcing and the modules that will allow you to understand the value, and potential, MeRLIN has for you.

Supplier Management

Supplier Management is designed to onboard, evaluate, approve, and manage suppliers, including their contacts, surveys, ratings, and documents. Qualification starts with a simple request based on supplier name, country, email, and unique (DUNS) identifier. Based on the supplier category, the next step will be to send the suppliers the qualification surveys and pull in the external risk information, send it to technical and risk reviewers, and if that passes, it will go off to compliance to ensure the supplier can comply with all necessary regulations the company is subject to and then, if that passes, the supplier will get a registration invite to provide all of the additional information necessary to do business with the company as well as details on additional products and services.

Supplier Management captures all of the core company information, locations, accounts, questionnaires, risk information and scores, compliance reviews, scorecards, and approvals. For each of these there are standard fields, and as many additional fields can be added by the customer organization as needed.

Compliance Management

Collects and manages the organizational policies, supplier policy statements, compliance surveys, audits, risks, scorecards, and complaints. It can accept all documents, support custom surveys, import third party data from financial and environmental (and other) risk providers, provide you with compliance scorecards, and automatically extract and centralize all “risks” from the surveys based on scores and/or responses in a risk management view.

Moreover, in full compliance with the German Supply Chain Act (GSCA, known as the LkSG within Germany), MeRLIN provides the buying organization, each of their suppliers, and their entire employee base, a unique portal where they can register complaints. They have upgraded their platform to fully support the GSCA and can also support other supply chain acts as well (and future releases will encode more out-of-the-box support, even though it can already be custom figured on a client-by-client basis to support the majority of acts out there).

Requisition

Requisitions can be used as traditional requisitions for purchase orders against existing contracts for goods and services normally used by the company or as intake requests for sourcing. When they are used as intake requests, they go to a central management screen where the buyer can group them by material, bill of material, and/or category to identify sourcing event requirements and then create a sourcing event off of a bundle of them.

Sourcing

Sourcing is primarily RFX based, but auctions are supported as well off of base RFQs. A sourcing event can be kicked off from one or more requisitions, a category, a BoM, or an event template, which can consist of one or more RFIs, questionnaires, and line-items with custom price breakdowns in the RFQ. Associated with the RFQ can be the suppliers, addendums, budgets, stakeholders, terms and conditions, contract template, event schedule, and ongoing Q&A.

In addition to being able to review bids by total cost per unit and evaluation score (by the relevant stakeholders), the application also supports automatic award recommendation by criteria which can include target award by supplier, range of suppliers to split the award between, minimum and maximum shares, and preferred supplier status.

Contract “Authoring” & Management

The platform is primarily “signature” and “execution” management, as authoring is simply the packing up of contract templates, terms and conditions, specifications, and associated addendums for agreement by electronic signature. The electronic signature capability is compliant with USA regulations and most European regulations for private enterprise contracts. Once the contract is signed, the platform can manage the project timeline, stakeholders, documents, events, milestones, and obligations. In addition, the user can define alerts against any event, milestone, document, obligation or other entity on status change or due date.

Reporting & Dashboards

Reporting and Analysis in MeRLIN is through widget-based dashboards that summarize any data of interest in the system. Right now there are hundreds to select from in the reporting library, with more being added as needed. For each of the built in reports and dashboards (on suppliers, spend, process, etc.), the user can apply multiple filter options and save the configuration to their liking. There is no Do-It-Yourself (DiY) widget report builder yet, but more DiY analytics enhancement is on the roadmap.

Strategic Project Management

This is MeRLIN‘s built in project management capability where a user can define and instantiate RFX templates, supplier onboarding workflows, contracting processes from award specifications, procurement processes, and even entire Source-to-Procure projects which collect all of the necessary templates and workflows together. In addition, leadership is provided with a high level overview of sourcing projects.

Master Data Management

All of the system master data templates can be altered by the user including, but not limited to, currencies and conversions, items, locations, plants, prices, suppliers, contract metadata and milestones, and other key items. The customer can control it’s master data and master data identifiers.

Business Administration

All of the templates in the system can be managed and customized in the business administration section including, but not limited to supplier onboarding, qualification, evaluation, and audit questionnaires, product and item templates, requisitions, RFQs, purchase orders, contract terms, contracts, statements of work, email, and workflow templates.

Bill of Materials Manager

A key aspect of Direct Sourcing is managing the Bill of Materials. In the Merlin platform, that can be done through the BOM Manager, which unlike basic direct sourcing platforms, can maintain as many versions of a Bill Of Materials as the organization wants to maintain (for correlation with historical sourcing and procurement and cost estimates during new product design and/or product modification).

These versions can be uploaded from the ERP (or your PLM of choice with custom integration) or created in the BOM Manager, and this creation can be from scratch or from a previous BoM version which can be copied and modified as needed.

The best part of MeRLIN‘s BOM manager is its built-in ability to allow for easy should-cost analysis during NPD and BOM (re)design. Once a BOM has been uploaded or created, the user can click a button to “cost” and it will automatically find prices for every component in the BOM for which it has a price from a contract (first), catalog/commitment (second), or quote (third). Then, the user can push the remaining items to the Demand Management module for quick quote (or import into the internal catalog from a connected source) or simply create a place holder item (with an estimated cost). They can then return to the BOM Manager and re”cost” the BOM to get a complete cost estimate, which can be compared against the cost of all prior BoM versions (that were costed). This allows the organization to understand the costs associated with BOM changes over time (independent of supplier or distributor pricing changes). Gone are the days where you have to use a completely separate application to do BOM cost estimation.

Finally, the next update to the BOM Manager will allow for the user to enter a cost estimate directly in the BOM manager for materials/parts not yet quoted for even quicker price estimates, and those estimates will be clearly marked as internal estimates only.

Other Capabilities

We’re not going to discuss the procurement modules as they are not MeRLIN‘s focus (but we will assure you that they cover the foundations if you don’t have P2P and need it), demand management as you know what forecasting should do, category management (and category strategy management) as that is rather self explanatory, or finance management, as budget and price management is also straight forward.

The Full Picture

The platform is quite deep in all core areas and one could write pages about each module and its deep capabilities, but hopefully this is enough to convey the facts that

  • the MeRLIN platform was designed from the ground up to support direct and discrete sourcing,
  • has the capability to support these projects from inception to contract signing through the very last order against the award, and
  • goes beyond just raw sourcing capability to related capabilities of supplier risk, compliance, and execution (tracking the order to the delivery and qualification)

CONCLUSION

Given the relative lack of true direct and discrete sourcing platforms in the mid-market, MeRLIN is a platform you should definitely be aware of. If you’re in direct manufacturing, automotive, aerospace, and related industries, you might want to check them out today.


It’s for discrete wizards,
it’s a platform with a twist.
A discrete wizard
needs a tech assist …

CF Suite for your Consumer-Friendly Source-to-Contract Needs

Founded in 2004 to help public and private sector companies save money through reverse auctions, the Curtis Fitch Solution has expanded since then to offer a source-to-contract procurement solution, which includes extensive supplier onboarding evaluation, performance management, contract lifecycle management, and spend and performance management. Curtis Fitch offers the following capabilities in its solution.

Supplier Insight

CF Supplier Insights is their supplier registration, onboarding, information, and relationship management solution. It supports the creation and delivery of customized questionnaires, which can be associated with organizational categories anywhere in the 4-level hierarchy supported, so that suppliers are only asked to provide information that the organization needs for their qualification. You can track insurance and key certification requirements, with due dates for auto-reminders, to enable suppliers to self-serve. Supplier Insights offers task-oriented dashboards to help a buyer or evaluator focus in on what needs to be done.

The supplier management module presents supplier profiles in a clear and easy to view way, showing company details, registration audit, location, and contact information, etc.. You can quickly view an audit trail of any activity that the supplier is linked to in CF Suite, including access to onboarding questionnaires, insurance and certification documents, events they were involved in, quotes they provided, contracts that were awarded, categories they are associated with, and balanced scorecards.

When insurance and certifications are requested, so is the associated metadata like coverage, award date, expiry date, and insurer/granter. This information is monitored, and both the buyer and supplier are alerted when the expiration date is approaching. The system defines default metadata for all suppliers, but buyers can add their own fields as needed.

It’s easy to search for suppliers by name, status, workflow stage, and location, or simply scan through them by name. The buyer can choose to “hide” suppliers that have not completed the registration process and they will not be available for sourcing events or contracting.

e-Sourcing

CF eSourcing is their sourcing project management and RFx platform where a user can define event and RFx templates, create multi-round sourcing projects, evaluate the responses using weighted scoring and multi-party ratings, define awards, and track procurement spend against savings. Also, all of the metadata is available for scorecards, contracting, and event creation, so if a supplier doesn’t have the necessary coverage or certification, the supplier can be filtered out of the event, or the buyer can proactively ensure they are not invited.

Events can be created from scratch but are usually created from templates to support standardization across the business. An RFx template can define stakeholders, suppliers (or categories), and any sourcing information, including important documentation. In addition, a procurement workplan can be designed to reflect any sign off gates as necessary when supporting the appropriate public sector requirements some buying organizations must adhere to.

Building RFx templates is easy to do and there’s a variety of question styles available, depending on the response required from the vendor (i.e. free text, multichoice, file upload, financial etc.) RFx’s can be built by importing question sets, linking to supplier onboarding information, or via a template. The tool offers tender evaluation with auto-weighting and scoring functionality (based on values or pre-defined option selections). Their clients’ buyers can invite stakeholders to evaluate a tender and what the evaluator scores can be pre-defined. In addition, when it comes to RFQs for gathering the quotes, it supports total cost breakdowns and arbitrary formulas. Supplier submissions and quotes can be exported to Excel, including any supplier document.

The one potential limitation is that there is not a lot of built in analysis / side-by-side comparison for price analysis in Sourcing, as most buyers prefer to either do their analysis in Excel or use custom dashboards in analytics.

In addition, e-Sourcing events can be organized into projects that can not only group related sourcing events, and provide an overarching workflow, but can also be used to track actuals against the historical baseline and forecasted actuals for a realized savings calculation.

e-Auctions

CF Suite also includes CF Auctions. There are four styles of auction available for running both forward and reverse auctions; English, Sequential, Dutch, and Japanese auctions, which can all be executed and managed in real time. Auctions are easy to define and very easy to monitor by the buying organization as they can see the current bid for each supplier and associated baseline and target information that is hidden from the suppliers, allowing them to track progress against not only starting bids, but goals and see a real-time evaluation of the benefit associated with a bid.

Suppliers get easy to use bidding views, and depending on the settings, suppliers will either see their current rank or distance from lowest bid and can easily update their submissions or ask questions. Buyers can respond to suppliers one-on-one or send messages to all suppliers during the auction.

In addition, if something goes wrong, buyers can manage the event in real time and pause it, extend it, change owners, change supplier reps, and so on to ensure a successful auction.

Contract Management

CF Contracts Contract management enables procurement to build high churn contracts with limited and / or no clause changes, for example, NDAs or Terms of Service. CF Contracts has a clause library, workflow for internal sign off, and integrated redline tracking. Procurement can negotiate with suppliers through the tool, and once a contract has been drafted in CF Suite, the platform can be used to track versions, see redlines, accept a version for signing, and manage the e-Signature process. If CF Suite was used for sourcing, then if a contract is awarded off the back of an event, the contract can be linked with the award information from the sourcing module.

Most of their clients focus on using contracts as a central contract repository database to improve visibility of key contract information, and to feed into reporting outputs to support the management of the contract pipeline, including contract spend and contract renewals.

The contract database includes a pool of common fields (i.e. contract title, start and end dates, contract values etc.) and their clients can create custom fields to ensure the contract records align with their business data. Buyers can create automated contract renewal alerts that can be shared with the contract manager, business stakeholders or the contract management team, as one would expect from a contract management module.

Supplier Scorecards

CF Scorecards is their compliance, risk, and performance management solution that collates ongoing supplier risk management information into a central location. CF Suite uses all of this data to create a 360 degree supplier scorecard for managing risk, performance and development on an ongoing basis.

The great thing about scorecards is that you can select the questionnaires and third-party data you want to include, define the weightings, define the stakeholders who will be scoring the responses that can’t be auto-scored, and get a truly custom 360-degree scorecard on risk, compliance, and/or performance. You can attach associated documents, contracts, supplier onboarding questionnaires, third party assessments, and audits as desired to back up the scorecard, which provides a solid foundation for supplier performance, risk, and compliance management and development plan creation.

Data Analytics

Powered by Qlik, CF Analytics provides out-of-the-box dashboards and reports to help analyze spend, manage contract pipelines and lifecycles, track supplier onboarding workflow and status, and manage ongoing supplier risk . Client organizations can also create their own dashboards and reports as required, or Curtis Fitch can create additional dashboards and reports for the client on implementation. Curtis Fitch has API integrations available as standard for those clients that wish to analyse data in their preferred business tool, like Power BI, or Tableau.

The out-of-the-box dashboards and reports are well designed and take full advantage of the Qlik tool. The process management, contract/supplier status dashboard, and performance management dashboards are especially well thought out and designed. For example, the project management dashboard will show you the status of each sourcing project by stage and task, how many tasks are coming due and overdue, the total value of projects in each stage, and so on. Other process-oriented dashboards for contracts and supplier management are equally well done. For example, the contract management dashboard allows you to filter in by supplier category, or contract grouping and see upcoming milestones in the next 30 days, 60 days, and 90 days as well as overdue milestones.

The spend dashboards include all the standard dashboards you’d expect in a suite, and they are very easy to use with built-in filtering capability to quickly drill down to the precise spend you are interested in. The only down-side is they are OLAP based, and updates are daily. However, they are considering adding support for one or more BoB spend analysis platforms for those that want more advanced analytics capability.

Overall

It’s clear that the Curtis Fitch platform is a mature, well thought out, fleshed out platform for source to contract for indirect and direct services in both the public and private sector and a great solution not only for the global FTSE 100 companies they support, but the mid-market and enterprise market. It’s also very likely to be adopted, a key factor for success, because, as we pointed out in our headline, it’s very consumer friendly. While the UI design might look a bit dated (just like the design of Sourcing Innovation), it was designed that way because it’s extremely usable and, thus, very consumer friendly.

Curtis Fitch have an active roadmap, following development best practices, alongside scoping workshops, where they partner with their clients to ensure new features and benefits are based on user requirements. Many modern applications with flashy UIs, modern hieroglyphs, and text-based conversational interfaces might look cool, but at the end of the day sourcing professionals want to get the job done and don’t want to be blinded by vast swathes of functionality when looking for a specific feature. Procurement professionals want a well-designed, intuitive, guided workflow, a ‘3-clicks and I’m there’ style application that will get the job done efficiently and effectively. This is what CF Suite offers.

Conclusion

While there are some limitations in award analysis (as most users prefer to do that in Excel) and analytics (as it’s built on QlikSense), and not a lot of functionality that is truly unique if you compare it to functionality in the market overall, it is one of the broadest and deepest mid-market+ suites out there and can provide a lot of value to a lot of organizations. In addition, Curtis Fitch also offers consulting and managed auction/RFX services which can be very helpful to an understaffed organization as they can get some staff augmentation / event support while also having full visibility into the process and the ability to take over fully when they are ready. If you’re looking for a tightly integrated, highly useable, easily adopted Source-to-Contract platform with more contract and supplier management ability than you might expect, include CF Suite in the RFP. It’s certainly worth an investigation.