Category Archives: Market Intelligence

When it Comes to Procurement, Don’t Forget Finance!

Surveys regularly ask Finance to rate Procurement effectiveness, but is this the right question to be asking? Maybe Procurement should be rating Finance effectiveness? After all, is it necessarily Procurement’s fault that there are usually noticeable gaps when the results of these surveys are published? Maybe, but maybe not.

The only way the gaps will close is if the root cause of the gaps is identified and addressed. Is Finance providing the necessary funding for the platforms, training, and resources that are required to effectively address all of the categories? Is the organization evaluating effectiveness against the right KPIs? Does the Procurement agenda align with the organizational agenda that Finance has a hand in shaping?

Now, I’m not saying it’s Finance’s fault, and I’m not saying it’s Procurement’s fault, but I’m saying there is a reason for the gap and the reason needs to be identified. Sometimes it will be a lack of effort or focus on Procurement’s part, sometimes it will be a lack of effort or focus on Finance’s part, but the doctor‘s guess is that more often than not it will not be anyone’s fault but be due to a lack of alignment.

As the maverick points out over on Spend Matters in his post on “What Does the CFO think of Procurement”, Procurement and Finance are misaligned in numerous ways, and this misalignment is costing companies a lot of money.

That’s why the maverick teamed up with ISM to conduct a new study on Procurement and Finance Alignment to help Procurement and Finance understand all the misalignment areas and the loss of value caused by this misalignment so that Procurement and Finance can work collaboratively to realign. the doctor had a chance to review, comment on, and contribute to the study before its release and can tell you that it’s well designed and well worth your time, especially since the average company will be able to complete the full study in about 15 minutes.

I strongly encourage every company, no matter how well they think their Procurement function is doing, to take this study which is designed not to assign blame but to detect areas of misalignment where Procurement and Finance can work together to improve performance.

Taking the study is easy. Simply e-mail the maverick at pierre (at) spendmatters (dot) com and you can get the study link and first access to the results.

ERP is Not Enough!


When your organization was sold its Enterprise Resource Planning (ERP) solution suite back in the 1990s or 2000s, it was probably told that the ERP suite was the answer to all of its information management problems and it would be the last suite the organization would ever buy. As the evolution of Manufacturing Resource Planning (MRP) software — which was focused primarily on product planning, manufacturing, and inventory management — ERP was supposed to address all of the weaknesses in the MRP software as well as give Sales and Marketing, Finance, and Executive Management visibility into operational status. Specifically, ERP was supposed to handle sourcing and procurement, receiving and distribution, sales forecasting and integration into production planning, and provide a solid foundation for accounting and finance. ERP was supposed to provide the organization with a real-time end-to-end view of core business processes that could be used to effectively monitor, manage, migrate, and market the business. ERP was supposed to be delivering on the single system promise that you were waiting for since the dawn of MRP. But it didn’t.

“Why ERP is not Enough” by b2bConnex (Registration Required)

Those of you who are regular readers know that SI rarely promotes vendor-authored white-papers, as many turn out to be more marketing fluff than solid content, but every now and again SI finds a real gem, and this paper is one of them. Not only is it a solid, factual, educational piece, but it’s echoing a message that SI has been promoting for years (and often while screaming at the top of its lungs). ERP is Not Enough, and the continued over-reliance on ERP is why so many organizations, especially in manufacturing, are struggling to find efficiency, savings, and value in their supply chains.

Even though Sourcing and Procurement platforms are now mature technology, the number of your peers that have still not adopted modern platforms is still quite high. That’s why a number of new SaaS-based start-ups are still finding success a decade later with streamlined, on-line, implementations of sourcing or procurement modules that are almost a commodity at this point. When a company finally realizes the value, SaaS allows for a quick, easy, low-cost entry point to a modern platform.

And a modern platform is needed. Just because your ERP might support document exchange, that doesn’t mean it supports online tenders. Just because it supports price quotes doesn’t mean that it can maintain detailed price history and do trend analysis. Just because your ERP can store a contract doesn’t mean that it can store all of the delivery schedules, rate tables, and agreed upon performance metrics in formats that can be easily accessed, queried, and automatically compared to invoices and time sheets. Just because it can store a PO, that doesn’t mean it can store a full requisition and approval history. the doctor is sorry to say that he knows of more than one company that has spent over a million dollars trying to implement a good e-Negotiation platform or contract management platform on an ERP, only to fail when they could have bought a best-of-breed solution for 1/10th of the cost.

One has to remember that where ERP is concerned:

  • it is still rooted in MRP & on-site inventory management
    and distribution, logistics and supply chain optimization was never in the core vocabulary
  • it is all about reporting
    but supply chain success is all about analysis and actionable data
  • it is designed around an old-school data store with a rigid format
    and not a modern, extensible, workflow-based Master Data Management model
  • it was based on the concept of an activity journal
    not around transition management for an evolving supply chain
  • it is internally focussed
    but supply chain management needs to be externally focussed

This paper addresses all of these issues in detail, outlines the shortcomings of an ERP, and helps you understand why you need, depending on your business, a modern sourcing platform, a modern procurement platform, or, particularly in manufacturing, a modern supply chain communication and collaboration platform that handles all of the communications necessary between a provider of consumer or manufactured goods and their product and component suppliers from the initial tenders through the delivery of the final goods receipt and invoice pair when the contract has been completed. Moreover, the paper does this without any reference to any particular platform or marketing spiel and really helps you understand why your ERP is not, and will never be, enough and why you have to move to modern Sourcing / Procurement / Collaboration platforms, depending on your vertical and needs.

If you are not on a modern Supply Management / Supply Chain Collaboration platform, the doctor strongly encourages you to register for, and download, Why ERP is not Enough today and spend a good deal time of understanding the issues addressed. The sooner you understand what you need and why you need it, the sooner you can acquire the right platform and supercharge your supply chain. All the technologies you need to do so are out there waiting for you. You just need to know what to look for!

KWIPPED: Simplifying Rentals for Your Business Needs

In our last two posts, Robin Salter of KWIPPED introduced us to the many benefits of an online marketplace for rental procurement. KWIPPED is one of the, if not the, first general purpose marketplace for your business rental needs. Launched in late February, KWIPPED is closing in on 100 suppliers that can meet your rental needs across 17 categories:

  • Audio and Visual Equipment
  • Electronic Test Equipment
  • Environmental Testing Equipment
  • Heavy Equipment
  • HVAC Equipment
  • Laboratory Equipment
  • Medical Equipment
  • Surveying Equipment
  • Work Zone Safety Equipment
  • Computer Equipment
  • Farm Equipment
  • Film Production Equipment
  • Material Handing Equipment
  • Oilfield Equipment
  • Power Equipment
  • Telecommunications Equipment
  • Welding Equipment

Like all modern online marketplaces, KWIPPED is simple and easy to use. All a buyer has to do is

  1. log on to the site
  2. fill out a request
  3. let the system direct it to the appropriate, verified, suppliers with potentially matching inventory
  4. wait for quotes

Once a quote to your liking has been received, you can accept it and check out on the site. The site then collects the first payment and seals the rental contract on your behalf. It’s that simple. And the next version coming late this quarter will allow you to check out commodity rental items on the spot – no RFQ needed. Quick and easy like rentals should be.

KWIPPED will do for rentals what sites like BuyTruckload.com did for truck rentals and turn the commercial rental industry on its head. It’s Rent-a-Center for business. Check it out!

How an Online Marketplace Can Improve Equipment Rental Procurement Part I

Today’s guest post is from Robin Salter, CMO of KWIPPED.

Today, when people are planning their vacations, they typically use an online marketplace like Travelocity or Expedia. Why? Because if you need to book a flight, hotel, rental car or some combination of the three, it’s much faster and easier to go to a single website that:

  • Displays availability
  • Provides ratings and descriptions
  • Offers pricing comparisons
  • Enables scheduling and booking

The cumbersome, time-consuming alternative is to research and compare each airline, hotel and car rental company individually before making a particular booking decision. The online marketplace model provides obvious benefits to the traveler in the form of convenience, simplicity and efficiency. Of course, the travel industry is just a single example. Online marketplaces have popped up across virtually every industry — and why wouldn’t they — the benefits they offer to buyers and sellers are undeniable.

Oddly, the B2B equipment rental industry has been slow to adopt the online marketplace model despite the fact that the granularity of the industry seems to make it a natural fit. There are more than 27,000 rental businesses in the U.S. and that number does not include many businesses that may not consider themselves rental businesses even though they do rent certain equipment.

It’s important to point out that there are currently a few online marketplaces that support the construction/heavy equipment industry; but equipment rental is estimated to be a $38 – $50 billion market, of which construction represents less than half. Businesses and organizations rent all kinds of equipment, for example:

  • Medical equipment
  • Laboratory equipment
  • Audio/Visual equipment
  • HVAC equipment
  • Farming equipment
  • Film production equipment
  • Electronic testing equipment
  • Environmental testing equipment
  • Materials handling equipment
  • Roadwork safety equipment

The list is practically endless, but the point is, equipment rental is big business and is ripe for an online marketplace that provides the technology to connect renters and suppliers across all industries in a more efficient and productive way.

In Part II we will discuss how an online equipment rental marketplace differs from traditional equipment rental sourcing and the advantages it brings.

Thanks, Robin.

How Many Procurement Myths Have You Fallen For?

As a Senior Buyer or Procurement Leader, you probably feel you’re doing almost everything right, or at least right enough to get great results. Maybe that’s true, but maybe you’ve fallen for a handful, or two handfuls, of the procurement myths that still plague even leading Procurement organizations to this very day.

If you think you’re at the top of your game, I urge you to follow the new series on Procurement Myths that the maverick is running over on the new Spend Matters CPO site. While the doctor isn’t co-authoring this particular series, he did work with the maverick to identify the most common myths and outlined what he saw as the most common symptoms, and these inputs are shaping the 25-part series to come.

Myth I and Myth II are already up! Check them out and see if you’ve fallen for any of them. (And if you have, as you are the leader, there’s still plenty of time to fix your perspective and lead the organization into a new era as they will never figure it out without you.)