Category Archives: Procurement Innovation

Vinimaya: Taking Their Procurement Marketplace Global, Part III

In Part I we noted that since we last covered Vinimaya, the B2B Search Engine that was the the next wave in product catalogue management with their ability to do real-time federated search across all of your supplier databases, catalogues, and punch-outs through a single consumer-like search and shop interface, they have continued building out their base platform, adding (more extensive) auditing capability, workflow-based catalog management, quick-quote (RFX) capability, e-Forms, deep analytics capability, mobile capabilities, and social integration on top of a base platform that supported content management, federated search, powerful connectivity options, personalization and customization, globalization, and an easy to use shopping cart. Then, in Part II, we focused in on their vTransport and their new quick-order and e-Forms functionality, known as vQuote. Today we’re going to dive a little deeper into five of the new capabilities added since our last major review, starting with vQuote.

vQuote
vQuote was specifically designed for the time when multiple bids is the right, or only, option but the situation does not warrant a full-scale sourcing event. For example, unless the organization is bundling the printer cartridge spend with the printers (which is generally NOT a good idea, by the way, since most printer manufacturers make their money off of ink that costs more than blood), running a full sourcing event to award next year’s printer cartridge buy is not worth the effort. Also, many small projects in the public sector, such as network support services at a small local government office, have to go to bid, but aren’t worth full scale sourcing events either. In this case, a quick quote — often to known suppliers already in the system, is typically the way to go. The Vinimaya vQuote solution was designed to make this process as quick, easy, and painless as possible — whether the request for quote was going to existing suppliers in the system or to new suppliers.

Since it was designed specifically for those categories of buys that fit between spot-buy from a catalog and full-fledged sourcing event, Vinimaya was able to streamline the solution significantly. Creating a quote request is as easy as giving a quote a name, specifying line items, selecting suppliers, and providing a due date – which can all be done on a single screen. If the line items are services, a SOW can be attached and quickly sent off. The buyer can see the status of the quote requests on a summary screen, review each quote as it is returned, compare them side-by-side in a summary report, and select a winner just by marking a quote, or line item from a quote, as awarded. It’s as quick and simple as a quoting solution can get and meet the needs of the quoting category they designed for.

vRank
vRank is the ability for a senior buyer or contract manager to ensure that contract items always appear first in the search results, that items from preferred suppliers always appear before items from non-preferred suppliers, and that prohibited items never appear. Basically, the administrator has the ability to assign each item that appears in a search result a rank between 1 (do not include) and 4 (show first), where 3 is (show ahead of other items) and 2 is (normal rank). It’s pretty simple, and it works based on the simple fact that almost half of all people who use search functionality click on the first link that is returned. (Recent Google statistics indicate that a whopping 47% of searchers click on the first search result.) The ranks can be applied to individual items or suppliers, with item ranks overriding supplier ranks). In addition, these ranks can be defined in real-time on every search and will take effect immediately on all future searches. This allows an administrator to define priorities as needed based upon what users are actually searching for and buying, saving a lot of up-front configuration to define ranks for products that might not even be searched for!

vCatalog
vCatalog updates the capability Vinimaya has always had to manage local catalogs in a manner that pushes all of the work back on the supplier. With vCatalog, a supplier that is not technical enough to, or that does not want to, maintain a punch-out or other on-line catalog can upload their entire catalog to the buyer through a web portal. The catalog file is completely validated, and any errors are pushed back to the supplier, with specific details on the error, for correction before it is allowed to be pushed to production.

vAudit
vAudit is what allows a buying organization to take advantage of vendor managed catalogs with confidence. It continuously monitors products and pricing from punch-out, vCatalog, and web-db suppliers to make sure that prices are compliant with contracted prices or original quotes. As soon as a price is detected that is above the contracted price, the appropriate buyer representative is alerted to the issue. The system can be configured in three different ways:

  1. block a purchase for a product over the contract amount
  2. allow the checkout to proceed, but don’t send the PO to the supplier until the price is corrected
    (and alert an administrator to contact the supplier to get the price fixed)
  3. allow the checkout to proceed at the current price, but tag the item for proactive cost recovery

With the vAudit solution, it’s quick and painless to retrieve a report of all items bought above contract or quoted price in a given timeframe, and just as simple to break it down by supplier to allow the AP department to go after suppliers for money owed.

vAnalytics
vAnalytics is Vinimaya’s new reporting engine that was designed to provide Procurement Directors with an understanding of what people were buying and how they were selecting the items they were buying. With the understanding that the purchase process cannot be optimized without a good understanding of shopper behaviour, Vinimaya built a platform that allowed a Procurement Director to understand not only the the top purchases, the top suppliers, and the top buyers, but also the top search terms, the items they led to, the failed search terms, and the actions the buyer took on a failed search.

vAnalytics, which includes a report builder, has all of the standard reporting package features you would expect in a Procurement reporting system and allows reports to be created by supplier, buyer, item, and even checkout process. Common report types include unique users, spend by supplier, line items by supplier, utilization by search time, and out of compliance check-outs (if they are permitted). Since these reports are against real-time data (and not cached in an OLAP system), some can take a few minutes to run, but those restricted to a single-user or supplier will typically be quite responsive. And, of course, all data in the entire Vinimaya platform is exportable.

Vinimaya has also made advancements in mobile and social, but these enhancements will be the subject of a future post on the Vinimaya Global Procurement Marketplace.

Are Your Invoices Out of Control? Want To Do Something About It?


Paper, paper everywhere
all the desks did warp.
Paper, paper everywhere
enough to fill a thorp!

Despite the recent appearance on the market of some modern solutions that can revolutionize invoice management and automation at even the largest Fortune 500 and Global 3000 companies, the state of e-invoice and AP Automation today is dismal. The 2012 AP Automation Survey Report found that 9 in 10 organizations still deal with paper invoices and that 90% of invoices are paper-based in half of the organizations that responded!

Moreover, Aberdeen’s 2012 study of of 180 organizations, reported in AP Invoice Management in a Networked Economy, found that laggard organizations, which represent the bottom 30% of organizations, require an average of 16.3 days to process an invoice from receipt to approval. The good news: this is a significant improvement over their 2009 study on E-Payables: Invoice Receipt and Workflow that found laggard organizations required an average of 32.9 days to process an invoice. The bad news: it’s still a very large amount of time, especially if an organization wants the opportunity to take advantage of early payment or dynamic discounting.

As a result, the average organization spends somewhere between $30 and $40 just to process a single invoice! In other words, with the exception of best-in-class organizations that heavily employ modern invoice automation solutions and only spend an average of $3 to $4 to process a single invoice, invoices are out of control in 4 out of 5 organizations. But they don’t need to be!

To find out how you can get your invoices under control, join Sourcing Innovation and Nipendo next Tuesday, November 19, at 8 am PST / 11 am EST / 4 pm GMT for a live webinar on How to Make Invoice Automation Pay Off! In this webinar we will cover the challenges in the invoice process, how traditional e-Procurement technologies have let us down, what is required for true end-to-end invoice automation (and the 80% cost savings that can be obtained therefrom), how the Nipendo Supplier Cloud (which facilitates over 5 Billion in Procurement a year) fits the bill, and how it enables Israel Aerospace Industries (IAI) to reduce its paper-process by over 90% through the electronic receipt and processing of over 100,000 e-Documents from over 3,000 suppliers each year — which has already allowed IAI to reduce its operational overhead by over 50% in two years.

In addition, attendees will be the first to receive Sourcing Innovation’s new Illumination on An End-to-End Invoice Automation Framework — Benefits & Best Practices! So Sign Up today. Space is limited.

Conversant Coupa – Communicating Cybernetically

Well, almost.

This Wednesday, Coupa takes its One Vision tour online and brings the best of its One Vision tour to those of you who were unable to make it to one of the live events. In this series, which will consist of at least seven webinars between now and the end of January, Coupa will bring you insights on

  • The Vision and Reality
  • Building Your Business Case
  • Technology, Transformation, & Procurement
  • Financial Services
  • e-Invoicing
  • Amplifying Procurement with Managed Travel
  • Modern Procurement

This should shape up to be a good webinar series. the doctor was at the Toronto stop and the presentations were quite informative, especially the presentations on building your business case and the future of procurement. In addition, assuming they don’t leave out the talent, the talk on technology and transformation should be invigorating as Supply Management is all about the 3 Ts — talent, technology, and transition from where the organization is today to where it needs to be in a transformation journey.

The only thing missing from the agenda so far is a few of their customer presentations. One of the unique aspects of the One Vision World Tour is that every stop had a customer presentation, and Coupa encouraged their customers to talk about anything they wanted to share and the attendees to ask any questions that were on their mind. This is the best insight into a solution, and a solution provider, a prospective customer can get.

If you are on the market for an e-Procurement solution, or just looking to get a better understanding of what an e-Procurement solution can do, check out the One Vision webinar series.

Oompa-loompa-doom-pa-de-doo
We will share our secrets with you
All that we ask is you log in
Listen to our one world vision

Then you can share in enlightenment too
Like the Oompa-loompa-doom-pa-de-doo

John Mavriyannakis on the Future of Procurement: Part II

In Part I, we described the 4 major trends affecting Procurement today that were identified by Deloitte in its research and consulting initiatives (and which have been addressed in publications that include “Supply Chain Strategy”, “Winning With Your Supply Chain”, and “Charting the Course: Why Procurement Must Transform Itself by 2020”) that were summarized nicely by John Mavriyannakis, a Senior Manager at Deloitte Canada (and the Practice Leader in Sourcing, Procurement, and Settlement), in his recent presentation on Empowering Modern Procurement that was given as part of the Coupa One Vision Roadshow in Toronto

Specifically, John Mavriyannakis identified the following four trends:

  • Margin Pressure
  • Supply Chain Risk
  • Government Regulations
  • Talent

As a result of these trends, it is clear that today’s supply managers need to:

  • control margin pressure,
  • mitigate supply chain risk,
  • stay ahead of changing regulations, and
  • win the war for talent.

But that’s not going to be enough for a Procurement organization to succeed in the long term in the dynamically changing global marketplace. If they wish to survive, Procurement and Supply Management organizations need to rethink mission and capabilities. Specifically, they need to:

  • get strategic
    and establish a formal organizational presence that ties metrics to company performance,
  • transition
    to re-aligned processes and responsibilities that focus on business outcomes,
  • task talent cross-functionally
    to enhance the procurement capability of the organization as a whole, and
  • tie it all to technology
    that blends service and management tools that are easy to use and that allow for the right level of control.

While keeping in mind that they need to get to the 2020 Procurement and Supply Management organization in just 6 short years (which is no easy feat given that the average transformation time that is required for a Global 3000 organization to become a world class Procurement organization, according to The Hackett Group, is at least 5 years). In 2020, Procurement, according to Deloitte, is going to (need to) be:

  • the keepers of the global supply and demand perspective,
  • the nexus of finance, operations, and supply chain,
  • risk forecasters,
  • the arbiter of risk vs. reward,
  • the value-generation unit that is the treasure trove of ideas, and
  • talent rich.

And SI fully agrees with all but the last of these predictions. In addition, it partially agrees with the last prediction that Procurement is going to need to be talent rich to achieve the goals that are set before it, but given the lack of investment in talent to date in the average Procurement organization, SI isn’t sure that the talent is going to be where it needs to be in 2020. Even though talent has been in the top three Procurement issues for at least the last three years, it’s still in the top three budget items that are cut every year in these tough economic times, even though a small investment in talent can lead to a (very) large return in savings in a Procurement organization. (For example, one of the first companies to certify their entire department with the SPSM designation offered by Next Level Purchasing, a 1 Billion furniture manufacturer, doubled their annual savings only one year after completing the certification on the department level. That’s a double digit ROI multiple in one year! Compare that to the 2X or 3X you might get from automating manual processes.) Basically, the most successful Procurement organizations in 2020 will be talent rich, but the average Procurement organization will be struggling at the current rate of training and talent induction into our space.

John Mavriyannakis on the Future of Procurement: Part I

John Mavriyannakis is a Senior Manager at Deloitte Canada and the Practice Leader in Sourcing, Procurement, and Settlement who recently gave a presentation on Empowering Modern Procurement as part of the Coupa One Vision Roadshow in Toronto. Through its regular CPO Surveys, CFO Surveys, and its Source-to-Procure experience across 1000+ projects for 300+ clients, which made it #1 in the Procurement Consulting provider in the global Procurement Consulting marketplace, Deloitte has built up a considerable understanding of the current state of Procurement [which it has captured in a number of publications, including Supply Chain Strategy (Deloitte), Winning With Your Supply Chain (Deloitte), the CFO Surveys, and Charting the Course: Why Procurement Must Transform Itself by 2020 (Deloitte)].

According to Deloitte, Procurement today is dealing with 4 major trends, which are going to continue for the foreseeable future:

Margin Pressure
Margins are getting tighter and organizations need to be looking at least ten years ahead to determine future (labour) arbitrage opportunities, which are becoming increasingly more difficult to leverage as emerging economies emerge and produce middle classes with higher wage expectations (and transportation costs increase to make up the difference). In addition, the fact that price volatility has increased 57% in the last 12 months hasn’t helped matters any.

Supply Chain Risk
Due to the increasing interdependence and extensiveness of supply chains, risk is increasing, as illustrated byt he fact that 85% of surveyed organizations experienced at least one large scale disruption in the last 12 months. The increased risk is a big issue given that companies announcing supply chain disruptions had a 30% lower supply chain return compared to the benchmark group.

Government Regulations
Regulatory compliance issues have resulted in high-profile, high-cost shutdowns in recent years and with 2/3rds of CPOs admitting that their companies are only in the early stages of compiling information required to meet the recent SEC reporting changes, this is not a good state of affairs as the SEC reporting requirements are only one of a plethora of reporting requirements an international company that is importing and exporting on a daily basis around the globe needs to be compliant with.

Talent
Given that 76% of CPOs feel that their staffs’ skills need improvement or have a significant gap, talent is on the radar in a big way. And not just any talent — with 91% of the 60% of CPOs planning to change their operational model announcing a shift to center-led or centralized supply chain operations, this means that over half of the talent that is required needs to be effective in these type of Supply Management models.

So what does this mean? We’ll discuss tomorrow in Part II.