Category Archives: Procurement Innovation

Some Good Advice from Hackett on Building a Better Procurement Scorecard

Supply Management is about more than cost. Much more. But it’s hard to make the point if all that you’re measured on are (soon to be very elusive) cost savings. So you need to be measured on a scorecard, preferably one that’s balanced. But what should it contain? A recent Supply Chain Brain article indicated it should focus on service. CPO Rising indicates that you should focus on categories. And SourceOne authors Bill & Joe say to focus on the balanced scorecard.

Hackett indicates that the following considerations are important

  • innovation
  • supply assurance / supply risk
  • regulatory compliance
  • working capital
  • P2P process efficiency
  • supplier diversity

and I would agree that they are all relevant to Supply Management, but what I really like is their 10 key considerations to keep in mind when developing your next scorecard that should help ensure a more holistic level of success that starts off:

  1. Align with the Business
    While most organizations have still failed to realize this fact, Supply Management is the business. Now that companies no longer make what they sell, supply management now serves the most critical function – as there is no product without it. So its critical that supply management closely align with the business and provide the business what it needs.
  2. KISS (Keep It Simple Stupid)
    When creating a scorecard, its critical to consolidate to a manageable set of metrics. Otherwise, the complexity becomes overwhelming and the utility of the tool becomes increasingly diminished . While it’s important to include all of the key contributions that supply management makes, the scorecard should only measure the key contributions that provide the organization the most value. Your organization might do 101 things, but probably only needs to report on the top 11 or 21.
  3. Compare Externally
    While not all measures need to be externally benchmarked, the organization does need to understand what the measures mean.

Check out this article on My Purchasing Center (on building a better procurement scorecard) for their other seven key considerations for developing a scorecard that will help your Supply Management organization achieve a holistic level of success.

Iasta: Smart Source-Style! Part II.

To the tune of Gangnam Style.

Sourcing Smart-Source Style.
Smart-Source Style.

Sourcing platform for users and bosses too. Sweet.
SaaS on the cloud, always on, real-time reporting complete. L33t.
Analyze this. Auctions, Performance. Real time data.
Optimize It. Contracts, and vendor schema.
One. Two. Smart-Source Success!

In Part I, we covered the first three significant changes to the Iasta platform since we last covered Iasta in depth on SI three years ago. Today, we cover the remaining significant changes.

Extensive Support for Third Party Data Feeds
Realizing that no analytics platform is complete without the ability to enhance the data with supplementary data that makes it meaningful (like index data for raw materials / components, inventory cost data from an ERP, services spend from a third party management [3PM] system, etc.), Iasta has developed native in-house capabilities to pull in data from a plethora of ERP/MRPs, e-Procurement/P2P systems, and third-party data feeds (like D&B, etc.) as well as custom feeds from sources you already use.

P2P Integration Capabilities
Iasta knows that the best sourcing event is all for naught if the sourcing plan, ultimately embedded in a contract, is not properly implemented and followed through and 40% of the negotiated savings leaks and goes down the drain. Thus, they have developed powerful P2P integration capabilities in-house and can suck in all of the transactional data from your e-Procurement and/or P2P systems, map it against your contracts, and let you monitor spend in near-real time as the contract progresses. This way, if the contract is being neglected, the buyer can detect that after the first or second purchase, and not three years down the road during the re-sourcing event when all of the negotiated savings have been lost due to maverick spending or dishonoured discounts and/or rebates on the part of the supplier.

Customizable Reporting and Dashboards for Users and Executives
While Iasta, like other (e-)Sourcing and (e-)Procurement providers has always had sourcing dashboards, by module and by suite, it has developed the ability for users to create their own dashboards using pre-configured reports and widgets, custom reports (which can be created by its custom reporting engine), or existing dashboard templates. Most clients don’t, choosing to have Iasta do it for them, but the extensive reporting and dashboard configuration capabilities allow Iasta to create extensive summary dashboards to meet any need or desire in a matter of hours. Buyers can see what they need to see to be most effective on a daily basis, supervisors can see what they need to see to make sure all of their buyers’ programs are progressing appropriately, and high-level executives can get their traditional 6-gage 30,000 foot view dashboard and see that everything is, or is not, under control.

A Broader Services Offering
Iasta is finding what many other software and services providers are finding, that most organizations that (still) don’t have a (modern) (e-)Sourcing platform don’t have the resources to manage one, the skills to fully apply one, or the support to acquire either. The fact that an average organization still is not hiring or putting money back in the training budget means that a new supply management software acquisition is not beneficial to an organization without vendor or third party support. Due to the lack of talent, and training, most of the advanced functionality ends up being shelf-ware unless it’s used by an appropriately knowledgeable third party. So, like BravoSolution, Iasta has extended their suite of services and are now doing as much, or more, services work than software support. In addition to being able to fully manage events, they can fully manage sourcing programs, spend analysis efforts, integrations with P2P or ERP systems, and training efforts.

Other changes include enhanced category management and sourcing pipeline management capabilities, built-in trend reporting and variance analysis, geographic reporting, enhanced project management with milestone-level tracking, and built-in supplier scorecards.

It’s an extensive suite, and exemplative of why Iasta is now a clear-leader in the e-Sourcing mid-market.


We are the Priests of the Temples of Syrinx
Our great computers fill the hallowed halls!

Robbie and the Coupa Factory, Part II

Oompa Loompa Doom-pa-dee-do
We can’t stop building products for you!
Oompa Loompa Doom-pa-dah-dee
If you are wise you’ll try it tout-de-suite

What do you get when you’re UI obsessed?
Teams of coders who are distressed
Until they reduce the clicks to one or two
That’s what the ‘loompas will do for you.

Coupa is still trying to make the easiest end-to-end e-Procurement platform on the market, and still innovating new releases on a quarterly cycle.

So what’s changed since our last update in July?

  1. A greater focus on the front office.
  2. A stronger focus on supplier support.
  3. Better Inventory Management.
  4. Universal Search.
  5. Transactional Spend Analysis.

A greater focus on the front office.
This shows up in the form of better budget visibility and better contract management. In Coupa, a user can see what the budget impact of a requisition will be before they submit it, not after the fact. This feature is more powerful than it appears to be on the surface. For example, in one large retail client, every department that used Coupa was under budget, while every department that did not use Coupa was over budget. When people see the impact of a purchase before they make it, they are much more frugal.

With respect to contracts, Coupa has set up a “contract dropbox” where all contracts can be uploaded to the system and real-time spend dashboards by contract. Again, this may not sound that important until you realize that without such dashboard, the average user in an organization does not see the importance, and impact, of a contract. When spend quickly adds up, it becomes clear not only which products and suppliers are critical to the organization, but which contracts — and it also becomes a trivial exercise to determine the cost of buying off contract, which is where a lot of the savings leakage occurs in an average organization. The reality is that most savings available to an organization in the majority of non-strategic and non-high dollar categories lie in off-contract spend. In many organizations, just getting the majority of spend on contract can increase savings 50%. (Given that, on average, savings leakage is 40%, and the majority is due to maverick spending, shifting another 30% of spend on-contract where only 60% of spend was on-contract before increases savings opportunities by 50%.) For example, one company saved 120K in one year just be getting bottled water on contract with Staples!

A stronger focus on supplier support.
Suppliers, who are never charged by Coupa (as this greatly increases the odds that they will use the system) will soon be able to invoice their Coupa clients any way that they want to. In addition, a lot of effort has been put into insuring that their UI is as easy to use as the buyer’s UI.

Better inventory management.
Coupa has created a new API for inventory management and the system can automatically determine if the order is for internal inventory or external inventory. In addition, it now supports configurable lists for items bought on a regular schedule, which support par levels and auto-buy calculations based on current inventory to make it simple for a user to do regular re-orders. In addition, the system can auto-generate GL codes based on user, department, and commodity so that the re-order is charged against the right budget and filled by the right contract.

Universal Search.
One thing that Coupa learned is that its average user did not want to leave Coupa and punch-out to a third party site to find a product or service they needed to accomplish their day-to-day job. In response, Coupa now includes punch-out and other external products and services from partner-sites through scraping and auto-loads. In addition, they have integrated back-end reporting that lets Procurement know when prices change.

Transactional Spend Analysis.
They have implemented a basic data analysis tool (GoodData) that lets a user slice and dice spend by contract, commodity, department, and other basic measures so that they can better understand the Spend Under Management through the Coupa System. While not a replacement for a full-fledged Data Analysis Engine, it now has the same power as any package that contains a canned set of spend visibility reports and a basic report building engine, which is impressive for a Procurement platform. No more heavy lifting in Excel for the simple stuff for sure!

Oompa Loompa Doom-pa-dee-do
They can’t stop building products for you!
Oompa Loompa Doom-pa-dee-dar
They have the goal to take your spend far.

PDF? PDF? You call that e-Invoicing?

Over on the TradeShift website, a recent post highlights “the downsides for enterprise” of PDF invoicing. I know that SI has been preaching going “e” at all costs, but, where Supply Management is concerned, PDF is not really “e”. It’s just paper being sent over the wire.

When your buyer’s organization gets a PDF invoice, the accounts payable clerk has to print it out and then manually enter the information in the accounts payable system. And yes, they typically do have to print it out as they are usually given a single monitor setup and the entire display is usually taken up by their AP program so they have to print it out. So all you’ve done is shifted the task of printing out the paper (and killing a tree) to them.

And, more importantly, you haven’t increased the speed at which they can process the invoice, or the accuracy, and have sacrificed the benefits you get when going electronic. If you use EDI, XML, or another standard, open, document format, then the buyer can import it into their AP system automatically with 100% accuracy — and you get all the benefits that go along with faster, 100%, accurate processing. These benefits could include getting in the queue in time for early payment discounts (should you want a quicker payment) and a buyer who can more quickly detect who the active, relevant, suppliers are as your transactions get in the system faster.

So don’t replace paper with PDFs that just get turned into paper. It doesn’t help anyone. And don’t trust anyone who claims they have software that can “automatically process PDF invoices”. There are so many different invoice formats that there is no software that gets, or even comes close enough to, 100% accuracy that you know, at some point, your invoice is going to get totally messed up and you are going to get 201,211.13 for that Million dollar invoice (when it thinks the date stamp, 20121113, is actually the total amount due).

Wallmedien: A New Option for North American MultiNationals to Eke Procurement Value out of their ERP

Last week we noted that if you were stuck with an ERP, you do have options! Specifically, we noted that you could acquire a best-of-breed solution that runs on your ERP backbone to automate and enhance Procurement in ways that ERP never dreamed of (and will likely never aspire to) and extract the value that your smaller competitors, not locked into an ERP, are extracting with the big names in stand-alone best-of-breed Procurement, which, with the recent SAP acquisition of Ariba, now include relative newcomers (to this side of the Atlantic) like Coupa, iValua, and GEP (which was formerly Global eProcure and which acquired Enporion).

In addition to the traditional, known options of (CC-)Hubwoo and Capgemini’s IBX, you have a European player by the name of Wallmedien which has been around for fifteen (15) years, has over one hundred (100) customers (with dozens of big names including Johnson Controls, Continental Tire, Syngenta, Ford, Alstom, Bayer, BASF, and Alcoa), has offices on three continents, has enabled over sixty thousand (60K) suppliers globally, and, most importantly, has rolled out their solution in twenty-six (26) languages across forty-five (45) countries! In the sourcing and procurement world, this last feat is rare and somewhat astounding when you consider most of the smaller companies still haven’t hit double digits in the language metric.

Wallmedien has a powerful Procurement Automation Suite that includes all of the standard features in a new, consumer-inspired, easy-to-use cart-based UI which allows for easy catalog-based purchasing (whether it be through EDI, cXML, or a custom database), punch-out to a supplier’s online store, and services procurement as well as straight forward RFX capability which can be used with our without their private supplier network portal. Their portal is a standard web-based supplier interface that allows for easy supplier communication and document exchange. And it all runs seamlessly on top of SAP, with or without SAP SRM, and Oracle (although most of their customers are currently SAP, as that is the ERP platform they cut their teeth on).

And like BravoSolution, which is rapidly becoming a global best-of-breed leader in (e-)Sourcing, especially now that IBM has scooped up Emptoris, Wallmedien backs all this up with an extensive suite of end-to-end services that cover implementation, integration, hosting, catalog and application management, benchmarking, and, most importantly, a wide-range of consulting services including process improvement, technical backbone improvement, sourcing integration, and getting the most from your SAP (SRM) (or Oracle) ERP implementation.

And the new North American team of Wallmedien consists of the market leaders who previously brought you ground-breaking sourcing and procurement innovation at GE, TPN Register, B2EMarkets, VerticalNet, and Vinimaya … just to name a few. This company is going to become a force to be reckoned with in the global procurement space, especially since their platform works just as well if you don’t have SAP and they have pretty much been-there, done-that where all of the international (e-)procurement headaches are concerned. Keep your eye on ’em. On this side of the ocean, they’re movin’ on up.