Category Archives: Sourcing Innovation

Procurence Meercat: Still Watching Over Your Supply Chain

The last time the doctor covered Procurence was on Spend Matters in 2019 in a two-part series that provided a Vendor Introduction and a SWOT, Selection Checklist, and Market Overview.

In that coverage, we covered the supplier management solution, customized for direct supplier management, that supported the following areas of supplier management:

  • information management
  • performance / KPI management
  • risk assessment
  • quality audits
  • incident and warning management
  • NPI / PPAP / APQP support (with NCR / 8D)
  • administration management

We also noted at the time that some of the positives and unique capabilities of the platform were:

  • extensive task support and tracking
  • deep support for technical assessments and QMRs
  • great self-service administration support
  • extremely deep KPI support
  • flexible report construction

For deeper details, if you have access, we highly recommend checking out the links above (as well as Bertrand’s 2022 follow-up: Part 1: SXM and New Modules and Part 2: SWOT), which also contains the foundations of a SWOT in its 8-page summary.

Today we’ll provide an update and dive into the key capabilities of the platform, which has evolved from a supplier management focussed offering to a source-to-pay collaboration and management platform that addresses so much more than just the supplier lifecycle, with Source-to-Pay capabilities launching this quarter with appropriately enhanced SRM and Compliance capabilities.

Procurence Meercat is a modular platform where an organization can buy only what they need after starting with the core module. The platform contains offerings in six key areas:

  1. Supplier Relationship Management (Core)
  2. Source to Pay
  3. Compliance & Risk
  4. Materials & Quality Management
    (SRM++ for Direct that also encapsulates aspects of part and production management)
  5. ESG
  6. Project & Resource Management

Procurence Meercat is unique in that while they are a smaller niche vendor, the platform was made to support even the largest of enterprise customers, and do so with ease. We’re going to take the six areas one-by-one, focussing primarily on what’s new or unique:

Supplier Relationship Management

Procurence Meercat is a leading Supplier Management Platform with extremely deep supplier profiles that supports custom onboarding workflows, prequalification (in compliance with EU regulations), supplier master data management, documents (inc. contracts and translations), audits, and even supplier development. The SRM module is the core module and provides you with a complete Supplier 360 where you can quickly access any and all information associated with the supplier across the modules you have installed.

Procurence Meercat can handle all of your supplier (related) master data management because it sits between external systems and data providers and internal back-office / ERP platforms (and even existing S2P systems if you prefer to maintain those, especially for indirect/services sourcing and procurement).

Since the platform is highly integrated, onboarding can take advantage of all of the compliance, risk, and ESG data collected as well as all of the part and production data collected and give a buyer complete 360-degree insight into the supplier during the pre-qualification to ensure that no non-compliant (or sanctioned) suppliers get into the system at approval time. Moreover, the onboarding process cna be configured to have as few, or as many, steps as your organization needs to collect all the required information; do all of the external risk, compliance, and ESG validations; verify the contact information; and complete any regulatory KYS (Know Your Supplier) requirements.

One key capability is that it allows you to track all of the relations(hips) associated with a supplier by subsidiary, business unit, location and/or primary commodity type as well as who owns the relationship, what the terms (of the contracts typically) are, and the status of the supplier down to that level. (i.e. You might want to block a supplier only from certain subsidiaries or business units in certain commodities or areas due to poor performance in those commodities or areas but still allow them to do business with you for other commodities in other areas where they are meeting all the regulatory requirements and not causing you any problems.)

Another key capability that comes into effect during onboarding, information management, and procurement is bank account validation. In order to greatly reduce payment fraud, they have introduced multi-step approvals to create or change a bank account profile to ensure only verified information gets into the system.

Another overlooked capability is the ability to define rules that will automatically assign the different individuals required for different aspects of supplier management: overall relationship, assessments, risk, compliance, purchase orders, (payment) approvals, etc. etc. etc. based on role, team or other factors. The platform includes features that support high workforce mobility including temporary delegations and permanent delegations which can be done using rules that reassign tasks in bulk or individually, ensuring that a task always has someone assigned to it. (It also has automatic blocking of user access on a bounced email, helping with ISO 27001 compliance, a certification which they hold.)

Remember, there is no supplier management without human interaction and oversight, and most suppliers go unmanaged because it’s usually impossible for one person to do all the work (and yet that’s how many supplier management systems were set up — one supplier owner). By allowing the work to be broken up and defined on supplier creation, a supplier actually gets managed (and then supervisors get notified when an item is past due and relationship owners notified when key tasks have not bee completed). Match this with the capability to automatically trigger workflows (that can be built up from task suggestions using existing assessments) on any change in any supplier flex status — which can be defined at the level of supplier, commodity, part, tooling, or any combination — and you have powerful, guided, semi-automated supplier (performance) management.

Source-to-Pay

Their new source-to-pay capabilities centers around two new primary modules with core support for sourcing and procurement, namely

Strategic Procurement

  • RFX
  • Contracts (enhanced)
  • Savings Tracker
  • Commodity Profiles
  • Supplier Innovation Sourcing

The core of sourcing is RFX which allows the user to create (multi-round) RFX events that can be used to collect bids and specifications, create award scenarios for evaluation, and walk the user through a templated sourcing cycle (that can be adjusted on implementation and tweaked in the administration control panel). Standard parts of an RFX are settings (type, business unit, category, terms and conditions, currency, timing, etc.), specifications (documents), positions (cost breakdowns), suppliers (suggestion capability based on sourcing history, risk, and location, but the buyer can select who they want), assessments, communications (associated with the RFX), responses (final bids, displayable side-by-side), scenarios (potential awards based on rules such as cheapest supplier or position with location, position, or risk constraints or manual selection), decisions (awards), and, post award, the event can be associated with contracts and orders.

As we noted, contract management has been enhanced as they have implemented multiple AI tools to automatically scan an uploaded document, classify it, auto-extract the suggested metadata (tagged to the appropriate location in the document), and then the user can accept, override, or reject as they see fit. In addition, they’ve also integrated DeepL for automatic document translation, so the user can get a highly accurate (but not legally certified) translation of a contract or document in their native language.

The savings tracking module, which works like most other savings tracking modules you’d be familiar with, kicks in post award and allows you to track historical to projected to actuals over time based on the sourcing event. However, if you use Procurence Meercat for S2P for your direct, it will automatically populate the historicals, projections, and actuals based on each order that flows through the system, making savings tracking easy-peasy for you.

The supplier innovation sourcing is a relatively new module that allows buyers to post challenges where they need innovation to reduce cost, streamline energy requirements, minimize environmental emissions (including carbon), stay ahead of global compliance regulations, or meet an emerging market demand. Like the first generation crowd sourcing innovation platforms (remember those?), it allows suppliers to suggest innovations to meet a buyer’s needs, which, since it’s integrated, can be flipped into RFXs if the proposal sounds promising.

This is because the submission process is partially structured and, when a supplier submits an innovation idea, they can specify the expected business benefits (in terms of sales, sustainability, quality and warranty, production, procurement, process, or logistics factors), the materials that will be used, the associated financials, and the document types that are being submitted. This semi-structured approach allows for quick searching, identification, and RFX/project creation off of a submission.

Moreover, the platform can be opened up for suppliers to provide their own innovations with respect to existing parts or processes if they feel they have a way to improve the end product they are offering to the buyer.

Operational Procurement

  • Purchase Order & ASN Management
  • Invoice Management
  • Capacity Planning

Once an award has been made, and a contract has been cut, purchase orders can be manually, or automatically using appropriate rules definitions, created and sent to the supplier. The platform can also accept ASN (Advanced Shipping Notices) from the supplier and track those as well. When the invoice is submitted, it can be captured, and if it’s an attachment, the platform uses ThinkingMachine-driven AI to automatically parse the invoice into standard metadata and line item data for matching, processing, and payment approval. The approval chains can be defined to be as simple or complex as the organization wants, with single, multi-stage, and even simultaneous approvals supported.

Compliance & Risk

They’ve had compliance and risk management (including a risk decision matrix) since 2012, but it’s been significantly enhanced over the past few years. This includes a number of out-of-the-box integrations including riskmethods, prewave, Z2DATA, Euler Hermes, and D&B. New capabilities revolved around:

  • Sanction Checks
  • Semiconductor Risk
  • AI Risk Review

Procurence integrates with multiple sources to check (potential) suppliers against sanctions list and these checks can be included early in the pre-qualification process (to prevent time being wasted on qualifying a supplier that your organization ultimately can’t do business with. It also integrated with multiple AI technologies in addition to third party risk ratings and can parse available data from documents and the internet to estimate certain risks and help you pre-populate models and then generate an overview of supplier risk from that model. Finally, it integrates with Z2DATA to provide you with deep insight into the semiconductor risk of every part you source that uses semiconductors (as long as you maintain your semiconductor listing in the parts management and associate the semiconductors with the parts they are used in). This isn’t hard to do because you can track the composition (level 1 of the Bill of Materials by default, but the system can track components at multiple levels if required for risk, ESG, etc.) of each part that you purchase (which you need to do for Scope3 CO2 tracking and reporting).

The risk management also includes risk monitoring (which can be continuous on every risk data element update or on a schedule), which can not only support the manual scheduling of automatic (technical) reviews based on identified risk types or scores, but automatic scheduling if a risk factor gets too high.

Materials & Quality

They’ve had part masters, material profiles, PPAP/APQP, NCR/8D, compensation claims, and even NPD for a decade, but all of the capability has been enhanced in recent years as it was spun out of core SRM (which revolved around parts linked to the supplier) into its own product development and quality module which supports highly integrated part development and management centered around a buying organization’s part, and now even supports tooling management.

Their part and material master is quite deep. For each part, in addition to tracking metadata that tracks all of the classification data (id, eClass, HTS, SIC, HS, CN, TARIC, CAS, ECN, SCIP, etc.), it also tracks the default units, criticality, risk, type, tooling, specification documents, related plants, projects, materials, and whether or not it uses semiconductors. It maintains RoHS Data, validations, and current status. Finally, it maintains the lifecycle status, timelines, and cost models required for purchasing; associated RFXs; and, post award, the associated factories, purchase orders, ASNs, and information on received lots.

ESG

They’ve always had the ability to support ESG, as you could extend supplier and part profiles to capture whatever you wanted, but with the recent rise of ESG in the EU (especially around Scope-3 reporting and the German Supply Chain Act [LkSG]), they now have custom capabilities to support both of these requirements, and even have a whistleblower portal. They also have out of the box integrations with ecovadis, and Integrity Next.

As we noted above, you can track the carbon down to the part component level, and this includes the packaging and logistics emissions, where you can track the logistics emissions at the route level, with the emissions tracked for each leg of the route (which might use a different method or carrier). In other words, in Procurence Meercat, your Scope 3 calculations can approach 100% accuracy and, more importantly, you can not only identify real opportunities for Scope 3 improvement (based upon different plant or production efficiencies and production rebalancing) but quick improvements through packaging changes and packaging reduction, better routings, etc. — which is sometimes the only improvements you can really make (if your parts are custom and you can’t easily switch factories, or you’ve already optimized the production and the only way to further reduce carbon is a redesign that takes months or years, etc.).

Project & Resource Management

They’ve had basic project management since last decade, but with a growing customer base in a few key industries (including wind power), they have expanded their capabilities significantly to also support staffing and resourcing profiles (including HSE Compliance), with training requirements, down to the individual employee — like an Avetta but specifically designed for complex industrial supply chains.

Communication

Finally, they have a 7th core module that serves as the communication hub across your organization and its supply base that centralizes asynchronous online communication, mass mailings and notifications, generic platform content in a CMS/Library, and even a generic portal for supplier/third party access to communications. The platform even supports the definition of meeting protocols with topic specific templates to guide staff through supplier meetings.

Procurence Meercat has come a long way since its humble beginnings when it first poked it’s head out of the hole to take it’s first shift in watching over the supply chain landscape, and it’s one Meercat you definitely shouldn’t overlook!

Stop Being Clueless. It’s Time for Revenge of the Nerds!

Last week we tried to further demystify the marketing madness for you by clarifying that spend orchestration is essentially Clueless for the popular kids.

This is really important because there is no difference between a “spend” orchestration and a plain old “regular” orchestration provider, and neither provides any value whatsoever if you don’t have any spend management (i.e. procurement) systems in place to actually process the spend. Otherwise, the best you get is intake to nowhere … which just provides your stakeholders yet another avenue to ask “where’s my stuff” and another reason to say “I thought this new system was supposed to make you more efficient” and get more impatient when their stuff doesn’t arrive any faster.

In other words, unless you have a hodge-podge of best-of-breed systems that cover most, if not all, of the source-to-pay process, that don’t interconnect, and the systems are old and don’t support multiple roles (or charge full license fees for each user, even a 99% read-only role, that access the users), there is no value in an orchestration, as we’ve said many times (including in our post on how Marketplace Madness is Coming.

What you need is not spend orchestration but spend defenestration — you need to throw any and all unnecessary spend out of the window, and that requires spend investigation, need verification, negotiation, observation, and payment verification. That requires spend analysis, demand forecasting and management, fact-based market insight, adherence to contracts and plans, proper procurement platforms, and proper payment validation platforms.

Moreover, it requires proper utilization of these platforms. And that requires Human Intelligence (HI!), skill, and deep (deep) Procurement knowledge. Geek skill and Procurement nerdiness. The nerdiness to use a best-in-class spend analysis and seek out the opportunity that a pre-packaged analytics routine will never find (because you’ve already stared at that report ten times and found nothing after the second time [wonder why?]). The nerdiness to examine the forecasts and use best-in-class forecasting techniques on real (and up-to-date) sales and market demand data. The nerdiness to pour through market cost data for materials, standard overhead costs, energy costs, water costs, differential costs for different production models, and cost models presented to you by third parties and the supplier to pinpoint the right the model, the right data to feed it with, and the true production cost at different volume levels — and then use this in a fact-based market data negotiation. Then, when you cut an agreement, the nerdiness to make sure it is encoded in the right systems and properly executed on as well as the nerdiness to follow the market over time and detect any inflections that would require you to change direction. And, finally, the nerdiness to make sure the platform is configured to properly m-way match every invoice, detect any attempts to fraudulently change the amount, terms, and payee, and only pay for goods and services received on the agreed upon schedule. In other words, if you want to truly succeed at Procurement, forget about the Clueless — It’s time for the Revenge of the Nerds!

Sourcing Success in these Turbulent Times Require Long Term Planning and Cost Concessions

This originally posted on January 2 (2024).  This is being reposted, in case you missed it, due to the rising criticality of Long Term Planning!

In a McKinsey article a few months back on How medium-size enterprises can better manage sources, McKinsey said that small and medium-size enterprises often struggle to find Procurement cost savings. Yet there are ways to do it while still pursing growth and providing a superior customer experience. The article, which concluded with an action plan for procurement cost savings, recommended:

  • establishing CoE teams
  • improving forecasting
  • expanding (the) use of digital procurement tools
  • gaining greater market intelligence
  • establishing a culture of — and process for — continuous cost improvement
  • incorporating supplier-driven product improvements

which, of course, are all great suggestions, and mostly address four of the five reasons that McKinsey give that prevent companies from reining in spending, which included

  • a lack of spending transparency (which would have to be corrected to improve forecasting)
  • talent gaps (which can be minimized with the right tools, market intelligence, and CoE teams)
  • underused digital tools and automation (which is directly addressed by using more of them)
  • exclusion of procurement and supply chain in business decision (which would hopefully be a byproduct of a corporate culture for continuous cost improvement that only happens when procurement and supply chain is not involved higher up)

but the fifth is largely unaddressed — the myopic focus on the short term which McKinsey claims could be addressed by putting more effort into planning and forecasting. But that doesn’t solve the problem.

Better forecasting will allow for longer contracts to be signed for higher volumes, which can lead to long term strategic supplier relationships, and better planning can allow this to happen, but this does not completely address the need for long term planning.

Supply Chains today are not the supply chains of the last ten to twenty years.

  • rare earths are even rarer
  • many critical raw materials are in increasingly limited or short supply
  • transportation can be unpredictable in availability and cost; even though most of the world declared COVID over in mid-2022, China still had mandatory lockdowns, ocean carriers scrapped many of their ships for insurance (and in some cases, post-panamax ships that had never made a single voyage), airlines furloughed too many pilots who found other jobs or just flat out retired, and the long-haul trucking in North America (the UK, and many first-world countries) has been on a steady decline for over a deacde
  • ESG/GHG/Carbon Requirements are escalating around the globe and you need to be in compliance (both in terms of reporting 1/2/3 and ensuring you don’t exceed any caps)
  • human/labour rights are escalating and you have to be able to trace compliance down to the source in some jurisdictions; you need suppliers who insist on the same visibility that you do
  • diversity is important not just to meet arbitrary requirements for government programs or arbitrary internal goals, but to ensure you have the right insight and expertise to solve all types of problems that might arise

And you can’t effectively address any of these problems unless you think long term AND accept that some of the solutions will cost more up front.

  • In mid November, the trading price for Neodymium (a rare-earth that is critical for the creation of strong permanent magnets, which makes it possible to miniaturize many electronic devices, including the [smart]phone you might be reading this on) was over $87,000 USD/mt. In comparison, hot roll steel was around $850 USD/mt. In other words, Neodymium was 100 times more expensive than steel. And while you can still buy steel for about the same price you could 10 years ago (it was around $900 USD/mt), Neodynmium is almost $20,000 more (as it was around $69,000 USD/mt in November 2013). It’s not the only rare earth to increase about 26% in 10 years, with further increases on the horizon. You need to have a strategy to minimize your need (which could include product redesigns that use more sustainable alternatives or recycling strategies that use recovered materials from older phone models). And when it comes to recycled materials, due to a historical lack of recycling efforts, or research into technologies to make recycling efficient and cost effective, recycled materials are almost always more expensive at first. Always. But as adoption increases, plants, technologies, and processes get more efficient, and the cost goes down (while, at the same time, raw material prices for materials in limited supply continue to go up). In other words, if you want to mitigate the ever-increasing costs for rare earths and other materials that are in limited supply, you have to incorporate the use of recycled materials, and maybe even invest in your own plants (and recycle your own phones you buy back because it’s cheaper just to buy them back and extract the rare earths yourself than buy the recycled rare earths from someone else).
  • Global trade is costly and unpredictable. Supply assurance is finally dictating near-sourcing and home-sourcing (which SI has been advocating for almost fifteen years, as inevitable disaster was the logical conclusion of outsourcing everything to China as eventually a pandemic, global spat, natural disaster, or other event would send shockwaves through the world when it severely disrupted the trade routes [because even though the chances of a pandemic, natural disaster on the scale of Krakatoa or the Valdivia earthquake, or another catastrophic event is minimal in any given year, over the course of a century, it becomes very likely]), and that is going to require re-investing in those Mexican factories (that worked just fine, by the way) you shut down twenty years ago, training appropriately skilled workers in low cost North American (or Eastern Europe) locales, and paying a bit more per unit (and even transportation until the carriers rebuild those routes). But in the long term, as global transportation costs continue to rise, and the local-ish resources get much more efficient (using the best technology we have to offer), your costs, and transportation risks, will go down while your competitor costs continue to go up.
  • if you don’t insist, and ensure, up front that your suppliers can report the data you need, how will you get it; chances are those suppliers need help and modern systems, which temporarily increase their operational costs as they install, integrate, and learn the systems; not more than a few cents here and there per unit, but a noticeable blip on the overall costs none-the-less
  • if you want suppliers that monitor their supply chain and insist on no slave/forced/child labour, appropriately treated and well paid labour, and, better yet, a community focus throughout the supply chain (so that the humans who mine the materials, harvest the food stuffs, weave the silk, or otherwise do the foundational work have a reasonable quality of life, health, and safety), you’re going to have to put the effort in to find them and the extra money to support them in their humanitarian efforts; since most of these workers in remote low-cost locales are paid pennies on your dollar, it’s another blip on the total cost to ensure they are paid every penny they deserve, but it’s still a blip; but you can’t afford not to do it if your jurisdiction has laws making you responsible for slave labour that later gets discovered in your supply chain
  • and while diversity shouldn’t cost more, since it’s the same number of employees, the reality is that the supply base embracing it could be a minority, and if these minority suppliers suddenly become in demand, market dynamics may kick in and they may charge a premium that your competitor will pay; but, as new challenges continue to arise, you will need the diversity to solve them; so, another blip in the cost you need to absorb

In other words, you need the long term focus to guarantee success, and you need to understand that, up front, it may cost a bit more. However, done right, your costs will decrease over time while your competitors’ costs skyrocket. So if you truly want success, in any high dollar, strategic, or emerging category, plan for the long term. And you will truly succeed.

666+ S2P+ Solutions … But Key Problems Are Still Not Addressed! Part 2

In Part 1 we noted that, by now, you should have seen the Mega-Map and the 666 solution logos on it.

We also noted that you will have repeatedly heard the doctor and THE REVELATOR say repeatedly that another massive purge is coming to our space over the next 18 to 24 months (which will be the greatest since 2009-2011 where hundreds of companies were acquired, merged, or went insolvent), and that it’s already starting (with a few notable insolvencies, at least as far as the doctor is concerned, already occurring).

And you’ve heard us say multiple times that there isn’t room for this many companies because even if you account for market size and vertical, we still only need so many solutions that more-or-less do the same thing.

That being said, there are still core needs not being met in the modern enterprise, especially given that we are seeing a return to protectionism, sanctions, and border closings; a continual rise in natural disasters; and a continual disruption in logistics. Solutions are needed that go beyond siloed Procurement. And any company that steps back, analyzes the problem and the needs, and takes the time to define, and build, something truly new still has a chance to breakout and succeed in today’s overcrowded SaaS market.

the doctor is not alone in this understanding. Back in 2022, THE PROPHET saw this need to rethink Procurement Technology and that’s why he proposed his alt-suites. And while we believe he didn’t get them all right, some of the fundamental issues he saw and reasoning he gave, when expanded upon and thought through, will lead you in the right direction. Just like two of our last three suggestions were built on the core ideas behind his DFS [Design for Sourcing] (which was almost perfect) and A2M [Assess to Monitor] suites, two of today’s take some ideas from two of his suggestions as well.

4. Third Party Management (TPM)

Now, you’re probably saying “wait up, we already have that” since we have third party risk management and third party compliance management solutions starting to pop up, but those just represent a slice of Third Party Management requirements. Now you’re probably saying “but we have some very extensive supplier management solutions that do development and performance and they can be used” but the answer here again is that they represent another slice as they are not only supplier centric, but typically found in organizations that need to manage direct suppliers for quality and cost control — and typically not used to manage partners for consulting or implementation (which those systems have no capability to support).

Just like an organization needs a Risk 360 for it’s Risk Management function, it needs a TPM system to fully monitor and manage the third parties it works with, regardless of what it uses them for. Having separate systems for product suppliers (SXM), contractors (CWM), services providers [for implementation, integration, and support) (TPRM), etc. not only gives a fragmented view of the organizational partner ecosystem, but doesn’t even give a complete view for any single partner. A services partner may provide you with internal headcount (CWM) and third party service outsourcing (TPRM). A product partner may provide you with goods (SDM) and select services (TPRM). And so on. Plus, there’s also quality control systems and customer support systems that will have relevant data on the partner performance.

In other words, you can’t just Assess-to-Monitor from a Risk perspective, but you also need to manage and develop as well. And while you might think that Risk360 could be a sub-offering, risks go beyond the entities you are dealing with to include risks that are independent of partner and sometimes specific locations.

5. Vertical Enterprise Project Management

Now, before you say the doctor has lost it, because we have more project management systems than we can shake a stick out, the reality is that most of these “project management” systems don’t really manage projects across the enterprise, and most don’t support anything beyond timelines, milestones, and resources — not nearly enough to handle the intricacies of complex projects that involve the entire enterprise like NPD/NPI, building/facility construction, partner-aware supply chain (re-)design, and so on.

When THE PROPHET said we needed Commercial Value Management (which was defined as the next generation of Contract Lifecycle Management), he was onto something … because no one really “manages” contracts; no one really takes full advantage of what modern, advanced, contract modelling/creation/analysis systems can do; and no on ever pulls the contract out of the electronic filing cabinet unless there is a dispute … even though it is the foundation of the relationship and should be used as the baseline for relationship management. Commercial Value Management was defined to fix all that, putting the contract at the center of organizational “value”, but “value” is nebulous, and organizations have already proven time and again that they only thing they want to do with a contract is redline it, sign it, and resign it to the e-filing cabinet.

However, at the core of the CVM concept is an ability to manage projects off of the contract, projects that would span multiple departments throughout the enterprise. That is useful. If we focus in on that and then realize the problem with most “generic” project management solutions is that they don’t meet specific organizational needs because every vertical has its own unique project needs, we can see that what enterprises need is true enterprise-wide project management support tailored to its vertical. Software that understands the intricacies of construction/facility construction and how it requires the coordination of sub-projects with many contracts and subcontractors, as well as temporary assignment, use, and return of equipment. Software that understands NPD in electronics and how the quest to even determine if you are going to design a new mobile personal computing device will require input from the entire company tailored to electronics project design, component and supplier identification, supply chain design, customer support, etc. Software that understands the unique aspects of identifying an organization’s needs before, during, and after the rip-and-replace of an ERP system and all of the project aspects that will be required (process analysis, data analysis, gap analysis, integration requirements, change management, training, etc.). And while there are tools to support the core activities in the core departments, none take an enterprise view and, further more, can link into the TPM system, ERP/Inventory/HR system, CLM system, etc. and take a truly enterprise view of project management customized to a vertical.

And while it’s possible that someone could build a baseline solution that can support multiple verticals, the front end and customizations required will require separate offerings for each vertical that company goes after. Efficiency, which should be the goal of technology acquisition, cones from supporting integrated processes, not piecemeal tasks.

6. Real-Time True Enterprise Analytics

This is a bit of a cheat in that the doctor knows of one system that can do it (Spendata), but the reality is that the vast majority of enterprise analytics systems claiming to be “best in class” cannot. Even the majority of “best in class” spend analytics solutions don’t even permit true, real-time, do-it-yourself spend analytics.

At a minimum, a modern analytics system must be capable of:

  • pulling in any type of data from any source in real time (and mapping it to a structure that supports analysis)
  • allowing the user to define whatever rules are necessary for cleansing, enrichment, validation, and mapping to not only the internal structure but multiple, simultaneously supported, taxonomies for analysis
  • defining as many derived dimensions as necessary, on whatever calculations and metrics are required
  • supporting as many cubes as are required to accommodate the different data sources being pulled in
  • enabling federation across as many cubes as are required for the analysis
  • managing not only supporting multiple views across the federation, but linked views that support simultaneous drill down
  • creating arbitrary, reusable, filters that can filter on an dimension using any value, or calculation, as is required
  • enabling derived cubes, federations, and views as needed to support dependent, what-if, and problem specific analysis
  • performing data updates in real time, and then propagating those updates through all affected cubes, federations, and views as well as all derived cubes, federations, and views in real-time
  • permitting a user to do all this, on demand, in real time

Most current Business Intelligence (BI) solutions are still based on ROLAP, at best, and all analysis is done against fixed cubes that are updated on a schedule (or on demand, but the entire cube needs to be recalculated before any analysis can be done). They also generally support fixed view types on the provided ROLAP cubes, and an analyst is very limited in terms of what they can do.

The same goes for most Spend Analysis systems. The providers support a fixed number of cube types, give you a default set of reports and dashboards, and you are limited to customizing views on those cubes and dashboards. Building whatever you want, whenever you want, from scratch is out of the question, as is real-time data updates. The best solutions will allow you to bring in additional data to augment your analysis, but unless it’s in the main database, it will be lost when the analysis expires, which is whenever the core cube is updated as only one of these solutions currently supports true inheritance.

In other words, a Strategic Spend Terminal is not enough. Not even close. In fact, it’s just one view, tailored to Sourcing, on the federated data sets that such a next generation analytics solution will support. In fact, there should be multiple strategic spend terminals, one per business unit that shows them the data they need the way they need to see it to allocate their time and effort accordingly.

Until analytics is rethought at the core, users will never be able to do the what-if analysis they need on different data types to get the insights they need when they need it, and AI won’t solve the problem. AI allows for better predictive analytics IF you have the right, verified, structured, data and IF you know the right AI algorithm to apply to the question at hand with the data you have. If you don’t have the right platform, AI is ultimately useless.

666+ S2P+ Solutions … But Key Problems Are Still Not Addressed!

You’ve seen the Mega Map and the 666 solution logos on it.

You’ve heard the doctor and THE REVELATOR say repeatedly that another massive purge is coming to our space over the next 18 to 24 months (which will be the greatest since 2009-2011 where hundreds of companies were acquired, merged, or went insolvent), and that it’s already starting (with a few notable insolvencies, at least as far as the doctor is concerned, already occurring).

You’ve heard us say that there isn’t room for this many companies because even if you account for market size and vertical, we still only need so many solutions of the following varieties:

  • Sourcing
  • Supplier Management
  • Spend Analysis
  • Contract Mangement
  • e-Procurement
  • Invoice to Pay (I2P) / Accounts Payable (AP)

And even when you consider the wide variety of needs across all possible size – vertical -region combination, two to three dozen solutions in any category is more than enough to handle all of the complexities when you take even the most varied companies into account, but we now have over a hundred options in some of these categories. Only the strong, sorry, the smart, will survive … and only if they have enough money to do so (and enough control to make smart decisions, i.e. if they are controlled by greedy investors who double and triple prices that force them out of their target market, they will be the next casualty).

But even with all these solutions, core needs are not met. The reason being: in today’s business environment that is seeing a return to protectionism, sanctions, and border closings; a continual rise in natural disasters (thanks to global warming that will once again reign unchecked under administrations coming into power in multiple “first world” countries); and a continual disruption in logistics (due to epidemics, pandemics, reduced capacity, Panamanian droughts, and Houthis in the Red Sea), solutions are needed that go beyond siloed Procurement.

Back in 2022, THE PROPHET first tried to get the message out there with his proclamation that alt-suites would rise. (They still haven’t, but we do need new types of cross-functional applications.) He also made five predictions. They varied in terms of usefulness and vision (in the doctor‘s view, two in particular are desperately needed, although one of these needs to be broader than defined; one is nothing more than just an enhanced dashboard across various S2P applications and needs to be rethought, and two aren’t quite right [but contain ideas that can be built on]).

But THE PROPHET was right in that we need to rethink Procurement Technology in some organizations, who needs to contribute to Procurement, and how Procurement Process fits into overall operational processes. The solutions that worked for the last 20 years aren’t always enough anymore, and it’s not just a question of “intake” (which is not new despite what the providers will have you believe, see our prior posts on the subject) or “orchestration” (which is just a fancy term for SaaS middleware).

Here are three solutions that are needed now more than ever:

1. Design for Supply (DFS)

THE PROPHET was right on the money here. Not only is 80% of the cost locked in during design, but so is 80% of the risk. You not only need cost control, but you need supply assurance. This means that R&D needs to work with Procurement during design to ensure the products can be sourced affordably at low risk, and that Procurement needs to work with Supply Chain / Logistics to make sure the products can be reliably sourced in a timely manner (and the organization won’t have to stock months and months of inventory). Product design and development organizations need integrated DFS solutions that span R&D, Procurement, and Supply Chain.

2. Supply Chain Sourcing (SCS)

In the world of Direct, when organizations need to source for BOMs (Bill of Materials), they need to do it Supply Chain Aware. Under pressure, Procurement will always search for the lowest cost — but what if that is from a supplier in an unstable region; that is not part of the current, optimized, supply network; that can’t offer timely and secure delivery? Sourcing needs to be supply chain aware. And Supply Chain needs to be aware of what Sourcing is looking at so they can do network planning if the current supply network is not sufficient.

In fact, it would be even better if the DFS and SCS solutions were hosted on the same underlying platform.

3. Risk 360

This was the second platform where THE PROPHET was almost right on the money as well with his Assess-to-Monitor alt-suite. Risk is everywhere, both inside and outside the organization, inside and outside your partners’ organizations, inside and outside your suppliers’ organization, and its everywhere your physical, financial, and digital supply chains touch. Supplier risk, supply chain risk, cybersecurity risk, personnel risk, etc. can’t all be separate solutions. They need to be one integrated platform that constantly monitors, assesses, and protects your organization.

There are, and will continue to be, a need for new solution types, in S2P+, but these would be a great start!