Category Archives: Technology

Cognitive Procurement is Coming …

But precisely what form will it take?

Over on LinkedIn, the procurement dynamo asks what is the role of machines in the future of Procurement? Why? Because, in some cases, machines are now, supposedly, threatening the knowledge workers because they can collect and process more information, memorize way more than we can, and enable us to do things that were previously impossible.

And that is true, but they are still not intelligent. They can emulate intelligence through (evolutionary) programming, they can make predictions (using advanced mathematical based algorithm) that hit the mark much more often than the average analyst, and they can find connections we miss. But at the same time they can emulate grave stupidity when they decide to direct you to the camping supply store when a Brit asks for a torch, make false predictions when they just compute the trend without taking into account supply and demand, or connect carpentry to stock trading because both deal with floors. All algorithms have breaking points, especially near untested boundaries. But you don’t know where they are or when they’ll be hit.

The reality is that even though some knowledge workers are being displaced, the need for knowledge workers to create, maintain, and improve these algorithms … and find new areas in which they can push capability forward. Every time an algorithm or machine displaces someone out of an existing job, a new job is created, even if it’s not that apparent. True, a good software solution can replace 10 to 100 workers doing brute force tactical or grunt work with one or two drivers, but someone has to build the software, sell the software, maintain the software, and start a new initiative to build the next generation. Plus, when a company isn’t focussed on non-value add activities, they can dedicate teams to identifying and chasing value-add activities — who might even create new lines of business, and new jobs, in the process.

So yes, the procurement dynamo is right, the future will be man and machine, in a delicate dance, and the focus will be on cognitive activities, but mainly on the human side … finding ways to properly apply, and verify, new technology. Weeding out the false positives with intelligence, identifying the false negatives with insight, and finding new applications the machines themselves will not.

Thus, the true form of cognitive procurement is smarter Procurement Professionals with more TQ than they have today.

Simeno – Global Catalogs for Global Businesses

Simeno, which is not yet a household Procurement name in North America, is a provider of a SaaS-based e-Procurement that has been around since 2000 and that has been offering catalog management solutions and services since 2002. Headquartered in Basel, Switzerland, Simeno has grown to be a rather large provider of such solutions in the EU and around the world. With 250,000 users in 60 countries, including users from dozens of Global 3000 companies, Simeno is still growing steadily, having recently opened offices in Germany (Hannover) and the USA (Chicago).

In addition to offering catalog management, Simeno also offers supplier-onboarding, catalog maintenance, and the custom requisition form creation services for their clients so all of their client spend — product and service — can flow through the system. But they are heavily focussed on selling long-term Procurement solutions centered around their catalog-based Procurement solution that can be integrated with the ERP, AP, and other relevant Supply Management solutions that can support the relevant parts of the Source-to-Pay cycle.

The core of the SIMENO solution is the catalog management capability which, like other leading platforms, allows clients to integrate punch-out catalogs, their-own catalogs, and vendor-provided catalogs (in various file formats) and search across all catalogs in real time. Simeno not only focusses on integration, but on fast upload and even faster search. Simeno can process extremely large updates (in the GB) in minutes, search catalogs of up to 10M items in 1.5 seconds and provide a real-time glimpse into what’s happening from a buying perspective in their global organization in just a few seconds.

This catalog solution is offered as a private cloud solution, where access to public catalogs and punch-outs can be as broad, or restrictive, as the organization wants it to be. The platform can be used in conjunction with, or as a replacement for, other catalog and purchasing systems, and can integrate with, or replace Oracle iProcure and SAP SRM UI5. Simeno regularly integrates with a host of ERP solutions and best-of-breed Sourcing / AP systems and can set up workflows to take data in and push data out as needed, which is all part of the initial set-up.

The catalog also supports 22 languages simultaneously, including accents and special characters, product and supplier centric views, and very easy requisition and purchase order creation. The form-based “guided-buying” solution works so well that some organizations have over 1,000 predefined forms, and define more as needed using the detailed form builder that can be used to create forms customized to the organization’s needs.

Simeno is very powerful, and there is a full solution around the platform with RFX, contract management, requisition, purchase order, and invoice management. For more information on these extended capabilities, and deeper insight into Simeno, check out the recent >Spend Matters Pro series (Part I, membership required) by the doctor and the prophet. The deep coverage is worth the time it takes to review it.

Agiloft — For those with Lofty Ambitions for Contract Management Agility

Agiloft is another rare breed in the Supply Management space. It’s ancient (as it was founded in 1991, only a year after the first web browser was invented), it was founded to be a back-office B2B enterprise application (and their main offerings are service desk, workflow & business process management, and contract management), it’s debt-free, it has a large network of resellers, it has multiple global hosting locations (to support local privacy laws or government & military security requirements), and you can have it anyway you want: pure (low-cost) multi-tenant SaaS, classic ASP, or even on-premise with your choice of two different platforms (Windows or Linux). [Hint, choose the 2nd.]

Obviously, in this post we are going to focus on the contract management solution, as that is the most relevant to Supply Management, and the related BPM and Workflow elements they have in their Workflow and BPM solution to support it as well as their Asset Management capabilities. While the ability to use a single vendor for multiple “back office” B2B applications might be attractive to some organizations, our specialty here at Sourcing Innovation is Supply Management and Supply Technology Innovation, and that’s what we will cover.

The contract management solution supports contract creation, negotiation, approval and renewal. It contains a searchable central repository with double-byte language support and automatic audit trail for regulatory compliance, clause libraries, Word templates, and Word integration. In addition to Word integration, it also provides a complete API and and bi-directional pre-built integration with systems such as AD, SAML, Oauth, SSO, SalesForce, MS Exchange, DocuSign, QuickBooks, and Xero.

The contract creation is not only flexible, but so is the complex review and approval routings that can contain a combination of sequential, parallel, and conditional approvals. Agiloft’s ability to create and support complex, customizeable, business processes and workflows make complex creation and approval processes a snap. Furthermore, in addition to complete version history (and automatic redlining), it also supports a complete audit trail of those changes, built in OCR that can process attached image files, and fine-grained security that can control access by user group down to individual fields in a contract record.

It can easily be configured to support any industry and regulatory requirements that the organization has to support (or wants to support) by way of additional data capture, workflow modifications, mandatory checks and required approvals by appropriate risk management personnel. It can also be integrated tightly with asset management and each asset affected by the contract can be correlated with the contract, and each contract that references an asset can be correlated with the asset. This last point is particularly relevant as some assets can be shared across contract if they are only needed for short periods of time (such as excavators on construction projects).

However, as of now, any organization that has regulatory or compliance needs, requirements to track additional types of compliance, insurance, or audit documents has to define the requirements, create tables to track the necessary data and documents, define the relationships, create the monitoring tasks, create the notification templates, hook the notifications up to email, and so on. The wheel has to be re-created in each and every organization that needs to track a specific requirement. The platform needs the ability to capture and store common tasks, workflows, and components in a repository that can be accessed by any and all customers and included in individual instances as needed. Agiloft plans to release a community next year that will allow customers, consultancies, and anyone on the platform to export and share custom capabilities that they have created, and this is a good start, but it would really quicken start up time if this functionality was there.

That being said, the configurability of the solution (and the speed at which it can be configured by their services team) should not be overlooked. Consider the example of Enki(.co). Enki is a cloud services provider that was founded by the former NetSuite CIO and Director of Engineering. They spent 6 man-months customizing NetSuite for contract management, sales, and support, but never realized their vision. They eventually replaced NetSuite with Agiloft, and managed to customize it to their needs in 10 days, going live a week after that. In other words, the platform can be customized to the needs of most organization’s in a matter of weeks, but only by an experienced configurator. (However, once someone in the organization goes through about a week of training with Agiloft, they will learn to maintain and customize the platform at close to the same speed going forward.)

Agiloft is a great fit for those organizations that have some supply management capability (in front end strategic sourcing or back end procurement / procure to pay) but do not have good contract management and need a good CLM tool to serve as a foundation for their Supply Management processes. The ability to define the required contract lifecycle and sync with other platforms makes it a great central system for any organization that does not have, or cannot acquire, a fully integrated source to pay suite (as it can manage workflow across applications).

Talent Tempering: Part III

In our first post we discussed that in our last two series we discussed Technology Advances and Process Transformation, which SI calls Transition, that collectively comprise two of the three T’s critical for organizational success. The third T is, of course, talent, which must not only be in abundance, but which must also be appropriate for the organizational needs. This means that you not only need talent with a good mix of IQ (intelligence and skills), EQ (emotional intelligence and wisdom), and TQ (technology and mathematics/logic), but that the mix must be suitable to cover the range of Supply Management tasks before your organization, and in sufficient quantity.

In order to temper your talent, you need to start with a page from the process transformation handbook that says before you can make any changes for the better, you first have to understand where you are (via a collective assessment), then where you want to be, identify the gaps, and put together a plan to close the gaps. This plan should consist of a mix of internal training, on-site seminars, conferences, online courses, and certification programs, appropriately matched to the learning needs of the team. But is this enough to temper your talent?

Of course not! This will only get the talent to where they needed to be at the time of the measurement, and since then processes will have evolved, technology will have moved on, and Procurement will have changed. The rapids keep charging ahead, and your team will need to continually navigate those rapids or drown. So how do you keep up?

The answer is, you don’t. Your only chance to stay a float is to make sure you have a team that is actively working together collectively and individually to keep the raft afloat amidst the ever present and ever turbulent rapids. This means you have a team that not only absorbs all of the training you provide them with a sponge, but also seeks out knowledge and training opportunities on their own.

Even though their opportunities will be limited compared to the organization’s, as they have much less time (as your organization expects overtime and forsaken vacations on a regular basis, whether it will admit it or not), money (as they are not nearly as well paid as the organization’s overpaid, over glorified sales professionals who contribute much less to the bottom line than your Procurement professionals do), and brand recognition (that can open doors to the best learning opportunities out there), they still need a quest for knowledge and a mission to find it.

You need team members who continually seek out low cost and free online courses from leading establishments (such as that provided through the MIT OpenCourseWare) related to different aspects of their job or the organization (even if Supply Management isn’t a topic, anything that improves their mathematics or logic skills is a plus), low cost and free materials offered promotionally by vendors seeking attention or utilization of their platform (as some vendors will sponsor the creation of guides and some big online stores, such as Amazon, will offer up deep discounts to get you to use their e-reader hardware or software), and opportunities for discounted talks and seminars through their local associations or their friends’ local associations.

And while these individuals will not be able to learn, or even find opportunities to learn, everything they need to on their own, they will be more aware of the changes that are coming, the knowledge that is needed, where the organization is likely to find it (at a price, especially if the organization wants to be leading edge), and what foundations they need to have in order to even begin to acquire that knowledge. (For example, just like you can’t really learn calculus without a good understanding of limits and trigonometry, you can’t learn advanced supply chain cost optimization without a basic knowledge of cost modelling.)

There’s no silver bullet when it comes to talent tempering, but finding talent who want to temper themselves to be the best they can be is a great start. (And if that’s not that talent you have, then, and only then, can you be sure that you need to find new talent.)

IT and Functional Departments – Finding the Middle Ground


Today’s guest post is from Torey Guingrich, a Project Manager at Source One Management Services, who focuses on helping global companies drive greater value from their Procurement expenditures.

One of the challenges Procurement can face when working within the typical IT category is working on IT-related services that are used to support functional areas. Think of the marketing group or supply chain function; there are a number of different systems or software products that support those departments, but how clear is ownership of the solution between IT and the business group or function that the solution supports?

The answer to that question can vary across companies, across industries, and even across those within IT and the department utilizing the solution. Given this ambiguity, it is critical for Procurement to ensure representation from both and IT and the functional group for sourcing efforts that involve products and services that are not “purely IT”.

Does Procurement really need to be involved?

For many organizations, IT groups tend to work in a vacuum or keep their sourcing efforts separate from Procurement. While there are nuances that Procurement professionals need to be aware of and navigate within IT, there is clear value that Procurement brings to the table, especially when other functional departments are involved. Those in Procurement should be comfortable working with different areas with differing needs and finding a cohesive path forward. Procurement also brings market information (suppliers, price points, service levels) that IT may not be as focused on, but that could be critical to the overall solution. IT groups can at times limit themselves to certain suppliers for system or software solutions, but there may be alternate suppliers that easily integrate, or provide enough value to justify the effort required for working with disparate suppliers or systems. Procurement can bring that perspective forward and champion the needs of the business to balance the costs associated with IT change.

How do I know if something is “purely” IT or not?

When we look at organizations today, there tends to be a number of software and hardware suppliers that are categorized in spend data as “IT,” but fulfill a more functional or business need. When looking at spend and suppliers considered as IT, be sure to think through your organization’s end users and how the program or solution is being used by different groups. Marketing, HR, supply chain/logistics, and finance are all key functional areas that likely use some form of software to support their processes and should have a principal role in selection, whereas supplier selection for hosting or PCs and related consumables may be made more centrally within the IT area.

How do I get IT and functional departments to work together and come to a consensus?

When working with multiple stakeholder groups, no matter the departments involved, it is important to establish roles and responsibilities from the onset of the initiative. A key to working with these two groups is to consider what is most important to each group. Likely the functionality, ease of use, and flexibility of the solution will be top of mind for the functional department, whereas IT may be more focused on integration and hosting requirements, continuity with the company’s overall technology strategy, and licensing/purchasing models. Beyond IT and the functional area, discuss what other stakeholders may be affected or if other IT systems (and those who administer them) would be impacted downstream in the process. Focus the two (or more) groups on the goals for sourcing and what criteria is going to drive supplier selection – this will help to ensure that any critical issues or “deal-breakers” are identified and don’t come up later in the process. Each group will likely have their own set of requirements and criteria that need to be aligned and prioritized to ensure they are not in direct contrast with each other. Ask each group to look at their requirements and define the priority of each (e.g. rank as nice-to, prefer-to, or must-have) to ensure the core solution encompasses all must-have requirements.

Who ultimately makes the decision?

This is likely going to depend very heavily on your organization’s priority of functional and IT requirements. Ideally, Procurement can help bring these two groups together and drive to a decision point that all, including Procurement, can agree on. When the solution is business critical or the department relies heavily on the given product/service on a day to day basis, the business function is likely to be the lead in terms of making a decision, but IT will in any case need to validate that the solution will work from an infrastructure and support position.
While most may think of Procurement as a cost-reduction engine, we are uniquely positioned to enable relationships among different groups within the organization. Especially when working with software and hardware systems to meet business needs, it is critical to bring in IT stakeholders at the onset of the process to enable a more efficient and effective sourcing process that balances the needs of IT with the needs (and wants) of different functional areas.

Thanks, Torey!