This is the third in a five-part series discussing the obstacles and potential paths forward to achieve visibility — essential to any Procurement organization. The series was initiated based upon the following Ardent paper – HERE. In the first and second installments the need for procurement visibility starting with Spend Analysis was discussed. Let’s dive right in and examine the second key area or leading indicator of procurement success as outlined by Ardent: Savings.
Congratulations are in order if you are focused on a Savings initiative. This likely means that you have a solid Spend Analysis program, have most of your spend under management and are seeking to do more.
It's easy to get caught up the "go live date" for your eSourcing software implementation. Many procurement leaders believe their team will be empowered to succeed simply by turning on a tool. However, that is not the case.
Michael van Keulen from VF Corporation (a Selectica client) shared some best practices and advice at eWorld London for groups who are rolling out new eSourcing software. Michael shared some key elements from VF Corp's successful eSourcing technology adoption that included...Continue reading >>
Sourcing and procurement are often used as interchangeable terms, and indeed they are related ideas in supply management. However, they’re not quite the same, and neither are eSourcing and eProcurement. But what exactly are the differences?
Let’s start with their definitions.
Preceding the actual purchase of goods and services, sourcing facilitates the full life cycle of procurement by analyzing how a company spends their money on those assets. This includes identifying and selecting opportunities to reduce spend using knowledge of the external markets and the company's needs, and negotiating, managing, and monitoring contracts for goods. eSourcing is simply performing most, if not all, of this process electronically, consolidating proposals, quotes, and bids from various suppliers in one central information hub for ease of comparison.Continue reading >>
This is the second installment in a five-part series discussing the obstacles and potential paths forward to achieve visibility – essential to any Procurement organization. The article was initiated based upon the following Ardent paper – HERE. In the first installment I discussed the overall drive for procurement visibility. In this installment, we'll discuss the first of the three key areas of procurement visibility: Spend.Continue reading >>
During my annual pilgrimage to Ireland on the ferry from NW Wales to Dublin I was struck by the unnerving thought that all it would take for a ship like this to be unrecoverable is for it to list by 11 degrees or more. Thankfully, it was early in the day and the captain didn’t seem sauced as was Captain Schettino on the Costa Concordia.
The point is that there are risks in our lives everywhere, many of which are unknown; but each tragedy that occurs reminds us of the importance of risk management. In fact, managing risk is being recognized as critical to keeping businesses afloat. In a recent Times article, "Unheard of 20 years ago, chief risk officers have become indispensable," the author points out that getting ahead of and being more informed about risk is becoming an increasingly high priority.
I often approached the discussion around risk tentatively with our clients because everyone immediately asks, “What do you mean by risk?” and the answer is unclear. Why? Because everyone has a different perception or understanding about what the risks are and how much priority they should be given.Continue reading >>
Nearly everyone in the business world has worked on an RFP in some way, whether by helping to put one together or by responding to one. Either way, it can be a source of frustration. Why is that?
A recent Spend Matters paper, which you can download for free here, outlines the issues with the RFP process specifically as they affect software providers, but it could really apply to RFPs in any competitive, fast-growing field. The best suppliers in the market are busy and don't need to respond to every RFP that comes their way. They know who their target market is, and they know how to qualify into and out of deals.Continue reading >>
In the past, we’ve seen innovation as the critical ingredient for creating and sustaining company growth. Now, leading executives are asking for innovative new frameworks and processes for designing higher value business models on which to build their enterprise. Many, however, still struggle with day-to-day operational function and count on their vendors to provide innovative solutions.
Today the responsibilities of the CPO are even greater. There’s more pressure and expectation for procurement to cut cost and realize every contractual savings. Increasingly complex regulations of international trade, as well as government and regional mandates are making managing and compliance more and more challenging. Not only in dealing with suppliers but also securing the product. Legal teams are being mobilized to streamline contract cycles, avoid and reduce risk, and increase collaboration between other departments to ensure compliance, contract visibility and efficiencies throughout the enterprise. How does innovation fit into all this?Continue reading >>
Many prospects call me before they fully understand what contract lifecycle management (CLM) is or what it can do for their company. What they do know is that they need "something" to manage their current contracting processes. As a BDR (business development representative), my role is to help them understand what our contract management solution can do, what sort of pain points the software can minimize, and provide a basic understanding of the solution features.
I answer a lot of specific questions and usually will describe the nine stages of CLM. However, for those who are in an early research phase and have not identified their business requirements or fully understand the optimal benefits of CLM, I like to introduce them to my favorite "go to" resource: The Ultimate Contract Management Starter Kit.Continue reading >>
Over the past 5 years, general counsel have become increasingly aware of the need for the corporate legal department to steward an enterprise contract management business process. The previously "federated" approach to ownership of the process meant that groups like legal, procurement, finance, marketing, sales, etc., all were involved in "contracting" at some level, but this also meant that no one owned the management and optimization of the contracting business process across the entire company. This awareness has translated into a trend of the office of general counsel taking over administrative control of the enterprise contract management business process in order to properly manage risk and value for the company.
Among the key developments that are part of this trend is that contract lifecycle management (CLM) technology has become an important factor in enabling an efficient and effective business process. One of the biggest appeals of this automation is that the previously distributed and uncontrolled process of contract creation, negotiation and approval can get more structure and standardization. With this, comes consistency and therefore more risk control. What has not, until late, become of paramount importance as part of this technology enablement effort, is the establishment of a deliberate "source of truth" of all material obligations in the repository of the contract management system.Continue reading >>
In the past, Supplier Information Management (SIM) systems have focused on, well, managing supplier information. They kept everything in one place and made supplier data available to those who needed it. But that’s essentially where it ended. And that old SIM method is no longer enough.
Sourcing is increasingly complex, forced to satisfy a growing number of regulations and strict compliance requirements, in addition to constant directives from executives to trim waste wherever possible. As a recent Spend Matters™ paper points out (you can download it for free here), the problem with SIM platforms is that they’re often disconnected from the overall sourcing process. They take an exclusively data-management approach that overlooks crucial analysis factors, which can heavily impact an enterprise’s bottom line.Continue reading >>