Tag Archives: technology

How Some Strategic Sourcing Technologies Fall Short

Moving to a true strategic sourcing plan can bring increased efficiency and huge cost savings. But why do so many fall short of this? Technology is evolving rapidly making many once cutting-edge solutions obsolete. Finding the right fit can be a struggle – this article has everything you need to know about sourcing tech.


Strategic sourcing is not a particularly new concept, but the market is evolving rapidly. Applications have become increasingly sophisticated and in the near to medium term future we will see more strategic spend management via advanced analysis and AI-based sourcing with more “fuzzy” intelligence that increasingly guides the user to the optimum solution.

TechTarget defines strategic sourcing as follows:

Strategic sourcing is an approach to supply chain management that formalizes the way information is gathered and used so that an organization can use its consolidated purchasing power to find the best possible values in the marketplace and align its purchasing strategy to business goals. 

One reason that organizations often struggle to achieve true strategic sourcing is that the tools they are using, such as reverse auctions and eRFXs, which once represented the cutting edge of sourcing technology, are too limited in scope and lacking in integration, both with other procurement modules and with third party software suites. This is especially problematic when it comes to large events and bundling items in which there are many variables and business objectives.

In its recent Market Guide for eSourcing applications, Gartner Group identified four phases of the evolution of eSourcing:

Basic RFQ and RFI (request for quote/information)

This is where things started back in the nineties. Specifications had to be very precise and buyers generally sought the lowest price and/or best delivery availability. Early digital sourcing platforms were primarily designed for indirect sourcing of categories such as IT hardware, computers, office furniture and supplies, where there are multiple suppliers with little differentiation. This worked just as well for non-strategic direct categories (materials and components used in production). Purchasing teams could therefore shop around to find the fastest, cheapest option available, and so long as the tool could take into account cost breakdown models, resource costs, taxes, and one-time costs like setup and onboarding, there was a good chance that projected savings would be realized.

Standard eSourcing 

Standard eSourcing then built on RFQ capabilities to support more complex RFIs and RFPs (request for proposals). According to Gartner, “They are typically used to solicit supplier responses and pricing for strategic spend categories. Specifications may or may not be clearly defined.” At this stage eSourcing becomes more strategic, multiple stakeholders are included in the buying process truly creating a strategic team. The modules are increasingly deployed as part of an entire suite which also includes spend analysis, CLM and supplier management. Also, we see distinct solutions for indirect and direct (or bill of materials (BOM)) categories. As Gartner states, “more advanced analysis and capabilities require integration with PLM and BOM. This is often better suited for vendors that specialize in direct spend or those that support all spend categories.” 

These applications also typically support various auction formats, multi-round bidding, response scoring and proposal analysis. A further aspect is that the detail level of direct procurement requires special capabilities in software, and all of these needs to integrate seamlessly with the ERP/MRP system.

Advanced sourcing optimization (ASO)

ASO is the current state of the art for handling complex category bidding that must analyze large volumes of data points. This is best represented by JAGGAER’s Sourcing Optimizer, capable of analyzing thousands of data points using algorithms to determine the optimal award decision quickly. This makes it suitable for highly complex sourcing events such as multimodal transportation, where there are hundreds of potential scenarios and dozens of rules which buyers use to try to identify a “sweet spot” with the optimum number of suppliers for an optimum number of scenarios. Users do not always know exactly what they are aiming for in such events, as they need to navigate through complexities such as limited knowledge, tradeoffs and time limits.

Artificial intelligence in sourcing

AI-based sourcing is where we are headed. This emerging technology will integrate itself across all aspects of sourcing. In the coming years AI will transform sourcing and will have the ability to automate entire sourcing events. This will be a very attractive option for handling the vast majority of sourcing functions that are high volume-’low cost’ and can be accurately recommended from AI. This will free up professionals’ time to focus on the high value sourcing events as well as the larger sourcing strategy.

One direction that is already clear is the development of preference-based extensions to advanced sourcing optimization, enabling the user to add fuzzy preferences on top of the firm rules already entered. In a transportation event, the AI technology explores possible solutions to narrow in on the best options. The user can go through several iterations to get the ideal result. On top of this advanced decision support, AI-based sourcing will include increased automation, eliminating much of the routine involved in sourcing.

Sourcing for CapEx Events

We have mentioned indirect and direct sourcing, but capital expenditure projects offer a third type of sourcing event with dramatically different requirements. They are project-based, meaning that many different purchase orders and contracts need to be bundled together and tracked against a common project budget. Furthermore, these events are extremely complex and detailed, and they have long timeframes. Projects may last multiple years. Any sourcing platform for CapEx needs to be able to track events over time.

Capital expenditure projects also often involve many different supply bases in one project. Consider a building project that involves a concrete foundation, steel framing, glass work, electricity, and more. Then there’s paving for the parking lot and landscaping for the surrounding areas. It’s essential that the digital tool can track multiple types of expenses in one solution. Plus, many items might be sourced weeks or months in advance. The solution should support this kind of detailed project planning.

For all of these reasons, strategic sourcing is challenging for major CapEx projects. There is also ample scope for the integration of artificial intelligence to predict and reduce costs, schedule and reduce cycle times while increasing customer satisfaction and managing regulatory and CSR data. It is important that all providers should be compliant, and the sourcing process needs to capture this information. Having the right strategic sourcing approach and the appropriate tools to support that are vital.

What are your thoughts on how technology is creating an opportunity for more strategic sourcing? Let us know in the comments!

5 Telltale Signs Your Tech Is Failing

In times like these, all systems need to be firing on all cylinders, so how can you tell if your system is beginning to show it’s in need of optimization or replacement?  There are 5 telltale signs that suggest your tech is failing. 


The digital age marches on and it’s rare to find an organization that has not automated some or all of their procurement operation.  The business case for going digital in S2P is compelling, so it is critical that it works. 

Yet many organizations have tech solutions in place that no longer fit their intended purposes. Worse still, many have just given up and are settling for an inferior system that is not meeting their needs.

The signs are there, but they are either going unnoticed or they are being ignored. Both situations are perilous and without swift action, the cost to an organization in time and resources – and the immediate need for a new solution or an optimization – can really mount up.

What are the key signs that your tech solution is failing?

And how do you recognize them before it’s too late?

Here are some of the most common.

1.     User adoption is on the decline

Your tech may have been heralded as the solution to all your organization’s ills. And for a while it was exactly that. But now even the staunchest champions of the solution are withdrawing their support and end-users are finding ways to avoid using the system altogether.

End users are reverting back to picking up the phone to place orders or finding other ways to go around the system.  This will result in more spend going through P-Cards without prior approval and/or more invoices showing up that are not tied to a PO. 

Decreasing adoption is one of the key signs that your tech is failing, and that action needs to be taken. Once users are working around the system, any efficiencies the solution offered are being lost. And it’s probably costing you more to keep things running.

Close communication with end-users is a good way to track ongoing performance and opportunities for optimization. 

2.     High end-user support rate

Your end-users will also be able to tell you when the solution is failing when it comes to usability. A clear sign will be when the rate of users seeking system support begins to increase and where tasks become increasingly difficult to perform.  Especially with your more infrequent users of the platform. 

When this happens support tickets will increase and if they are not resolved quickly, end users will lose confidence.  When that happens, tickets may decline, but not for reasons that are good.  as end users will typically turn to work arounds. 

The most common work around is sending requests via Free Form requests to the buyers to complete for them.  If your buyers are spending more than half of their day chasing down requisitions, you have a problem that needs to be corrected. 

The second most common work around is the use of a “Power User.”  This is when departments or locations turn to one person to complete all of their requests on their behalf.  This was common in the days of ERP requisitioning systems, but not today.  Especially when P2P systems of today have user interfaces that resemble what they have at home. 

If any of these work arounds are happening, your tech may have seen better days and has become dated and too cumbersome to work with.

Communication with end-users is key again here. You want to be able to have a continuous feedback cycle to raise issues before they start impacting operations. It will help to identify any bugs to be fixed and create a forum for new feature requests.  What you learn may surprise you. 

Which brings us to the next telltale sign.

3.     Lack of New Innovation

You’d expect your tech solution provider to be leading the pack in new features and improving your overall user experience to create even more value for your organization. 

If you’re not seeing these, it is time to start asking questions of both your system administrator and your software provider.

Being a system administrator can be hard work, especially when there are 3 new releases per year to keep up with.  If you are not seeing new features/functionality it may be that your system administrator is overwhelmed. Since new features come to you in the off position, you may have new features that have never been turned on. 

If that is not the case, and your solution is not keeping up with other S2P providers, then it’s a clear sign that your provider’s focus is elsewhere or they built their platform on a system architecture that is difficult to develop new functionality.

Both situations should be a red flag to your organization. You should set the wheels in motion to optimize what you have or determine if it is time to test the market for a new tech solution.

4.     ROI less than expected

Before you started out on this journey with your chosen provider, you created a detailed business case of what you expected in terms of outcomes from your new tech solution. You probably broke out the soft costs from the hard costs and knew what processes the tech would help to improve and how it would increase efficiencies in your organization.

These expected benefits – hard dollar savings, employee time, resources and removal of unnecessary or duplicated processes – could be quantified with a monetary value. This, in turn, allowed you to calculate your ROI. 

However, as time has gone on, it’s become clear that the level of expected benefits isn’t being delivered. The ROI for the solution isn’t being met and it’s time to understand why. There could be a number of factors (including the items on this list). But all of this is a further sign that your tech solution is no longer fit for purpose.

5.     Wandering solution roadmap

Even The Beatles had a ‘long and winding road’, but they at least knew the destination that awaited at the end.

Your technology journey may not have an end point by its very nature, but it should at least have clear direction. This would have been identified at the outset of your selection process, complete with clear goals and initiatives, helping to determine which technology solution would be selected.

Years later you may find that what was once their focus is no longer.  Maybe you selected your tech provider due to their commitment to your industry or their commitment to a certain product road map.  It is not uncommon for plans to change and for tech companies to change their focus for a variety of reasons.  Is this enough reason to leave and start looking elsewhere?  If it were up to me, that would depend on how many other items are on this list that are currently plaguing your operation as these issues may be related.  If they have changed direction and are focusing on industries and organizations that don’t resemble you, it may be time to start looking elsewhere before things start getting worse. 

Now you’ve seen the list, do you have any signs of your own to add? Anything in your organization that might now seem like a warning sign? These signs may not be immediately obvious which is why it is so important to know your KPI’s and be measuring what matters. If you don’t have anything in place, your solutions provider should be helping with this with a strong roadmap and support.

So keep these signs of a failing tech system in mind. You should then be able to avoid being encumbered with an ailing solution and instead remain as close to the cutting edge as you can.

Procurement’s Time To Lead Is Now. Here’s How to Take Advantage.

A new survey of 500+ professionals reveals where procurement must focus to establish leadership and earn executive trust.


Procurement: it’s your time to lead. New research from Procurious and Coupa, released today, reveals that nearly two thirds of professionals have seen trust increase with the c-suite over the past three months. Similarly, more procurement leaders report having a seat at the executive table today compared to May, when we asked the same question as part of our Supply Chain Confidence Index.

“Procurement leaders continue to step up and executives are taking notice,” said Tania Seary, Founding Chairman of Procurious. “Procurement plays a critical role in navigating the uncertainty we face today. The function’s stellar performance opens the door for more – more recognition, trust, and opportunities to lead. It’s time to take advantage.”

Procurious and Coupa surveyed over 500 procurement and supply chain professionals in July to assess the state of the function and what’s on tap for the second half of 2020. Reflecting on procurement’s strategic position within the organisation, just one-fifth (21%) report that they are still being viewed tactically internally. While that number is still higher than we’d like, most would agree that for a function that’s historically struggled to stand out and get the recognition it deserves, we’re moving in the right direction – in a big way. Consider that over the past three months, only 7% said they did not see trust increase between procurement and the c-suite.

“Procurement today has a clear opportunity to capture our seat at the table. The findings of this survey highlight how important it is for us to think strategically and ensure our objectives are aligned to the board and our peers in the c-suite,” said Michael Van-Keulen, CPO, Coupa. “We must step up to help our organizations not only control costs, but also mitigate risk, maximize value, and increase the agility needed in today’s business environment.”

These results build off Procurious’ research findings from earlier this year. “In June, we uncovered clear indicators that the c-suite was paying more attention to procurement and supply chain. This trend is accelerating as executives recognise procurement’s unique and essential position in the ongoing recovery,” said Seary.

Procurement leaders looking to capitalise on this newfound opportunity should focus on delivering results that increase resiliency and continuity, and improve the bottom line. According to our research, the top three areas the c-suite wants procurement to contribute to are mitigating supply risk (70%), containing costs (69%) and driving business continuity (64%).

“At first glance, we’re seeing a back-to-the-basics approach for procurement teams, with a laser focus on savings, spend visibility, resilience and risk mitigation. However, when you step back you quickly realise this approach is anything but traditional. The desired outcomes may be similar, but companies are investing more strategically, aggressively and intentionally,” commented Seary.

Second Half Procurement Priorities: Controlling Costs and Risk 

Procurement’s top three priorities for the second half of 2020 are similar to what we referenced above: containing costs, mitigating supply chain risk, and supplying the products and services needed to maintain operations.

Naturally, managing supply chain risk remains front and center for organisations across the world. But risk takes on many different forms. What are executive teams most concerned about right now? The top five areas, in order of concern, are:

·       Operational risk

·       Supplier Risk

·       Business environment risk

·       Reputational risk

·       Cyber risk

Interestingly, the most prominent risk differs geographically. In North America and Asia Pacific, executives are most concerned about cyber. In Europe, the primary concern is operational risk. Either way, stronger investments in supply chain risk management will undoubtedly become one of the lasting marks of COVID-19. Mature procurement teams will never take supplier health, collaboration and risk lightly again.

When it comes to business risk, there’s often more than meets the eye. The survey also found that more than 80% of organisations have significant gaps in spend visibility, which is its own risk. This finding poses an important question: How can procurement teams lead and control supplier risk if they lack full visibility into where money is being spent?

Equipping Procurement to Lead and Thrive

Looking at the next 6 – 12 months, economic uncertainty was the number one concern for survey respondents, followed by cash and risk. Given the stakes – and procurement’s proven ability to add value in business-critical areas, including risk, resiliency, and cost containment – the majority of organisations (93%) are investing big to propel procurement forward. The top three investments organisations are making in procurement leadership are:

·       Data and analytics

·       Talent development

·       Technology

“COVID-19 continues to act as an accelerant for procurement transformation. The business case is right in front of us, and organisations are investing accordingly.” said Seary. 

While organisations are finally stepping up to fund procurement initiatives, the function still has an important role to play to shape the future. 

“We need to ensure the investments are strategic, and not tactical. We need to set the agenda, and ensure the c-suite’s vision for procurement is aligned with what we know is possible. It’s our time to lead, and we need to do it right,” said Seary.For more insights – including details on procurement priorities, operational gaps, investment strategy, supply chain risk and more, join Procurious and get the full report: Procurement’s Time to Lead.

People Aren’t Adopting Your Tech: Now What?

How can you get your tech launch back on track if adoption is less than desired?


You’ve done your research, selected a new tech solution, secured buy-in from your C-Suite, and spent time setting it all up and testing that it works.  You have a detailed plan in place to measure success and everyone has attended training.  So, you press the button and ‘go live’, then sit back and watch the fruits of your labor grow.

Or maybe not.

After months of planning and integrating, user adoption is… underwhelming. In fact, the conversation at the water cooler is about how the new tech is a management fad and a waste of resources – and why the old ways are the best. And suppliers know they don’t have to make a change because they’re still getting paid in the old way.  All parties are still left wondering “What’s in it for me?” 

It looks like your implementation is reaching a state of emergency – so how do you convince people to take the new tech plunge?

1. Make Adopting Appealing and Achievable

Managing any big change is all about people and a tech adoption is no different.  It doesn’t matter how good the technology is if your end-users don’t embrace it.  Before you start out on your plan to get adoption underway, consider how well you know each user population and what could be their barriers to adopting?   

  • Have you been clear with users what the objective of the tech change is?

Take the time to ensure your end users clearly understand the case for change and why it’s necessary to implement the system.

  • Have you connected to their “why”?  What’s in it for them and their suppliers?

Making a connection with the emotional side of the brain is often critical in a period of change.

  • How well do you know their concerns/frustrations/fears for the impending change? 

Take the time to understand what may be your users greatest barriers to adopting.  Work together on finding solutions and let them ‘own’ the solutions you find. 

  • Are the steps toward adoption clear?  Do they understand the timeline?

Comprehensive plans, training and support are vital to keep things on track.

2. Keep It Simple

Don’t get trapped into the belief that just because this is the way it has always been done, that your process can’t be changed.  Too many organizations take cumbersome, complex processes and try to automate them.  They spent all this time shopping for an intuitive user experience for their employees and then they design/configure a solution that their users resist. 

Take a tip from the old US Navy design principle – Keep It Simple, Stupid (KISS) – to stop your potential state of emergency reaching a code red.

Configure your tech to first support most of your users and use cases. Don’t fixate on the complex or outliers. Based on our experience, when you adopt a critical mass of users the momentum will be restored, and your potential state of emergency will then pass.

Finally, as the Harvard Business Review advises, highlight anything that won’t be changing. Are there policies that will still be in place – for example, ‘no PO, no Pay’?  Reassure your users that it’s the ‘how’ not the ‘what’ that is changing. It helps to simplify people’s perception of the impending change.

3. Communicate and Make it Fun!

Don’t underestimate the need for a robust communication strategy from your executive leadership.  The higher in your organization the better. As Carol Kinsey Gorman stresses, talk about ‘what people want to hear and what they need to see’.  Think about how you want to present your message to drive adoption and then use all your powers of persuasion to generate excitement and buy in…so much so that they’ll want to start using it.

Remember, avoiding an impending state of emergency requires high-impact tactics to eliminate potential and real threats. When we communicate inside the business it is often boring and lacks appeal. We think that functional language and formats will suffice. Use change management and training teams to help craft fun and engaging messaging that will get your adoption points across.

All people are different and learn in different ways. Build training resources that use a range of different forms of media. Try video and audio alongside the written word. Onboard key people within teams to provide that personal connection and testimonial. They’ll become great champions to speed adoption throughout your organisation And if suppliers are part of your tech adoption process, communicate early and often with what is expected.   Then make sure you keep your message consistent no matter who is delivering it from your organisation. 

4. Plot a Clear Path to Code Green

Once your people know what’s expected of them and can buy into the change, the right support and a road map is all they need. Make sure you’re measuring the things you need to monitor progress with adoption, and that any risk can be mitigated.

Create metrics that identify individual progress on the adoption path, whether by users or suppliers, so you know exactly where they are. Be sure to monitor key influencers in the team, highlight quick wins and celebrate victories.  Target reluctant adopters for training or support. Using a continuous improvement approach, ensure users know that feedback is addressed.  Keep in mind that metrics can serve to reward as well as a means to course correct.

So, if your tech adoption process is starting to feel like a state of emergency there is plenty you can do to avoid reaching a code red. Focus on effective communication that engages your users where they are to take action, stay focused on meeting the needs of the masses, identify and address challenges early, and your new solution will become the talk of the company. 

To go deeper on the perfect tech implementation, tune in to our series ‘Major Tech Fails.’

Technology For Dummies: Your Easy Guide To Everything From Automation To Robots

Here’s your simple explanation of six technologies that will change the future of procurement.


Are you tired of nodding along when people throw around terms like ‘blockchain’ and ‘machine learning?’

Fear not. Here is your simple guide to six technologies that will change the future of procurement. Spoiler alert: some of these are already here and shaking up the supply chain.  

Quantum computing

What it is: Quantum computing is an entirely new kind of computer based on the science of quantum mechanics. Sounds intimidating, right? Don’t worry – this stuff is pretty cool.  

Quantum computing is exciting because it’s not just some super powerful version of the computers we already have, explains physicist Shohini Ghose. “Just like a lightbulb is not a more powerful version of a candle, you cannot build a lightbulb by building better and better candles.”

It’s far more advanced than our current computers, so it can solve problems that we can’t even begin to solve now.

How it works: If your personal computer had a personality, it would be a stubborn person who can only see things in black and white. The answer can only be 0 or 1. That’s known as a bit.

Quantum computing is more open minded. It knows life isn’t that straightforward. The answer could be 0 or 1, or anywhere on the spectrum between the two. That’s known as a qubit (pronounced cue-bit). That spectrum makes quantum computing super powerful.

As Wired’s Amit Katwala puts it: “If you ask a normal computer to figure its way out of a maze, it will try every single branch in turn, ruling them all out individually until it finds the right one. A quantum computer can go down every path of the maze at once. It can hold uncertainty in its head.”

That tolerance for uncertainty opens up a world of possibilities, like uncovering new chemicals or speeding up the discovery of new medicine.

Katwala adds, “If you can string together multiple qubits, you can tackle problems that would take our best computers millions of years to solve.”

Is it really that exciting? Well, in IBM VP of Research Bob Sutor’s words: “I think it’s going to be the most important computing technology of the century.”

Why it matters for procurement: Quantum computing will vastly improve logistics problem solving.

IBM (one of the biggest players in quantum computing) gives the example of global shipping. If companies could improve container utilisation and shipping volume by even a tiny fraction, it would save millions and reduce the carbon footprint. That’s the scale of quantum computing’s ability.

It can also help supply chain managers improve decision-making and manage risk by responding in real-time to changing market demand.

Internet of Things (IoT)

What it is: The Internet of Things (IoT) is taking real-world objects and connecting them to the internet.

You’ve seen this with the boom in ‘smart appliances’. These home appliances are internet-enabled, letting you turn on your coffee maker, start a load of laundry, and even pre-heat your oven with just a smartphone.

How it works: The Internet of Things lets you create a network of devices that can ‘talk’ to each other and share data.

And this explosion of smart products will only get bigger. In fact, there could be more than 41 billion IoT devices by 2025. Why? Cheap computer chips and widespread Wi-Fi.

Why it matters for procurement: Even though the Internet of Things is widespread in homes, the biggest market is actually businesses. The so-called Industrial Internet of Things (IIoT) is already commonplace – especially in manufacturing through the use of sensors and other monitoring devices.

These internet-enabled devices give companies greater control, and even help ensure safety. For example, pharmaceutical companies use IIoT temperature sensors when transporting vaccines to make sure they stay at the right temperature.

McKinsey notes that sensors are also used to monitor container-fill levels: “This real-time transparency allows the logistics team to manage the material flow more accurately and order raw materials and other inputs closer to the date they are needed, reducing inventory.”

The firm says these monitoring abilities are even more important in a post-pandemic world.

Machine learning

What it is: Machine learning is the ability of a computer programme to ‘learn’ and adapt based on new data, all without the help of a human.

How it works:  The programme sifts through huge amounts of data looking for patterns. Then companies use those patterns to inform decisions and influence customer behaviour. It’s how Netflix chooses what shows to suggest for you. The more you watch on the platform, the more data it has about you and the better it can predict what you’ll like.

Why it matters for procurement: There are many use cases for machine learning in the supply chain. One especially relevant one is improving demand forecasts. At the moment, it’s hard to account for all the variables in supply chain. As McKinsey points out, there are long-tail items, extreme seasonality, customer preference changes, and media coverage that all render forecasts useless.

Yet with machine learning can help companies reduce forecast errors by up to 50%. And equally important, it can reduce lost sales due to product unavailability by 65%.

Another example comes from professional services firm EY. The firm was asked by a major shipping port to help with the logistics of 100 vessels coming and going each day. When predicted arrival times were off, the port faced expensive bottlenecks. So EY used machine learning to analyse different sources of data – like tidal patterns and historical arrival information. It combined that with satellite navigation for more accurate tracking. As a result, the port saved more than $10 million from increased accuracy.

Through machine learning, computers can process more data points about a business than a human could ever hope to analyse. That means unparalleled visibility in the supply chain.

Enterprise blockchain

What it is: A blockchain network is a way to store digital records so different parties can all access the same version of the truth.

The records are unchangeable, which helps build trust by taking away human bias and politics.

How it works: Enterprise blockchain is a blockchain network that is specifically for businesses. It’s different from other types of blockchain because it’s private. The only people who can access records are those who have been invited.

Apart from blockchain records being transparent and unchangeable, they can also improve speed.

For example, the United States Food and Drug Administration recently finished a pilot programme with IBM to track and identify prescription drugs using blockchain. The results? It now takes two seconds to trace medicine, instead of 16 weeks.

Why it matters for procurement: Of all industries, blockchain has made the biggest impact in supply chain and logistics. Several companies already use the technology to keep tabs on what’s going across the supply chain.

One example is US retail giant Walmart, which requires all lettuce suppliers to be part of its blockchain network so it can track the product’s journey from farm to shelf. They use IBM’s enterprise blockchain as part of the IBM Food Trust.

Some retailers are using this traceability to improve customer confidence. They include QR codes on packaging so customers can simply scan with their smartphones and see a product’s history.

Human augmentation

What it is: Human augmentation is using technology to give humans increased physical and mental abilities. One example is an exoskeleton, which is a wearable robotic suit that makes humans stronger. And you thought Iron Man was fiction…

Most technological advancements seem to take humans out of the equation. Yet this area is all about improving human capability with technology.

How it works: Essentially, human augmentation is about making up for human design flaws.

As David Cearley, VP analyst at Gartner, said, it’s about “moving from designing for humans to architecting humans themselves”.

Gartner describes four main types of human augmentation: sensory (hearing, vision, perception), appendage and biological (exoskeletons, prosthetics), brain (implants to treat seizures) and genetic (somatic gene and cell therapy).

One example is the ability to control a machine using just your mind. By popping on a wearable device, a person can operate machinery with the power of thought. Who’s developing such a device?  The US government, of course.

And it’s not alone in seeking new ways to enhance performance. Gartner predicts 40% of companies will use human augmentation technology by 2025.

Why it matters for procurement: The obvious use for biological augmentation like exoskeletons is in warehousing, automotive, and manufacturing. Benefits include letting workers lift heavy things with minimal effort, protecting them from bodily injury, and working longer without fatigue.

And companies are already realising those benefits. Car manufacturer Ford has used exoskeletons for workers since 2018.

Robotic Process Automation

What it is: Robotic Process Automation (RPA) means using software to automate processes with “bots”. These bots do simple, repetitive tasks like data entry and reconciliation.

How it works: Bots are programmed to use your company’s IT systems, just like a human would.

By automating repetitive tasks, companies cut down errors. These bots can also perform tasks much faster than humans. Consulting firm Deloitte says it takes a bot one minute to do what it takes a human 15 minutes.

It gives the example of a robot pulling data from a PDF into an Excel document, using that information to generate an invoice, then sending the invoice by email automatically. The idea is letting the bots do the repetitive stuff, freeing you up to do higher-level thinking.

Why it matters for procurement: RPA has huge potential for supply chains and procurement. In fact, shipping company DHL uses it to automatically invoice carriers and schedule delivery appointments.

And shipping company Maersk relies on bots to complete 38 different procurement processes, like reporting and requisitioning.

Likewise, industrial company Siemens uses bots to get quotes from companies that aren’t current suppliers.

At this rate, it might not be long until automated sourcing becomes the norm in procurement.

Does automation make you nervous about your role?

You aren’t alone, says Natalie Chapman, Head of Urban Policy at the UK’s Freight Transport Association (FTA).

“Anxiety about mass automation is widespread; in one study, 34% of UK workers surveyed believed automation would result in large job losses and that few will be replaced by new and different roles,” Chapman says.

Encouragingly, though, she adds that FTA research shows technology will be complementary, replacing routine tasks rather than job roles.

“In response to the rise of automation in the workplace, skills demand will change in the coming years,” Chapman says. “The need for workers skilled in manual dexterity and precision will decline – as these tasks can be completed by machines most easily – and in its place, employers will seek staff skilled in analytical and innovative thinking, creativity and emotional intelligence.”

So, the good news is the robots aren’t stealing our jobs. At least not yet.

Want to know more about all things tech? Tune in to our recent series Major Tech Fails where we set you up for a total tech-success.

Forget The Pretty Face, It’s The Content That Matters

Don’t be seduced by a sleek user interface or fancy bells and whistles – it’s the solutions ability to address your most critical spend categories, use cases and suppliers that really matter in the long term.


It’s easy to be taken in by the shiny exterior of a product, it’s pretty packaging, isn’t it? As we all know, companies use clever product branding and marketing to draw us in and boost their sales. And the pretty-packaging strategy is no different when it comes to tech solutions. 

Think about the last tech solution you or your organisation purchased. More than likely it had an appealing design, intuitive user interface, and web 2.0 look and feel.  Or maybe you were drawn in by the way the system looks in mobile or app form? These are all design features intended to lure in a tech buyer.

But is design really what matters most when it comes to making a success of your tech implementation?

Success Requires More Than Just a Pretty Face

Once you’ve decided to purchase a new tech solution, you pull together your shopping list of requirements. Key stakeholders add to your list of requirements and then each requirement is stack ranked based on need.  “Must-haves” vs. “nice to haves” are thrown together into an RFP.  Tech vendors check all the boxes and impress you with their demos.  By the time you see the third or fourth vendor, you start to believe, any one of these vendors can meet our requirements and help us achieve the success we desire.    

Then the system demos take place and that pretty packaging comes into play. There’s a risk that all the focus on the shiny new objects distracts from what really matters. So how do you stay focused and stick to your requirements and select a tech solution that’s right for you? 

Here are my three tips to keep your mind focused and ensure your head isn’t turned by the razzle-dazzle of a great sales presentation.

1. Keep suppliers top of  mind 

One of procurement’s key relationships is with the suppliers that we use. Choosing a solution that puts the suppliers’ user experience at the top of your priority list is pivotal to making your tech implementation a success.

Your business case probably includes reducing supplier-related work. As far back as 2015, Hackett Group research estimated that e-invoicing could cut costs by 31 percent and supplier enquiries by 24 percent – big wins for you and the team if you get the implementation right.

But this goes beyond making it easy for suppliers to transact efficiently, it includes making it easy for suppliers to keep their content up to date.  Supplier data, certifications, qualifications, financial info, and catalog info are just a few things that suppliers can keep up to date to make it easier on you and your team.   

During your selection process, don’t forget that suppliers are no different to any other user of new tech. They expect it to be free and easy to use or they, like your end users, will do all they can to go around the system.

Successful supplier adoption of new tech can be critical to making your implementation work. If buyers ensure that regularly used suppliers are onboarded correctly and ready to go at go live, then adoption will be a whole lot easier for your end users.  Why?  Because the suppliers they are used to transacting with, will be easily found in your new tech.   Resist the pretty packaging and keep your supplier experience top of mind.

2. Ensure your new tech effectively addresses the categories that matter most

Imagine you have just installed your new tech and your end users engage the platform only to find that their spend categories are not enabled.  It doesn’t really matter how intuitive the user interface is or how much it looks like Amazon.com.  If they can’t engage with their suppliers and buy from the categories they typically buy, they will not adopt your new tech.  

Buyers of tech can easily be persuaded to focus on the shiny new object.  Don’t be distracted, stay focused on what really matters for your end users.  What spend categories must your new tech address to deliver the value your business case promised?  

Make sure your new tech supports the categories and departments that are large spend areas, but are not effectively managed today.  If your new tech can match the spend coverage you have today, while also positively affecting categories and departments that you have typically struggled to manage, you will see wider spread adoption and a significant increase in spend under management.  Your end users will feel as though they have been heard and will appreciate that you are implementing a solution that appears as though it was built for them.

3. ‘Keep the main thing the main thing’

In the razzle-dazzle of the tech demo, it’s easy to lose track of the critical use cases that separate success from failure. Tech companies will want to show off their most fancy stuff, but that is not typically where success is found.  In fact, many that focus on the shiny objects don’t focus enough attention on the use cases that matter most.  

For example, what’s the real use of an Amazon-like procurement system when a very small percentage of your spend is actually “shopping” for items?  It is also a very low bar for any system to shop for a laptop, put it into a shopping cart and route it for approvals.  That changes though if your end users are shopping for MRO and/or research items where shopping is the norm.  

We are also seeing a trend for organizations moving toward systems that are able to effectively address use cases for both direct and indirect.  This is certainly an area that you don’t want to assume your new tech can effectively address.  Take the time to engage the right stakeholders and let their voice be heard.  Bringing them in after contracts are signed is way too late. 

Ask yourself – does the tech solution give me what I need? Are core functions as they should be? Is the user experience for suppliers and end users acceptable for your standards? Does the solution cater to your key categories and departments? You will find there is a big difference between updating your processes to fit best practices to minimize customization and feature requests with your new tech and trying to fit a square peg in a round hole on the other. Make sure you’re clear on what your critical use cases are and the features that you will need to support them. Consider how much you are prepared to change processes to fit within your new tech and document everything so all parties are on the same page on what needs to be done.  This will help clarify which tech is a better fit and which solution is better aligned to support your industry and organizational uniqueness. 

It’s great to have a tech solution that has a pretty face. But the lure of pretty packaging may lead you down a path that’s just not right for you, your team or your business. Use my 3 tips during your selection process to ensure you get a solution that will deliver the outcomes you are expecting. 

To go deeper on how to find your perfect tech match, download our e-book ‘How To Select Source-To-Pay & Procure-To-Pay Systems That Deliver Results‘ and tune in to our series ‘Major Tech Fails.’

Working From Home Is Resilient, But Is It Sustainable In Procurement?

The coronavirus pandemic disrupted Procurement in unimaginable ways. Running Procurement from home is possible, but is it sustainable?


The coronavirus pandemic has disrupted the workforce in ways we have never experienced, affecting also Procurement departments and Procurement Outsourcing (PO) providers. Shared service center locations first across Asia and then the rest of the world became hot spots, leading to a rush of company initiatives to enable procurement professionals to productively work from home. IBM was successful in moving 99% of its Procurement Outsourcing teams from 60 centers across 40 countries into a home office environment in only 10 days without service degradation (1), proving that running a Procurement business working from homeis possible and productivity can be maintained when a business can react quickly, but is it sustainable? Have critical activities just been postponed or is this is the new business as usual? Three considerations for sustained resiliency.

#1. Make regularly working from home part of your team’s DNA

While many of us are used to working from home in some capacity, over 80% of our procurement professionals have never done so on a regular basis.  And just because our workforce can work from home does not mean they are able and willing to do so long-term.

But returning to the office means finding the balance between safety and productivity for our teams, and deciding whether to aim for a quick return to the office or a more comprehensive re-modeling toward “borderless workplaces” where staff works from a combination of office, client site and/or home. Returning to the office is based on smart, quick and simple fixes: social distancing, mask wearing, and setting up sanitation protocols, such as rethinking where and when we eat and gather, how we open and close doors and use elevators. Re-modeling more fundamentally looks at how we work and defining what the worker’s purpose and intent is inside the office. Buildings become much more purpose-driven; deliberately sought out for team meetings, new employee onboarding, and collaboration sessions, with more hot desks and larger shared spaces, instead of being the default place to go for work.

But no matter in what capacity we return to the office, working from home regularly or even primarily will have to become part of our DNA going forward, as future infection waves are likely to force us out of offices again multiple times over the next few years.

Achieving this will require us to focus more than ever on internal communication. We have already seen a personalization of written communication over the past few months, with people expressing genuine care for each other, but we need to also listen to our employees and keep an eagle-eyed focus on engagement. By taking time for one-on-one discussions, acknowledging everyone’s individual challenges, ramping up appreciation and recognition, and ensuring we create virtual spaces for socializing we can maintain a sense of belonging and feeling of pride. On a collective scale, short pulse surveys can be a simple way to gauge the team about how they feel and adapt measures for greater engagement and productivity.

Ultimately our teams and their willingness to be flexible will be the first line of defense for sustained productivity in the new world.

#2: Bootstrap adjustments in operating models to accelerate your digitalization journey

Just a few months of working from home on a large scale have successfully increased the sense of urgency for digitalization and more intelligent end-to-end workflows. IBM and our clients have already seen an explosion of home-grown dashboards and trackers, aimed at gaining more visibility into procurement operations, allowing for more granular insights and daily views of the business. In the spirit of agility, we should initially allow for the creation of these “quick and dirty” data collection and visualization tools, even if it is manual and there is duplication. As we learn more about what our post-COVID-19 world will look like and the effort required to maintain a plethora of semi-manual tools becomes a burden, we can start distilling down to only a handful of tools and a new operating standard, creating the enablers for a broader roll-out of “no touch” procurement solutions, including traditional tools like catalogs, as well as newer solutions like marketplaces, chatbots, guided buying assistants, robotic process automation, and analytics to accelerate speed to insights and decision making.

Even more delicate and trust-based processes like Category Management and Strategic Sourcing can benefit from digitalization, for example by running “Virtual Sourcing Bootcamps” with business stakeholders using a series of video calls to map out purchasing plans, identify additional addressable spend and define more robust category wave plans for the year.

Additional incentives can be created for those internal clients or BPO customers who are resistant to a more permanent work from home delivery environment by redistributing real estate charges and differentiating expected employee productivity to create a price differential between home- and office-based setups.

#3: Learn to build trust virtually as a buyer and a seller

Until recently, meeting face-to-face was a non-negotiable prerequisite for the signing of large contracts, which we at IBM have experienced both as a supplier of Procurement Outsourcing, but also a buyer agent with our own and our customer’s suppliers. Finding a way to make customers comfortable pulling the trigger on multi-million-dollar contracts with little to no human contact is going to be a key success factor for our new future.

In the outsourcing world, visiting one or more delivery centers is a staple in every sales pursuit, but with increasingly distributed teams and a desire to reduce non-essential business travel, we are now showcasing our teams and their capabilities virtually. Using a mixture of live and pre-recorded videos, online whiteboarding tools and virtual roundtables with practitioners we have been able to create an authentic virtual delivery experience to aid in the sales process.

Experiment with virtual collaboration tools not just internally, but get comfortable using them with clients and suppliers to co-create, or hear from experts and practitioners that wouldn’t otherwise have been flown in. Focus your travel dollars and effort on one key meeting or workshop and augment it with a few virtual “visits” to round out the picture.

Summary

Leading a borderless workplace Procurement team is possible and can even deliver superior results if employees are engaged, but ensuring sustainability requires active shaping of your team’s DNA, a more digitalized operating model and the confidence to build trust in a virtual environment. Sometimes creativity requires constraints to really flourish, and let’s use the existing restrictions as an opportunity to emerge from this crisis stronger than when we entered it.

By Matthew Bounds & Martin Esser. For more information about operational resiliency, read:

·       Business Process Outsourcing (BPO) Services for business continuity and resiliency ibm.com/bpo

·       Building operational resiliency for anytime, anywhere and any situation

Footnote: (1) IBM Services blog, “Building operational resiliency for anytime, anywhere and any situation”, May 4, 2020, https://www.ibm.com/blogs/services/2020/05/04/building-operational-resiliency-for-anytime-anywhere-and-any-situation/

How To Prove The ROI On Your Tech Solution

Your tech solution should be delivering the benefits and ROI set out at the start of the agreement – but how do you prove this to your CFO?


Making a substantial investment in a technology solution is not something that any organisation takes lightly.  Getting the green light to go ahead often involves significant stakeholder engagement, a comprehensive sourcing and supplier selection process and, of course, making the business case for the investment required.

Once you’ve gone live with your new tech, your C-suite will want you to report back and validate if the money they invested was well spent?  Are you on track to achieve your projected return on investment – that essential ROI?

So, how do you prove your technology is providing the benefits outlined in the business case? How can you demonstrate that savings are actually being achieved?  Ideally, you can go to a single savings tracker that contains all of your key metrics and ROI outputs.

But if you’re leaving things to the post-implementation phase to capture and easily report on that information, then you’ve probably left it too late.  I’ve seen the inability to demonstrate and prove ROI being one of the key factors leading to a major tech fail. 

1. Know What Your Organisation Requires in Terms of ROI

Your process of identifying and delivering on ROI needs to start at the inception of your tech implementation project.  You need to be clear on what your organisation needs in terms of ROI.

Before preparing your presentation for project approval, make sure you know the answers to these key questions:

  1. What is your cost of capital?
  2. What does your organisation require in terms of payback?
  3. Over what period does your organisation measure Net Present Value(NPV)?
  4. What kind of return on capital expenditures does your organisation require?
  5. What projects were recently approved and what projects were recently rejected?  Talk to those that were involved and see what lessons you can learn so you don’t make the same mistakes.
  6. What other projects are you competing with?  How can you position your project as a bigger priority than the rest?
  7. Based on your project size, what is the process for obtaining approval?
  8. Who are the key players?  Once you know the process, identify the key players who will be determining your project’s fate.  What are their priorities and how can your project align?  If possible, get introduced to them and start building a relationship.

This will help you eliminate any potential surprises you may encounter as you seek for approval of your business case.Key here is to not make assumptions on what goes into your business case and what will, or will not, be approved. 

2. Know Your Numbers

Begin with knowing and owning every number in your business case.  In order to deliver, you first need to have sufficient detail of your targets.  If not, how will you ever know what you are aiming for and if you achieved them?  I mention that because I find many business cases are template-driven and lack the defendable detail when it goes under the spotlight.

For example, many times I will see a blanket percentage applied to all spend.  Or an efficiency savings applied across all POs and invoices.  Basically, I see many organisations adopt a one size fits all approach to many of these business cases.  That may work for some organisations, but it doesn’t for many of the CFOs we work with. They want to know specifics. 

They also understand that each category of spend is different and should be treated as such.  What is realistic to be achieved in one category, may not be realistic for another.  What was achieved by one organisation does not inherently mean that you can experience the same result in your organisation. 

There are a lot of factors and assumptions that must be considered in the process of creating the business case.  .  This includes being able to know how each category of savings was calculated, so when the time comes to present the business case for approval it is easily defended

We coach our clients to never go into a meeting with their CFO to get their project approved if they are not 100% clear on how each number in their business case was calculated.  If they don’t know their numbers at the start of the project, they will have a really difficult time knowing how to realize those savings after go live. 

You have to know and own your numbers better than anyone. Those that don’t, rarely succeed.  If you don’t know how those savings will be realized and what the critical path and key performance indicators are to realize those savings, it will be very easy to get distracted during implementation and lose sight of what is most important.

If you want to be able to go into your CFO’s office and show off how you have over-delivered on your promise of savings and efficiency, then it would be wise to take the time to know and own your numbers before you kick off your next project. 

 3. Measure What Matters

Part of our success blueprint process is making sure we’re clear how to capture and report on the measurements that are going to demonstrate positive ROI. Being clear about cost baselines is an essential starting point.  Making sure you are clear as to how you’re going to capture the following financial metrics can help ensure your ROI can be tracked throughout the life of the project:

Make sure to capture any REVENUE impacts:

  • Are there back end supplier rebates that the project is improving?  
  • Are you enabling product innovation that can be tracked? 

How will the project contribute to less spending:

  • Operational Spend reductions, your plan to track future spend and compare your historical spend 
  • Where your project creates the opportunity to avoid historical spend altogether.  Is that historical spend in an existing budget or is it leakage that needs to be tracked?
  • And where are there reductions in capital expenditure or overall lower Total Cost of Ownership?  As an example, are there license and hardware costs from retired systems that are removed from the budget? 
  • And lastly, resource utilization and efficiency: Are you doing things faster and better and thus requiring less resources?

The Right KPIs are going to drive the project ROI.  They need to be presented and agreed upon during business case approval.  From there, the path to monitoring the financial benefits are easier:

  • Building Dashboards that can handle the data and calculations for your metrics.  
  • Capture the current state as well as your goals over time, and then track the advances throughout the implementation and rollout.  

This will translate to easier benefit analysis.

In the absence of the right dashboards and savings tracking process, resistances within the organisation have stronger voices during any project setbacks.  This ultimately can erode the confidence inside and outside the project team.

Soft benefits go alongside your financial benefits, though they are usually much harder to quantify accurately. They can be factors such as your employees having improved utility, skill, and even joy with their activities.  That investment in your people should be measured and recognized continuously.  It should be captured through periodic feedback surveys as well as activity audits. 

Engaging with end-users and suppliers both at the outset and on an on-going basis will give up-to-date information and allow for changes to be tracked.  Ensuring cross-function coordination is also necessary, as the tech solution will touch all areas of the business.

There is no single solution to providing a fully accurate ROI calculation.  Take the time upfront to fully quantify costs, including those that may require more research to identify.  Capture processes and work patterns so that efficiencies can be identified.  And secure key stakeholder sign-off, so you’ll have consensus on what returns you expect and how it will be measured.

How Covid 19 Affects What Gets Measured

We cannot ignore the times we are in. CEOs and CFOs will be adjusting key KPI’s.  Whether you are driving change or reacting to their changes, as Procurement and Supply Chain leaders, it is imperative that you are in synch with leadership. 

In recent times, more and more companies are measuring their performance towards diverse, green and ethically compliant spend goals.

And now Covid-19 has forced risk avoidance into the front lines of KPI tracking.  

The agility of your supply chain will become an essential measurement.  For instance the percentage of your business that can be fulfilled through alternative distribution channels, modes and suppliers will be key to measure.

And all these primary and alternative options will come under more stringent risk criteria.  Risks will be evaluated by geography, ethics, politics, as well as financial stability.

In Closing

It’s a cliché, but what gets measured gets managed and what gets managed gets measured.  

Whether you choose to implement a savings tracking module within Source to Pay or not, I feel that it is very important to create a standardized intake and validation process for each KPI.  Pair that with a robust and flexible analytics solution to best monitor those KPIs that roll up to the overall project ROI.

Those that have followed these footsteps, are confident when they get the request to meet their CFO in a few hours to review how their project is tracking towards the business case.  They are actually excited because this is what they have been waiting for – a great opportunity to not only prove the ROI, but to also advance their career. 

To go deeper on how to find your perfect tech match, download our e-book ‘How To Select Source-To-Pay & Procure-To-Pay Systems That Deliver Results‘ and tune in to our series ‘Major Tech Fails.’

What’s Under The Hood? Identifying Potentials Gaps With P2P Providers

4 must-have requirements for your next P2P solution 


Finding the best Procure-to-Pay (P2P) solution to meet your organization’s needs and goals is no small feat. The ideal P2P solution will take the entire organization to the next level through improved realized savings, compliance, and operational efficiencies.

So, how do you identify a best-in-class P2P solution? To start, I’ve outlined these must-have characteristics below.

4 must-have requirements for your next P2P solution 

1. A single data source.

The best P2P solutions host all information in a single database. A single, searchable data source enables a consumer-like online shopping experience that end users and suppliers will embrace. Having a unified data hub:

  • Decreases total cost of ownership
  • Provides one portal where suppliers and vendors can collaborate
  • Improves user adoption by allowing users to quickly find, compare, and purchase across multiple suppliers in one interface

2. Process and data flow visibility.

Visibility enables procurement teams to strategically source goods and services to expand cost saving efforts. Procurement can use data to negotiate better supplier terms and drive effective purchasing behaviors.

Best-in-class P2P solutions have robust analytics with both automated reporting capabilities and the ability to produce ad hoc reports. Users gain strategic insights into and control over real-time savings, spend by supplier, and spend by region, to name a few. In addition to spend analytics, behavioral data on the most popular items purchased, top search terms being used, and search terms with no resulting products are available within a click of a button.

3. Intelligent workflow capabilities.

A best-in-class P2P solution should allow you to trigger workflows based on user profiles. Intelligent, automated workflows in next-generation P2P solutions minimize time spent on manual processes, and can even make existing automated processes more effective.

Many organizations waste time chasing down invoice discrepancies (missing details, quantities do not match, misalignment with purchase orders). Best-in-class systems automate this process with business rules triggered by missing information. Administrators construct and configure the business rules to reconcile the inconsistency, deny the invoice, send it to an employee with AP permissions, or push it through without changes.

Intelligent workflows do more than automate workflows. Data and insights collected on employee efficiencies can reduce tactical labor and better allocate head count accordingly.

4. Dynamic cloud-based software.

When analyzing a best-in-class P2P solution, it’s important to understand how the software will be implemented into your environment. Why? Because how the software is implemented will directly affect your total cost of ownership.

Break down prospective P2P software into these four categories:

  • On-premise: Software is a single instance, built on-premise behind the company’s firewall. IT owns the licensed software and codebase, so only they can make configurations and customizations to the software. Most ERPs exist in this manner.
  • Hosted Cloud (SaaS model): Code is still designed for hosting on-premise, but lives in the cloud. Vendors are responsible for making any changes to the codebase.
  • Built for the Cloud: This is a self-service software. No code needs to be written to make any changes. The business owns the system, making it easier to maintain.
  • Living and Breathing Cloud: This type of software has all the benefits of “Built for Cloud,” but also leverages all of the benefits of the cloud provider (such as Amazon Web Services) to expand and contract. This technology is built for maximum performance, extremely fast loading times, and scales to handle maximum traffic on the system.

The technical capabilities of any P2P solution are obviously important, but don’t overlook these questions during the evaluation process:

  • What do customer references say about this vendor?
  • Will this vendor help lower total cost of ownership (TCO)?
  • Will this solution easily integrate with other solutions in the P2P landscape?
  • How will this vendor support the procurement team and company’s vision?
  • What is the pricing model and fee structure? Does the model allow for growth?
  • What is the implementation plan, and what is the support structure for post go-live? 

When you’re choosing a Best-in-Class solution for your organization be sure to look for signs of integrity and trust. They may not be on your list of requirements, but you’re choosing a partner for your organization, and when the going gets rough you’ll need an organization you can trust above all.

This article was originally published on LinkedIn on 24 April 2020 by Katie McEwen. It has been republished here with permission.

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Why A Source-To-Pay Ecosystem Is Best-Practice

Learn why end-to-end, source-to-pay (S2P) suites are no longer a feasible option for modern businesses and instead, organisations should turn to partner ecosystems.


Master of all? Or specialise?

Once upon a time the “one size fits all” vendor approach seemed ideal. It definitely held appeal as it seemed to be an ideal way to cover all an organisation’s S2P needs while only requiring one vendor.

But now, the industry has matured to learn that no vendor truly offers a full source-to-pay (S2P) suite that is best-in-class across all modules. Not to mention, the time it would take to roll out and maintain such a solution. In the past decade, vendors attempted to support the entire S2P process, however, as buying organisations strive to digitalise procurement and sourcing, it’s becoming apparent that a single suite is typically not enough to accomplish their goals.

Understanding your S2P ecosystem

Similar to wireless providers that switch between towers to ensure you never lose service, a proper S2P partner ecosystem makes sure you cover all areas of business spend, by using a multivendor approach. As noted in Gartner’s “Predicts 2019: Sourcing and Procurement Application Vendors Embrace APIs and the Ecosystem Approach”, “Growing partner ecosystems are making it easier for organisations to take a connected, multiple-solution approach to sourcing and procurement automation.” “By 2021, major source-to-settle and procure-to-pay vendors will have more than doubled their preconnected partner ecosystems.”

While the bulk of importance is directed towards automating purchasing, payments, and a flexible supplier network, there are many value-add services that surround the S2P process. Services like supplier management, risk management, and contract lifecycle management often only offer basic functionality from suite providers claiming an “end-to-end” solution. Best-practice suggests selecting one vendor for the core areas of focus, then supplementing with other products and services from specialised providers. Companies should evaluate the data in an ecosystem to ensure core information is shared between partners so that analytics can be applied on data across the systems.

To understand the value of a vendor’s product ecosystems and to evaluate the effectiveness of its community, Gartner recommends requesting the following:

  • Data from the vendor outlining the number of ecosystem participants, the trajectory at which the ecosystem is growing, and insight into those that use it regularly.
  • Metrics that disclose the number and frequency of documents, components or templates being uploaded by the vendor to the community (often called an online library).
  • A summary of the past three years of product updates originating from, or inspired by, suggestions by ecosystem partners.
  • Customer references that you can contact directly for an assessment of the vendor’s product ecosystems, and any user groups that they may participate in.

Analyst perspective

In an interview with Magnus Bergfors, in conjunction with Spend Matters, Magnus details why, at one point and in some circumstances, an end-to-end suite.

He explains, “An end-to-end source-to-pay suite often seems more appealing than a specialist solution at first glance. And there are advantages to it — there’s no doubting that. The most practical one is from an IT management perspective. Your business will have fewer solutions to deal with and fewer integration points with an end-to-end approach. Second is that you get a similar look and logic across multiple solutions, making it easier to use. The third advantage is in the analytics where you can have data from multiple modules succinctly located in one place.”

Bergfors reveals that though there are many appeals to a singular S2P suite, it’s not always the best option. There are inevitable problems, including “…that your organisation sacrifices specific functionalities with a unified suite. When you sacrifice too much, it starts impacting your ability to manage your spend and stay agile in your operations.”

Additionally, he warns that “A lot of the end-to-end suites in the market today aren’t natively developed or integrated and are instead made up of acquisitions, some of which are better integrated than others.” So, even if a S2P suite claims to be end-to-end, it might operate more like a patchwork of solutions than a cohesive unit.

Join Basware at Connect Digital – free webinar series

Join Basware for our new Connect Digital webinar series where Magnus will further discuss his views and we’ll offer the opportuning for a live Q&A session. Find details for the webinar below.

Determining Your Future Tech Strategy – Spend Matters

Wednesday 10 June 2020

Hear from leading industry analyst Magnus Bergfors from Spend Matters on how to best determine your technology strategy and get the most out of the increasingly diverse and broad options available in the procurement technology market.

Register here