I was thinking that it must be about a year since I started this blog, but hadn”t got round to checking the date.  So, at 7 am this morning I looked back to my first post and…. it is  today!  The blog is a year old.   So we’ll wish ourselves happy birthday and take the opportunity to say a bit more about our exciting and imminent plans.

We announced recently our link up (early next week is the target go-live date) with Jason Busch to launch  Spend Matters UK & Europe (incorporating Procurement Excellence).  Our focus initially will be heavily UK based but we will as quickly as possible develop more content of interest to a continental European audience.  And in time we may look at variants on the blog for different regions or countries.  We’ll see how it goes.

Why are we doing this?  Well, apart from the fact we think it will be fun, we believe there is a real need in Europe for intelligent and freely available procurement opinion and analysis.  We will report news, but what has brought Spend Matters its huge readership is the quality and depth of its analysis of procurement issues, technology, products and vendors. Jason has a background with procurement software and technology vendors, and I was blown away by the quality of the Spend Matters research into technology issues in particular.  All available free of change to readers I should say.

My background as many of you will know, is as a procurement practitioner; 15 years or so as a Procurement Manager / Director in several organisations, then 10 years consulting in the field.  So what we want to do is combine our strengths, in a UK and European context, and provide a resource that provides analysis and insight into procurement technology, products and vendors; useful thinking about procurement best practice; analysis of procurement issues and news, all leavened with a bit of humour (and the monthly music review).  Jason will write for the new site and I hope to do a bit more for the US Spend Matters site.

Now, about the business side of things.  After 15 years plus on the procurement side of the table, I developed (how can I put it politely) a healthy distrust for many service providers, consultants and so on.  And one of my pet hates was lack of transparency; not knowing that the consultant was getting a kickback from the software provider, or the logistics firm was in cahoots with the raw material supplier.

So I was pleased that Jason shared my views on this and has a principle of total openness about how Spend Matters works – which is how we are also going to operate in the UK and Europe.  We will be ‘monetising”  (that’s been a new word for me to learn…) the operation; I will be putting around half my working time into this so it does need to become somewhat commercial, although I wouldn’t be doing it if I didn’t really enjoy it, as I suspect it will never be as lucrative as strategic consulting or indeed being CPO of NatWest!

So, Spend Matters in the US gets income from sponsors (of the overall site or individual products, such as research papers) and we will do the same.   But there is one golden rule; the editorial content and opinion is independent of the sponsorship and finances.  And I know Spend Matters has stuck to that absolutely; and we will as well.  We will write about firms who don’t pay us a penny if we think they are interesting to the procurement audience; and we’ll be honest about those who do support the site.  Feel free to chastise us if you ever see evidence that goes against this,  but we know we won’t be credible and therefore successful if we don’t do this.  We will feature our sponsors regularly IF they have interesting things to say; but we will do the same for other firms as well.  Audience interest is the key driver for the content basically.

We believe that sponsorship will offer access to a strong, senior-level procurement readership, the ‘advertising” benefit of featuring on the site, with links to sponsors own material and websites; direct advisory support from Jason and I, and other benefits.  We have some excellent sponsors lined up now; but still have some opportunities.  So if you are interested in being part of this exciting development, please drop me an email and I will send you some relevant information by return;  psmith@procurementexcellence.com

Jason Busch at Spend Matters points out in a post yesterday that much of the new employment in the US, such as it is, has come via temporary staff – or ‘contingent labor’ as our US friends call it.  (Two countries separated by a common language and all that…)

He suggests that procurement needs to get to grips with this area of spend; and I would support that advice in the UK and Europe as well.  Of course, labour and employment regulations around temporary staff differ across European countries, which creates more of a challenge; but there is no doubt that procurement can add a lot of value to what is traditionally a line or HR managed area.

In my experience, procurement often gets as far as putting a preferred supplier agreement in place, with perhaps some negotiated margins with the major staff providers; but then backs off again.  And that is rarely enough to really control demand, manage specifications, monitor compliance or capture supplier performance; all of which the organisation should ideally be doing.  As Jason says;

Granted, procurement must work hand-in-hand with HR and key business leaders (e.g., IT), a department increasingly dependent on contingent workers. And they should also get to know the managed services provider (MSP) and vendor management system (VMS) landscape as well. HR should definitely be a partner and not the driver of contingent procurement efforts.

Coincidentally, I caught up with Fieldglass, one of the technology leaders in this sector, last week for a chat, and I’ll write about that later this week, but in the meantime the Spend Matters Compass research reports focusing on this topic are excellent and free to readers here .  And the Aberdeen report we mentioned last week – which put Fieldglass at the top of the charts in this area along with Emptoris, IG Navigator and Beeline – is available here via the Emptoris web site.

In a move that surprised many, Ariba have sold their sourcing services group business to Accenture. That makes Ariba pretty much a pure software firm, and strengthens Accenture’s position in the sourcing consulting and outsourcing market.  It looks like Accenture got a good deal in terms of the price, and the capability they are buying; while Ariba get to focus on core business, as the old cliche goes.

Spend Matters has done a superb job on commenting on this, so do take a look here. Jason’s last post in particular gives some great advice if you are an Ariba client; the potential for cost increase was my immediate thought, as Accenture have never been noted for their – how shall I put it – ‘bargain’ consulting fees!

One additional thought – I can’t speak for the US, but my perception is that Accenture have dropped down the league table for ‘intellectual property’ in Europe in the procurement space over the last few years.  Purely my opinion, but if I go back 10 years I would have put them well ahead of KPMG, Deloittes etc in terms of their procurement and supply chain thought leadership.  Since then, their focus on outsourcing and large delivery type work seems to have dulled the IP edge a little.  So maybe this acquisition helps them get some of that back?  Or is it all about winning more large BPO projects?

Interesting – and do take a look at Spend Matters for more in depth analysis.

Not for readers of a nervous disposition…

Have some sympathy for Jason at Spend Matters.  Not only do I get bragging rights for the next two years following Europe’s humiliation  of the USA (OK, hair’s breadth victory) at the Ryder Cup, but he suffers this on his United Airlines flight.

I don’t perceive that Fieldglass are quite as well known in Europe as in the US, but the Chicago venture capital firm, Madison Dearborn, has acquired a majority stake in them, valuing the firm at $220 million and paying a multiple of over 6.5 x sales; a price that I suspect some other supply chain software firms will look at somewhat longingly!  Who are Fieldglass?  As the press release says;

Fieldglass’ Software as a Service (SaaS) Vendor Management System (VMS) enables companies to more efficiently procure and manage contingent labor and services such as statement of work engagements, offshore projects and independent contractors across dozens of categories,

Jason at Spend Matters has regularly written about Fieldglass and this market sector in some detail, and he has covered this latest development with insightful comment as ever, so if you’re interested and / or Fieldglass are a supplier, its worth having a look here and here.

After long negotiations, fees to advisers that run into the double digit (yen), and a bid rumoured to be well into the realms of a bottle of really quite reasonable pinot grigio, nothing special but drinking quite nicely, the Procurement Excellence Blog has agreed to team up with what is (in all seriousness) probably the world’s most successful procurement and supply chain website / blog, SPEND MATTERS.

Spend Matters has created a whole new type of ‘product’; combining elements of publishing, analysis (cf Gartner), opinion and consulting / education type advice.  It has many thousands of regular readers, in the US and globally, and has become a serious opinion-former around procurement issues, technology and services.

Jason Busch of Spend Matters was one of my inspirations behind me starting this blog, and having got to know him over the last few months he is an excellent and impressive guy.  Apart from the fact he is younger than me by some distance, smarter, taller, slimmer, fitter (runs Marathons etc), more productive (son number 3 on the way),  can write 10,000 words of intelligent procurement content in a day, and plays the bass guitar better than me, I really like him…

What do I have to offer? Well, I know more about RAWWCKK music than him.  I suspect I’m still a better soccer player despite my advancing years (Americans – what do they know about football, eh?).  And I think I own more wine than him.  OK, that’s about it really.

So…in early October we are launching “Spend Matters UK: Europe (incorporating Procurement Excellence)”.

We will build on the Spend Matters US (and global) readership and reach, along with our Procurement Excellence (much appreciated) regular readership!  I will obviously be writing, Jason will also write some specific pieces for the new site,  we’ll have some US Spend Matters material re-focused on Europe, and interesting guest writers.  If you know Spend Matters you will appreciate that Jason has an incredibly strong understanding of procurement and supply chain technology, so look out for real insight in that area.

We’re really excited about this; but let me just give you one assurance.  We ‘ve agreed that we will continue to write about music and occasionally other non-procurement stuff.  Indeed, if you read Spend Matters, you will know that they are not averse to the occasional rather ‘leftfield’ post, and our shared sense of humour was a key element in our deciding to team up in this way.  So we won’t lose anything that you might enjoy about Procurement Excellence; but you should get a whole lot more in addition.

Finally, we are looking for sponsorship of the site (as per Spend Matters in the US).  I’ll say more about that tomorrow, and we already have a number of sponsors lined up, but if anyone else is interested in reaching a very high quality procurement readership, and gaining other benefits from working with Jason and I, please drop me an email on psmith@procurementexcellence.com.

A technology theme today for no particular reason….

Schools still use paper apparently….

Within a week of a mass-buying event for A4 paper being published on the Schoolquote procurement website, 256 of the schools using the service added their potential demand to the purchase, a massive 56,000 reams in total. Over 1000 schools are using the platform which, with Wiltshire Council’s schools, won a CIPS Supply Management Award in 2007.

There is an interesting tension here between a ‘top down’ approach to collaboration and technology and the more grass-roots ‘bottom-up’ strategy.  The Department for Education has been developing its own procurement platform to schools for some years now - OPEN - while commercial businesses such as Schoolsquote have been building their customer base school by school.  I don’t know how the new administration feel about OPEN (or if it has even crossed Ministers’ radar yet) but it will be interesting to see how this race to become the standard procurement platform for schools develops; notwithstanding other potential market competitors of course.  We’ll also come back and look at Schoolquote in more detail sometime soon.

Emptoris in the clouds…

We mentioned the Emptoris user conference last week; they also announced a new service, Emptoris Echos, a cloud-based delivery system which enables users to deploy their suite of applications “behind the firewall”.   So my interpretation is that it enables you to get stuff up and running more quickly than installing conventional in-house apps, and (as they say)  “adds ‘burst’ capabilities to support fluctuating demands for performance”.   For a more informed analysis of this, a piece that is insightful yet somewhat perplexing at the same time, have a look at this Spend Matters post from Jason Busch.

The biggest IT beasts…

Impress your CIO with your category and market knowledge!  Computer Weekly has a useful list (originally Gartner material) of the largest IT service providers in Europe and their revenue chnage 2008 to 2009.  Did you know Cognizant – number 1 on the growth list -  started as the technology arm of Dun & Bradstreet?  I didn’t (until 5 minutes ago) and I was actually working for D&B in 1994 when apparently Cognizant was formed!  Must have dozed off during that bit of the Management Conference….

While we’re still in the enthusiastic, weather still good (well…), back to school mood, our next ‘New Year’s Resolution’ is to stand back and take a hard look at your current and future strategy around procurement-related technology.

Since I got into this blogging thing, and made a conscious effort to get more up to date with this whole area, I’ve bean amazed by how much things have progressed in the few years since I had a more direct interest in running procurement functions (as a full time then interim CPO).  It really is worth making sure you’re up to date.

So for some organisations, reviewing your current opportunities may mean looking to take first steps into real ‘eSourcing’ or P2P automation.  For others who are already well advanced on the journey, it means reviewing recent market developments to ensure you’re remaining at the leading edge.

Spend Matters published this a few weeks back, which I thought proposed a very good way of classifying procurement and supply chain technology into three high-level sectors or “uber-segments” as Jason called them:

1. Supplier information management – incorporating supplier enablement, performance management,  risk, and spend analysis (which could arguably be seen as a separate ‘uber-segment I guess).
2. Next generation sourcing / collaborative sourcing – which includes the well-known strategic sourcing toolsets from vendors including Ariba, Intenda, Emptoris, BravoSolution, Iasta etc; sourcing decision support (e.g. optimisation), marketplace offerings, and also commodity strategy / trading type technology in more specialist categories.
3. Finance-driven purchasing; including ERP systems, but also technology supporting working capital and treasury objectives.  Jason points out that this sector is very  dynamic, and that the dominance of traditional ERP providers is perhaps not as embedded as you might think.

So, we can’t generalise about what the right strategy is for any particular organisation, but why not take the opportunity this Autumn to review where you are, where you want to be, and how technology across these three sectors can help you get there.  And Spend Matters and Procurement Excellence will do what we can to help – without pretending we have all the answers!

If you’ve not caught up with Spend Matters, probably the top procurement blog in the world, this feature of some of their top posts is a good place to start.

Jason Busch, the founder and editor in chief of Spend Matters is on vacation, so although he has been posting from sunny (?) Vermont, the site has in the last week or so featured some ‘greatest hits’ of previous pieces.  This list gives their most-read posts, so a good introduction to anyone new to the site and a sample of the type of stuff that Jason features.

Back in the olden days, when dragons roamed the countryside and I was a CPO, software selection was pretty easy.  SAP or Oracle?  Or build something yourself in Basic?  Then eProcurement was invented and since then, matters have got increasingly complicated as the software gets smarter. Now…where do you start with serious players?  Ariba, Intenda, Iasta, BravoSolution, Emptoris, ProcServe, Spikes Cavell, Rosslyn, Trading Partners, iValue, ibx,  Zycus, ..the list appears to be endless and growing by the day.

Personally, I’m working hard to get myself into a more ‘expert’ place on these options.  So I found the Spend Matters series of posts last week on demonstrations really useful  – that’s software demos, not standing outside offices with a placard. The role of demonstrations in the overall sourcing process was discussed in the first post here; then the merits of using scenarios to assess the product (as opposed to just allowing the vendor to show you the features) in the second installment here.  Finally, post three gave an example of the sort of scenario that might be suitable.

Jason Busch of Spend Matters worked previously for Freemarkets and Ariba, and these posts are further examples of how he uses that experience to bring real insight to his posts.  If you’re interested in technology and software the posts are well worth reading – and perhaps saving for the next time you are in software selection mode.  I’d also suggest you read on down to the ‘comments’ below the posts; there is real value in many of them and some good arguments back and forth on a couple of key issues.