Comments on: If you are going to do a “Proof of Concept” (POC) Spend Data Classification “Test” with a Potential Supplier– Do it Right (Part 1) http://www.esourcingforum.com/archives/2009/11/30/if-you-are-going-to-do-a-%e2%80%9cproof-of-concept%e2%80%9d-spend-data-classification-%e2%80%9ctest%e2%80%9d-with-a-potential-supplier%e2%80%93-do-it-right/ The source of information and best practices in strategic sourcing. Fri, 12 Mar 2010 03:32:03 -0500 http://wordpress.org/?v=2.8.6 hourly 1 By: Rod True http://www.esourcingforum.com/archives/2009/11/30/if-you-are-going-to-do-a-%e2%80%9cproof-of-concept%e2%80%9d-spend-data-classification-%e2%80%9ctest%e2%80%9d-with-a-potential-supplier%e2%80%93-do-it-right/comment-page-1/#comment-11741 Rod True Thu, 03 Dec 2009 17:28:30 +0000 http://www.esourcingforum.com/?p=35797#comment-11741 My blog above points out drawbacks of which to be aware regarding the approach when doing a POC. My advice is reflecting what we have seen in the marketplace over the past year and more. We see a significant shift occurring. Companies are maturing and focusing on smarter cost savings and Spend management capabilities. This involves broader Spend classification beyond UNSPSC (categorizing directly to sourcing groups), more opportunity assessment (smarter Analytics beyond cubes), and more ongoing category management (specific BI around categories and structured refresh of Spend regularly for measurement and management). As such, the vendor selection process should embody a wider range of review than choosing a vendor primarily based on “how fast can you auto-class my Spend to UNSPSC”. We are seeing that this perspective is no longer the best means to determine if a vendor is right for your company for ongoing Spend Management. Many companies we work with try to analyze their data in the UNSPSC structure. In most cases, they quickly realize that it does not make sense for their business. Additionally, the typical POC does not test (or validate) transparency into the process…the feedback and control mechanisms for accuracy…the ability to easily change classifications to match sourcing programs/supplier groupings/etc. My Part 2 blog (forthcoming) does not say to not do a POC, they do serve a purpose. It focuses on how best to incorporate seeing your data within a vendors application, alternative sourcing classifications, and where a POC fits within the overall selection process. My blog above points out drawbacks of which to be aware regarding the approach when doing a POC. My advice is reflecting what we have seen in the marketplace over the past year and more. We see a significant shift occurring. Companies are maturing and focusing on smarter cost savings and Spend management capabilities. This involves broader Spend classification beyond UNSPSC (categorizing directly to sourcing groups), more opportunity assessment (smarter Analytics beyond cubes), and more ongoing category management (specific BI around categories and structured refresh of Spend regularly for measurement and management). As such, the vendor selection process should embody a wider range of review than choosing a vendor primarily based on “how fast can you auto-class my Spend to UNSPSC”. We are seeing that this perspective is no longer the best means to determine if a vendor is right for your company for ongoing Spend Management. Many companies we work with try to analyze their data in the UNSPSC structure. In most cases, they quickly realize that it does not make sense for their business. Additionally, the typical POC does not test (or validate) transparency into the process…the feedback and control mechanisms for accuracy…the ability to easily change classifications to match sourcing programs/supplier groupings/etc.

My Part 2 blog (forthcoming) does not say to not do a POC, they do serve a purpose. It focuses on how best to incorporate seeing your data within a vendors application, alternative sourcing classifications, and where a POC fits within the overall selection process.

]]> By: Anonymous http://www.esourcingforum.com/archives/2009/11/30/if-you-are-going-to-do-a-%e2%80%9cproof-of-concept%e2%80%9d-spend-data-classification-%e2%80%9ctest%e2%80%9d-with-a-potential-supplier%e2%80%93-do-it-right/comment-page-1/#comment-11739 Anonymous Mon, 30 Nov 2009 21:33:48 +0000 http://www.esourcingforum.com/?p=35797#comment-11739 Dear Sir, I find components within your post extremely inaccurate and actually poor advice. It appears that you are purely trying to deflate existing processes within the marketplace that are working with incredible success and are supported by 3rd party analyst groups. I understand your need to differentiate your company offering by writing reports highlighting "your view" but be careful on stating some of your claims because they are off target based on what existing spend classification leaders can deliver today. I appreciate your views and look forward to future blogs from you on Spend Classification. I am interested in reading your thoughts on an optimal PoC. It certainly must be part and parcel to how Spend Radar works Dear Sir,

I find components within your post extremely inaccurate and actually poor advice. It appears that you are purely trying to deflate existing processes within the marketplace that are working with incredible success and are supported by 3rd party analyst groups.

I understand your need to differentiate your company offering by writing reports highlighting “your view” but be careful on stating some of your claims because they are off target based on what existing spend classification leaders can deliver today.

I appreciate your views and look forward to future blogs from you on Spend Classification. I am interested in reading your thoughts on an optimal PoC. It certainly must be part and parcel to how Spend Radar works

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