Category Archives: Global Sourcing

Global Sourcing

Going Beyond Supplier Diversity 101

In today’s world, supplier diversity is becoming a growing concern and objective for procurement teams. While supplier diversity can be a moving target for most organizations, there is no denying diversity is becoming a competitive advantage. Improved supplier diversity is helping organizations strengthen employee motivation and emerge into new markets. Often, procurement teams struggle with where to start when mapping out their strategy, goals, and metrics for the diversity program. Dysfunctional processes, bad data collection practices, and the inability to … More

Time to broaden how we think about purchasing capability

“You are only as good as your team” is an oft-quoted phrase and something that procurement chiefs have taken to heart as their personnel numbers have grown. Each and every year procurement chiefs say that one of their key priorities is to improve the skills and capabilities of those in their team. Understandably this focuses on those who sit under their direct jurisdiction, but 2014 should be the year that this mindset changes because purchasing capability extends far beyond the … More

Shattered myths mean no let up in commodity markets

After locking themselves into a long-term contract, procurement chiefs could be forgiven for only giving the commodity markets a cursory glance over their morning cup of coffee, but recent price moves in the natural gas market prove there is no time to rest on any laurels. Between February and April this year, natural gas prices on the CME Nymex rose from $3.153 per million British thermal units (mmBtu) to $4.408. After reaching this yearly high, prices steadily fell and on … More

Disintermediation & The Insurance Intermediary

As consumers, we are all flooded with TV ads from GEICO, Progressive and other insurance companies that are providing insurance coverage direct to consumers. In fact, it seems the Gecko is TV’s most famous and recognizable celebrity today (at least he is to me). So, why do these companies sell their insurance products directly to the consumer instead of through insurance agents? The reasons are simple: Increased profit margin A direct relationship with the buyer The intermediary/agent provides little added … More

Service Providers Tell All: How to Improve Innovation in Services Relationships

Clients often complain that they don’t get enough innovation from their service providers, so we asked a group of providers at our recent Sourcing Industry Conference about why this might be. They defined innovation as a two-way street and said their clients don’t understand the collaborative process needed to foster innovation. They also noted that the contract between service provider and client can cloud the matter with vague promises of innovation but that it often lacks specificity on how to … More

Lessons from Apple: Who is Keeping Watch Over Your Supply Chain? Part 2

Click here to read Part 1 of this series. Apple makes their suppliers sign Nondisclosure Agreements , and warns employees against disclosing anything beyond what is absolutely necessary, but clearly they have lost much of the control they were previously able to exert over their research & development and manufacturing processes. Their procurement and supply chain groups are clearly facing real challenges if they hope to bring non-publicly available information back inside the fold. While it is necessary to share … More

Put on Your Detective Hat & Solve Mysteries with Spend Analysis

When procurement professionals are speaking with me about spend visibility, one of the first questions I ask them is: “What do you want to accomplish with improved spend visibility and data?” I lead with this question because there are many ways to define spend analysis as part of the strategic sourcing process and countless ways to empower sourcing professionals with actionable information. I encourage my clients to start with spend velocity reporting as a traditional starting point, which helps access … More

My Procurement is Your Beschaffung and Their Approvisionnement

“A rose by any other name would smell as sweet.” – William Shakespeare, Romeo and Juliet There is amazing variety in the titles used by professionals in the spend management space. In most cases, those differences are nominal and other than suggesting something about the organization someone works for, or their relative seniority, we know we all do the same thing for a living. One of the advantages of being a process-driven function is that we have the opportunity to … More

10 Reasons eSourcing Fails: Part 1

eSourcing has become essential in best-in-class procurement organizations.  Strategic sourcing improves efficiency, communication, and consistency – all of which are highly regarded in any organization.  As companies implement an eSourcing solution to take them to the next level, they should consider the following potential pitfalls to avoid. 1.    Lack of internal buy-in. A common issue among companies implementing an eSourcing solution and process is the lack of internal buy-in.  You make the decision to move forward with a new process … More

Procurement’s Role in Investor Relations: Part 2

In Part 1, I introduced Procurement’s role in investor relationships. Click here to read Part 1. Today we will dive deeper in investor relationships and what it means for the CEO and CFO.  The problems with many IR departments are not dissimilar to that of many procurement functions 15 years or so ago. They are focused on transactional and compliance task rather than value creation. I would argue there is a case for investors to be regarded as strategic suppliers, … More

Insourcing: When Does it Make Sense to Bring Services Back Home?

While outsourcing continues to grow at a solid pace each year, a number of companies have needed to insource a part of their formerly outsourced services portfolio. The drivers behind these decisions include: a CEO-mandate to change corporate sourcing strategy, a way to remediate a troubled outsourcing relationship, or a healthy look at an old sourcing decision to find the right mix of in-house and outsourced services based on current business goals. Mergers and acquisitions can also drive insourcing decisions. … More

Open Letter from IASTA on SAP/Ariba & Procurement Industry Changes

 Dear Procurement Colleagues, As many of you are aware, the Procurement applications industry experienced a tectonic shift last week on May 22, 2012 when SAP agreed to acquire Ariba. On behalf of IASTA, I congratulate Ariba and its shareholders on their well-earned, well-deserved success. Now I want to take a moment to address what I believe the acquisition means for you and the broader marketplace. While not entirely unexpected, the acquisition has ushered in extreme uncertainty within the sourcing practitioner … More

10 Ways to Drive Procurement Influence Using Advanced Technology: Part 2

In Part 1, I covered Spend Matter’s first idea to enhance procurement’s value to the business. Click here to read Part 1. The second idea to deliver new value to the business is to connect sourcing activity to contracts- implement savings faster and manage compliance. “Contact management is one of these things in the past five years that’s hung outside of procurement,” Busch said. “But we are seeing a newfound focus to use contract management to drive implemented savings.” Procurement … More

10 Reasons to Contact your eSourcing Support Team Part 2

In Part 1, I discussed 5 times when you should contact your eSourcing support lead for tactical advice. Click here to read Part 1. In other situations, you might simply need more strategic advice when planning or working in your eSourcing tool. Here are five situations when you should contact your eSourcing support team for strategic advice: 1. Structuring your event to optimally collect pricing. Collecting pricing should be both useful to you and simple for your suppliers, and you want … More

Drivers of Incorporating Sustainability in Procurement Organizations

Sustainable sourcing — considering environmental and social impacts in selecting and managing suppliers — can enhance your company’s brand, improve operations and drive efficiency while promoting a healthier environment and stronger community. Regulators, consumer groups and customer demands drive sustainability requirements. Trillions of dollars are being invested in green funds, and companies tout their sustainability initiatives through ad campaigns. Risk management experts know that a company’s reputation can be tarnished by the careless environmental actions of its suppliers. Procurement organizations … More