Friday, September 12, 2014

Mine Untapped Opportunities To Realize P2P ROI


We would like to welcome back Roshnee Mistry who works with the content leadership team of Zycus. 

One of procurement’s main functions is to help organisations achieve excellent value from supplier relationships. Top performers deploy holistic purchasing and payables technology platforms to deliver breakthrough results from sourcing, purchasing and invoice processing. 

Deriving operating efficiencies and improving performance of working capital to deliver maximum value to internal business customers is only possible when internal processes and external supply relationships are managed collaboratively.

According to a study conducted by The Hackett Group, “Top-performing purchase-to-pay organizations outperform their peers nearly two-to-one when it comes to efficiency, while also delivering on the higher-level effectiveness objectives of the company. Such objectives include payment strategy optimization, compliance to preferred suppliers, spend visibility and internal compliance and control.”

The current business environment allows little margin for error. Business enterprises must constantly re-evaluate processes and cost structures and align CPOs’ agendas to top corporate priorities. Data shared in a recent white paper by Zycus titled ‘The P2P Payoff: Mining the Untapped Return from Procure-to-Pay’ demonstrates simple ways of maximizing savings opportunities by optimizing P2P processes.

Ø  Make your P2P system the only approved way to buy. By guiding users all the way through procurement processes, compliant buying for can be increased for all indirect purchase categories, boosting potential procurement ROI by a factor of three or more and eliminating maverick spending over time as user acceptance and spend visibility increases. In a service-friendly way, turn off all other order and payment vehicles – make it policy.

Ø  Guide requisition approvers by providing visibility into current budget consumption. Effective P2P systems ensure that all purchases are on-contract and enforce budget control at a line-item level, denying or deferring purchases that are not budgeted and providing complete, real-time visibility into spending versus budget. Such visibility creates individual accountability, engenders proactive management of corporate funds and aids in plugging savings leaks.

Ø  Achieve best-in-class P2P performance by accurately coding and classifying purchase transactions without burdening end uers. An Artificial Intelligence–powered platform assists in eliminating user guesswork, classifying transactions accurately and triggering pre-configured approval workflows, which improves overall P2P usability.

Ø  Streamline requisition-to-order cycles to enable reduced inventory and associated carrying costs. Seamless requisition approval and visibility into order status ensures that all indirect goods and materials can be purchased as and when required. Buying teams can provide outstanding customer service to each business unit and realize exceptional transactional efficiency.

Ø  Eliminate manual invoice processing. Best-in-class invoice processing is achieved only through automation. High first-time match rates feed through to other areas, resulting in greater productivity, lower costs per invoice and larger numbers of invoices paid on time.

Ø  Increase discount capture. Both suppliers and buyers benefit when financial supply chains operate efficiently. Discounting is an effective way for buyers to generate returns on surplus cash and for suppliers to boost cash flow. Automated and accelerated invoice approval cycles enable greater capture of prompt-payment discounts while maintaining appropriate controls.

Ø  Improve spend visibility and enable advanced analytics with P2P automation. Provide insights into suppliers, categories, prices, supply lead-times and contract compliance to promote and maintain strong supplier relationships and to proactively manage supplier performance and improve contract utilization.

Seamless integration of a procure-to-pay automation solutions with existing systems is critical to ROI and employee usability. End-to-end process management approaches are required to transform and realize ROI from automating P2P processes. It is imperative to track successes, report and follow up to prevent leakage and to improve controls and compliance. Corporations must understand that usability, customer centricity and vision are key differentiators for maximizing adoption of P2P systems across organizations.

Each new dollar of spend brought under control can yield significant total cost savings for organizations. As the old adage goes: "A penny saved is a penny earned." Read the whitepaper to learn about more ways to save.

Roshnee Mistry from Zycus regularly writes on procurement-trends and best practices, sometimes taking the off beat path to bring in a fresh perspective.  She also drives the branding activities of her company.

In her free time she enjoys hot cuppa coffee with the latest fiction book.

She is an MBA in Marketing and a commerce graduate.


Thursday, September 11, 2014

A Bellwether of Change for Procurement Departments

Are you one of those unfortunate procurement professionals who spend the end of every month putting on your detective coat and becoming a sleuth in a never ending quest to find paper spreadsheets and those who created these monstrous disasters?  If you work for a small to mid-sized organization and are tired of chasing after people every month for their purchase orders, Bellwether Software offers a viable alternative for your business, ePurchasing Management Xtra or ePMX for short.

ePMX is a cloud-based, procure-to-pay system that is really geared towards small to mid-size businesses and is local government-friendly as well.  Dan Ross, VP of Sales & Marketing for Bellwether, said that the typical user counts for their customers are less than 50 end users and 10 procurement department users. 

The current version of the ePMX system does not offer any real-time integration with ERP systems, but can export data to them. The next version of ePMX will allow for integration with Open API’s and is scheduled for the first quarter of 2015.  According to Dan Ross of Bellwether, “the next major version release of ePMX will be a significant upgrade to the current version.  It will include a new UI, notification center, WYSIWYG work flow & approval process builder, and report builder”.  However, current ePMX users are able to import/export data to AP or into an existing ERP system.

While the more recognizable names in the procure-to-pay space target huge customers who want better procurement system performance than their ERP systems are able to provide, Bellwether’s solution is more targeted at smaller organizations who are replacing manual processes with a more formal process that gives them the control over procurement that the big companies already have.

One feature of ePMX that we found appealing was the fact that you are able to only license the actual modules that you will be using as opposed to paying for modules that are irrelevant to your organization.  This is a great cost-savings opportunity for organizations just getting their feet wet in the online procurement world without causing an aversion to due to price.

Bellwether is up-to-speed with the trend of “approvals by email” where no logging into the system from a desktop is required for approvals.  As we often mention, this particular capability can cause stress on IT in terms of security concerns.  With respect to security, Mr. Ross states, “those users on mobile devices still need to log in with a user name and password at least once.  After they authenticate them self once, they can do additional approvals until they log out or the system logs them out.  The client chooses the length of time a user is allowed to be logged into ePMX in the configuration settings based on their security requirements”.

The requisitioning module is fairly simplistic, but also very intuitive. Requisitioners have the ability to PunchOut to a vendor website, select their items and ePMX will download all the order information.  Then they follow the ePMX requisition workflow for approvals and continue the process.  In our opinion, it is impressive that a small company can utilize PunchOut capabilities.

The quotations module does a nice job of organizing and automating the creation of the type of basic RFQ’s that smaller companies do and allows procurement departments to compare bids in a unified location.  It accepts quotations in sealed bid format only – no reverse auctions or dynamic bidding events are facilitated by this particular module.

Even though the graphical user interface doesn’t have a particularly cutting edge look, it is actually pretty pleasing to the eye and thoughtfully designed.  We really like how various records (requisitions, purchase orders, RFQ’s, etc.) can be accessed via dropdown box in the various processes where they are needed. 

Though many eProcurement systems shy away from inventory, ePMX has an inventory module which would prove to be valuable for a smaller company that doesn't want to have to deal with a separate inventory system or worse – inventory kept in an Excel spreadsheet! 

ePMX offers  a very user-friendly help functionality.  Say you are in a particularly deep part of the inventory module and you are unsure of how to handle a particular process; all you have to do is click on the help function and a web page pops open that matches the particular area of the module you are in.  In our opinion, Bellwether hits a home run with this feature as it allows the user to quickly find information as opposed to crafting their own search terminology with respect to what they think their problem is at the present time.  This takes considerable stress away from the user and allows them to finish their tasks at hand much quicker and more efficiently.

Deployment of the Bellwether ePMX system only takes a 3-4 week implementation time frame and is for clients that choose the cloud option.  According to Mr. Ross, “currently 90% of Bellwether clients choose the cloud version.  Only organizations that have extreme security requirements choose the on premise version”.  Mr. Ross further states, “for clients that choose the purchase option for on premise installation, they can expect to add an additional 3-10 business days to the set up process”.  

Overall, Bellwether ePMX offers a great opportunity for smaller companies to professionalize their transactional purchasing process.  It is designed to provide a proven structure to most of the purchasing activities in which smaller companies engage.

Wednesday, September 10, 2014

Supply Chain Social Responsibility Is Finally Within Reach

Are you aware of the risks of not having a socially responsible supply chain? Unless you are managing your supply chain in the most socially responsible way, you are risking getting your organization into more trouble than ever. Getting bad publicity, losing customers, and being subject to criminal consequences are just a few of the risks that your organization can face when its procurement professionals are unaware of constantly changing social responsibility principles.

Fortunately, the process of implementing supply chain social responsibility no longer has to be a mystery.

Today, the Next Level Purchasing Association has launched an online course entitled "Exemplary Supply Chain Social Responsibility."   This course will teach you the wide variety of details that can take a supply chain organization from clueless to industry-leading. You'll get more than just an introduction to social responsibility - you will become an expert at flawlessly executing and managing a supply chain social responsibility program.


Learn more about "Exemplary Supply Chain Social Responsibility" at http://www.nextlevelpurchasing.com/supply-chain-social-responsibility.php.


To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

Monday, September 08, 2014

More Negotiation Steps For Optional Procurements

I hope that you have enjoyed the article "7 Steps For Negotiating Optional Procurements."

In that article, I shared the first five of those seven steps.  Here are the remaining two steps...



6.     Offer to settle at an amount up to your organization’s maximum.  If you haven’t reached an agreement with your supplier at this point, it will require some back-and-forth conversation to reach a price that is less than or equal to your organization’s maximum.  At this step, you may need to disclose your organization’s maximum.  If you reach agreement, you don’t need to move on to the final step.

7.     Revisit the maximum your organization is willing to pay.  If you have executed the preceding steps well, you have pretty much determined the neighborhood of the supplier’s lowest price.  If you haven’t settled, you need to confer with your internal customers and/or management to see if there is a willingness to raise its maximum to meet the supplier at or near its most recent offer.  If not, then you’ll simply need to forgo the procurement.  It was optional, remember?

That's about it.  

Please click here to return to the article to read the "Spotlight on Professional Development Opportunities," "Latest Purchasing News" and "Free Offer" sections!
 

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

Wednesday, September 03, 2014

Last Chance To Register For The NLPA Conference This Month!

Time is running out to register for the procurement event of the year!  You only have until Monday, September 8, 2014 (or until the remaining 15 spots sell out) to register or you're going to miss out!

Get off of the bench and into the game by attending the 2014 NLPA Conference - being held September 15-17, 2014 in Pittsburgh, Pennsylvania.  This valuable and exciting procurement conference is designed for what today's procurement professionals like you need:

* Dynamic speakers providing insights into critical issues and challenges

* Workshops on the latest procurement strategies and techniques

* Networking opportunities with influential procurement thought-leaders

At the NLPA Conference, you'll get the procurement insights that you simply can't get anywhere else! You'll hear 3 keynote speeches covering the most cutting-edge business topics. Plus, you'll get to choose from 11 skill-building workshops and attend an interactive panel discussion sharing insights to help you to deliver better procurement results for your organization.
In addition, your attendance can earn you up to 16.5 Continuing Education Hours (CEH's). Not only will you learn, but you'll also have fun and get energized about procurement.

Procurement professionals from around the world have already secured their spot at the 2014 NLPA Conference. Companies sending their procurement team members include:

* Alcoa
* Bayer Healthcare
* Boston Scientific
* CB Richard Ellis
* Fidelity Investments
* GUESS, Inc.
* Honda
* Mitsubishi Nuclear Energy Systems
* Select Medical
* Wood-Mizer
* And more!

Register today for the opportunity to network with these leading procurement professionals and others while learning from them what is and what isn't working in procurement.

Secure your spot at the 2014 NLPA Conference by visiting:
http://www.nextlevelpurchasing.com/nlpa-conference.html?lc
and selecting "Add to Cart" next to your preferred registration option. 

If you prefer to use a method of payment other than a credit card, please download and complete this form:
http://www.nextlevelpurchasing.com/resources/conferenceregistration.pdf

If you have any questions regarding the 2014 NLPA Conference, please respond directly to this email or call 1(412) 294-1990 and a member of the NLPA team will be happy to assist you.

Registration will officially close on September 8, 2014, unless the conference sells out before then. There are only 15 seats remaining, so don't wait until the last minute if you are considering attending.

Again, the link to register is:
http://www.nextlevelpurchasing.com/nlpa-conference.html?lc


I look forward to meeting you in Pittsburgh later this month!

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


Why All the Buzz Around Coupa Software?

In the 3/20/2014 Wall Street Journal blog, it was reported Coupa Software raised $40 million (US) dollars in venture capital in less than 48 hours according to their CEO Rob Bernshteyn.  Perhaps it is because, according to Mr. Bernshteyn, “Coupa has been beating SAP AG”.  Now that is a pretty big claim to make, so we decided to take a look at Coupa and see what all the buzz is about!

Coupa Software offers a cloud-based procure-to-pay system. Being well-regarded throughout the industry as having a user-friendly eProcurement system, we did not notice any significant surprises in the Coupa software eProcurement portion of the demo, which was more pleasant than earth-shaking in a sector that is rather mature. 

One thing that wasn’t resolved was whether the system had the capability of showing items from hosted catalogs and “PunchOut” catalogs in the same search results.  It didn’t appear that was possible.  We could see that being a problem in cases where their preferred suppliers have the more tech-savvy ability to provide PunchOut, but their products are less easily found than those in hosted catalogs based on what the demo had shown. 

One nice thing in their eProcurement system that we haven’t seen elsewhere was a line-by-line budget thermometer in their cart which allows the buyer to know how much they have left to spend or are permitted to spend.

A big differentiator in our opinion is their Expense Management capabilities.  Expense Management is a module that many other suites do not include as it is often considered in the accounting realm more than the procurement realm.  More so than just including it, we loved how they integrated the expense concept with the procurement concept via reports and other features, with the goal to migrate future out-of-pocket expensed spend onto purchase orders.

Within the Expense Management module itself, we were impressed with the ability to dump corporate card data into the system.   Users can take a picture of a receipt and use the Coupa app to automatically add it as a line item to ease the administrative burden of creating expense reports.

We were impressed with the ability for managers to approve requisitions, orders and expense reports from email and/or the app (available now for both iOS and Android) without the need to log into the system itself.  Once a request is approved by individual(s) at a particular level, the approver ( or approvers, as the case may be) at the next level receives a notification either via email or the mobile app.  While this convenience is greatly appreciated by those at approver levels, it in turn can raise questions for those in IT as to the security of such applications.

The e-Invoicing module was also very impressive.  What stood out most to us specifically were the analytics that showed the discount opportunities, the list of top savings opportunities (for taking discounts for early payment, missed discount, no discount available, no payment terms), and the various ways that invoices are added into the system (electronically via cXML, created via a “flip PO to invoice” feature, and emailed into the system by supplier).  The list of top savings opportunities (listed by invoice #)immediately jumped out at us and this feature should prove invaluable to those who utilize the Coupa Software system.

Coupa also makes it easy for buyers to buy the right products they are allowed to purchase.  If there are particular technical specifications for a certain product, the required specs will show up on the screen when the buyer performs a search for the product.  Also, the software allows for users to read reviews and rate suppliers and products in detail. 

Other features of the Coupa Software system we liked include:

•          Internal forms can also be created for time off, temporary laborers and other situations
•          The ability to handle transactions in multiple currencies and languages simultaneously
•          Suppliers are not charged a fee to be included in the Coupa Software catalog system
•          Coupa's plan to add asset tracking to the system


For those procurement departments whose #1 technology priority is obtaining an eProcurement system, Coupa deserves a very close look.  While Coupa’s sourcing and contract management capabilities aren’t quite strong enough to stand on their own, they would be nice bonus add-ons for procurement departments who want a world-class eProcurement system with a little extra.  

Friday, August 29, 2014

Read Procurement Advice & Predictions In Spend Matters' Interview With NLPA Founder

This week, Spend Matters UK/Europe published a fun and informative interview with me.

Lots of ground was covered in this short, but info-packed, interview.  I share my thoughts on advice for young procurement professionals, why organizations should even care about procurement, and the one criterion that may become more way important than price in future supplier selections.

You can read the entire interview at http://spendmatters.com/uk/charles-dominick-of-next-level-purchasing-todays-procurement-provocateur/.

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


Tuesday, August 26, 2014

Types of Procurement Expertise

I hope that you have enjoyed the article, "5 Types of Procurement Expertise."

My main goal with the article was to give some perspective about how broad one's capabilities must be to be successful in procurement today.  I think that the article did that.  But...

Are there only five areas of expertise that a procurement professional must have?

Nope!  There are even more.

I can think of at least one more right now:  business acumen.

In our online Express Course series, "Procurement KPI's & Business Acumen," we share a definition of business acumen from the Financial Times.  An excerpt from that definition is "[b]usiness acumen is keenness and speed in understanding and deciding on a business situation."

Some of the smartest people in the world don't have business acumen.  They wouldn't be able to come up with a way to increase an organization's revenue or market share.  They wouldn't be able to grow profits at will.  They wouldn't be able to develop a new strategy that can take a business to heights it never achieved before.  They can't talk to a senior executive on the same level and have an equal, mutual respect for each others' ideas, concerns, and hopes.

Business acumen is a unique type of expertise.  One that is increasingly being required of procurement professionals.

As you can see, being a successful procurement professional isn't being good at one thing, like knowing how to get an invoice approved for payment or even executing a sourcing process on time and without challenges.  It's many things.

How many of these areas of expertise are you working to improve?

Hopefully all of them.

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer - Next Level Purchasing Association
Co-Author - The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com


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