Author Archives:Pierre Mitchell

This installment of the Spend Matters PRO research series “Procurement Services Market Landscape Report andDirectory” focuses on regional consulting firms as we continue our analysis of six procurement services market segments that we’ve outlined:

• Source-to-Pay Implementation (consulting, systems integration, optimization)
• Regional Consultancies
• Managed Service Providers (MSPs)
• Strategy Consultancies
• Global Consultancies (including the “Big 5”)
• BPO Providers

Part 1系列的调查findi作了一个概述ngs and lists the 34 providers that we’re initially profiling. See ourservices provider directoryto learn more about the providers and what specifically they offer.Part 2details how procurement professionals can use this information, and it gives more information on the six market segments and providers in those groups.Part 3detailed the seven S2P implementation providers in the first post on the individual groups.

In this installment of group coverage, our focus turns to the six featured regional consultancies that pick their specialization in terms of geography, capabilities and service delivery models that help differentiate them from the mega consultancies. And as with the last installment, PRO subscribers can go to the directory to access a detailed PDF profile of each provider that lists company intelligence information — like employee count, services mix, regions covered, competitors and more strategic insights.

Now, let’s dive into these regional consultancies.

This installment of the Spend Matters PRO research series “Procurement Services Market Landscape Report andDirectory” begins our detailed look at each of the six procurement services market segments that we’ve outlined previously:

• Source-to-Pay Implementation (consulting, systems integration, optimization)
• Managed Service Providers (MSPs)
• Regional Consultancies
• Strategy Consultancies
• Global Consultancies (including the “Big 5”)
• BPO Providers

Our group coverage begins today with the seven Source-to-Pay (S2P) technology vendors that focus predominantly on S2P implementation, but these providers also handle broader consulting and a small portion of managed services. Xoomworks is on our S2P list, and to show how vital and vibrant the services market is,Xoomworks was acquired by Accenturethis week.

Part 1of the series gives an overview of the survey findings and lists the 34 providers we’ll be profiling. See ourservices provider directoryto learn more about the firms. For today’s seven S2P services providers, and in subsequent market segment mini reports, PRO subscribers can go to the directory to access a detailed PDF profile of each firm that lists company intelligence information — like employee count, services mix, regions covered, competitors and more strategic insights.

Part 2details how CPOs can use this information, and it gives more information on the six market segments and the vendors in those segments.

Now, let’s dive into the S2P market and its group of providers.

InPart 1of the Spend Matters PRO series “Procurement Services Market Landscape Report andDirectory,” we started with the chief procurement officer (CPO) essentially being the “CEO” of a spend/supply management services business. This business includes seven major service areas:

1. 战略和运营模式设计和transformationled by the CPO but guided by the business. It determines which set of services are most needed by the business, the use cases for those services (e.g., FP&A, S&OP, M&A, customer-led digital transformation, “one company” initiatives, resiliency improvement, ESG efforts, NPDI support, ERP implementations, etc.), the assessment of the ability to support and even influence those business strategies, and then a target operating model and portfolio of programs/projects (including capability improvement projects surrounding talent, digital, or certain processes or spend/supplier categories).
2. Knowledge-based category management services for major spend categories and associated stakeholdersin order to organize both around supply markets but also to align tightly with critical functional partners that are also supporting business strategies and driving their own services and strategies.
3. Operational services for category/‘super-category’ execution that align to the strategic category management services and other corporate requirements(e.g., risk management), including sourcing execution, supplier relationship management and contract/commercial management.
4. Transactional services(e.g., P2P) supporting the above requirements with a focus on moving toward low/no-touch guided processing, an intuitive self-service UX, and fail-safed fraud/compliance monitoring.
5. Joint services with functional partnersin departments like finance, IT, risk, HR, legal, operations, etc. rather than just helping them manage their spend and suppliers better.
6. Agile product and service (internal/external) developmentworking closely with IT (and broader “digital” strategy/transformation groups) and the service provider ecosystem that your company has built up, whether methodically or ad hoc, for new strategic processes and programs being invented on the fly.
7. Enablement services delivered through a center of excellence(CoE) within procurement or at the enterprise level — e.g., via a global business services (GBS) model.

It is hard to overstate both the importance and the complexity of these services in industries where supply chains and suppliers are so volatile and complex right now, and the fact that there are so many internal stakeholders and external technology/service suppliers that have their own ideas of how they plan to run their own services and ecosystems.

There is massive complexity here, but also massive opportunity. It’s a chance for CPOs to build out their services business on what they really need: a next-generation Procurement-as-a-Service Digital Platform (which doesn’t really exist yet) in the broadest sense — i.e., the ability to mix and match processes like Business-Process-as-asService), enabled by highly modular SaaS, built on emerging application Platform-as-a-Service (aPaaS infrastructure such as low/no-code tools), iPaas for integration, DaaS for outside-in data/intelligence flows and underlying infrastructure.

构建出来,要需要很多help from the procurement “XaaS” ecosystem, even though that ecosystem is highly in flux. And this problem is an even bigger issue for the services providers, which are either supporting pieces of this puzzle or are tasked with assembling this for their large, complex clients.

To do so, CPOs will need to understand their current/future options and then determine the best fit strategy for them.

Previously, we identified a basic segmentation model for the procurement XaaS market that starts with demand segmentation and the “CPO as service provider” (and strategic value partner and ecosystem builder … there should be no conflict with this). The basic approach is to segment out your processes/services by process scope (e.g., upstream source-to-contract vs. downstream procure-to-pay) and by spend category (e.g., indirect vs. direct) to create your “market basket for procurement services” (individually and collectively) and then consider your supply-side service provider options. The more granular that you break this up, the more flexibility you have with best-of-breed options, but also the greater number of integration points and points of failure. This is only getting made more complicated with agile development processes that are quick to roll out new bite-size apps that might bite you back if you’re not planning for a cohesive architecture (e.g., composite data models and master data harmonization and synchronization).

To help take the services landscape basket out to the market (which is full of different vendors, we created a basic segmentation framework on two dimensions that generally encapsulates the market:

• Transform (consulting) vs. Operate/Enable (BPO&MSP)
• Strategy&Operations vs. Digital (which is both “I” and “T” in IT)

For No. 1 above, you may strategically partner with a large BPO that becomes a large virtual extension of your own organization and that helps craft an ecosystem for/with you built on next-generation digital platforms for intelligent automation and analytics (and integrating it to a fragmented flotilla of ERP and S2P applications that your business has built up over over the years) — even if you have a somewhat reduced menu of choices that your provider supports well. You are driving the strategy and services, and you are excellent at managing a large complex services relationship with this partner that has become your “easy button.” On the flipside, your own IT organization may be excellent, but you need third-party transformation services not wedded to any ecosystem, and you want the best thinking, best business models and best emerging practices — and you’ll figure out how to stitch it all together.

For No. 2 above, you may want to engage a single trusted advisor that knows your organization and can help you both create the strategy and roll up some sleeves to help you implement it, all the way through implementation of standardized S2P application suites. Conversely, you may want the absolute best objective thinking on strategy without any preconceived notions or subtle bias toward implementing technology strategies and solutions (and associated tech-vendor practices).

Once you’ve identified your general strategy, then you can home in on the best-fit service providers to engage to start building out your new ecosystem. To help in this effort, we organized our analysis on these dimensions so that we can try to best help match procurement service supply in the ecosystem to procurement service demand by procurement organizations. Also, since we serve the entire procurement provider ecosystem, we are developing this intelligence to help the supply side of the equation to help providers identify partners that they can engage operationally or “strategically” to help make sure that their part of the ecosystem is appropriately broad and/or deep.

Given this context, here’s what we did and what we learned …

Spend Matters today begins a PRO series meant to shed light on an often-overlooked part of digital procurement transformations — namely the services needed to formulate and execute the actual transformation strategy itself!

Our series — “Procurement Services Market Landscape Report and Directory” — will profile 34 vendors in six industry categories. Spend Matters analystsgave the rationale for this researchas helping “the Global 2000 make more holistic solution decisions that are increasingly incorporating a diverse set of strategy, operations, technology and BPO partners.”

But first let’s consider the current state of procurement.

大多数采购组织正在努力improve their stakeholder alignment and business impact. They are trying to extricate themselves from low-value activities in order to expand their portfolio of spend/supply services and capture more value from the supply ecosystem, where nearly everything is now available as a service (i.e., “XaaS”).

That’s good news because procurement needs help transforming its diverse “service portfolio,” which is simply all the things that it does to reduce spend, improve supplier value, impact innovation and top-line growth, improve supply chain resiliency, demonstrate environmental/social leadership, and other objectives.

However, buyers must approach the procurement services market with a holistic mindset, a disciplined approach and an understanding of the trade-offs involved with different service strategies as well as service provider types.

In this initial report that focuses on the end-to-end procurement services market rather than just the business process outsourcing (BPO) market or the procurement consulting market, we will focus on procurement itself as a service provider to the business before turning the lens to the vendors in the supply market.

The supply market dynamics are not just driven by legacy service provider segments, but also the disruptive effect of digital on these segments and service providers such that they can cross over more easily into other segments directly or via partnerships.

The procurement services market is evolving into an ecosystem that can be harvested for value if buyers know what to look for. As such, in this series, we analyzed nearly three dozen representative procurement service providers in the market to learn from them who they are, the value they deliver and their capabilities across more than two dozen individual competencies. We also investigate how they go to market in these evolving service segments and how evolving digital capabilities are helping them add new value streams beyond traditional ones.

See some background on the initial 34 providers here in the provider directory that we’ve created just for this research.We’ll add detailed provider profiles to the directory when we discuss the respective market segment that the providers serve.

These are the six provider categories, shown with an explanation of the group’s value propositions:

• Source-to-pay technology specialists— These purpose-built consultancies will help rapidly and effectively implement and optimize the leading S2P applications and suites — and some other tools as well.
• Global consultancies— These firms, including the Big 5 firms, have worldwide reach and support across a spectrum of services, even beyond S2P.
• Strategy consultancies— The C-suite at buyer organizations are undoubtedly using one of these firms, and most of these consultancies are developing formidable capabilities.
• Regional firms— Use these consultants for local presence, cultural fit and specialization (and maybe even lower rates).
• Global BPOs— Clients of these firms get one-stop shopping for large-scale digital transformation and global operations.
• MSPs— These firms occupy the “long tail” of the market and offer niche enablement by category, process, resource, benefit, commercial model, etc.

Now, let’s get into the deeper details about the services that procurement delivers to its stakeholders across a business, challenges that procurement faces and how to engage with the types of service providers that we’re profiling in thedirectory.

Organizations are increasingly adopting a triple bottom line (TBL) framework to create wider business value from social, environmental and financial interactions — partly because external pressures demand it and partly because the time has come when considering the greater good weighs heavily on the business-conscious.

The juxtaposition is that while the tri-part TBL commitment to profit, people and the planet emerges, it does so at a time when product lifecycles are shortening and supply chains are lengthening, therefore increasing in complexity and volatility. The way around this predicament lies in digital innovation.

For businesses, and manufacturers in particular, the need to innovate at speed has not been greater. And as the business world progressively comes to terms with this need, it recognizes that the best source of innovation comes not wholly from within its own four walls, but from a most valuable external source — its suppliers. To benefit from this partnering fully, an organization’s need to manage supplier relationships is rapidly increasing in importance. We’re seeing instances of supplier innovation that support multiple strategic priorities that go way beyond a company’s core product development. To tap into these efforts, a supplier innovation model and underlying supplier management competencies are essential, so that priorities are aligned and supported.

We explore this model and required management competencies in depth in a recent white paper authored in collaboration with Oracle,“Making Supplier Innovation Deliver to Manufacturers’ Triple Bottom Line,”by our Chief Research Officer Pierre Mitchell. This Spend Matters PRO brief excerpts the highlights and provides a framework to help understand how to move from transactional supplier relationships to achieving SRM Nirvana.

Editor’s note: Spend Matters' analysts write about what they’re thinking in the Analysts’ Corner feature for our weekly email updates, like this post from Chief Research Officer Pierre Mitchell about the annual planning process, budgeting and procurement's role. On occasion, we publish these insights for our wider audience. To read future Analysts’ Corner posts,sign up for our weekly email update.

Well, it’s coming to that time of year when many procurement organizations are beginning their annual planning processes that coincide with enterprise annual planning and budgeting processes.

Unfortunately, this is also usually a time of missed opportunity for these companies and the providers who serve them.

During a recent discussion with the CPO of world-class cruise line operator, Carnival Cruise Lines, we found that in some industries and for certain supplies on-time delivery is absolutely non-negotiable. For example, in this industry, when a ship leaves port, it leaves. There’s no contingency for lateness.

As we know, there are always two sides to the supply/demand equation. The buyer at a supplying firm might well encounter delays in parts acquisition, might think enough time has been built into the order process, or might have a CFO ordering them to keep cash in the business until absolutely necessary and to buy just in time. The customer, on the other hand, just wants their goods on time. It throws up all sorts of questions for the supplier: so what's a supplier to do? We asked chief research officer Pierre Mitchell.

Siemens AG, a global technology provider,announced the acquisition of Supplyframe, a provider of the Design-to-Source Intelligence (DSI) platform for the global electronics value chain.

In a press release announcing the acquisition, the companies said the $700 million deal will allow customers access to both Siemens’ offerings and Supplyframe’s market intelligence. The companies will aim to help clients reduce costs, increase agility and make informed decisions. The deal strengthens Siemens’ portfolio with new capabilities in SaaS.

5yframe’s DSI platform is home to over 10 million engineering and supply chain professionals worldwide, providing options for businesses to design, source, market and sell products in the global electronics supply chain. Its expected revenue for 2021 is $70 million.

"We are very pleased to welcome Supplyframe’s highly innovative and talented team to the Siemens family. Supplyframe will be the nucleus to accelerate our overall digital marketplace strategy,” Cedrik Neike, member of the Managing Board of Siemens AG, said in the press release. "Supplyframe’s ecosystem and marketplace intelligence complements our industrial software portfolio perfectly and strengthens our capabilities for the growing market of small- and mid-size customers.”

This Spend Matters Rapid Analysis research brief explores valuation considerations, the rationale for the combination, the increasing intersection between product lifecycle management (PLM) and direct materials procurement, and the rise of supplier/product intelligence as a critical required capability for procurement organizations — and by extension design engineering and supply chain teams. This brief also explores broader market and supply chain implications of bringing the combined assets togethers. To learn more about Supplyframe’s direct materials procurement capabilities, we recommended starting with a recent PRO Vendor Analysis on the provider which you can findhereandhere.

We wrote recently that we would be starting a new series of posts on ‘unconventional wisdom’ imparted by our chief research analyst Pierre Mitchell. Whatever takes our eye during our conversations with the market, the industry and the procurement people within it, will be a topic for scrutiny — we are looking for the more challenging and unusual questions that are often left unsaid, unexpressed, or unaddressed.

Today, we are responding to a comment made during a CPO interview: "Right now, in my opinion, provider choice is very big and specialization too narrow.” We mine Pierre's brain to understand better what it is that is holding the solution providers back from addressing this challenge.

Deloitte has released its latest Global Chief Procurement Officer Survey, titled “Agility: The Antidote to Complexity.” The survey comes out every two years to gauge the priorities, performance, capabilities, perceptions, plans and perspectives of roughly 400 CPOs around the world.

The 2019 edition of the study focused on complexity as the major headwind to procurement performance, and the 2021 edition focuses on agility as the critical emerging competency to addressing this complexity/risk. Agility isn’t a new idea, but the study describes it holistically; read on for some examples, an analysis of the findings and an interesting new twist to the 2021 edition.

In theprevious installmentof the introduction into the direct materials sourcing area (which itself is part of abroader direct procurement landscape), the focus was on direct spend analytics and design collaboration & early supplier involvement/innovation.

在这个花箴分期,重点will shift toward the next five areas, which move from collaboration on product lifecycle management (PLM) into cost management, supply chain and direct extensions of upstream source-to-pay (S2P) applications. And we’ll give examples of vendors that excel in these areas.

SAP Fieldglass Assignment Management is a new solution that enables organizations in asset-intensive industries (like Oil & Gas, Chemicals, Utilities) to manage the execution and accounting of day-to-day plant maintenance work conducted by external workers, the provider said in a demo with Spend Matters. Read more about the benefits of tracking projects, workers, compliance and pay in near real time. And our analysts give their key takeaways from the demo.