When Tim Minahan left Aberdeen to head to Procuri five years ago, the average tenure of procurement analysts at the firm dropped from years to quarters -- and in some cases, mere months. As some predicted at the time, Aberdeen would never be able to regain the research bench strength that Tim and his team once had. But Andrew Bartolini, who came in a couple of years ago, finally created some stability in the ranks. Earlier this week, however, Andrew quietly left the firm for a new venture that he is in the process of launching. Even though I don't know the details yet -- I am hoping to catch up next week at the Procurement Leaders event in Chicago -- I am sure he'll continue to build on his relationships and work in his previous endeavor. But where does this leave Aberdeen?

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Without question the procurement BPO space is heating up--at least as you listen to providers talking about it and going after it. I've personally not seen an uptick in the percentage of deals resulting in signed agreements, but it does feel like the market may be turning from one of window shoppers to those who are serious about pulling the trigger. Earlier this week, I came across this announcement that EGS, a London-based Spend Management solutions provider, had also launched into this market by signing its first deal with NHS Brent, a UK public sector client. EGS marks yet another entrant into the Procurement BPO market that also delivers other types of procurement solutions and services (many BPO providers like IBM and Accenture have different consulting, services, and even software arms, in the case of IBM).

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Inside many companies, the recession has caused supply risk to move from a secondary issue to a primary concern. Despite this interest, many companies are approaching the topic from a narrow scope, considering only supplier financial viability as a risk driver in their supply chain. According to Spend Matters' affiliate site, MetalMiner, the Chilean 8.8 magnitude earthquake shows that supply disruptions can take many forms--and not just from suppliers going bust or cutting corners. According to MetalMiner, the "disaster serves as a reminder that supply risk in the form of supply disruption remains alive and well for many metal markets." But geographic risk from proximity to moderate or high probability disaster extends beyond the metals markets.

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The most important functional announcement in Coupa's latest release (you can read the first post in this series here) is a new expense reporting capability designed to provide organizations with an integrated system to help capture, in Coupa's words, "all non-payroll spend." Spend Matters' research suggests that this claim is a bit of an exaggeration because Coupa has not yet targeted direct and services spend--nor do they offer spend analysis, sourcing, and contract management tools to manage the supplier/spend lifecycle. But from a basic execution, capture, and reporting standpoint, Coupa can now legitimately claim that their system supports the key requisitioning and T&E lifecycle elements for two key spending areas. As I demoed Coupa's latest release, what became clear is that they had thought through the key process flows from a T&E perspective and all of their key linkages into the procurement process.

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As Spend Matters readers know, supply risk is a topic I've been fascinated by for some time. Going back to an original white paper I wrote with FreeMarkets colleague, Mark Clouse (who is now at AT Kearney) back in 2002, I believed that most organizations failed to quantify the overall exposure they faced from multiple supply chain operating angles -- financial risk, operational risk, demand risk, brand/reputational risk, etc. Since that time, I've not written enough on the subject in an extended format, but the latest Spend Matters Compass Series 2, Spend Visibility and Beyond--Analytics Broader Role in Procurement and Supply Chain, gave me a chance to explore it in a free research brief that we're making available today: The Intersection of Analytics and Supply Chain Risk Management: Using Intelligence to Drive Early Intervention.

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Spend Matters would like to welcome back Sherry Gordon, our resident supplier performance management expert – and my co-conspirator in getting to the bottom of supply risk technology.

There has been a lot of discussion lately on Spend Matters about supply risk. One very challenging area within this arena is sub-tier supply risk. It can be hard enough to find out what's going on with direct suppliers, but what about their suppliers and their suppliers' suppliers? Understanding sub-tier supplier risk is an important challenge, and has long been an area that the aerospace and defense industry has been trying to address. One failure to conform to DoD rules or one supplier problem can adversely impact multiple prime contractors. This situation occurred when an existing government regulation, the Berry Amendment (regarding metals that go into DoD products) was suddenly enforced. It caused over 50 suppliers in violation to be put on a stop-payment list.

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I'm in the process of beginning to research procurement BPO and outsourcing more seriously. Later this year, we'll publish some of this research on Spend Matters and also under the Horses for Sources label. At this point, I've thought about the following topics that I find relevant to procurement and finance organizations considering outsourcing part or all of the source to pay process:

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Today marks an important milestone in Spend Matters' relatively brief history. We’re launching our second Compass research series. We’ve designed Spend Matters Compass briefs to deliver high quality and insightful research at a level that goes deeper than Spend Matters, the blog, could ever do. It also forces us to stick to a yearly editorial calendar. Two different people who’ve already read the initial briefs from the first series on services procurement collectively nailed what we’re trying to do when they both said: "AMR quality, Aberdeen business model."

I was tickled when I heard this quote -- twice. It's precisely what we're trying to do with Spend Matters Compass. Candidly, I don't think we're at the AMR level yet; nor, for that matter, do I think AMR will be at the AMR level for many more years, if you know what I mean. By focusing on depth and objectivity and offering a sponsor-supported model that provides download lists to providers and gives them exposure on the cover and last pages of each analysis, we’re able to offer up a level of research that practitioners and consultants would have to pay tens of thousands of dollars for in annual subscription fees anywhere else.

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Last week marked a milestone in Spend Matters' five-year history: We hired our first full-time editorial and marketing resource, Sheena Moore. Sheena, who has a background in advertising and copyediting, will be contributing her skills in a variety of ways to both Spend Matters and our sister publication, MetalMiner, as we continue to scale and grow our business models. Having survived (and sometimes even thrived!) in a large advertising agency earlier in her career, we have no doubt she'll be right at home in the chaos that often is procurement (and most certainly the environment of two fast-growing blogs and research sites covering the subject). After a few days on the job, I asked Sheena to share a few thoughts on her maiden experience with our content corner of the enterprise universe. Here’s what she had to say:

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A fundamental challenge of indirect and services procurement is that we’re often asked to make sourcing decisions -- not to mention negotiating with and managing suppliers -- based on historic data that may or may not reflect future demands and requirements. Travel procurement is the spend poster child for this kind of challenge today. Might the evolution in travel procurement that we’re seeing today represent an even larger paradigm shift that will permanently reshape the function? Perhaps, especially if you believe some of the key tenets presented in a February Wall Street Journal article. According to the story, “Historically, business travelers have accounted for half the customer base of major carriers and an even bigger chunk of their revenue. But even as the airline industry reports that corporate travel has begun to bounce back, many U.S. companies are keeping a tight leash on travel expenses.” From a travel-sourcing perspective, it's more than just volume levers that may be changing permanently.

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