Spend Matters welcomes a battle of the bands guest post from Timothy Yoo, Principal at Archstone Consulting (rebutting Mike Fuller's claims from last week).

I read last week's guest post by Mike Fuller Ain't No Half-Steppin": Why You Should Still Be Focusing on SRM, and I'm sorry to say, Mike, but I completely disagree with you. Rod Stewart's song and video 'Da Ya Think I'm Sexy' is NOT sexy. I've always been partial to Marvin Gaye myself, and when given the opportunity to source a complex category I find myself exclaiming "Let's Get It On!"

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In the first three posts in the series (Part 1, Part 2 and Part 3), we looked at different models and approaches for sourcing and managing complex finance (including legal) categories. Courtesy of ICG Commerce, the discussion, in the most recent post in this series, also looked at a case study examining the types of results that companies can achieve through sourcing what's arguably the most sacred sourcing services cow of all: external audit services. But in this final post in the series, we'll leave the realm that involves sourcing firm-based services for a minute and instead examine another finance services case study: T&E and p-card programs. Even though many companies look at p-cards without realizing the type of price compression possible (based on revenue in fact -- incentive payments), the results speak for themselves.

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Please click here for Part 1 and Part 2 of this series.

In this next post examining some pragmatic insights from ICG Commerce (and others) in the legal and finance sourcing and category management areas, we'll turn our attention to a case study to bring the savings potential of services procurement alive. In looking at areas that fall under the purview of finance, no single category of spend is more sacred than external audit, which we previously mentioned has an existing supplier tenure of over twenty-five years (that's right, by the averages, the last time your company switched its auditor was towards the tail-end of Reagan's first term of President of the United States). Clearly, if a company is to successfully pursue the sourcing of audit services, it's critical to gain broad buy-in and support from the CFO and controller, not to mention other key executives.

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In the first post in this series examining how companies can apply and gain incremental value from new sourcing approaches across their complex categories, we looked at how one organization, courtesy of Trade Extensions, has used an advanced sourcing/optimization approach in the packaging area. We'll continue the analysis today with another example of optimization and related data gathering and scenario analysis approaches in the area of contingent/temporary labor. This particular case involves a Fortune 500 manufacturer that leveraged an optimization-driven approach to source this category in both the US and Europe prior to deploying a specific services procurement/VMS platform to manage the broader contingent lifecycle.

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Economists like to point to the "Big Mac Index" to understand the relative purchasing power and cost of buying a burger in different world markets. Yet in the corporate travel world, at least in North America, a slightly more expensive cut of beef may be a far more accurate predictor of where prices are headed and our own corporate travel buying power. A recent article that hit the Medill news service suggests that Morton's Restaurant group performance is riding a slowly expanding tide of business travel. According to the story, "The Chicago-based upscale steakhouse company, which is reliant on business travel and entertainment spending, saw a precipitous drop in its sales during the Great Recession."

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Click here for Part 1 of this post.

In working with its BPO customers in the legal spend areas, ICG Commerce focuses both on category-driven cost reduction as well as ongoing vendor compliance, including maintaining a focus on minimizing the impact of rate price increases. For example, ICG recommends a formal process with specific dates for rate reviews no more than annually. They also encourage companies to create a formal rate management process and tracking system. From a stewardship and management standpoint, they suggest that a "standing committee...evaluate and approve all rate increases and discounts." In other words, as with all complex spend categories -- especially complex services -- a well-defined sourcing and supplier management model can improve upon legacy models where consensus was nonexistent because rate increase approvals and related vendor management reviews were accomplished only by single individuals rather than the broader team.

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A few weeks back, I provided continuing coverage that explored how companies can apply optimization and advanced sourcing techniques to great effect, even outside of logistics categories, where they're most used today. I also promised to share additional examples of how more leading-edge procurement organizations are using advanced techniques to great effect, realizing results that go far beyond what's possible with basic negotiations or auctions. In the past month, I've caught up with both Trade Extensions and CombineNet, the two leading independent optimization players that do not sell a broader sourcing / supply management suite (as a primary offering), to discuss, among other things, how companies are applying their capabilities to complex categories. In a series of posts exploring what I learned in these discussions and subsequent follow-up research efforts, I hope these case and category examples will provide inspiration for others to consider the use of technology-enabled techniques with their own spend, moving beyond the elementary tactics that no longer provide the level of returns needed.

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Late last year, Spend Matters had the chance to catch up with a number of the category management leaders at ICG Commerce in the areas of finance/accounting and marketing spend. The insights we gleaned from these dialogues are at once fascinating and useful in terms of both engaging executives at organizations in allowing procurement to pursue these areas as well as providing the necessary tricks/tools of the trade when it comes to achieving and implementing results. In a series of posts looking at what Spend Matters learned from these discussions, I'll share a number of engagement approaches and general models for pursuing complex categories where executive spend owners aren't likely to be overly trusting or excited about having procurement take ownership of their spend baby at the outset (even when, in the back of their head, they probably know it's in the best interest of shareholders to do so). We'll start this investigation by looking at tips for pursuing and implementing savings in finance, tax, accounting and legal spend areas.

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In my first real job out of graduate school, I spent much of my day analyzing structured and unstructured information to come up with potential scenarios for companies, industries and markets. The firm I worked for specialized in what's known among corporate strategy-types as "scenario planning." This type of scenario modeling work differentiates from purely data-driven financial and supply chain forecasting exercises by introducing qualitative inputs as well as enabling participants in the exercise to have a say, and in fact participate in the outcome and analysis that results. I've always found scenario approaches for conceiving where the future may take us to be a useful exercise, and one that can be accomplished in surprisingly pragmatic ways with actionable output. Moreover, scenarios can help inspire those who either participate in their creation or review the resulting materials. In our latest Spend Matters Compass research brief, The Future of Procurement Analytics and Content -- Three Scenarios For Company Adoption, we've attempted to bring alive multiple scenarios for where analytics and embedded content will take procurement in the future based upon technology that is available is today.

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