Today, Spend Matters would like to welcome back Richard Rich, who leads his company's supply risk management efforts, to continue the discussion on this critical topic.

Risk and the supply chain will be married soon. But what happens in the interim, before the marriage? Many courtships employ dancing as a way to engage each other; our first date will be a dance at the San Diego Hilton for three-plus days in April, when the ISM 95th Annual Conference provides the first opportunity for this potential couple to dance.

ISM has opened the door to this partnership by including a supply chain-risk track in its conference curriculum. Seven workshops over the course of more than three days will bring the two potential partners together. It starts on Sunday, April 25 with Kishan Khemani, a Partner in the Risk Management Practice of ATKearney, and ends on Wednesday morning with our own Jason Busch and Sherry Gordon. Attendees will be treated to workshops that provide risk tactical applications implemented by Eli Lilly's Catherine Herr; contractual-terms mitigation strategies put in place by Laurie Brooks, Chief Risk Officer for Public Service Enterprise Group, a New Jersey based electrical utility and holding company; a workshop on how to apply risk tactics to the supply chain by Don Dixon, a Director in the Risk Practice at Deloitte & Touche; and an excellent workshop provided by Jason and Sherry on understanding software, providers, and analytical tools. Mickey North-Rizza from AMR Research will define fundamental risk drivers in the supply chain, based on AMR’s research data.

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I'm often asked my opinion on events and conferences. While I've tackled this subject on Spend Matters a number of times, it seems that I’m getting more and more questions lately from providers about what events they should sponsor this year, and from practitioners about what events they should invest their time, money, and precious travel budgets to attend. In today’s rant, I’ll share a few thoughts on what I consider worthwhile events to attend in 2010, as well as some of the not-so-well-kept secrets behind some that will help you gauge the objectivity of the presentations. Let’s begin.

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It appears SAP is taking a move from Oracle's playbook when it comes to becoming more transparent with its On-Demand pricing and discounting: at the Influencer Summit last week, SAP shared a number of pricing details around its On-Demand products. As an example, consider SAP's approach to pricing its On-Demand E-Sourcing offering (not including contract management or supplier management, mind you). For its "standard offering," SAP pricing starts at 300 euros per month for primary users ("sourcing-event owners" in SAP-speak); other users are free. Sourcing-event owners have, in SAP's words, "full access to the features listed in the functional package [including the ability to] create, edit, and delete sourcing event information." Pricing for the standard offering drops to as little as 30 euros per month per seat for each sourcing-event owner above 250 users.

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At SAP's Influencer Summit last week, one thing became quite clear rather quickly in discussions with key SAP team members as well as during the specific analyst and customer briefing on its latest products. And that's the fact that SAP is prioritizing E- Sourcing as a key component of its broader procurement portfolio. The three reasons SAP outlines for this are fairly cut and dried: One, SAP views cost reduction as one of its customers' largest concerns of late (no surprise there; however, quite an about-face for an ERP provider to speak to ROI vs. TCO, no?) Two, SAP also sees sourcing as a significant opportunity because of the rapid time to value it can deliver. And three, SAP believes that an on-demand value proposition is central to engaging procurement organizations already sold on all the benefits of SaaS- or cloud-delivered solutions.

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This afternoon, I'd like to welcome Kevin Potts from Emptoris to Spend Matters. Kevin is VP of Marketing at Emptoris and he has offered to share his thoughts from the ISM event earlier in the week. Thanks, Kevin, for your contribution.

Two of the hot topics from ISM included sustainability and supplier risk management. Gerd Hofman, Head of Purchasing for Hugo Boss, gave a key note presentation on the role of supply management in creating the "sustainable supply chain." He presented a very eye-opening chart showing that being green does not conflict with stockholder value. According to the chart for the period of January 2006 to July 2007, the EuroStock Index comparison of environmentally-friendly companies rose over 30% while the stock price of less environmentally-friendly companies rose only 22%. He proposed that sustainable supply base initiatives do not hurt stock price and in fact may help them because of the improved brand image in the consumer's mind. While he acknowledged that supply management must continue to focus on typical considerations when making decisions about supply approval (i.e., cost, quality and time to market), he advocated three new "sustainable" criteria -- environmental, social and economic costs (e.g., earnings for workers in developing countries) as important in the decision process. He proposed a three step supplier approval process framework which included (a) pre-qualification or certification, (b) monitoring and (c) audit and assessment.

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My whirlwind spring conference travel schedule finally ends after my trip to Ariba LIVE next week. I've always enjoyed LIVE because the show is not too big and not too small. Sure, some of it is a commercial, but much of the customer stuff is usually quite useful. LIVE is in Vegas this year -- which I can't stand because I believe gambling is anathema to Spend Management thinking -- but at least the location will give me more an excuse not to cut out of the breakouts to hit the beach like last year (even bloggers need a break sometimes to catch some rays). But seriously, what's on my mind relative to covering Ariba this year? First, I want to come away from the event with a call on whether or not Oracle will finally seal the deal with Ariba in the next 12 months. Many of you have heard countless rumors in the past three years about Ariba and Oracle getting together. I hope to make the definitive call after the event based on Ariba's direction and trading thoughts with a few of the financial analysts who are coming. Personally, I'm guessing Ariba will continue to remain independent, but I'll leave my analysis on this for later. I'm also curious to poll internally and externally whether Bob will be staying with the organization for the foreseeable future (another rumor that's been circulating in the past year).

But much more important from a customer perspective today is Ariba's overall product and solution direction. Personally, I think Ariba has been too quiet on the innovation front for far too long. Now, I'm all for Benjamin Franklin's adage that "talkers are no great doers", but in the software/tech world, you either innovate or become a Computer Associates (and the later choice is one that in a rapidly growing market, no vendor can afford to make). Even at Sapphire, SAP proved their attempt to think out of the box in the SRM space -- whether they can execute is another question. But that's not the point. Ariba, as the largest pure-play in the space, needs to step up to the plate and tell its customers and other attendees what they should be doing tomorrow – not just how to improve the status quo today. And their product and solution roadmap needs to reflect this vision.

If Spend Matters readers would like me to drill down on any particular product areas next week, let me know (post a comment or drop a line). From a solution perspective, I'm planning on doing a somewhat deep dive on Ariba's latest offerings in EIPP, services procurement, spend visibility, contract management and supplier performance, among other areas, not to mention the supplier network, which is always a topic that interests me.

Disclosure: I do not directly hold stock in Ariba or any of its competitors though may own mutual funds which trade in technology stocks. Ariba is, however, a client of my consulting firm, Azul Partners, and a sponsor of this blog, but we also work with over a dozen of Ariba's competitors in a commercial capacity as well. SAP, also mentioned in this post, is a current client of my advisory firm, Azul Partners, though I have not worked with them directly for over two years.

- Jason Busch

I'm about to leave Newport Beach, CA to head back to Chicago after 5 days on the road. I just attended the Sourcing Interests Group (SIG) event and came away from the past 36 hours with about twenty pages of notes from various presentations and discussions. All in all, a very insightful time. While I have much to write up upon my return -- including a great presentation on the total economic benefits of free trade -- I thought I'd share a few quick thoughts on what has made this conference different from many I've been to. First, the close knit relationship of the group -- everyone seems willing and interested to share ideas and chat. Even though 350 people registered for the event, it feels like a much smaller group in a good way. Second, the quality of many of the presentations has exceeded that of most events I go to (not to mention the willingness of presenters to answer tough questions either in front of the room or offline). And third, I've found the provider (i.e., vendor and service providers) to be equally engaged in the discussion and not just here to sell (even though there was at least a bit of this in one break-out session I attended, despite SIG's intent to make the event 100% non-commercial).

- Jason Busch

This morning, I'd like to welcome Mickey North Rizza of AMR Research. Mickey is spending the early part of the week at ISM and has graciously offered to share her perspectives on the event. You can learn more about Mickey’s research activities on her analyst page at AMR Research. Please join me in officially welcoming Mickey to the blogosphere.

The ISM conference held in St. Louis, Missouri this week has brought forth many best practice presentations and discussions in six broad categories:

Lean Supply Management
Leadership in Supply Management
Sustainability and Green Strategies
The Decade Ahead in Supply Management
Business Continuity
Project Management
Global Strategies

The 2400+ participants are engaged, asking lots of questions, and they're looking for ideas to help them execute some quick wins. Many of the discussions have centered on today's economic environment and how to navigate today's world of rising prices and make a difference.

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I arrived in Orlando yesterday afternoon for SAP Sapphire and spent much of the evening catching up with my fellow Enterprise Irregulars who are also attending the event (twenty of us were planning to come). The EIs are a ragtag group of bloggers covering a whole range of enterprise areas and SAP has paid our travel costs to come to the event. For those who do not know SAP's commitment to the blogging world, you should consider that SAP not only provides strong support for external bloggers like us but also the SAP Developer's network -- an online technically oriented community. And they are now beginning to reach out to the social media business community as well through their BPX site. One page within this community is dedicated to SRM.

According to the first blog post on the site discussing Sapphire, "In the procurement arena, Sapphire is the opportunity to present the Business Suite including SRM and to discuss in detail the trends to be expected for the Q4 release of the Business Suite including SRM 7.0. The Business Suite release allows an even tighter integration of the processes in particular in the services and contract management areas. The new E-Sourcing and CLM releases are also products that we expect to be released into ramp-up early in the third quarter of this year. We’re going to be covering the events with a small series of blogs from the start of Sapphire.” And look for Spend Matters to cover the news as well. Check back early and often as I update Spend Matters throughout the day this week. And a big thanks to SAP for having us all out for another year at the Sapphire Blogger's Corner.

- Jason Busch

Sourcing Interests Group (SIG) is an organization attempting to preserve the best of its past while transforming itself from within. In 2007, Dawn Tiura Evans (formerly of Denali), bought the organization from its founders. I've spoken and traded emails with Dawn a number of times since the transfer of ownership and it would appear that there are a lot of things going on within the organization. Shortly after acquiring the company, Dawn wrote to me that they planned to "enhance all of the offerings, expand internationally, add a robust webinar series, and plan up to 12 regional meetings per year". While I've not been a part of these new programs, I can say that I was more than happy to accept an invitation to speak at their global conference, which is taking place later in the week.

In the past, SIG was both praised and criticized for being a somewhat small, clubish organization that dangled a pot of gold in front of vendors and services providers -- while charging them significantly more than other members -- to participate in the group's activities. But at the same time, the organization was known for enforcing a strict code of "non-selling" to its members, insuring that conference and other activities did not devolve into little more than pay for PowerPoint time. I know that SIG is continuing this approach even as its new leadership explores all of the options it might take to increase its membership base while continuing to serve its existing community. Stay tuned for more thoughts on SIG after the event.

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