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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Psst. I'm about to let you in on one the most secretive elements of services procurement (let alone regular procurement) success when it comes to identifying, implementing and sustaining results. This cloak-and-dagger subject has nothing to do with hiring the right team, using the best technology or getting the best support through a consulting or managed services provider (MSP). Nor is this secret particularly deep -- it's about as superficial as it gets. What is it? It's specific tips and tactics for marketing services procurement inside your organization. In our jobs, it's important not to underestimate the challenges we face in convincing multiple services spend stakeholders that change is a positive thing. Effecting positive change requires thinking through all of the political, emotional, technical, economic, organizational and power challenges that may disrupt the status quo through procurement's involvement. Overcoming these hurdles requires not just empathy, but also the ability to lead with a clear vision and inspire others to join your cause, bringing them into a success story before the plot has completely unfolded (and allowing them to take credit for results).

What are the best ways to winover spend stakeholders and make them part of your team (versus adversaries) on the path to savings and compliance? Read the latest Spend Matters Compass series research brief to find out. Spend Matters Compass is a free research series aimed at going high and low to answer procurement questions that practitioners need information on. In this latest research, we provide context and concrete tactics to successfully market and evangelize procurement to your broader organization. Our research and fieldwork suggests that procurement organizations who market themselves effectively to the business drive greater identified and implemented savings across both simple and complex services categories.

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Even though I can think of a million ways to divide the time in my day between different initiatives, the area that's been capturing the highest amount of my attention recently falls into the research arena. Indeed, Spend Matters Compass, our new research offering, is helping establish Spend Matters as more than just a blog or research site -- we're becoming a new type of analyst research house in our own right. In fact, I spent part of the weekend looking at the editorial calendars of other analyst and advisory shops and realized our comparative research agenda was even more ambitious than I realized. Alas, we'll see how much of it we get to by the end of the year, but already, just a few weeks into the program, we will have launched four separate research briefs. This week we're announcing the availability of the third research brief in Compass Series 1 on services procurement, as well as the initial brief for Compass Series 2, a collection of research labeled: Spend Visibility and Beyond -- Analytics Broader Role in Procurement, Risk Management and the Supply Chain (for the high-level planned research calendar for the year, please click here).

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Earlier today, Oracle announced the formal launch of its On Demand suite of procurement products. These solutions, which Oracle labels as Oracle Procurement On Demand should be no surprise to Spend Matters readers (check our recent coverage here and here.) When Oracle actually launched its On Demand procurement capability at OpenWorld last year, I noted: "The full range of Oracle's procurement products are now available in an On Demand delivery format including supplier management, spend analysis, strategic sourcing, contract management, requisitioning and procurement (both buy and settlement). In Oracle's words, what they've essentially done is 'to allow customers to deploy strategic procurement on the cloud with payment options that can still leverage behind-the-firewall ERP.' To support this vision, Oracle continues to plan to deliver hosting capabilities both internally and through partners (their internal delivery capability is limited to a single tenant format which is not true SaaS as others define it)."

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A couple of weeks ago, I re-introduced Spend Matters readers to Supplierforce, a Dublin-based Spend Management software/SaaS suite provider and consultancy with particular strengths in the area of supplier information management. Today I'll conclude my analysis by walking through some of Supplierforce's functional capabilities and its overall solution philosophy and approach. When considering what Supplierforce is trying to do with its platform, it's most important to remember they started by intending to make up for the shortcomings of procurement and supplier management in existing user ERP systems. In this regard, Supplierforce provides a virtual vendor master that allows users to push and pull data from multiple back-end sources to create a unified view of who their company is doing business with, in a way that is nuanced relative to other solutions.

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There's been a lot of chatter in the market these past few weeks about acquisitions. Some larger players are clearly headed to Costco to look for warehouse bargains (smaller formats and Ma and Pop shops aren't worth the time for these larger players, it seems). As someone pointed out to me the other day, Ariba has clearly spent quite some time attempting to clean up its top line to show higher-quality SaaS revenues--perhaps to argue for a higher valuation in the SaaS multiple range--while quietly pushing increased CD upgrades in Q1 to show the installed base is still alive. Might Ariba be on the shopping list for these larger players? I'd be surprised if wasn't, but then again, it has been for some time. It's just a question of valuation.

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If someone pinned me down and asked my opinion about the broadest and most universal trends in procurement in recent years, I'd have to say that organizations of all sizes and sophistication are gaining access to an ever-increasing amount of information to make decisions. That being said, this information may be leading them to make the wrong decisions rather than the right ones. That’s because more information in and of itself isn't necessarily a positive thing. I've seen firsthand numerous examples of data that misleads companies and becomes a negative, disruptive force rather than a positive one. Does this mean that we should all go back to the stone Spend Management ages and continue to make decisions in a vacuum? Absolutely not. We owe it to ourselves, the business, our suppliers, and our shareholders to not only focus on gathering more information, but also to ask ourselves about its integrity, accuracy and how we can best act on it. Consider, for a minute, the following examples of how data can mislead an organization, potentially lending credence to the ignorance-is-bliss argument:

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There's been much buzz in the Apple community about whether Apple will be able to meet initial demand for its new iPad. Many Apple enthusiasts would agree with the statement that Apple's new product supply chains usually take time to flex to keep up with order demand (not to mention early supply chain/supplier quality issues). When it comes to early defects, it feels like Apple sometimes sweeps issues under the screen, so to speak (when the 3G iPhone came out, someone close to my local Apple store told me to hold off on buying one until they worked out the supply chain kinks, because of overheating and battery issues). After reading stories like this, which suggest potential problems with iPad suppliers such as Foxconn (AKA: Hon Hai Precision), it would seem that the iPad may continue Apple's tradition of disappointing hopeful customers who must get in the virtual (and even physical) queue for the product.

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You might have missed this announcement last week that there is a new force of nature in the boring and stodgy industry analyst world. My good friend Phil Fersht--he's only "good" when he’s buying the first round, mind you--has decided to leave the provider world and go back to his roots as an analyst. While one of the rumors surrounding his departure from Cognizant circles back to a rejection of a single malt on an expense report submission, I'd recommend you don't believe the hype. Phil, the analyst, is for real, and my guess is that every day away from the advisory world was one where he felt he was not fully leveraging his skills set--and above all, what he enjoyed doing most.

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Yesterday, we reported that First Index, a sourcing marketplace for industrial parts and former consulting firm, had closed its doors earlier this week. My tip on the situation came from AJ Sweatt, a colleague and friend who serves as community and blog master for MFG.com Mojo. AJ's employer is a competitor to First Index so there was some obvious gloating in his tone, but I'm appreciative for the tip and also his connection to colleague David Landsman, another MFG.com employee, who had previously worked for First Index and shared a number of details and thoughts with me about their history.

According to David, First Index's final decline was very sudden. What's more interesting than how it ended is how it began--and what made First Index different. First Index hosted an online site where it facilitated the exchange of supplier information to buyers, but the primary core of the business remained offline, where groups of employees would cold call buying organizations to drum up RFQs which they could then provide to their active suppliers, in effect "making the market," just as a trader does on the floor of an exchange. Using this model as a foundation, First Index's core revenue generation came from selling subscription services to suppliers (for anywhere from $3,500 to over $10K per year), and in turn gave them access to buyer RFQs. The primary categories they focused on were a near carbon copy of the early target areas FreeMarkets (not Ariba) tackled from a strategic sourcing perspective as well: machinings, stamping, fabrications, electronics, plastic injection molded parts, etc.

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