We're excited to announce our latest Spend Matters Perspective: Sourcing, Contract Management, and Supplier Management Cloud -- Business Users Benefit From Savings Enablement (Dining with Procurement, Not with IT). Authored by Spend Matters' Thomas Kase, the paper takes a close look at functional and business integration of cloud solutions in the sourcing, contract management and supplier management areas. Specific SAP business integration use and customer cases are included. Our findings suggest that cloud capabilities typically result in quick implementations with limited or no IT involvement and that the approach has empowered the procurement community in a range of ways, including ease-of-use and general front-line business user accessibility, permitting experienced sourcing experts plus more traditional "buyers" to walk up to a tool set and be productive with little or no training.

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Click here for Part 1, Part 2, and Part 3 in this series.

Perhaps the most predictable of all of the industries in terms of the leading sources of supply chain disruption in the latest BCI research study are transportation and storage companies. For these organizations, it's no surprise that "adverse weather (windstorm, flooding, snow, etc.)" tops the list as the leading cause of disruption. "Unplanned outage of IT or telecom systems" takes second and "industrial disputes" come in at third. At least in the US, a fourth factor to consider might be border delays across US and Mexico (and in certain cases, though on a more limited basis, Canada), although one could argue that logistics companies and manufacturers plan for such delays. Still, if there is a surprising item on this for logistics companies it's the danger of not over investing in either an internal or a third party's IT and communications infrastructure.

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Today, D&B will announce a new mobile website for accessing supply risk information on a variety of wireless smartphone devices. Spend Matters was briefed about the new mobile toolset yesterday and had the chance to walk through a webex demonstration and then demo the capabilities on our own mobile device. In our analysis, D&B Supplier Risk Management Mobile (see picture below) essentially takes much of the basic capability from the standard Supplier Risk Management modules and makes it available in a streamlined and faster loading interface optimized for mobile devices. Users that log in to the mobile site, which has a different URL than the main D&B log-on, are treated to a customized profile page based on the alerts and configuration of their regular web portal site. This new service is available today, and is free for D&B users.

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Spend Matters would like to welcome back Dr. Jason Brown, a former CTO at CombineNet, who will further share information on how companies can best apply optimization to their overall sourcing practices. See his previous posts here, here, here and here.

Investigating Future Opportunities

This investigation usually takes place by forward-thinking buyers who are willing to listen to their suppliers and re-think their own supply chain by effectively collaborating with the suppliers, having them be the innovators. Some have termed this type of sourcing "transformational" in that it could transform the supply chain, usually taking the form of alternative offers for an item. For example, a different type of material for packing boxes, a different printing and labeling mechanism, a different shipping method and delivery time or a different warehouse location.

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Spend Matters would like to welcome back Dr. Jason Brown, a former CTO at CombineNet, who will further share information on how companies can best apply optimization to their overall sourcing practices. See his previous posts here, here and here.

Money Savings

In previous posts, I brought up the fact that if analysts are running analytics without using optimization, their results may come up with AN answer that satisfies all of their business criteria, but not necessarily the BEST answer. Depending on the category of the criterion, this could impact anywhere from 1-20% of the total spend.

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Spend Matters would like to welcome back Dr. Jason Brown, a former CTO at CombineNet, who will further share information on how companies can best apply optimization to their overall sourcing practices. See his previous posts here and here.

Negotiation and Contracting Time Savings

A large problem with sourcing applications today is that they have limited or no optimization. This is particularly true in reverse auctions based solely on price.

If there are no business rules, then you are good to go -- but this is rarely the case on the items that actually have any importance within a business. This is where optimization with constraints has a huge advantage, as you are always presented with an award (allocation) that satisfies every single one. Simply keep adding them into the scenario until they are all taken into consideration, and then receive the optimal answer relative to these constraints. By doing so, you can quickly bring the award to contract and hence realize the savings faster. Since optimization engines will take into account all your business rules, you can effectively write a contract off of an award out of one of these systems.

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Spend Matters would like to welcome back Dr. Jason Brown, a former CTO at CombineNet, who will further share information on how companies can best apply optimization to their overall sourcing practices.

In this next post (see the first post here) introducing Spend Matters readers to the fundamentals of sourcing optimization, we'll turn our attention to looking at the time savings benefit of applying such a toolset.

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