This dialogue occurred on Thursday, March 27, at 2:00 p.m. EDT.

Increasingly, choosing the right software and technology tools is critical to empowering procurement to realize strategic advantages. We've invited Richard Waugh, vice president, corporate development at Zycus, to talk about the company's recently released Pulse of Procurement study and to share his thoughts on technology's place in the supply chain. We'll be meeting at 2:00 p.m. EDT (11:00 a.m. PDT) on Thursday, March 27.
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We look forward to seeing more of you on the site, Richard! Have a great week.

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Thank you Hailey - and thanks to all for participating

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And thanks everyone for the great questions and commments! We've got our next chat on the calendar so i hope you all will come back.

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Thanks, Richard, for taking time with us today. It's been great. I'd encourage readers to download the full study. There's some interesting information there.

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right - less time gathering data and more information to make decisions

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It sounds like the bottom line is that organizations can take time on strategy rather than grunt work.

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Also take a moment to weigh in on our latest poll. It's in the column to the right and pertains to the current conversation! Feel free to weigh in and make commetns there too/

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best practice is to get muliple stakeholders involved to weight and score supplier responses on these non-price factors

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Folks, we are at the 45 minute mark so queue up any last questions and comments.

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Great Question - these tools optimize on lowest total cost which factors in quality, delivery, service along with purchase price

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@Richard, you've done a great job of keeping up...You didn't miss a thing.

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Richard, price isn't everything. Quality counts a lot, whether it is canned vegetables or computer parts. How do you balance that with price point in the analytics?

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Any questions i missed?

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So , if you can harness the power of analytics to award thousands of line items to the lowest total cost suppliers - potentially at the individual line item level - why not do it?  Big $$$ at stake

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when we dug deeper, companies got automation benefit from spedning less time assembilng bid packages and gathering responses from suppliers, but actually chose to spend more time on the back-end using the analytics in the tools to perform multiple "what-if" anaylyses to optimize award decisions across thousands of line items

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@Jim O, as you know, we have a strong policy and culture of respect. :)

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@Richard, what do you think that gap was about?

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that didn't make sense - both simple and complex categories should both see cycle time compression moving from manual to on-line sourcing

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As long as it's the mix and not the flames!

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@Jim O'reilly, glad you could make it! We always love throwing a heretic into the mix.

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Sourcinf cycle times were cut ~1/3 for simple categores after introducing e-Sourcing tools, but only about 10% for complex categories like electronic parts

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On the topic of sourcing complexity - this was an area we found an anomaly in the study data

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More complexity simply means greater pain with manual process and therefore more urgency to adopt leading edge tools

 

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I noted a knock at spreadsheets. Hate to be a heritic, but a new generation of collaborative tools make spreadsheets much more useful as interfaces to databases and as collaborative tools.

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I agreed, but it sounds like we're both wrong! :)

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Hailey, betting means, agreeing or not

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Electronics is among highest adopters and also has some of the most complexity - for example Zycus is enabling Electronics Mrfg. clients to source very large bid packages ((10K + line items and 100 suppliers) all on-line

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@Richard, those millenials really are chaning stuff.

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@Jacob...i'm betting the same thing.

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who are the major performers from the hackett Study  that supply this service to Hi Tech

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hailey, in elctronic industry i feel that technology adoption is slow when compare with IT industry

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any others in hi tech besides AMD?

 

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Good news about future adoption - millenials have grown up on web technology and expect that when they buy in a corporate enrionment it should be like buying on Amazon - hence the focus on ease-of-use

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How do you think the electronics industry rates in terms of technology adoption compared to other sectors?

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The ROI figure is based on Top Perfomers in benchmarks from Hackett Group - an example would be AMD in the High Tech Industry

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@hailey-Thanks!
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@kdawson-great blog!great perspective. my point is unless.u train a new generation workforce to use portals instead of spreadsheets u won't go anywhere fast.
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Hi Screen Writer...welcome to the chat. We're glad to have you with us!

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Both procurement users and suppliers need to adopt the tools to make them as effective as possible - so they need to be extremely easy-to-use; hence the move away from ERP type systems that are hard to use and not very "open"

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Tell your mum happy birthday from the EBN crew!

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The compliance piece of this is of interest to me...that's going to get more important, and until now has been kind of neglected.

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11x roi? Really! Can you cite some companies

 

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@hailey-i would nt miss it for the world!I wrapped up my mums birthday party early so I wouldn't miss the ebn chat session .lol!
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Most effective portals are actually part of an integrated procurement suite

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Top Performing Procurement groups that invest in best in class technology are getting an 11x ROI - not many investments a business can make to genreate those kind of returns

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@rwaaugh, that extra level of vetting is comforting, actually.

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@Tech4People, welcome to the conversational fray! Glad you are here.

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@tech4people, spreadsheet abuse has been rampant for decades: http://quickbase.intuit.com/blog/2014/03/24/its-time-to-end-spreadsheet-abuse/

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@rwaugh-what portals r most popular here? sharepoint?
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One suriprise -adotpion of hard dollar ROI apps like e-Sourcing and P2P only about 50% currently

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asish, in a sleepy mood,

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Richard, can you talk a little about how these solutions work? Do all of the suppliers have to adopt the solution or is the OEM committment enough? What are the concerns you hear from folks that are stopping them?

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rwwwaugh, security is a major concern with networks, especially your senstive dats are communicated through network

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Question about what was a surprise in our study - there were a few

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@jacob-dont u sleep??? lol!
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Security is a concern and the portal infrastructrue itself is highly secure - moreover, while suppleirs enter profile info self-service, approvall workflow ensures that all supplier entered data is vetted thru an approval process by the buying org and can also be supplemented with third party data verification

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@jimc-absolutely!such solutions do work well u just need to integrate it with erp and sales to get best effects.
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@kdawson, great question! the supply chain tends to be a little behind the curve on security. We just did an e-mag around that topic: Navigating Cybersecurity on the Big Data Highway

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Most procurment groups don't have sufficient information about who is in their supplier network or what they are buying from them - spells potential risk and opportunity for increased savings

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Any security concerns with SIM portals? Seems to me mischief could be done by hacking into a competitor's portal.

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@rwaugh-i m constant ly amazed at the amount of work still done on just spreadsheets!
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@Richard, what do you see on the horizon for this category? And what in your study did you find surprising?

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Richard, If procurement teams want an integrated solution, do they have enough options to choose from?

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@JimC, glad you could stop by. Pull up a chair and join the conversation.

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@Kdawson, I always make that mistake!

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So best practive is for a SIM (Supplier Information ManagementP Portal that gives suppliers self-service access to maintain their profile info and certificates (insurance etc.) on behalf of the buyong org

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Hi, all

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Supply chain management is growing at a good clip. Gartner says the worldwide supply chain management (SCM) software market grew 7.1 percent to $8.3 billion in 2012. The analyst there echoes Richard: "While IT budget scrutiny and global economic conditions are moving cost reduction back to a main business driver, supply chain remains a key source of competitive advantage in driving business growth objectives," said Chad Eschinger, research vice president at Gartner. "North America and Western Europe continue to be the prime consumers of SCM software, with nearly 77 percent of market revenue. However, Western European growth slowed and Asia/Pacific continued to experience robust growth, reflecting a shift toward investment in technology in emerging-market manufacturing centers."

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@Hailey, no, that's my left.

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Supplier management is a particular challenge when trying to do it with spreadhseets and word files - there are simply too many of them.  Approximately 3-4K suppliers per $1B in spend

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kdawson, certain tools are availabile

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@KDawson, glad you could make it. The virtual guacamole can be found on your right.

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Another thing that came through in our study - procurement groups don't want "point" solutions - they want one integrated view of all aspects of a supplier or a category, for example

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@Richard, with  that sort of investment, it certainly is becoming more mainstream.

 

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Simple question from an outsider: How does one manage supplier relationships? Are there tools, or is it all Word files & spreadsheets emailed around?

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So these solutions are more accessible to mid-size companies as well as large enterprises

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@Rodney, its useful for all companies.

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Table stakes - investments usually start at 6 - not 7 figures - and implementation time measured in weeks or months - not years

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@Richard, does that mean that large enteprises will get the most value from S2P tools and suites, or can it be a good deal for SMBs as well?

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Many procurement organizations spend the last few years focused on cost reductions (there was a big recession after all) but are now more focused on managing the suppleir relationship and the long term supplier performance

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Quesiton about how tools impact Supplier relationships - the Supplier Management area is actually the component that our survey says is prioritized for future investment

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What are some of the table stakes features in these apps? And what's on the horizon?

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@hailey, sure you can

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@Jacob, midnight snack? Can I pass you the virtual guacamole?

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Large enterprises ($500M+) can't afford to maintain manual, spreadsheet procurement tools

- good news is tes, cloud has made it easier to implement state-of-the art suites - and more affordable

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@Richard, are there lessons that smaller organizations can take from these big enterprises even if they dont' have a huge budget?

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Hailey, yes. now the time is 11.42pm

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@Jacob... Glad you could make it back...It's pretty late for you right?

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recognize of course, that our survey skew towards larger enterprises - of the 300+ repondents, more than 80% are from organizations of $500M revenue

 

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How does the implementation of this sort of  technology change the OEM/procurement relationship with suppliers?

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Sounds like these tools are primarily cloud-based?

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Great question about death of spredsheets for Procurement - death notice may be premature, but clearly on life support

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hi every one

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@Kim, thanks for stopping by. Pull up a chair...and help yourself the guacamole.

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@Richard, why the shift? What is it that S2P suites do (or do better) than ERP can?

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And among the Top Performers in our study - those with cumulative savings greater than 20% - 80% of them are already using s specialized, inetgrated Procurement Suite

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You beat me to it... that means there's a huge opportunity there.

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Hi everyone.

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@Richard, is it finally the death of the procurement spreadsheet? I'm amazed at how many organiations are doing things manually? What percentage of organizations do you think are still early on the adoption curve?

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So 2/3 have ERP or Legacy today - but when we asked about future investment plans - the same number 2/3 said they will move to Procurement-specific apps

 

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Just had lucnk, Hailey, but thanks. OK, maybe just a little bit...

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Bigger picture - the clear trend is away from ERP/Legacy systems for Procurement - whcih 2/3 of our Pulse reposndents have today, and toward an integrated S2P suite from a Best-of-Breed such as Zycus

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Question aboout who are the top providers of S2P tools - Zycus is of course a leader in the most recent Gartner Magic Quadrant for providers of full S2P Suites

 

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@Rodney, welcome! Pull up a chair... can i offer you some virtual chips and guacamole? They are on the table to yoru right.

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For top performers, 63% of procurement staff are utilizing the tools and just as importantly, these organizations have highest adoption by functional stakeholders, with alnost 50% ot the business users on-board - 2x higher than the rate of stakeholder adoption for lowest performers

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Howdy folks. Who are the big suppliers of these new S2P tools and suites?

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That's a pretty astonishing rate. Where would you recommend organizations should start when looking at adopting or upgrading technology? WHo shold be in on the conversation? What should they be thinking about?

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For example, those with 20+% savnigs have the highest technology adoption rates overall

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Top performers report better than 20% cumulative savings and there is a clear correlation to their adoption of state-of-the art tools

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We have been tracking savings peformance in terms of cumulative savings from the last Pulse study to this one

 

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Did you track much about how that translates to savings?

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As a result, key procurement performance metrics are up siginificantly from the 2011 study - for instance, contract compliance rates have risen 11% over that time

 

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Companies have begun a siginificant shift away from ERP or Homegrown/Legacy Procurement Systems towards specialized procurement platforms - incresingly favoring integrated S2P (Source-to-Pay) Suites

 

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I'm sure a lot has changed in three years.

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Glad to - we first did the "Pulse of Procurement" study in 2011 and have just released the 2014 update

 

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IN the meantime, why don't you tell us a little about the Pulse of Procurement report. How long have you been doing it? What shifts have you seen?

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Hi Richard, glad to have you with us! We'll get started in just a couple of minutes.

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Richard Waugh - Zycus has arrived

 

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Our guest today is Richard Waugh,  Vice President - Corporate Development, at Zycus, which makes source-to-pay solutions for purcashing. Here is his bio:

As Vice President – Corporate Development, Richard leads strategic initiatives in the areas of new product introduction, market development, thought leadership, analyst relations, and strategic partner development programs. Richard has an extensive background in B2B E-Commerce, going back to his early career at GE, where he helped launch GE'S Trading Process Network (TPN), the first on-line Marketplace for Sourcing and Procurement in the mid 1990's. He was Co-founder of B2eMarkets, one of the first SaaS (Software as a Service) Sourcing Suite providers and later covered the Supply Management market as an Industry Analyst for the Aberdeen Group. Prior to joining Zycus, he helped bring to market new innovations in P2P (Procure-to-Pay), helping global clients achieve world-class P2P system adoption and performance. Richard has a BA from Wake Forest University and is a graduate of GE's Financial Management Program (FMP) executive training.

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You can take a look at Zycus' Pulse of Procurement Research Report 2014 (registration required).

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And always, please announce your arrival so we can give you a warm EBN welcome and offer you some virtual  guacamole. :)

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Questions, theories, ideas, real world experiences and even friendly rants are welcome here.

 

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This will be a fun, fast, and friendly conversation, so please do not hold back with your comments or questions.  There are no dumb questions and we value everyone's point of view.

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Second, if you have problems posting, we suggest trying a different browser.  IE9 is a popular choice, but sometimes find Firefox, Chrome, or Safari work better.

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We will be starting at 11 a.m. PST/2 p.m. EST sharp. First, though, there are two housekeeping notes:

First, please make a copy of your post before hitting the "post" button – just in case.  If the system "eats" one of your carefully crafted thoughts, please hit "Ctrl-Z" to recover it

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Hi Hailey, hope i can attend

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Hi Tech4People and Jacob. Glad you stopped by! We'll be starting in a couple of hours.

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choice!that's what it all boils down to finally.
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Hi everyone

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EBN Dialogue / LIVE CHAT
EBN Dialogue enables you to participate in live chats with notable leaders and luminaries. Open to the entire EBN community of electronics supply chain experts, these conversations see ideas shared, comments made, and questions asked and answered in real time. Listed below are upcoming and archived chats. Stay tuned and join in!
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Dave Bowen, CEO of e-sourcing firm MarketMaker4, will be our guest as we explore ways to minimize and manage geo-political and corporate risk in supply chain and sourcing through the use of technology.

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