Advertisement

Live Chat

Live Chat 3/27: Finding the Procurement and Technology Sweet Spot

130 comments on “Live Chat 3/27: Finding the Procurement and Technology Sweet Spot

  1. Daniel
    March 26, 2014

    Hi everyone

  2. Ashu001
    March 27, 2014

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

  3. Hailey Lynne McKeefry
    March 27, 2014

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

  4. Daniel
    March 27, 2014

    Hi Hailey, hope i can attend

  5. Hailey Lynne McKeefry
    March 27, 2014

    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

  6. Hailey Lynne McKeefry
    March 27, 2014

    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.

  7. Hailey Lynne McKeefry
    March 27, 2014

    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.

  8. Hailey Lynne McKeefry
    March 27, 2014

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

     

  9. Hailey Lynne McKeefry
    March 27, 2014

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

  10. Hailey Lynne McKeefry
    March 27, 2014

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

  11. Hailey Lynne McKeefry
    March 27, 2014

    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.

  12. rwaugh
    March 27, 2014

    Richard Waugh – Zycus has arrived

     

  13. Hailey Lynne McKeefry
    March 27, 2014

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

  14. Hailey Lynne McKeefry
    March 27, 2014

    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?

  15. rwaugh
    March 27, 2014

    Glad to – we first did the “Pulse of Procurement” study in 2011 and have just released the 2014 update

     

  16. Hailey Lynne McKeefry
    March 27, 2014

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

  17. rwaugh
    March 27, 2014

    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

     

  18. rwaugh
    March 27, 2014

    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

     

  19. Hailey Lynne McKeefry
    March 27, 2014

    Did you track much about how that translates to savings?

  20. rwaugh
    March 27, 2014

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

     

  21. rwaugh
    March 27, 2014

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

  22. rwaugh
    March 27, 2014

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

  23. Hailey Lynne McKeefry
    March 27, 2014

    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?

  24. Rodney Brown
    March 27, 2014

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

  25. rwaugh
    March 27, 2014

    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

  26. Hailey Lynne McKeefry
    March 27, 2014

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

  27. rwaugh
    March 27, 2014

    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

     

  28. Hailey Lynne McKeefry
    March 27, 2014
  29. rwaugh
    March 27, 2014

    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

  30. Rodney Brown
    March 27, 2014

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

  31. rwaugh
    March 27, 2014

    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

     

  32. Hailey Lynne McKeefry
    March 27, 2014

    @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?

  33. Kim Davis
    March 27, 2014

    Hi everyone.

  34. rwaugh
    March 27, 2014

    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

  35. Hailey Lynne McKeefry
    March 27, 2014

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

  36. Rodney Brown
    March 27, 2014

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

  37. Hailey Lynne McKeefry
    March 27, 2014

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

  38. rwaugh
    March 27, 2014

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

  39. Daniel
    March 27, 2014

    hi every one

  40. Kim Davis
    March 27, 2014

    Sounds like these tools are primarily cloud-based?

  41. Hailey Lynne McKeefry
    March 27, 2014

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

  42. rwaugh
    March 27, 2014

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

     

  43. Hailey Lynne McKeefry
    March 27, 2014

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

  44. Daniel
    March 27, 2014

    Hailey, yes. now the time is 11.42pm

  45. Hailey Lynne McKeefry
    March 27, 2014

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

  46. rwaugh
    March 27, 2014

    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

  47. Hailey Lynne McKeefry
    March 27, 2014

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

  48. Daniel
    March 27, 2014

    @hailey, sure you can

  49. Hailey Lynne McKeefry
    March 27, 2014

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

  50. rwaugh
    March 27, 2014

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

  51. rwaugh
    March 27, 2014

    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

  52. Rodney Brown
    March 27, 2014

    @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?

  53. rwaugh
    March 27, 2014

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

  54. Daniel
    March 27, 2014

    @Rodney, its useful for all companies.

  55. rwaugh
    March 27, 2014

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

  56. kdawson
    March 27, 2014

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

  57. Hailey Lynne McKeefry
    March 27, 2014

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

     

  58. rwaugh
    March 27, 2014

    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

  59. Hailey Lynne McKeefry
    March 27, 2014

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

  60. Daniel
    March 27, 2014

    kdawson, certain tools are availabile

  61. rwaugh
    March 27, 2014

    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

  62. Hailey Lynne McKeefry
    March 27, 2014

    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.”

  63. kdawson
    March 27, 2014

    @Hailey, no, that's my left.

  64. Jamescon
    March 27, 2014

    Hi, all

  65. rwaugh
    March 27, 2014

    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

  66. Hailey Lynne McKeefry
    March 27, 2014

    @Kdawson, I always make that mistake!

  67. Hailey Lynne McKeefry
    March 27, 2014

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

  68. Jamescon
    March 27, 2014

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

  69. Hailey Lynne McKeefry
    March 27, 2014

    @Richard, what do you see on the horizon for this category? And what in your study did you find surprising?

  70. Ashu001
    March 27, 2014

    @rwaugh-i m constant ly amazed at the amount of work still done on just spreadsheets!

  71. kdawson
    March 27, 2014

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

  72. rwaugh
    March 27, 2014

    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

  73. Hailey Lynne McKeefry
    March 27, 2014

    @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

  74. Ashu001
    March 27, 2014

    @jimc-absolutely!such solutions do work well u just need to integrate it with erp and sales to get best effects.

  75. rwaugh
    March 27, 2014

    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

  76. Ashu001
    March 27, 2014

    @jacob-dont u sleep??? lol!

  77. rwaugh
    March 27, 2014

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

  78. Daniel
    March 27, 2014

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

  79. Hailey Lynne McKeefry
    March 27, 2014

    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?

  80. rwaugh
    March 27, 2014

    One suriprise -adotpion of hard dollar ROI apps like e-Sourcing and P2P only about 50% currently

  81. Daniel
    March 27, 2014

    asish, in a sleepy mood,

  82. kdawson
    March 27, 2014

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

  83. Ashu001
    March 27, 2014

    @rwaugh-what portals r most popular here? sharepoint?

  84. Hailey Lynne McKeefry
    March 27, 2014

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

  85. kdawson
    March 27, 2014

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

  86. rwaugh
    March 27, 2014

    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

  87. rwaugh
    March 27, 2014

    Most effective portals are actually part of an integrated procurement suite

  88. Ashu001
    March 27, 2014

    @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!

  89. screenwriter
    March 27, 2014

    11x roi? Really! Can you cite some companies

     

  90. Hailey Lynne McKeefry
    March 27, 2014

    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.

  91. Hailey Lynne McKeefry
    March 27, 2014

    Tell your mum happy birthday from the EBN crew!

  92. Hailey Lynne McKeefry
    March 27, 2014

    Hi Screen Writer…welcome to the chat. We're glad to have you with us!

  93. rwaugh
    March 27, 2014

    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”

  94. Ashu001
    March 27, 2014

    @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.

  95. Ashu001
    March 27, 2014

    @hailey-Thanks!

  96. rwaugh
    March 27, 2014

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

  97. Hailey Lynne McKeefry
    March 27, 2014

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

  98. rwaugh
    March 27, 2014

    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

  99. screenwriter
    March 27, 2014

    any others in hi tech besides AMD?

     

  100. Daniel
    March 27, 2014

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

  101. Hailey Lynne McKeefry
    March 27, 2014

    @Jacob…i'm betting the same thing.

  102. screenwriter
    March 27, 2014

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

  103. Hailey Lynne McKeefry
    March 27, 2014

    @Richard, those millenials really are chaning stuff.

  104. rwaugh
    March 27, 2014

    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

  105. Daniel
    March 27, 2014

    Hailey, betting means, agreeing or not

  106. Hailey Lynne McKeefry
    March 27, 2014

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

  107. JimOReilly
    March 27, 2014

    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.

  108. rwaugh
    March 27, 2014

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

     

  109. rwaugh
    March 27, 2014

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

  110. rwaugh
    March 27, 2014

    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

  111. Hailey Lynne McKeefry
    March 27, 2014

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

  112. rwaugh
    March 27, 2014

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

  113. JimOReilly
    March 27, 2014

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

  114. Hailey Lynne McKeefry
    March 27, 2014

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

  115. Hailey Lynne McKeefry
    March 27, 2014

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

  116. rwaugh
    March 27, 2014

    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

  117. rwaugh
    March 27, 2014

    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

  118. rwaugh
    March 27, 2014

    Any questions i missed?

  119. JimOReilly
    March 27, 2014

    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?

  120. Hailey Lynne McKeefry
    March 27, 2014

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

  121. rwaugh
    March 27, 2014

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

  122. Hailey Lynne McKeefry
    March 27, 2014

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

  123. Hailey Lynne McKeefry
    March 27, 2014

    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/

  124. rwaugh
    March 27, 2014

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

  125. Hailey Lynne McKeefry
    March 27, 2014

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

  126. rwaugh
    March 27, 2014

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

  127. Hailey Lynne McKeefry
    March 27, 2014

    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.

  128. Hailey Lynne McKeefry
    March 27, 2014

    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.

  129. rwaugh
    March 27, 2014

    Thank you Hailey – and thanks to all for participating

  130. Hailey Lynne McKeefry
    March 27, 2014

    We look forward to seeing more of you on the site, Richard! Have a great week.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.