GXS announced today that is has acquired RollStream, a SaaS vendor that offers solutions for supplier discovery/sourcing, master data management, compliance and risk management, and supplier performance. RollStream has a healthy customer base in healthcare distribution and grocery retail with marquee customers like TESCO, Sainsbury’s, and Owens and Minor.
The key functionality that RollStream offers that really stands out is its ability to track all supplier information, communications, and credentials in a single, shared repository. Reading the press release from GXS, this was in part why it made the acquisition — “The acquisition deepens GXS’s long-term commitment to the Social Supply Chain, a vision that brings together information flows and information workers to break down barriers hampering supply chain efficiency.”
We’ve been writing about this concept for some time and see tremendous potential in the concept of applying the social networking paradigm to supplier management. In my February, 2011 report, “Enterprise Social Networking Can Help Crack The Code On Supplier Risk Management,” I explore this very concept — that through virtual communities of stakeholders, both internal and external to a company, executives can share common supplier data and insights on risk-related events.
This report explores how enterprise social networking can help build communication across siloes, create smart feeds to help aggregate and refine the noise, and encourage adoption through more familiar UIs.
Has your company published a supplier code of conduct? Most likely it has. Is it conducting supplier audits to ensure that the code of conduct is being followed? Maybe. Does it have a plan in place if you turn up something truly ugly? Doubtful. Would you publish those results if they were bad? Yeah . . . probably not.
Enter Apple, which recently released its latest Supplier Responsibility 2011 Progress Report, which outlines the specific findings of its own supplier audits. The results?
“In 2010, our audits of 127 facilities revealed 37 core violations: 18 facilities where workers had paid excessive recruitment fees, which we consider to be involuntary labor; ten facilities where underage workers had been hired; two instances of worker endangerment; four facilities where records were falsified; one case of bribery; and one case of coaching workers on how to answer auditors’ questions.” (Source: Apple Supplier Responsibility, 2011 Progress Report)
I give Apple high praise for making this information public. Hopefully, it has a ripple effect in the industry and we’ll see more transparency. Public sentiment does not separate the company that assembles an iPad from the Apple brand. Even if you’ve outsourced the supply chain, there’s still a corporate responsibility to ensure that socially and environmentally sound business practices are taking place. And this goes for subcontractor relationships too — yes, in the eyes of the consumer, you are responsible for your supplier’s supplier’s actions. Apple gets this.
Today started with breakfast in the supplier pavilion at Ariba Live and I have to say, this place is PACKED. Ariba reports over 1,000 attendees and there’s hardly an empty chair. In fact, they had to pull in extra chairs at the back of the room for the keynote sessions. I’m no economist but a filled to capacity software vendor event is a good signal to me that companies are now starting to revisit major application investments that have been on hold for the last two years.
Taking a walk to scope out the breakfast bounty I did notice that the services procurement vendors, Beeline and Fieldglass, both had booths set up front and center in the supplier pavilion. These are well spent marketing dollars as each vendor looks to position themselves to fill Ariba’s whitespace in what’s becoming a white hot software category. D&B was also a very visible sponsor, another smart move given Ariba customers’ insatiable appetite for supplier information and data enrichment services. The opening on the main stage had the typical flash, bang introduction with a live band and Blue Man Group styled actors creatively called the “Cloud Guys” moving to the “complex rhythm of commerce.” As I soon realized, this was not the last time we’d hear the term “cloud” at this event. The nice lady sitting next to me (who will remain anonymous to protect the innocent) leaned over and asked me, “I see cloud this and cloud that everywhere — what does it all mean?” Good question.
Lately I’ve been really focused on process automation -- specifically, how software can help but also potentially cripple cycle times. When it comes to enterprise applications, my strong view is that event and alert management solutions are two of the most critical components to achieving success.
Services Procurement (aka Vendor Management Systems) are no exception to this rule and since we are currently in the process of writing a Forrester Wave™ evaluation on this topic, I thought I’d share a few thoughts on what companies should look for in the context of these tools. Let’s start with a snapshot of a recent interview I conducted with a VMS end-user . . .
This company’s main goal was to free up key staff by automating services procurement processes and managing by exception only. The company viewed the software’s event management and associated alerting capabilities as core to achieving this. So when they found a vendor reporting over 200 alerts “out of the box,” that was a big factor in why they chose the solution.
The implementation team diligently gathered the requirements and presented the wide range of alerts to the end-user community. Business line managers were initially very excited at the prospect of being alerted via email when key events took place. The implementation team ended up enabling nearly all of the 200+ alerts.
The result? On Day 1 of acceptance testing, each primary stakeholder on the project who had signed up to do quality assurance received over 100 alerts from the application -- some in their email inboxes, others only in the dashboard. Now, this was clearly a setback but not necessarily a shop stopper. The team regrouped and decided to change the alerting philosophy to really only highlight exceptions in the process. Unfortunately, this is where the project started to come off the rails . . .
I had an interesting briefing Monday with Ashif Mawji, the CEO of Upside Software, and Dan Townsend, VP of Sales and Marketing. Upside is primarily known as a Contract Lifecycle Management (CLM) software vendor but also offers RFx capabilities and some elements of Supplier Performance Management. Upside is built on .NET and is a Microsoft Gold Certified Partner who also boasts Microsoft as a customer.
I rarely blog about vendor briefings, but this one stood out for a couple of reasons. First, it was the kind of briefing that as an IT industry analyst I’ve really grown to appreciate -- no slides, good two-way dialogue and a concise but impactful product demo. And, it was that product demo that really got my attention.
Over the last couple of months I’ve seen a real up-tick in inquiries from services procurement and vendor management teams asking about co-employment risk. This is partly due to concern that the U.S. government, in search of new sources of tax revenue, will double down its efforts to identify large companies who are potentially misclassifying workers.
The concerns have been exacerbated by software and consulting vendors over hyping co-employment risks as an avenue to sell vendor management systems and managed services. That’s not to say that software and services can’t help, but I do get the sense that the issue at hand may not necessarily merit the attention it gets in vendor teleconferences and white papers.
I received this question the other day from a reader and thought I'd open it up to the wider blogosphere for comment. I've included some general guidance on the topic as a starting point but it would be especially interesting if a vendor would like to give their perspective. What does it means to be 'strategic' versus a 'utility' to a client? What types of value added services do you provide and what do you look for in return?
Last week I had the opportunity to present the first half of a teleconference on contract lifecycle management (CLM) hosted by the Institute of Supply Management (ISM) and Zycus. You should be able to view the recording in its entirety within a week or so here. It was a good session covering the basics of CLM as well as some specific best practices so I recommend taking a look. As part of the presentation we polled the listeners on a few key questions and I'd like to share the results as well as some insights.
I'm currently researching the ROI of the Vendor Management Office (VMO) -- looking to help answer key questions like:
Of the services the VMO provides to the company, which have the most value?
What are best practices for establishing VMO credibility across the org?
How is VMO performance being measured?
With about 25 VMO interviews completed so far I've seen a surprising trend -- when asked what VMO services provide the most value to the organization, contract lifecycle management is consistently front and center.
Now, it makes sense that many VMOs are involved in some stage of the contract as an IT domain expert but these folks are actually taking ownership of the entire process -- building contract templates, authoring, owning the approval and review cycles, as well as ongoing monitoring. Some VMOs are also even leading the charge to bring in new software tools to automate this process and get better control of overall contract lifecycle management (CLM). Why?
Given the unique, complex and risky nature of many IT contracts, the CPO's organization is staying hands off and relying on the IT specialists to create a favorable deal that’s enforceable.
OK, makes sense. Buy why should the VMO really own the process end to end?
My initial reaction is no, it shouldn’t. And many of my VMO interviews agree -- but have still heroically stepped in to fill the void short of an alternative.
At Forrester’s Services & Sourcing Forum earlier this month in Chicago, Patrick Connaughton and Duncan Jones led a breakout session on common problems with software selection, organizing the selection process, and negotiations strategy. Below are some tips from clients and vendors at the session.
Plan ahead One client recommended plotting the next 90 days of negotiation milestones in order to plan sourcing’s involvement. This helps you structure your approach so that you close the deal at the point when you have the best leverage. Formalizing and documenting the process also helps you demonstrate to the business that you did your homework.
Get involved before the vendor selection phase Establish the value of what you do and let the business know how you can help throughout the process. Bring information the VPs don’t have, like benchmarking. The earlier you are brought in, the more you can plan ahead, and the better your understanding of what is important to the business before you meet with vendors.
Focus on differentiators The RFP process is so mature that vendors often respond in a way that highlights themselves without showing any real differentiators. Don’t just use packaged, boilerplate RFPs — pare down the criteria to reflect what’s important to you.
You have more leverage as an early adopter, and when replacing a competitor In both cases the vendor is likely to send the A-team and to concede higher discounts. The vendor may see you as a potential marquis client that can act as a reference and even speak at events.