Top Strategic Sourcing Articles by Source One:

Top News

ICYMIM

ICYMIM: May 29, 2017

Source One's series for keeping up with the most recent highlights in procurement, sourcing, and supply chain news week to week. To stay updated on the latest supply management articles, check in with us every Monday.

The Power of Positive Thinking in Uncertain Environments
Kelly Barner, riskmethods, 5/24/2017

When it comes to recognizing opportunities for growth, we occasionally need to take risks and make decisions that may have undesirable effects if they were not to work in your favor. As procurement professionals there are certain risks that we have witnessed to be profitable when approached with a positive outlook, including trying new suppliers and business models. Creating a new partnership is never easy, but one that can compliment your business like a new supplier that offers innovation potential could be a risk you're willing to take. Similarly with applying a new business model to an old offering, product or service, it can be risky but it offers a new perspective that will provide otherwise achievable benefits.

Trash Talk: Evolving Policy Changes Affecting Waste Management For All Types of Business
Megan Urbas, Corporate United Blog, 5/23/2017

A key aspect of every facility management project is waste management, and how to go about this inevitable by-product of business. This category specifically offers an opportunity to utilize a strategic partnership for your organization's long-term environmental liability and sustainability initiatives. In addition, companies that don't comply with policies enforcing regulations for waste removal/management are subject to facing fines and other fees for improper disposal that has negative effects on the environment. It will serve useful to be aware of waste management regulations that simple compliance with can prevent costly consequences.

The True Achiever Challenge
Charles Dominick, SPSM, SPSM2, SPSM3, NLPA blog, 5/24/2017

Even the most successful professionals have room for improvement, especially in an industry like procurement with consistently new and improved best practices. Even the best procurement negotiators are constantly looking for opportunities to enhance their skills and develop even more efficient skills. Even if you are considered great at your procurement work according to objective standards, there are ways you can achieve more by improving skills that will support your expertise to make you a well rounded professional that offers more than just a specific focus and has multiple categories of expertise that compliment each other.
Worker-focused initiative to target Adidas supply chain transparency

With accurate data about supplier practices, businesses can promote humane conditions. One of the ways to use transparency for good is to implement new technology to try and enforce anti-slavery laws and achieve compliance goals, or even go beyond them. Sportswear brand Adidas is taking the initiative to do this, according to Reuters.
Adidas works toward empowerment
The Thomson Reuters Foundation recently spoke to Adita Wanchoo, Adidas Group's Senior Manager for Development Partnerships, who is specifically looking to help the company try and create a supply chain built on clear information on slavery and employee conditions. Part of this has involved increasing communications with laborers through an app that would allow them to submit complaints. This comes in addition to the company's existing anti-slavery practices but could set a new tone if it expands.
"We want to make it as easy and anonymous as possible for workers," Wanchoo said. She added that "sometimes there can be resistance from suppliers, but we work with them to demonstrate how this can help them in the long run by improving supply chain transparency, communication, productivity and worker retention."
While this may have just begun as a pilot program, Adidas could see the practice expand and become normal at many of its factory locations. Even if other companies don't adopt this practice exactly, could it send the message that such apps are useful for gathering information?
As it's based on both technology and a current need, it seems to be very much of the times, and could play into similar efforts. Procurement management professionals may also find themselves increasingly tasked with addressing slavery, and making a key effort to transform procurement is a way to do it.
What procurement can do
Empowering this department within a business, or possibly creating a position to tackle slavery specifically, as Adidas did, may help define what a given company plans to do about slavery risks. A report from Walk Free Foundation and the Chartered Institute of Procurement and Supply specifically explained the role that procurement has to play.
This includes thinking ahead, planning out enforcement measures and creating a company culture that leads employees to enforce the policies laid out. In a broader respect, the report also said that businesses should hold themselves accountable and look for ways to promote sufficient auditing standards.
"It might also help to pay attention to possible problem signs of high-risk areas."
It might also help to pay attention to possible problem signs in high-risk areas, with conditions that might be more prone to exploitation. The document listed some of these, such as conflict zones, places where raw materials are and regions with high poverty levels.
A matter of international importance
There's been an emphasis on solving this problem that goes beyond companies. Spend Matters reported on former U.K. Prime Minister David Cameron, who recently appeared at a supply conference and explained the need for "responsible capitalism," something that could involve the procurement sector. He also referenced his government's efforts to respond to the industry and take a stand against slavery.
As necessary as ending supply chain slavery is, making a major change can be a difficult process. To ensure it works well, businesses can use benchmark data to drive a productive transformation.
Source One Round Up

May 26, 2017

Here's a look at where Source One's cost reduction
 experts have been featured this week!



RECENT NEWS:

50 Providers to Know and 50 Providers to Watch for 2017
Nancy Clinton, Spend Matters, May 23, 2017

Earlier this week, Spend Matters announced their lists for the 50 Providers to Know and 50 Providers to Watch for 2017. Every year, their industry analysts reveal the firms that they believe to be both recognizable and up-and-coming in the industry. These decisions were based on months of careful review of the latest procurement service and technology offerings. Source One was featured in the 50 Providers to Watch list as a firm that pushes the envelope and drives innovation in the industry. It is an honor to be recognized by the leading supply chain publication as a strategic sourcing firm that strives to challenge traditional practices and consistently offer a unique approach that enhances procurement and supply chain management capabilities.

ISM 2017 News & Update
The Institute for Supply Management, May 24, 2017

After four days of the annual international conference, the Institute for Supply Management reflects on the highlights of each day and summarizes the most anticipated sessions and speakers throughout. Monday began with ISM2017's kick-off keynote which featured General Colin L. Powell, USA (Ret.) speaking on how to be a successful leader in times of uncertainty which he had a considerable background in. In addition the conference featured more than 175 speakers, 73 sessions, and experiences including the Exec In sub-conference. Attendees were exposed to practical solutions delivered by industry experts, world-class strategies and case studies, best practices and networking opportunities throughout the course of ISM2017 and returned to their organizations with valuable takeaways for consideration as they plan for the future of their supply management organization.

UPCOMING EVENTS:


This summer, Corporate United is inviting procurement and supply chain professionals from regional areas around the U.S to participate in exclusive one day conferences. The first stop on their Road to SYNERGY series will be in Baltimore, Maryland on June 6th, where industry professionals local to the area have the chance to collaborate in a personalized atmosphere with other supply chain experts in the region. The audience will have an opportunity to learn from industry leaders and discuss hot topics with other attendees throughout the day. Highly anticipate educational presentations and engaging sessions will allow attendees to exchange insights and predictions for the future of supply chain that will be valuable takeaways for getting back to work and planning ahead for their organization. After Baltimore, Corporate United and Source One get back on the Road to SYNERGY to head to Dallas, Texas for the next event in the series!


Originally scheduled for the end of March, ISM New York's annual Risk Management conference was postponed and later rescheduled for June 14th. Attendees can still look forward to the schedule as planned, including all of the informative sessions and educational presentations anticipated for the March event. Procurement and supply chain experts will offer a variety of perspectives on industry hot topics and provide a range of valuable insights for the audiences to consider while planning the future of their function in their organization. This opportunity to exclusive to those in the greater New York area and local procurement professionals can use this one-day conference to regroup after the international event this past week in Orlando. Source One's procurement and supply chain professionals are looking forward to ISM NY's Risk Management event to meet with other industry experts.


IBM and SAP join forces: Imagining the world of cognitive procurement
Applying analytics and smart technology to procurement is a clear way for the industry to evolve, and major computing businesses are working toward this goal. Incorporating the power of sufficient processors and big data could help companies focus on transparency, effective improvement and other modernization issues, all in the name of better efficiency.

In that light, an announcement involving two computing giants working together on procurement could be another sign of new technology supporting the systems needed for future work. In that spirit, IBM announced an alliance that looks to help the industry save money and work faster, thanks to automation and prediction.

A procurement project
IBM's Watson and SAP Leonardo and Ariba will all contribute to a platform that leads to more intelligent operations, IBM said in a press release. According to this statement, the combined power of these two systems would also help companies prepare for the future using benchmarking data and supplier insights.

The president of SAP Ariba, Alex Altzberger, also commented on this in the same statement, citing what both participants could bring to the table by working together and calling the development "a major milestone".

"With the deep horizontal integration capabilities native within SAP Ariba's mature platform and the innovative capabilities of SAP Leonardo and IBM Watson delivered by the industry's most experienced and trusted providers, companies can realize an even more intelligent source-to-settle process for managing all categories of spend that creates value across the entire business," he said.

It's worth noting that SAP Leonardo has been part of other projects dealing with new technology trends and their potential. In January, SAP announced Leonardo as an Internet of Things portfolio, indicating a possible focus on the future of newly connected devices. Deliberately attaching this to procurement may be a sign that this sector could benefit from it.

" In January, SAP announced Leonardo as an Internet of Things portfolio."
Automation and prediction
Though it's still in development, a key feature of this collaboration seems to be using smart artificial systems to "fill in the gaps" of potentially tedious operations and help users see their best move for the future.
Concerns about AI and cloud security are likely to persist despite these advances, but the strategic use of automation does suggest a more realistic mode for companies to follow, with only certain elements of planning falling to these new intelligent systems.

An Information Age piece sourced from a different SAP Ariba employee, Dr. Marcell Vollmer, said that automation is set to "eliminate mundane tasks" instead of replacing the role of humans outright, and that it will also require new data-related roles for employees to fill.

Machine learning
Automation increasingly begs to be seen in relation to other features. An Industry Week interview with SAP SO co-founder Hasso Plattner, taken from a recent news conference, hinting at the role of voice recognition and security along with automation. Plattner also seems to believe that human input will never fully leave the enterprise.

So many factors can influence a company's bottom line that spend management has to change to keep up.
Summer is just a few weeks away and the Source One team is looking forward to the supply chain, procurement and sourcing industry events taking place this season from June to August. Corporate United's Road to SYNERGY one-day conferences kick off on June 6th with the first stop in Baltimore, Maryland.These regional events invite procurement and supply management professionals to join with other local experts in the industry to network, learn, and plan for the future of their organizations. The Source One team looks forward to attending the Road to SYNERGY as a featured Gold Sponsor of these events.

The sessions featured during these events are guaranteed to inspire and educate attendees while creating an setting for exchanging the latest in procurement best practices based on case studies provided by speakers and presenters during breakout sessions throughout the conference. These events also feature dynamic workshops for attendees to participate in interactive discussions with procurement thought leaders who can provide actionable insights.

The agenda for Baltimore's Road to SYNERGY conference begins with a morning of breakfast and networking and a Keynote General Session followed by an assortment of informative sessions and educational presentations and workshops throughout the day. Finally the evening will conclude with an evening event aboard the USS Constellation, the last all sail ship built by the US Navy on Baltimore's historic waterfront. The Road to SYNERGY events are all complimentary for all Corporate United members, friends and practicing procurement professionals.

For a detailed agenda and to find out more information about the Road to SYNERGY event in Baltimore, MD on June 6th, visit the event's website.
 Today's agenda for Day 3 of ISM2017 is just as exciting as the first two days, and features more of the educational and informative sessions that are highly anticipated by attendees! This morning kicked off with the J. Shipman Gold Medal Award before attendees gathered for another insightful Keynote General session from a renowned speaker who offered his perspective on recent current events and political trends that are affecting the economy and influencing key aspects of global supply chains. Following the keynote session was a variety of signature sessions and other panels and presentations throughout the Learning Track that attendees are looking forward to hearing from industry experts and thought leaders on procurement and supply chain hot topics. The Outside Track of Learning Track includes sessions that offer new and effective methods for improving skills and growing as a professional in the supply management field. 

With a variety of unique perspectives who provide their own best practices for attendees, these sessions are key resources for discovering how to establish a professional presence, enhancing skills in related fields and gaining strategic networking abilities that lead to valuable professional relationships. Included in today's Outside Track sessions was Emerging Professionals: Should I Stay or Should I Go?, which featured a panel of emerging professionals who have experienced the benefits of both staying with one organization for a majority of their career and moving from company to company. This session included Source One Director Diego De la Garza, who led the conversation as the panel moderator as the group discussed employee retention efforts and discussed the contributing factors into panel members decisions to either stay with or leave their current companies and previous employers. 

Today is also the final day of the executive sub-conference sponsored by Source One, Exec In. These select attendees are high-level executives that act as decision makers in their organizations, who had the opportunity to attend private sessions within a unique agenda designed specifically for them. This morning they had the opportunity to attend a Behind the Scenes event with the Keynote presenter after he spoke to the general audience to begin the day. In between the morning and afternoon sessions, the Exec In audience attended a Networking Lunch that included two rapid-fire insight sessions. Source One VP, Operations Bill Dorn shared the Three Cardinal Sins for the Modern Procurement Organization to prepare attendees for the coming year in supply management. 

With the final day tomorrow, the Source One team is sorry to see ISM2017 coming to an end while simultaneously excited to return to work with inspiration from the educational sessions and other industry experts they met throughout the conference. 
This post is part of a series discussing BPOs and Strategic Sourcing:


Over my last 5 posts, I reviewed the growing trend of outsourcing strategic sourcing to your BPO provider who handles your traditional transactional P2P.   And while I was a bit negative in discussing the concept and results of many of the existing providers, I don’t mean to imply that every onshore/offshore BPO provider is a bad choice.  I simply think that companies need to do a greater level of due diligence and become less focused on simple ROI calculators when trying to determine if and which BPO is a fit for them.   This final post in the series will hopefully present some other thinking and considerations that should take place as you evaluate your sourcing BPO options.

Here are some of the evaluation criteria and questions that you need to consider when you are selecting a BPO provider for Procurement:


  • Is the BPO model a hybrid model of offshore/onshore resources


  • What is the mix of resources of onshore vs. offshore?

  • How do the onshore resources manage the offshore resources?

  • What level of training is provided to each of the resources?
  • What is the turnover rate?


  • Of the onshore team?

  • Of the offshore team? 

  • Of the Jr./Sr. resources? 

  • Are they named resources or do they come from a pool?
  • Can you interview the resources?
  • Are the resources you interview the same resources that will stick with you through the life of the account, or will they be swapped out?
  • Do you have the ability to demand/request replacement resources?
  • What are the backgrounds of the Subject Matter Experts?


  • How long have they been doing sourcing/procurement? 

  • How long have they been employed with the BPO itself?

  • Will they be working on more than just my account?


  • If not, how many accounts do they work at once?

  • What is the category manager or SME’s role specifically?  
  • What is the quality control process of the work product coming back from the low-cost resources?
  • Have the resources that are assigned to your account worked on other accounts together?
  • How does the BPO provide a consistent on-boarding and culture and handle turnover?
  • Are they willing to provide a breakdown of hours worked on your account and allocations for the senior delivery team?
  • How do they communicate with your team/stakeholders?
  • How do they measure savings vs how do you measure savings? – get buy-in on this before you sign anything!
  • Test their acumen on a variety of categories.   


  • Make sure that the strategies used are not canned 3-bid and buy RFP mentality.

  • Look at work examples from both tactical and non-tactical categories.

  • What tools do they have at their disposal?  


  • Do you have access to the same tools? 

  • What happens if to the tools/data/knowledge if we terminate the relationship?

  • What databases or other content-pools do they have to pull from to support category specific knowledge?
  • How do they measure a successful supplier relationship (meaning your relationship with your suppliers)?


  • Do they only focus on the financial aspects of your relationships?

  • How do they share institutional knowledge with each other?


  • From your account?

  • From other clients?

  • And that’s just scratching the surface.   Also, here’s a pro-tip; you should be asking a lot of these questions in meetings/phone calls, not in canned RFP documents.  Make sure that the organization you select is compatible with your stakeholders.

    And lastly, most importantly, is outsourcing your strategic sourcing really the right thing to do at all? Many companies have found that it was a mistake, and have been trying to bring the resources back in-house which is much harder to do than giving it away.  Further, much better options exist out there, such as supplementing your existing capabilities with high-quality services.  They might not be as cheap on the surface, but the true impact (and financial benefit received in savings and finding the right suppliers) will far outweigh any differences in costs.


    Any other useful evaluation criteria come to mind?  If so, add them to the comments.


    As Day 2 of ISM2017 comes to a close, we want to share some of the highlights from the conference over the past two days. While there are still many exciting sessions and presentations lined up for Tuesday and Wednesday, attendees have already learned so much from the last two days of experiences and educational presentations. The members of the Source One team that are attending ISM2017 are looking forward to gaining more of the already valuable takeaways they have achieved thus far at the conference. Kicking off Sunday morning, attendees had the opportunity to attend the Business Behind the Magic tour in the morning followed by Signature Sessions, networking events and other educational presentations in the afternoon. In the evening, attendees had the chance to attend Procurement Transformation: Is a GPO right for your organization? which featured a panel of executives, including Source One's VP, Operations, William Dorn.

    This interactive discussion allowed the audience to ask Dorn and other panel members questions about how GPOs can offer value for any organization, and the opportunities that GPO members are exposed to beyond cost savings. This session was featured on the Learning Tracks session in Bust track of the Economic Segment, that included other sessions that offered effective strategies and tactics for surviving when economic times get tough. The evening of the first day concluded with the ISM2017 Welcome Party at the World Showplace at Epcot for networking and other activities to excite attendees for the rest of the conference.

    Monday began with a Keynote General Session for all audiences before executives separated from their teams for Day 1 of the exclusive sub-conference Exec In. Source One is featured as the exclusive sponsor of Exec In, that includes sessions designed for industry professionals who act as decision makers in their organizations. These sessions include Open Mic: Why Here, Why Now?CPO Roundtable and Procurement 4.0 which featured Source One Senior Data Scientist James Patounas discussing how to prepare the industry for a world that is driven by artificial intelligence and machine learning.

    Day 3 of ISM2017 has attendees anticipating even more excitement, with sessions including Emerging Professionals: Should I Stay or Should I Go? that includes panel moderator and Source One Director Diego De la Garza discussing the benefits of staying with one company for the majority of one's career compared to the benefits of frequently switching companies. Stay tuned to find out more about the exciting sessions and educational experiences at ISM2017 as the Source One team reports live from Orlando for the rest of the event!
    ICYMIM

    ICYMIM: May 22, 2017

    Source One's series for keeping up with the most recent highlights in procurement, sourcing, and supply chain news week to week. To stay updated on the latest supply management articles, check in with us every Monday.

    50 Providers to Know and 50 Providers to Watch for 2017
    Nancy Clinton, Spend Matters, 5/22/2017

    The Spend Matters industry analysts have shared their official lists of 50 providers to Know and 50 Providers to Watch for 2017. These lists are the results of careful consideration, intense debate, lengthy discussions and multiple refinements, and feature firms that have demonstrated innovative efforts in their work as professionals in the industry. Source One Management Services, LLC is pleased to be included on the 50 Providers to Watch list, being recognized as an organization that pushes the envelope and strives to find unique solutions through world-class procurement practices.

    Supply Management Technical Difficulty Part 1
    Michael Lamoureux, AKA The Sourcing Doctor, Sourcing Innovation, 5/17/2017

    The Sourcing Doctor differentiates between the aspects of e-Sourcing that are truly challenging and those that don't actually offer a technical challenge. While decision optimization and contract analytics are exceptions, baseline e-Sourcing can be acquired through a variety of providers. They may not all be equal, as some possess the true decision optimization and genuine contract analytics that surpass their competition and take the challenge out of coding. In Part II, the Doctor discusses
    e-Procurement, followed by Part III with supplier management.

    Why Should I Update To A Responsive Website?
    Shawn Fitzgerald, ThomasNet, 5/18/2017

    Coding best practices are evolving regularly with updates in technology, and applying these allow for more convenient, efficient, and attractive digital interactions. It's important to stay up to date with these developments to allow for a better user experience, faster loading times, and increased trust with partners, clients, etc. Updating your site regularly to meet these new solutions will also make it easier as mobile use increases over time. People are accessing the internet through their mobile devices more than any other system, and as that amount increases you will want to be prepared for this new standard of online formatting.
    This post is part of a series discussing BPOs and Strategic Sourcing:




    In this lengthy series of posts we’ve been exploring the idea of giving the strategic sourcing function to your procurement BPO provider.   I’ve outlined how they might propose an ROI and define the resources that they’ll provide; but I’ve also outlined that I think the ROI calculations they provide should not be trusted.   Further, I’ve argued, that in many cases, the low-cost nature of their services lends to having bad sourcing practices and overall crappy results.    We call this RFP spam, and onshore/offshore BPO providers are the worse culprits of this in the entire industry.

    What is RFP Spam?  If you don’t feel like reading about it in my many previous rants; here is the short of it:   RFP spam is taking a very basic level of requirements, slapping it into a document or online sourcing tool, and blasting it out to as many sales@abc.com or info@xyz.com supplier addresses that you can find.   If and when you don’t get a response, you move on to the next one.  Maybe if you send 20 or 30 emails out, you’ll get 3-6 responses which become your vendor pool.  And this doesn’t just relate to RFPs, it’s more frequently the RFI itself.  And to be clear, in an RFI, you the procurement expert, should be making as much effort to engage a supplier as they should be to win your business.   If you think that the best suppliers are going to bend over backwards for opportunities they don’t think are real, then you are sorely mistaken (and WILL overpay).   And this is the primary reason these BPOs could never get to the level of performance that your own properly equipped team could achieve.

     “My BPO explained to me that they have solid procurement processes and have smart category leads that will ensure this will not happen.”  Oh really?   I will not name names; but I could produce literally dozens of examples of this RFP spam process from the most recognizable BPO organizations, from this year alone.   Let’s discuss:

    • On average, about once every three weeks, we receive an RFI from one the fastest growing offshore supplemented BPO research companies.   It’s frequently in broken English, and starts with something along the lines of: we identified you as a leader in xxxxx.  We need you to answer these questions (10-20 questions, most of them unrelated to the topic at hand).  Then, it says they need the response within 24-48 hours.    If we attempt to reach out to these BPO providers to gain clarity, we are told that they will only speak to companies that pass their RFI stage, and that due to timing of the event, they do not have time to speak now.   If that doesn’t sound motivating to a supplier, let’s follow it with:
      • Want more?  Track me down at the ISM national conference or give me a call through Source One and I'll show you just how far I've gone with these BPOs that 'just don't get it'.   This includes responding with out-of-this-world outrageous answers to to these repetitive RFPs complete with photoshopped pictures of coffee stains and dead flies on top of my responses to make the page illegible....  And guess what; they still qualified us and asked us for more info!
    • We get the SAME requests from the same research BPO for DIFFERENT clients of theirs about once a month.   This means, that even had we submitted our answers, there is NO institutional knowledge at that organization.   That means that, contrary to what they sales team told you, the BPO does not leverage their internal databases in order to drive efficiency in the work flow.  It means that any client of theirs is paying for redundant services and that the BPO itself is not gaining any efficiency; nor lessons learned about the supply community.
    • Need more?   Another international provider reaches out to us and wants to discuss our services.   They need to execute 2 NDAs, one for the client, and one for themselves (with us). What they hadn’t looked at is the fact that we already had a direct NDA in place with their client; and we had about 3 direct NDAs that covered this same topic in place with them already. To top it off, it took them nearly 2 weeks to get through the NDA process and then release the RFI to us.  And, you guessed it, they need the RFI turned around in 24 hours. Why would any reasonable supplier want to get involved with a RFP process like this?  (They won’t).
    • Then there is the repetitive work.   As suppliers, we’re engaged by an offshore team.  They might do some light research and provide some dialog with us (if they are any good).  Then they introduce us back to their client.  However, the knowledge handoff is non-existent.  All of the discussions we had before are either inaccurate, misrepresented, or completely missing.  Us, the suppliers, have to go through the introduction process all over again.  What do you think that does to our cost/proposal?
    • The subject matter experts are not even familiar with the subject matter.    We see this entirely too often.  A blanket email, phone call, or linkedin request asking for information.  Problem is, the question is irrelevant or doesn’t make any sense.   Any requests for clarification are met with zero response, or an answer such as “just answer as best as you can”.
    • An RFP/RFQ document that is asking for pricing in a way that does not make sense, or would be cost prohibitive to the buyer.    We frequently get requested to provide pricing, but are not giving any specifics on what it is for nor are we provided the opportunity to provide alternative solutions.  Case in point “send us your rate card for benchmarking”.   Rate card for what?  How much volume are you providing us?  How quick is your turn-around requirements?   What are the categories your company wants benchmarked?   What exactly do you want benchmarked, price, business operations, competitive offerings?  It’s not as simple as a “rate card”.   Many of these providers don’t even know how to construct a proper SOW, let alone run a supplier qualification process.
    These are just a few of the examples of the non-efficient process that we’ve seen from some of the BPO providers.   Hopefully it’s transparent enough for you to realize that the 30% savings they promised you can quickly disappear by losing just one or two potential suppliers that are lost during the sourcing process for any of your categories.

    Are all BPOs bad?  Definitely not.    Will they all under-perform?  Of course not.     
    My intention was to highlight some of the overlooked issues that finance and management teams often overlook when they look to outsource the strategic sourcing of their tail-end spend.   In MANY cases, they focus on cost only, and fail to recognize the total value the supplier provides. 

    With these posts, I didn’t even focus on how important it is to find the right supplier; I tried to focus more on the savings aspect of it that many of these companies seem to chase.  Hopefully I’ve shed a bit of light on some things to explore during your BPO selection process.   

    In the next post, I’ll actually provide some specific talking points and consideration points to keep in mind while you are deciding whether or not to outsource.
    Telco Consolidation Part 1
    M&A activity is not uncommon to the telecom industry, but in the past couple years, there have been some major players coming together. Here is a sampling of some of the more major Tier 1 and Tier 2 M&A announcements from the last two(ish) years:
    • CenturyLink acquisition of Level 3
    • Verizon acquisition of XO’s fiber business
    • Charter, Time Warner Cable, and BrightHouse merger
    • Verizon select services sold to Frontier
    • Windstream acquisition of Earthlink (and recently announced Broadview Networks)
    While your organization is likely to be affected by these changes in the market, there are some key areas that can be proactively addressed to prepare for the changes and mitigate potential negative impacts. Part I of this series will focus on the account-level and billing aspects that are likely to be affected:

    Customer Service:
    If you do not have an assigned account rep or account management structure in place with the acquired and/or acquiring carrier, you may experience some level of run around while services and accounts are in transition. When Verizon sold select services to Frontier, I worked with clients who were stuck in a cycle of customer service where Frontier did not yet have the account on file, but Verizon was no longer servicing the area, leading to a lot of frustration. Work with the carriers to proactively determine customer service transition dates and push for new account numbers and to ease some of this back and forth.

    Account Management: Be aware that different carriers stratify their customer accounts in different ways with unique definitions for the level of scrutiny and account management for each type of customer. Certainly the aim/pitch from the carriers would be that your quality of account management will improve with any merger/acquisition, but do consider where your company, spend, and services fall in terms of priority for the acquiring/consolidated supplier. For example, you may have been 2% of the revenue at a smaller carrier, but only .2% or less once you combine multiple carrier revenue streams. Talk with your account rep to understand where your account falls in terms of a defined customer group and the impacts to your account management structure (for better or worse).

    Billing/Reporting: You may be rejoicing at some of the M&A announcements and assuming that your company’s billing and reporting will now be consolidated between suppliers who are now one entity, but don’t expect too much, too soon when it comes to consolidation. You are likely to see separate billing systems, reporting platforms, account codes, etc. for quite some time. There are certainly still vestiges of carrier consolidation from many years ago – your best defense against this is to have a well-managed telecom inventory and a billing/compliance tracking system in place so that as changes occur, you are able to make necessary updates and address changes as needed with the carriers.

    Pricing/Flexibility: Certain carriers are known in the market for being more competitive from a pricing standpoint than others, so while you may benefit from larger footprint and less administrative burden (eventually), there’s likely to be a trade off when it comes to price. Similarly, smaller carriers tend to more flexible in their offerings and ability to respond to customer needs. Not to say that this flexibility will completely go away, but for those who are used to dealing with the more rigid processes or slow turnaround times associated with the larger carriers, it can be long process to get agreements negotiated or to resolve billing issues. By leveraging existing pricing you have in place and taking a strategic sourcing approach to telecom services, you can continue to push your carriers to remain competitive and tailor services to your organization’s needs.

    Of course the positive part of market consolidation should be that top suppliers are expanding their footprint, increasing their suite of services, and pushing for more creative solutions to differentiate themselves. In Part II of this series, we’ll look at the potential service/logistics impacts of carrier consolidation and how it may affect your organization and services; until then, continue to watch the market, look for these announcements, and position yourself for change!
    Source One Round Up

    May 19, 2017

    Here's a look at where Source One's cost reduction
     experts have been featured this week!


    UPCOMING EVENTS:
    ISM 2017

    Next week members of the Source One team will be attending the Institute for Supply Management's annual international conference in Orlando, Florida. ISM2017 welcomes more than 2,500 supply chain professionals from all over the world for informative presentations, networking opportunities, educational sessions and a variety of other unique experiences. The four day conference features sessions for professionals at every stage of their career, from young professionals in the millennial generation to the executives that act as decision makers in their organizations. Supply management leaders are invited to attend the exclusive sub-conference Exec In, with an agenda designed specifically for these high level executives. As the exclusive sponsors of Exec In, Source One wanted to offer this audience a setting to discuss the future of procurement with other industry experts.


    Corporate United is inviting supply chain experts from select cities across the country to attend one-day conferences on their Road to SYNERGY series this summer! The very first event will be on June 6th in Baltimore, Maryland where industry experts local to the area will have an opportunity to collaborate in a close setting with other supply chain professionals in their region. While discussing hot topics with other attendees is highly anticipated during these meetings, the audience will also learn from industry leaders as they present throughout the day. Informative sessions and engaging conversations will allow for endless opportunities to exchange insights and expectations for the future of supply chain during these conferences, and attendees can guarantee valuable takeaways. Once they wrap up in Baltimore, Corporate United and Source One will get back on the Road to SYNERGY to attend the next event in the series in Dallas, Texas!


    ISM New York's annual Risk Management conference was originally scheduled for the end of March but was canceled due to Snow Storm Stella and has since been rescheduled for June 14th. The agenda will remain as planned and attendees can anticipate all the sessions that they were looking forward to at the March event. The event will feature presentations from procurement and supply chain experts who will discuss industry trends while offering their valuable insights and expectations for the next year and foreseeable future of the industry. An opportunity for procurement professionals in the New York area, this one-day conference is ideal to regroup after the international annual ISM event in Orlando just one month prior. The procurement and supply chain experts from Source One's team are anticipating ISM NY's Risk Management event to collaborate with other professionals and look forward to attending next month!