Top Strategic Sourcing Articles by Source One:

Top News




The tables have turned from a decade ago. Unemployment is down and the burden of employment has turned from the applicant to the hiring manager. The process can be overwhelming while attempting to balance the need to fill the vacancy and finding the perfect fit. For assistance with recruitment contact Source One for a personalized plan and increase attention to detail from our staff.

On top of the societal good it brings, the employee shortage has had many employers reconsider barring formally incarcerated individuals, given they have been rehabilitated. Yet, it would seem that too many employers are still fixated upon an applicant attaining a bachelor’s degree. Why? Many degree programs, though formative, have a great degree of rigidity and little exposure to real world problems. In contrast, an applicant may not have a four year degree, but instead have ten years of experience within the applicable industry and require significantly less training.

While Bachelor’s degrees may offer an accredited foundation of knowledge, new graduates are often very green and in need of extensive training. There are a lot of qualities that foreshadow a predisposition to success more so than a completed undergraduate campaign. Here are 5 attributes more important to determining a good fit from a resume than a Bachelor’s degree.

Rapid Advancement
A good resume paints a narrative. As an employer you should pay attention to this narrative through its rises and falls. While observing the rises, take note of the speed at which an applicant is promoted, or otherwise having greater impact on an organization. This shows that, despite lacking higher education, this individual displayed natural traits and leadership that gained them trust from their superiors. Rigor in the applicant’s career can display good time management skills and how they may handle adversity. Consider the challenges of a single mother of two who worked her way up without finishing a college degree. Whatever adversity may have been faced, it shows a larger commitment to success in spite of hardships than an applicant with little experience or obstacles to hurdle, but a framed degree in their apartment.

Relevant Experience
A given, but even if experience is not in the same industry, similar work in a practical environment can make for an easy pivot to your company’s needs much more than a formal, sometimes standardized, college education. This experience could come from a variety of activities and should not be limited to just paid experience. For example, serving as a chair person for a charitable initiative shows strong leadership skills and big picture idea generation. Experienced workers with the exact tool set needed for the position are becoming increasingly difficult to come by, because most would argue their experience is much more telling of an applicant’s likelihood of success.

Tangible Accomplishments
Look for terms like “increased sales by X” or “reduced spending to save X”. Tangible achievements in the workplace show drive to further a company’s success. Do not look past an industry award on a resume. Even for more minute commendations, they provide evidence of other employers or industry leaders recognizing the individual’s dedication to excellence and effectiveness in a given occupation.

Strong References
What do past managers, co-workers, etc. have to say about their personality drive and technical competence? A reference is the best way to tell how an applicant will be able to integrate themselves into your workplace culture. Additionally, is there anyone who does not say “My biggest weakness is that I’m a perfectionist” in an interview? Speaking to previous employers, partners, or co-workers will allow you to get a sense of their actual work ethic. Are they a reliable work horse? Are they the type of employee to think outside of the box and innovate from within? Are they the type to call in sick repeatedly and mysteriously post extravagant vacation photos their next day in the office?

In the case of letters of recommendation, look to see if the candidate has made an impact on the company or office space that the employer looks at with enough respect to denote it in writing. Interviews with references may be more effective in understanding an applicant’s personality, but letters of recommendation can show respect for authority and impactful impressions upon management or superiors.

Passion outside the workplace
Do not limit your credentials just to attributes exclusively visible in the office. For example, an applicant should display interest and involvement in community service, and religious, professional, or athletic organizations. A well rounded employee can bring a diverse viewpoint to company decisions and manufacture an atmosphere or casual conversation amongt employees, bolstering their cohesion.

Philanthropic involvements in particular show a dedication to ethical behavior, management skills or willingness to be managed, and respect for the people around them.
Professional organizations show commitment to the industry at hand. An applicant who is active within their professional organization is more likely to be up to date on emerging technologies and rising trends. They are also more likely to have a larger professional network.

The changes in the employment can make filling an opening difficult to navigate. Take some time to really evaluate how much value a Bachelor’s degree holds when compared to an applicant with incredible credentials otherwise. Consider the difference in immediate effects, and training time needed. Hire away.



October 21st, Corcentric's AP automation and optimization team will head to Chicago for the three-day Connect Leadership CFO Summit. The event will attract hundreds of Finance innovators and provide countless opportunities to network, exchange best practices, and discuss the Finance world's emerging trends and persistent challenges.

Serving as sponsors and featured presenters, Corcentric looks forward to sharing some of the insights that have made them a leading provider of both Procurement services and Finance automation solutions.

This year's key themes include 'Technology and Transition,' 'CFO Leadership & Innovation,' and 'Strategic Financial Management.' Corcentric's SVP of Sales Dan Andrew will touch on all three in his presentation, 'The Power of Payments and Accounts Payable Integration.'

Andrew, a long-time advocate for AP automation and 'the Nirvana of paperless,' will encourage attendees to retool their approach to the 'last mile' of their transactions. He suggests manual processes during this stretch cost organizations money, limit visibility into payments, and ultimately lead initiatives to collapse.

He joins an impressive roster of speakers that includes Fortune 500 professionals from the industries including retail, technology, and the non-profit sector.

Since its founding, Corcentric has committed itself to eliminating the inefficiencies that hold Finance departments back. They welcome every opportunity to share their expertise and encourage their peers to develop a more forward-looking attitude. Connect CFO's discussions and educational sessions promise to help the Finance specialists evolve in their efforts to optimize the way organizations, pay, purchase, and get paid.

Welcome to the third installment of this series on supplier relationship management! If you read the first two posts and are still on board, odds are you recognize the value your supplier base can bring beyond simply pushing toward cost reduction. If you’re joining the rest of us for the first time, take a moment to read over those posts first:
As a quick recap, we constructed a high-level definition of what supplier relationship management means to Procurement in that first post, and laid out a set of steps we can take to improve our SRM practice in the second. At that time, we discussed how to narrow our field of view to consider only the most important supplier relationships.

So, now that we’ve done that, how do we proceed? Let’s turn back to our five keys to SRM.

Our Five Keys to SRM, Revisited
Now that we’ve narrowed our supplier view using the first three bullets, it’s time to dig deeper into our supplier relationships:
  • Properly segmenting our supplier base.
  • Gauging the state of our relationships – and evaluate which are most important.
  • Consolidating suppliers to a manageable number, given the points above.
  • Reconsidering of what our suppliers mean to us and how we interact with them (and getting it in writing).
  • Improving how we communicate with our suppliers.
Realigning our Supplier Interactions
A lot of Procurement’s functions are highly tactical in nature, which is important but not the basis for valuable, company-wide improvements. Tactical is reactive. Tactical is stagnant. Procurement needs to grow beyond the tactical elements of the job. To take our game to the next level, Procurement needs to be strategic. 

Our goal with strategic partners should never just be about reducing cost. Rather, our goal should be to maximize the ROI of every dollar spent. This will be familiar to any Procurement Pros who work with their Marketing teams successfully.  Marketing can traditionally be a tough spend category for Procurement to break into, because those teams often think that we just don’t “get it.” In many ways, they’re right. If one creative agency costs us twice as much as another we work with, we’re likely going to start thinking about negotiating based on established rate cards. We might go out to market to bolster our benchmarks. But does this make sense in the long term? If that first agency produces a 3x ROI where all others have lagged, there might be more to the relationship to consider.
  • What are they doing right for the 2x price that nets a 3x ROI?
  • How can we expand this best-in-class service to cover more critical components of our strategy?
  • Are there any tactical elements we can separate from this agency and move to another? This could yield cost savings as well as allow this agency to focus more on the critical components more worthy of their time.
Better Communication is Key
Getting to the level of understanding needed to answer these questions requires a commitment to communication. This includes internal communication with Marketing, but extends out to our suppliers as well. Our strategic partners have a level of understanding that we just can’t have when it comes to their areas of expertise. This is, of course, why we hired them in the first place. Listen to their concerns and suggestions on how the relationship can be expanded for your mutual benefit.

Open communication doesn’t have to happen late in the game. I propose we start all relationships this way right off the bat. I’ve run through plenty of RFP initiatives, and one element dictates success more than any other: the amount of two-way communication is built into the process. At the risk of side tracking into a whole other topic, this means providing background on the strategy that participants will be supporting, and built-in question and answer sessions, ideally in real time, to discuss goals. Some clients avoided this discussion, choosing to keep critical info under lock and key. They did this to their detriment. Those who were open and collaborative during the RFP process ensured that proposed solutions,
  • Were a better fit for their organizations. Responses to the lock-and-key crowd rely on making guesses and assumptions about the buying organization, which don’t always align with reality.
  • Were more encompassing. Opening communication leads to suppliers who feel free to propose alternatives or new products and services that could be valuable.
  • Were more cost-competitive. Suppliers who are engaged as partners instead of just participants come to the negotiating table more openly and are receptive to the process.
Talk to your partners. Don’t wait until you’re ready to make your next order before discussing organizational strategy shifts.

Keep your Eyes Open
We’re about 800 words into this post, yet I could’ve just summarized my points here in four words: “Take your blinders off.”

Some of what we’ve discussed today deals with process change. A great deal more, however, deals with changing Procurement’s perception about what the buyer-supplier relationship means. It can be easy to fall back to the default of tactical thinking. We should challenge ourselves to proactively consider what our suppliers can bring to the table beyond their product offerings.


ICYMIM: October 15, 2018

Source One's series for keeping up with the most recent highlights in procurement, strategic sourcing, and supply chain news week-to-week.  Check in with us every Monday to stay up to date with the latest supply management news.

Dennis Bouley, My Purchasing Center, 10/12/18
According to the U.S. Department of Labor, job openings are at an all-time high. Though this reflects low unemployment numbers, it means that hiring managers across Procurement have their work cut out for them. As organizations compete to stand out, they must also contend with the growing contingent workforce. Bouley advises organizations to give serious thought to bringing in outside help. Even if your organization has never considered working with a consultant before, the unique talent situation presents an effective business case for making such investments. 

Michael Lamoureux, Sourcing Innovation, 10/11/18
Procurement was given a death sentence years ago. Somehow, it still survives. Unfortunately, Lamoureux suggests, the function is less a Phoenix rising from the ashes than a zombie trudging through a monotonous existence. "Day by day," he writes, "we're going through the same old motions, using the same old processes, dealing with the same issues, on the same old platforms." He then digs into why this situation persists. Though Lamoureux leaves his answer up in the air - the series will continue throughout the week - he suggests Procurement get started by insisting its vendors get better. Mandatory platform improvement clauses will get vendors on the hook and ensure they invest in continual improvement. 

Want to Know Your Industry's Risks? CSR Index from EcoVadis Takes Deep Look
JP Morris, Spend Matters, 10/15/18
More than ever, Corporate Social Responsibility is driving initiatives and dictating corporate strategies. Issues ranging from pollution to forced labor play a roll in each component of Supply Chain Management. In its new Global CSR Risk and Performance Index, EcoVadis assesses more than 30,000 organizations and their approach to responsibility. The index suggests that smaller organizations are more likely to deliver on their CSR goals than larger companies. What's more, EcoVadis found that no organizations scored above 90 on their 100-point scale. This means that none have developed an "outstanding" approach to measuring and reporting on their CSR efforts. 


Biopharmaceutical giant buys Narcan manufacturer

In what may best be described as a shake-up to the medical supplies and pharmaceutical industry, the maker of a widely known opioid overdose treatment is being purchased by a Maryland-based biopharmaceutical company, a supply chain optimization move that may help counter the painkiller abuse crisis.

As reported by Reuters, Emergent BioSolutions in August made a deal with Adapt Pharma to purchase the pharmaceutical company, the official manufacturer of Narcan. A needle-free emergency treatment that's approved by the Federal Drug Administration, Narcan contains chemical naloxone hydrochloride, a key ingredient that helps to counter the effects caused by overdosing on painkillers and use of illicit drugs, such as heroin and fentanyl.

Financial disclosure documents made available from Emergent revealed the deal totaled $635 million in upfront cash-and-stock payment and up to $100 million in additional funding should certain sales goals be reached between now and 2022, Reuters reported.

No disruptions predicted
In a conference call with analysts, an Emergent executive indicated that intends to maintain the development of Narcan by adhering to the systems AdaptPharma put in place so as to avoid supply chain encumbrances.

"Adapt has put together a strong, durable supply chain of partners to support the manufacture of the product," the executive stated, who was not named in Reuters' reporting. "We do not intend to disrupt that."

Health experts and physicians indicate the production supply chain of Narcan is crucial to emergency care. Indeed, the U.S. Surgeon General is one of a growing chorus of officials advising more medical offices - and homes - to have Narcan available or generic equivalents containing naloxone. In a poll conducted by Blue Cross and Blue Shield of Massachusetts, 70 percent of respondents said the opioid-reversal drug should be accessible in all workplaces.

Andrew Dreyfus, Blue Cross president and CEO, said the insurer is joining forces with more employers in the Bay State to make this possible.

"We're providing them with the resources they need to reverse overdoses and educate their employees, whether in an office setting, a job site or a city hall," Dreyfus said.
"200,000 people died from overdoses related to prescription opioids between 1999 and 2016."

Painkiller abuse a nationwide crisis
Opioid dependency has reached epidemic proportions and has claimed thousands of lives in the U.S. alone, particularly in recent years. It's been labeled a crisis by President Donald Trump and the Department of Health and Human Services. According to the Centers for Disease Control and Prevention, over 200,000 people died from overdoses related to prescription opioids between 1999 and 2016. Of these, 17,000 occurred in 2016, the most recent year in which data is available.

Increased demand for naloxone has led to an uptick in prices. As noted by National Public Radio, syringes containing the key ingredient once cost no more than $6. Now, they're upwards of $30 or more. And for automatic naloxone injectors, they're priced at north of $3,500.

Emergent says it's doing everything it can to build up supply and keep costs under control, this includes by offering a 40 percent discount on Narcan, available to nonprofits as well as local and state governments, according to Reuters. Emergent also said it intends to do more to address opioid overdose and why it's happening so often. Furthermore, the company seeks to gain access to Adapt's alternative treatment portfolio which help negate opioid dependency symptoms.
Even in a candidate's market, the job search is often an overwhelming process. The most positive professionals can find themselves growing exhausted and discouraged when things don't go as planned. These feelings don't help. When disappointment leads a candidate to enter interviews or send out resumes with a negative attitude, it could seriously hurt their chances of finding the right opportunity. 

Attitude goes a long way when you're an applicant. A motivated, energetic, and positive outlook can help you distinguish yourself as an asset to company culture. A defeated outlook? That'll have the opposite effect. 

Feeling demoralized in the job search? Check out these tips from our Procurement and Supply Management recruiter




October 12, 2018

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



White Paper:
A reminder that the MRO Demystified series is still ongoing! Part III will be released in the very near future, but if you missed it, Part II is still here.

New Blogs:
Dejana Dosen, Next Level Purchasing Association, 10/10/18
MRO is an often overlooked category of spend. However, transactions that may seem unimportant and minute can add up to a create a category with an underestimated impact upon profitability. Dejana Dosen discusses how to manage MRO more effectively and how much impact doing so can have upon the bottom line.

Jennifer Ulrich, Buyer's Meeting Point, 10/11/18 
Jen Ulrich describes “Broken Window Theory” defined in the Atlantic as it pertains to procurement rather than crime. The dangers in complacency and laziness are incredibly apparent in all procurement processes. Skipping that one step in analysis once or twice sends a message to the rest of the company that it really is not that important. Proper procedure begins to slip from there. Inversely, going for a period with no missed dates leads by example and will to many show the significance of the processes in place. 

New Podcast:
Programmatic buying is an exciting and fresh take on procurement especially within media buying. It may seem like an auto-pilot or easy mode alternative to traditional manual methods, but it sadly is not that simple. The podcast asserts the value of programmatic buying tools but also that contracting media buyers, though less needed, still has some uses that no algorithm can accurately tackle at this time. 

Upcoming Events:
Source One is hosting its fourth annual happy hour for Supply Chain professionals. Don't miss this chance to network with industry peers. Want to learn more? Contact Kaitlyn Krigbaum (kkrigbaum@sourceoneinc.com) today.

Hosting hundreds of top industry minds, Connect CFO Leadership Summit will take place in Chicago. Corcentric will be both in attendance and sponsoring, with SVP of Sales, Dan Andrew, giving a presentation on the Power of Payment and Accounts Payable Integration. The conference will foster an atmosphere stimulating the exchange of information surrounding of industry trend and emerging technologies.

At the end of this month, Source One will be a proud sponsor of ProcureCon MRO in Fort Worth, Texas. An event packed two day conference, ProcureCon MRO will define innovations in MRO Procurement, and Strategic Sourcing such that businesses can grow together. Artificial intelligence in Procurement is at the forefront of many key presenters. Our Source One team is ecstatic to be in attendance and looking forward to the excellent networking opportunities the conference will provide.



Last night, the Institute for Supply Management's Philadelphia chapter held its October Dinner Meeting. Jennifer Ulrich, Source One's Associate Director and Procurement Transformation lead, served as the keynote speaker. Leveraging her years of experience supporting Fortune 1000 organizations, she discussed 'Sourcing Excellence Through Category Management.'

An industry-recognized expert and an advocate for Procurement's strategic evolution, Ulrich has helped numerous companies replace their tactical practices with more nuanced approaches to managing spend and suppliers. In many instances, she has done so by building Category Management frameworks from the ground up.

"Realizing Procurement's full strategic potential," she says, "is only possible when companies allow their purchasing unit to continually grow and evolve. This begins with laying the groundwork for collaborating with other business units and proactively addressing every category on its own terms."

Ulrich's call to action focused on three key considerations for making Procurement a Category Manager: attracting and empowering Procurement talent, establishing strategic relationships with suppliers and other external stakeholders, and marketing Procurement's value internally.

Enablement and empowerment were crucial themes. Misconceptions, Ulrich acknowledges, still hamper Procurement within many organizations. Couple that with poor communication, and the function can struggle to deliver on its strategic objectives. She reminded ISM-Philadelphia's members that the function has to "speak the language" of its peers if it really wants to reach its potential.

She suggests that no stakeholders within the organization should ever wonder how Procurement will enable them to reach their goals. Instead, they should feel confident in Procurement's value and proactively seek out its assistance. It's up to Procurement, she believes, to create a culture where this happens.

Ulrich's thoughts on Procurement's ongoing evolution are also featured in Procurement Transformation: Industry Perspectives. Download the comprehensive eBook today to learn more from Ulrich and a collection of Supply Management thought leaders.


Brian Seipel opens the latest episode of the Source One Podcast by referencing a recent article on trends in media buying. The piece, he remarks, asks readers, "why not bring media purchasing in-house, why not do it ourselves?" The question got him to thinking.

Throughout the episode, he weighs the benefits of in-house, programmatic buying and asks a few questions of his own. "What," he asks, "are we leaving on the table by cutting out media buying agencies?"

Seipel first elaborates on what exactly programmatic buying means for the Marketing category. "In a nutshell," he explains, "programmatic buying means transitioning the onus of choosing ad space based on algorithm-fueled software, essentially automating the process." Predictably, this raises questions about the future of living, breathing media buyers.

So, will organizations be kicking their buyers to the curb? Not for some time, Seipel suggests.

He continues, "not all outlets are created equal when looking at programmatic." Though more and more outlets are looking like opportunities to introduce programmatic practices, they're still most often applied in the digital advertising subcategory. For most organizations, bringing media purchasing fully in-house is still beyond their means. They'll need to ensure their internal teams can "talk the talk and walk the walk as any outside agency would" before they commit to a major transition.

Seipel concludes by listing questions an organization should ask themselves to develop an optimal approach. By determining which skills they've got and which they need to work on developing, they can ultimately reach a strategic balance of in-house and external media purchasing.

Subscribe to the Source One Podcast today to listen to the full discussion.


Almost a year ago, I wrote an article that discussed some threats China was making. Not about tariffs, not about trade, but about recycling. Those threats are coming to a head.

Recycling ain’t easy – a lot of work goes into taking recycled scrap and converting it into new products. China has long held a lead position in the processing of this scrap material, handling some 65% of the world’s recycled materials. That’s right, over half of the world’s recyclable materials flow to China to be processed. At least, that has historically been the case.

Moving forward, China is cracking down on the scrap they’re willing to accept from other countries. In effect, China’s ban on scrap imports would halt a large chunk of recycling efforts worldwide. China’s main complaint that prompted this move? The country claims that the quality of scrap has been subpar. The cleaner and better sorted scrap is when it lands at a Chinese facility for processing, the easier it will be to process. Consequently, dirty, contaminated scrap makes the process that much harder (and less lucrative).

The Impact of China’s Ban
There are a couple big (and obvious) impacts this ban could have if left in place.
First, the environmental consequences. Let’s go back to our “65% of the world’s recycling” figure – an obvious question arises: If China isn’t processing the bulk of this scrap, then who is? Even if other countries expand their own capabilities, there will still simply be too much scrap to process. Where else would this scrap end up, then? Potentially a landfill, contributing to our growing garbage problem.

Beyond environmental, there are other consequences. First, there’s a potential for job losses among American workers who process and ship this scrap. If China isn’t taking such shipments, then tens of thousands could be out of a job. Second, there may potentially be an impact on the availability of “virgin” materials. Fewer sources of recycled paper could lead to a tighter pulp supply and higher costs.

How can Industry React?
Industry will need to respond to this ban, either proactively, reactively, or a combination of both.
On the proactive side, industry leaders can continue to pressure China to relax the ban and work with scrap exporters. The Institute of Scrap Recycling Industries (ISRI), a trade association composed of 30 countries, released a response to China’s proposed ban last year. The ISRI argues that clarification is required on China’s end to better outline how the ban will be enacted and calls China’s own capabilities into question in comparison to the United States’ recycling industry: “where it takes 1,150 tons of recyclable fiber to make 1,000 tons of new paper in the United States, it takes 1,300 tons of recyclable fiber to make the same 1,000 tons of new paper in China. As a result, Chinese manufacturers have come to rely on the supply of high‐quality scrap from abroad in order to stay competitive.”

On the reactive side, if China doesn’t budge, we have a few other options:

  • First, we can add more quality controls. China’s complaint is around quality control and, as such, steps taken to improve quality levels (ensuring a process that removes contaminates before bales of scrap are exported) may help resolve the situation.
  • Second, we can continue to develop and strengthen alternative markets. China’s threats aren’t new, and the country has in fact been increasing scrutiny of imported scrap for years. Some American exporters have used these intervening years to plan alternative outlets for their scrap – a plan that could become more and more critical moving forward.

There is, of course, one more option. The “do nothing” option. Forego recycling and send scrap shipments to the landfill instead. This is obviously a bad choice – one that damages the environment, kills jobs, and puts pressure on Procurement when it comes to sourcing these products.

Simply put, something must be done to resolve this issue, because “doing nothing,” is barely an option at all.


Last month Visa and MasterCard announced a $6.2 billion settlement in a law suit brought on by merchants claiming the payment network giants conspired with issuing banks to fix the fees charged to stores for accepting credit card payments.  The initial lawsuit was brought forth in 2005 when over 12 million merchants filed claims against Visa and MasterCard arguing that two rules imposed by the card associated were overinflating fees.  First, if a merchant accepted Visa/MasterCard at all, they were forced to accept all card types, even those with higher fees charged to the merchants.  Second, an “anti-steering” rule imposed by the networks prevented merchants from adjusting selling price based on the payment type to offset these charges.

While the settlement is a small win for merchants impacted by these fees, it does not come with a guarantee that interchange pricing will come at a reduction in the future.  For larger merchants such as Amazon, the settlement is likely to be rejected in an attempt to seek more restitution.  Regardless of a merchant’s size or business model, if credit card payments are accepted an interchange fee will be incurred.  These fees set by the payment networks (Visa/MasterCard) and paid to the card issuing banks are non-negotiable.  There are, however elements of a credit card transaction that can be negotiated in an attempt to lower the total cost of a transaction outside of these fees.

In any given transaction, there are multiple institutions that are involved in ensuring money is transferred from the customer’s issuing bank through to the merchant’s account.  Each entity charges a mark-up fee to fund their part of the transaction.  Some of these fees are non-negotiable even to the largest retailer, however some are able to be negotiated at competitive rates.

Non-Negotiable Fees

Interchange Fees – These are the fees set by the payment networks (Visa/MasterCard) and are applied to all transactions.  They vary based on transaction type and are published by the networks periodically. These fees are typically charged as a percentage of the overall transaction + a flat amount.  An example of a common interchange fee is: 2.10% + $0.10

Card Association Fees – There are smaller, circumstantial fees charged by the payment networks that are often split with card issuing banks.  These include debit/credit assessment fees and international acquirer fees.

Negotiable Fees

Credit Card Processor Mark Ups – These are the fees charged by your Merchant Service Provider (MSP) and are a key area for negotiation.  These fees represent the cost charged by your MSP to process your transactions.  It is important to keep in mind however, these fees are not all profit for your MSP, and are split among ISOs, acquiring banks, and other software providers who are involved in the transaction.

Payment Gateway Fees – This is typically a monthly fee payed to the payment gateway which facilitates online transactions.  There can also be a per transaction fee associated with the gateway provider.  Anymore, most MSPs have their own gateway or use a preferred partner, and costs can be negotiated in conjunction with markup fees for greater leverage.

For more information on pricing structures that ensure transparency in combining these fees, please see my previous article covering Selecting a Best Fit Merchant Account Structure.  The settlement does not prevent Visa/MasterCard from inflating these fees, and while more terms in the settlement will likely be released in the future, merchants must be diligent in keeping merchant accounts fees market competitive through MSP negotiations.


This four-part series focuses on why companies shouldn’t focus on a Gartner Magic Quadrant (MQ) when making a procurement technology decision. Part one (How does Gartner pick their vendors for a Magic Quadrant?) discussed why some vendors you may be interested in aren’t on there. In part two, we’ll look at the inherent conflict of interest that Gartner has with vendors on a MQ.

Part II: Gartner doesn’t do pay-to-play – at least directly

Gartner reiterates that they do not engage in any pay-to-play activities. That is, they do not accept money to improve a vendor’s standing on the MQ. This is technically true; however, it does not tell the whole story. As David Rossitar, co-founder of the Institute of Industry Analyst Relations (IIAR), explains:


"[T]here is one big advantage to being a Gartner client. What you are buying isn’t just the research, it’s time with the analyst to get their insights and advice.  And that is massively important. 
As a vendor [who doesn’t pay Gartner], I can brief an analyst perhaps four times a year. And analysts aren’t supposed to provide me with any feedback during a vendor call. Gartner's advice is only available to its clients. 
As a client, I can talk to my target analysts every week or so. I can find out what they see happening in the market, what they think is important, what they like about my business and what they think I should do differently. 
If I’m smart, I use this feedback to build a stronger, better business. I make sure the way I position my company to Gartner reflects back what I’ve been told is important."


Vendors cannot pay to be included on a MQ, but those that pay for Gartner’s services can receive weekly feedback from the analyst who completes their industry’s MQ, whereas vendors who do not pay for Gartner’s services can only occasionally brief an analyst on their product, and the analyst cannot give that vendor any thoughts during their briefing.

Imagine interviewing for a position at a company. You have the option of walking into the interview knowing nothing except what is included on the job description, or you could pay to discuss the position requirements with the hiring manager half a dozen times before the interview. Technically, you are not paying to get the position, but the feedback they provide would certainly give you a leg-up against those also vying for the spot.

This is how it works with Gartner. Vendors who pay for face time with the analyst completing their sector’s MQ have a better understanding of what the analyst is looking for and can better position their product to score well.

A company like Gartner could easily address this shortcoming by disclosing vendors who pay for analyst face time, but they do not. As an end-user, you have no idea which vendors have spent money in hopes of improving their MQ positioning and which have not.

Do you want a product designed to score well on the MQ, or do you want a product that works best for your use case? While the MQ can prove useful for evaluating vendors, it should not be the only consideration. Source One can help you navigate the market, find an ideal procurement technology vendor for your use case, and assist in a smooth onboarding of that platform.