Deborah R Wilson
Research Vice President
4 years at Gartner
12 years IT industry
Deborah Wilson, a Gartner research vice president, covers procurement strategies and applications. Her areas of interest include procurement transaction automation, e-marketplaces, e-sourcing, spend analysis, accounts payable automation… Read Full Bio
by Debbie Wilson | January 3, 2012 | Comments Off
It was great to spend some downtime visiting my family last week during the holidays. My mother must have been doing some spring cleaning before my visit because she handed me a thick manila envelope of school papers to look through – some of my elementary and middle school papers! We laughed and reminisced as we paged together through poems, crayon-shaded pictures of flowers and a bound journal of summer vacation reports from my entire 4th grade class. I marveled most when I found an imaginary magazine I compiled for my 8th grade American History class. One of the featured articles, clipped from a newspaper, described the US Postal Service’s worry that competition from electronic communication systems would render it obsolete. J.T. Ellington Jr., Senior Assistant Postmaster General, cited the imminent shift of 18 million federal employee paychecks from mailed paper documents to electronic deposit as the source of concern. I have no recollection of that piece but clearly our evolution to electronic communication has been a long and gradual one!
Just a few days later, a dear friend shared with me her young son’s frustration that he is required to work on his handwriting skills in his elementary school class. He interrupted our conversation to assert that ALL of his friends now own a smart phone of some type, and EVERYONE types out their messages online. He dramatically concluded that handwriting is clearly obsolete and certainly a waste of HIS time.
The funny thing is, I think my friend’s young son is right. We need handwriting skills now – to address envelopes, fill out paper forms, and write letters to our non-computer-literate older generation. In fact, it was priceless trying to explain to my mother last week how the book I had on my new Kindle got there. She thought surely there must be some photocopying going on to render the pages on my device. But every day, a little more data flows through the cloud instead of through an ink cartridge. Perhaps thirty or forty years from now —- taking the long view —- electronic devices will have completely altered the way we communicate. What an amazing time we live in!
Happy New Year!
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by Debbie Wilson | November 29, 2011 | Comments Off
Zycus recently published a really interesting study on what works best to drive high-performance results in procurement transformation – aka savings of 30%+ attributable to effective spend management practices. The number one enabler for high performance, in achieving contract and process compliance identified in the report was “monitor and report!” In other words, buyers that track compliance and share the results with affected parties are the ones most likely to achieve significant savings.
I have to admit, this finding makes a ton of sense. People are sensitive to numbers, and exposing trends, whether good or not, to the people that have the power to make changes, can really work. We use this tactic to manage deliverables all the time at Gartner, because most analysts work from home and a hovering management style isn’t possible.
For this lovely and useful Zycus report, “Driving High Performance Procurement Initiatives,” see: http://www.zycus.com/resource-centre/Research-Report2011-lp.html. Happy Holidays!
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by Debbie Wilson | November 18, 2011 | Comments Off
I have had the pleasure today of participating in the Digital Momentum e-procurement conference held in Reyjkavik, Iceland. The agenda for the conference, which was sponsored in part by Evenex, has been about e-procurement and e-invoicing. Speakers included the Iceland Minister of Economic Affairs, an executive director of Reykjavik University, and a director from PEPPOL. Two Danish case studies were presented.
One very interesting sub-topic has been to what degree standards (such as EDI) should be developed and enforced in a country to fuel and support business to business e-commerce. Almost every speaker touched on this issue – and for some such as PEPPOL it was the main subject. Some speakers positioned standards as a waste of time and an obstacle to development, while others advocated that standards are crucial and must be created. Discussion on this topic continued hot and heavy over lunch and breaks.
One thing is for sure – standards fuel interoperability between technology vendors, and interoperability makes multienterprise e-commerce more scalable for suppliers and it facilitates competition. I was dragged (kicking and screaming – at least inside!) into this subject when I proposed my master’s degree thesis a little over a decade ago. The subject of my study was indirect procurement automation. I had wanted to look at what was then brand spanking new tools from Ariba (remember ORMS?), CommerceOne and Netscape - and evaluate their prospects in the market. As luck would have it, my advisor was an active member of the European EDIFACT (the equivalent of EDI in the US) standards board, and he approved my thesis on the condition that I reframe it as whether EDI/EDIFACT are suitable standards for indirect procurement. My attitude towards EDI this way was not too positive – and that attitude was affirmed by the many field interviews I did with businesses in the thick of implementing e-procurement tools. Long story short – fast forward many years later – we actually HAVE ended up with some standards – namingly the punch-out standards cXML and OCI. These standards have data format portions, like EDI – but added in process steps/permissioning to allow users to shop catalogs.
The point is that trying to boil down to a single universal standard for commerce – anywhere or for any type of spend – is probably fairly futile. Witness the failed OBI initiative of the same vintage of my master’s thesis. But without SOME common formats – whether standards-body developed or developed by a vendor – like cXML (Ariba) and OCI (SAP) are – multienterprise commerce DOES require some common elements to work.
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by Debbie Wilson | November 2, 2011 | Comments Off
My esteemed colleague and cloud security specialist Jay Heiser made an interesting post today on the apparently-failing Contract Lifecycle Management vendor Mumboe. Mumboe earned much of its customer base by giving its SaaS-delivered solution away. Well, according to an article this week in Law Technology News, that business model didn’t generate enough cash to keep the business going, and so Mumboe is returning data to its clients.
Heiser makes some great points on the importance of keeping a watchful eye on SaaS vendors, because the risk of data and capability loss due to failure is much higher than if you install on premise. And clearly there were signs, such as lack of updates on Mumboe’s website. But perhaps the most important lesson of all is, if something looks too good to be true . . aka free in a market of products you pay for . . . . beware!
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by Debbie Wilson | October 27, 2011 | Comments Off
I was so pleased to read about the Acquisition Reforms Bill sponsored by fellow New Englanders Sens. Scott Brown (R-Mass.), Susan Collins (R-Maine) and Joe Lieberman (I-Conn.). According to this Federal News Radio article, the main gist of the bill is to enable consolidated purchasing at the federal US level. It carries the modest goal of $1 billion savings over four years. As a US citizen and taxpayer, I like this direction becasue we KNOW that sourcing larger lots is almost always cheaper than buying small.
Today, the 100+ US federal agencies often conduct their own bids. There are good reasons for this - one is to preserve opportunities for small businesses. If all agencies got together and chose a single supplier for furniture, PCs or you name it, it clearly would hurt a variety of businesses that currently enjoy the spread of awards. According to the article – the bill has some provisions to avoid this situation. I hope this is true.
Collaborative sourcing shouldn’t be all or nothing anyway. Surely there is a happy medium in between one large, single source federal contract and hundreds of smaller, agency-let agreements.
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by Debbie Wilson | October 5, 2011 | Comments Off
There’s been some debate in the press this week about Washington DC’s $16 muffins at a conference, which ended up actually being $14.29 for a continental breakfast and facilities rental at a DC Hilton. A Bloomberg article (see http://www.businessweek.com/magazine/revisiting-the-16-muffin-09292011.html?chan=magazine+channel_news+-+politics+%26amp%3b+policy) goes onto to say that continental breakfasts can be even more expensive – more than thirty dollars – in New York City. Ah time to bash the government again, right?
Well I for one think we may be grossly oversimplifying with “analyses” like this. It’s very well known in the hospitality industry that hoteliers play games with how they bucket pricing, and those buckets are configured to present as low as possible a price for the items that are listed in an RFP. For example, you take any standard travel booking engine, search for a hotel, and what comes up? The basic room night. I’ve lost count personally of how many fabulous $149 dollar rooms I’ve stayed in (cheap room rate for a large city!) but found $15 bowls of oatmeal, $5 cups of coffee, $12 internet fees and $17 movies. For fees like that, hotels can almost give away the room free. But since the travel engines present hotel room prices, not the average per night bill travelers pay —- well you can’t blame them for pricing this way. The point is that from a TOTAL COST point of view, was it reasonable?
I don’t know if this is the case with the “Hilton headliner.” But it does bring up the interesting point in procurement of how important it is to make well-formed bids. So, in other words, if you are buying internet connections and facility space and coffee and muffins – don’t make a contract award based just on the price of muffins. I’m not saying our federal government is best in class for buying, but I think before we bash them or anyone else we should at least get the facts right!
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by Debbie Wilson | September 30, 2011 | 1 Comment
It was a pleasure to have the opportunity to attend the Upside Software customer conference in Denver earlier this month. A picture is worth a thousand words, and seeing the Upside executive team interact with its clients spoke volumes. My take-aways:
- Upside is clearly an engineering-driven company. Case studies, detailed product implementation advice and extensive discussion from clients on what features to add next were featured rather than glitzy productions and marketing messaging.
- Most of the attendees were hands-on solution program managers.
- Tim Cummins of IACCM, the keynote speaker, delivered a powerful session on thinking through the impact of company standard terms and conditions on your relationship with you suppliers. His speech properly encouraged attendees to make sure that commercial language is not resulting in unintended consequences.
- Upside Software clearly has enough business opportunities to pick/choose who they want to deal with.
- Most of Upside’s clientele are Fortune 500 companies.
- Upside is clearly investing in its already robust solution to improve functionality and usability.
Clients in attendance weren’t universally satisfied with their solution or with Upside’s direction, but overall, the mood of the conference was quite positive and the ambience felt like a design meeting. It’s no wonder that Upside’s CLM solution is one of the most robust tools in the market.
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by Debbie Wilson | September 19, 2011 | 1 Comment
Last week at the Gartner IT Finance, Procurement and Asset Management conference in Florida was a blast. I always learn so much when I get the chance to “live” with end users for days on end. I had two amazing moments in the conference that I just had to share.
My first favorite moment occurred at breakfast one morning. I filled my plate and grabbed my coffee, and then sat down at a table of four people that seemed to be very engaged in an animated conversation. It looked like a great opportunity to just sup and listen. I was glad I chose that table, because they just happened to be discussing one of my favorite topics – how to measure supplier performance.
The specific item being discussed was the credibility of vendor managers. All at the table agreed that vendor managers often seem too vendor oriented, defending and promoting their vendors to the point of nauseousness. Their point was whether to include vendor managers’ input in supplier performance ratings. One of the fellows at the table piped up, saying that he had solved this problem by getting the vendor managers to put their ratings in writing, in a format that made their ratings and comments visible to the full team. By requiring the input to be in writing, the fellow said that the vendor managers were much more likely to provide fair and defensible input because they knew others would be looking. What an awesome idea – I know providing openness and transparency internally at Gartner is a key way that we promote integrity and objectivity. I saw the clever fellow the next day. I happily complemented him on his creative approach and learned even more about his philosophy on metrics.
The second totally interesting moment was when I met the CEO of the company E-Cycle, a Columbus-Ohio based IT hardware recycling vendor. E-Cycling’s specialty is buying used Blackberries. What amazed me was when the CEO said that the price tag for used Blackberries back could be $100 or more each. I had not realized that a Blackberry would fetch that much, especially since most mobile programs I’ve seen offer the blackberry free or for a few hundred dollars. But according to E-Cycle, these agreements are highly subsidized in terms of the hardware, and devices like an I-Phone might cost, on a stand-alone basis, as much as a PC. He continued to explain that in other countries, customers have to buy the mobile device at full price, and so many are more than willing to purchase a refurbished device rather than buy an expensive brand new device. Who would have thunk it? From experience, I know procurement can often make a lot of money on selling excess materials, so ye in search of new sources of savings, consider this!
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by Debbie Wilson | April 13, 2011 | Comments Off
Emptoris Empower Europe 2011
The Emptoris 2011 European customer conference held last week was a pleasant affair. The lovely setting by the Mediterranean Sea in Barcelona provided a relaxing backdrop to Emptoris’ favorite crowd – CPOs from the world’s largest companies, each accompanied by two or three top lieutenants. Altogether, I estimate that 30-40 organizations were represented.
CEO Pat Quirk opened the formal proceedings with news that Emptoris had achieved a 6th year of record performance in EMEA, closed 50 new deals and completed 400+ upgrades. The mood of his presentation was cautious optimism, reflecting shared hope that the global economy will continue to improve.
The agenda of the two-day conference covered, to a large extend, news and plans that were unveiled at last fall’s Empower conference in Boston. The main points were the introduction of Business Objects as Emptoris’ reporting and analytic tool, and an overview of echOS, Emptoris’ creative solution to ease upgrades for hosted and even on-premise installations of its applications. Although the possibility of implementing on premises and customizing its sourcing, contract management, spend analysis, services procurement and supply base management solutions is a differentiator for Emptoris, the vendor clearly doesn’t want customers to be bogged down by the common downside of such solutions, which is that they are costly and time-consuming to upgrade. Emptoris’ products, along with the broader market for procurement solutions, are still evolving far too much for the typical client to be satisfied with what they install today as sufficient for the next five years!
Emptoris did devote time in the conference to introduce its newest acquisition, telecome expense management provider Rivermine. Former CEO of Rivermine Mark Logan, who is now COO of Emptoris, was notably excited by the opportunity to pitch to Emptoris’ international client base. Emptoris also shared its work with the audience on some interesting, new enhancements. Sadly, I do not have permission to write about these, but definitely there is some intriguing stuff going on there!
Customer case studies and stories made up the rest of the conference. Advances in procurement master data management came up several times. Interest in MDM seems to be making a comeback, after a couple of years of doldrums brought on by too-large projects with too-small returns further stifled by difficult economic times. This time around, supplier and part MDM may have more legs given that solutions are increasingly configured to allow suppliers to update and maintain data themselves.
The other major themes from the customer case studies were best practices in sourcing, and how to improve the value of the Emptoris suite through integration to heterogeneous enterprise applications. Content on sell-side CLM was notably lacking, although Emptoris has won several new deals supporting sales contracts in the US over the last year.
All in all, it seemed like a successful conference with a private club feel and enthusiasm among attendees for the direction Emptoris is taking.
News
Aravo announced that it has appointed Michael Saracini as its CEO. Previous CEO and founder Tim Albinson transitions to Chairman of the Board. Saracini is the second veteran of the HR solutions applications market to be named in a key role at a procurement applications vendor. The first was Rob Bernshteyn, who was named CEO of Coupa after a stint in marketing at SuccessFactors. Aravo also announced that it recently signed new SIM deals with Pfizer and USAA.
Swedish vendor eBuilder announced that it is the first vendor to transmit live e-invoices in a program commissioned by the Swedish National Financial Management Authority (SNFMA) under the Pan-European Public Procurement Online (PEPPOL) initiative. The PEPPOL project is making steady progress forward to facilitate online trade between government and business in the European Union, standardizing on the XML Universal Business Language (UBL) format.
SciQuest announced that the latest release of its eProcurement solution features a) the ability for group purchasing organizations, states or other sourcing enterprises to open their library of contracts to their general membership for shopping in the SciQuest Marketplace; b) the ability for groups to work collaboratively to source and buy, and c) support for multi-location organizations with the ability to localize for language, currency, regulations, suppliers, documents and reporting.
The Inter-American Development Bank (IDB) awarded a $900,000 grant to the government of Jamaica for the development of a whole-government e-procurement system. Planned functionality includes a supplier registry, online access to procurement regulations and agency plans, e-notification of bid opportunities, download of bid documents, electronic bid evaluation and archived contract award information.
D&B recently acquired the assets of Supplierforce, an Irish procurement suite vendor that forced into bankruptcy last year. Supplierforce’s offering spanned supplier information management (SIM), e-tendering and contract management. Supplierforce customers included the Bank of Ireland, KBC Bank, Musgrave and several Irish public sector agencies. The solution will complement and overlap D&B’s current supply base management offering, D&B Supplier Risk Manager.
In response to the Japan earthquake and tsunami, Elemica is offering any buyer or seller located in Japan free access to its QuickLink™ Portal for the next six months. Inquiries regarding this offer can be made to Brian Selby, SVP Asia, brian.selby@Elemica.com or Ted Higuchi, MD Elemica Japan, takeshi.higuchi@elemica.com.
BravoSolution announced that it has achieved seven consecutive years of profitable growth. The vendor touts 40,000 procurement professional users from more than 400 clients in over 60 countries, and 2010 revenues of $76.3 million. Other 2010 accomplishments include a new office in Munich, Germany, and new clients from Mexico including the Mexican Federal Government. Becton Dickinson, a BravoSolution client, was recently named a Gartner Healthcare Supply Chain Top 25 company.
Agentrics announced that is has reached a major milestone. As of March 31, the vendor said it had hosted 100,000 sourcing events and saved clients billions of dollars. Agentrics was founded over a decade ago by several large, global retail companies to provide a single, online exchange platform in support of procurement and supply chain processes. Current Agentrics customers include ASDA, Carrefour, Auchan, Marks & Spencer, PepsiCo, Casino, Walgreens, Coles and Best Buy.
Heiler software revealed that it signed a two-year, $1 million deal with Macquarie Telecom, an Australian IT services company, to host its Enterprise Product Information Management (PIM) and Enterprise E-Procurement solutions. The move is expected to help Heiler expand its business in Australia.
New Research (Subscription Required)
I’m pleased to announce that we have named Coupa, K2 Sourcing and Meperia Gartner Cool Vendors of the year. Read about why these particular vendors were chosen in this newly published research note.
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by Debbie Wilson | April 6, 2011 | Comments Off
One thing I’ve been preaching to the market about over the last year is the problematic nature of trying to use a business model that works well for document exchange for direct materials and catalog-based procure-to-pay to the purchases of services. The basic issue is this: it’s reasonable to charge a transaction fee that is based on the value of the purchase (as we see for indirect supplies), or a per-partner fee (as we often see in EDI VAN services) when there are weekly, daily or even more frequent exchanges of purchase orders, confirmations, advance ship notices and invoices. The fee makes sense because the integration infrastructure (or e-marketplace) vendor is providing a regular service for volumes of documents exchanged.
The nature of transactions in services however is often completely different. Here’s a case in point – straight from one of our Gartner account executives, this week! One of our clients - a large, very progressive company – has a new program to get all invoices, electronically and direct from suppliers – a best practice, right? I.e. NO OCR or someone in a low cost country BPO provider typing in invoices and sending a file to accounts payable, but state of the art, direct communication between buyer and seller. As is traditional in other areas of spend, the business model of the e-marketplace vendor is to levy a charge on the supplier to pay for the service. So levy they did - and as a result, Gartner was asked to pay a 1% fee of the value of the transaction – which by the way amounted to several thousand dollars – for the privilege of uploading a single invoice for a year of research subscription services for the client. A single invoice!
Just last week, a reference for an e-procurement vendor told me his company was having issues maintaining supplier participation in his relatively new procure-to-pay for services solution. Participation dropped in the past year for them from 80% to 60%, due to the exact same issue, that fees based on the value of the purchase order often aren’t reasonable for this category of spend, because of the low volume of documents exchanged. Suppliers simply began refusing to go along.
I often get asked when P2P solutions for services will finally take off. Clearly, barrier number one is getting a business model that is reasonable and fair to all parties involved in the transaction – including suppliers.
News
I’m in lovely Barcelona for the 2011 European Emptoris conference. Stay tuned for observations and comments.
Verian announced that it has partnered with Cortex Business Solutions to offer e-invoicing capabilities integrated to its P2P solution. In the press release, an early client for the combined solution commented that the offering will help it deal with their many buys not handled with purchase orders.
Hubwoo announcedits 2010 results. Overall revenues were EUR 37.6 million, up 9% from 2009. 2010 services revenue was up 27% from 2009, largely due to the implementation of several significant new SRM customers as well support of on-premise and SAP Sourcing OnDemand deployments. During the year, Hubwoo signed 28 new technology contracts with buyers and Hubwoo recorded EUR 3.0 million in cash flows from operations.
Proactis announcedthat BDO, the world’s fifth largest accounting firm, with 110 member firms in 110 countries, will be implementing its procure-to-pay solution. The PROACTIS cloud-delivered eProcurement solution will be implemented across 13 regional offices and integrated to BDO’s PeopleSoft ERP.
Procurement automation is definitely hot in the UK. It’s amazing how many of the references for our upcoming e-procurement vendor rating report operate in the UK. According to this new piece, even the city of London is joining in. The city announced that it has hired Accenture to provide services and technology, including an e-marketplace and buyer portal, to save 30 million pounds over the next five years.
New Research (Subscription Required)
Taxonomy, Defnitions and the Vendor Landscape for Application Integration Solutions, 2011
This new must-have tome delves deeply into the integration infrastructure market, describing every type of integration solution imaginable, when to use it and where to buy it. I am a coauthor, covering embedded integration and business process hubs.
Key Issues in Procurement and Sourcing Technology 2011
This short document outlines our research agenda in procurement and sourcing technology for 2011-2012.
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