Author Archives: Peter Smith
The SAP / Ariba vision – Pierre Mitchell takes a look
This week we’re focusing heavily on supplier networks, a bit of a technical subject for me, but if you’re a SAP or Ariba user, or interested in P2P or networks generally, I urge you to read this article by my Spend Matters US colleague Pierre Mitchell here. It starts with a really excellent in its analysis of why SAP bought Ariba, and where they’re going. “And what is the Ariba Network? It’s a set of electronically-enabled commerce services focused on discovery, connectivity, and collaboration. The first two are straightforward and haven’t really changed since Ariba acquired Tradex nearly 15 years [...]
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The Southwest One story (part 2) – from hubris to High Court (almost) –
(Dave Orr, retired public servant, IT and project management professional and campaigner for truth continues his story of Southwest One with the procurement errors made in letting the contract. Part 1 is here). The year is 2005 and Project ISiS (Improving Services in Somerset) is underway, led by Somerset County Council from their 4*+ HQ in Taunton… Were strategic errors in procurement baked into Project ISiS from the outset in 2005, leading to an inevitable partnership breakdown in 2013? Yes, they were. ISiS only set high-level, aspirational requirements: for example to help modernise and transform the overall workings of the [...]
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David Shields to leave GPS (the UK Government Procurement Service)
David Shields, who runs the operational side of Government Procurement Service, is leaving at the end of June, it was announced yesterday. There was no Cabinet Office main website news, just a page on the GPS website. It also didn’t say anything about where he’s going – the wording certainly suggest it is his decision to leave, but I haven’t spoken to him yet. Indeed, I haven’t seen him since late 2012, so I have no inside information, but it is not a complete surprise. He’s been doing the job for over 2 years, it is a very challenging and [...]
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Spend Matters and Zycus Webinar – Putting the Supplier at the Heart of Procurement
A reminder that you can register now for a free webinar on June 5th featuring not just me but also my US colleague Jason Busch, (who forgets every day before breakfast more about procurement technology than I‘ve ever known in my life), and Richard Waugh of Zycus. It’s titled “Putting the Supplier at the Heart of Procurement” and it is being held at on June 5th at 5pm UK time (that’s 6pm in continental western Europe, and 12 noon on the East Coast of the US). We’re going to be talking about why category management is being challenged by supplier [...]
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Speaking the language of Finance – EBITDA
In the first of our irregular series on financial terminology, we looked at earnings and PE ratios. Very much linked to that, today we’ll look at EBITDA and some related acronyms. EBITDA stands for earnings before interest, tax, depreciation and amortization. So it is fundamentally an earnings or profit number, but taking out those elements that might be considered to be one-offs or variable factors – the interest the firm pays on any debt, the corporate tax charge, the depreciation charge related to capital investment, and amortization, which applies to writing off intangible assets such as goodwill or intellectual property, [...]
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High-speed rail – the National Audit Office lays into the programme
The National Audit Office has published one of the most critical reports I’ve seen in a long time, covering HS2, the high-speed rail programme to connect London with “the north”. They talk about a lack of clarity around objectives; a weak business case with limited evidence that HS2 will generate regional growth; errors in cost-benefit analysis; issues with programme management and oversight; a funding gap of £3 billion; and an over-ambitious timetable. (Apart from that, its fine…!) It really is a nicely written, but surgically precise hatchet job from the NAO. Politicians immediately began fighting back using hard evidence such [...]
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Supplier networks and the battle against monopolies
Procurement people hate monopolies and being in a situation where an overly dominant supplier can exploit that position commercially. When I first moved into procurement, my boss sat me down and said something like this. (I’ve somewhat anonymised this story, but the essence is absolutely true). “Right. You have two main objectives. In dairy products, break the virtual monopoly that xxxx has over the supply of zzz in the UK. And in terms of H******powder, find another supplier so we can stop getting ripped off by the b***** at H******”! Yet there’s one area where procurement has been helpless to [...]
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Better procurement – a simple tip
Here is a cast iron tip to improve procurement process and performance. I guarantee (or your money back) this will work. And please note – it may seem obvious but my feeling is this doesn’t happen as often as it should. Before you send out an tender, RFx, PQQ or similar document, electronic or otherwise, to potential suppliers, get someone who isn’t in procurement, or involved with the specific procurement, to have a look at it. They need to be a sensible and reasonably smart business person, but they don’t need to be in procurement or sales for that matter. [...]
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Francis Maude speaks – is the Minister for Procurement an enemy of procurement ?
The UK parliament Public Administration select Committee last week quizzed Francis Maude, Minister with responsibility for public sector procurement. I was going to do the same as in part 1 (here) and give a detailed commentary, but then we got onto the question of procurement skills in central government, and Maude made a statement that stopped me in my tracks. I listened several times to get his words exactly right. “Commissioning is about much more than procurement, it is about knowing the market of potential suppliers. Procurement is the relatively narrow and should be very short technical part in the [...]
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Supplier networks – a lively webinar promised tomorrow!
We probably don’t write as much as we should about the giants of the procurement software world, such as SAP / Ariba or Oracle. That’s partly because we tend to get more excited about exciting, new, innovative firms (not that those mentioned can’t be just as innovative). There’s also an element of those giants not being quite so concerned about getting a mention here perhaps compared to a start-up that can’t afford to sponsor Formula One or a golf tournament to get some exposure! But this week we’re covering SAP / Ariba following their recent customer events. And we’re going [...]
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Down the Procurement Pub – with Basware, Coupa, Procurement Leaders and Icona Pop
Actually, I spent some of last night down the procurement pub – a pleasant 90 minutes with an old friend and fellow ex CPO who wanted to pick my brains on procurement software in return for 2 pints of the very pleasant Hogsback Brewery T.E.A. (The brewery, just a few miles down the road from here, is pictured). I could only offer a fraction of what he would have got out of Jason Busch, Pierre Mitchell or Thomas Case from Spend Matters US but maybe I’ll share my very impressionistic and high level view of the “meta trends” in that [...]
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Francis Maude at PASC – select committee digs into UK government procurement
The UK parliament’s Public Administration Select Committee held the final hearing of their investigation into public sector procurement this week, and appropriately their witness was Francis Maude, the Minister with responsibility for the subject. As we’ve said many times, he is more interested in and knowledgeable about procurement than any other Minister we’ve had, and his hour or so on the topic was low key in style but quite illuminating. He got some good questioning from Bernard Jenkin, the Chair, but some of the other Committee members were poor in terms of their lack of any real insight or challenge. [...]
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The Rolling Stones, variable pricing and booking a hotel for the CEO!
We wrote in part 1 about the difficulty the Rolling Stones have had in selling tickets for their gigs in the US, and linked that to a debate about variable pricing strategies and how technology was helping some industries to differentiate better between customers prepared to pay different prices. What implications does this have for procurement people? Well, it highlights an issue around marginal costing and how procurement should be looking to take advantage of those opportunities. It highlights that economies of scale don’t go on indefinitely, and it is often better to be a relatively small buyer than a [...]
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Spend Matters and Zycus Webinar – Putting the Supplier at the Heart of Procurement
We’re pleased to announce a forthcoming Spend Matters webinar, presented in conjunction with the nice people at Zycus. It’s titled “Putting the Supplier at the Heart of Procurement” and it is being held at on June 5th at 5pm UK time (that’s 6pm in continental western Europe, and 12 noon on the East Coast of the US). There’s a Spend Matters Perspectives briefing paper coming out too n the same topic shortly as well. Why Supplier Management? Well, there’s a lot of talk around at the moment about it as a topic, linked to the need for better information and [...]
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From Hubris to High Court (almost) – The Story of Southwest One (Part 1)
(We are delighted to have finally persuaded Dave Orr to write for us, and as a Somerset citizen, he will be laying out the fascinating story of Southwest One over the next few weeks – a story that everyone involved in outsourcing should note with interest… and we’ll tell you a bit more about Dave himself next time). Apart from glorious countryside, hills and moors, rural Somerset is probably best known for a rustic blend of cider, cheese, cricket, the Wurzels and the Glastonbury Festival. Oh….we also split atoms and some whopping new nuclear reactors at Hinkley Point are coming, [...]
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Crown Commercial Representatives – 99 Problems (well, 9 issues anyway)
So , what do we think about the UK government’s appointment of new Crown Commercial Representatives? Here are a few questions. Not 99 problems maybe, as Jay-Z would put it, but certainly 9 issues. 1. Is there still significant cost to be taken out of government contracts, or has the first wave of CCR activity generated most of the benefit already? 2. Are the major suppliers going to feel even more victimised by getting set upon by these “heavies”, and less likely to offer any innovation to the government – will they just put “UK Government” firmly in the “cash [...]
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- David Shields to leave GPS (the UK Government Procurement Service) : Bill Atthetill said: Sadly, no-one will notice he's gone. I say this knowing that David has taken the organisat... more
- High-speed rail – the National Audit Office lays into the programme : Trevor Black said: I don’t recall the usual sheepish “lessons learnt” excuse following the ID fiasco. T... more
- David Shields to leave GPS (the UK Government Procurement Service) : Phoenix said: David moving on is a massive loss to public service. He's achieved an awful lot and has b... more
- Francis Maude speaks – is the Minister for Procurement an enemy of procurement ? : Paul Wright said: The good news is that he has recognised Procurement is important, even though he doesn't r... more
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