When I asked the Strategic Sourcing & Procurement LinkedIn group members to suggest topics for upcoming calls, there were a lot of requests pertaining to indirect spend. So, this Friday, the group’s July member conference call will be an open discussion on indirect categories (marketing and consulting will definitely be covered – if you have [...]
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The ISM NMI (Non-Manufacturing Index) came in at 53.8, which is down from 55.4 in May. The Business Activity Index was 58.1, down from 61.1 in May, and New Orders was 54.4, down from 57.1 in May. The employment index came in at 49.7, slightly below the growth threshold of 50. Here are some bullet points about [...]
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Long-time readers may remember a year ago when we interviewed Chris Stockwell, VP of Procurement at Heinz, on their efforts to really go after the company’s indirect spend and bring it under management. No doubt a major opportunity for Heinz and one which required careful planning and execution.
So, it was great to speak with Mauricio [...]
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Another category identified for cost savings in last week’s Top 5 Categories to Source Now webinar was commercial print (full webinar replay here). With marketing typically driving decisions on commercial print, it’s a category many companies have had trouble bringing under management of the procurement team. However if approached properly, commercial print provides great opportunities [...]
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It’s an understatement to say that the global economic recession has heightened focus of cost cutting and elevated the importance of spend management within most every organization. Yet, I have become increasingly troubled by the advice executives I speak say they are getting from vendors, analysts, or even their own IT departments when they ask [...]
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Friday’s group discussion on Vested Outsourcing led by University of Tennessee faculty member Kate Vitasek went very well. For anyone unfamiliar with her work, Kate literally wrote the book on Vested Outsourcing, a model that utilizes incentives to create more strategic relationships between buying organizations and their outsourcing vendors. So when she stepped up and [...]
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Earlier this week, Dan Ashton hosted a webinar (replay here) with speakers from Travelers Insurance and Kelly Services to discuss the current opportunity for driving value in contingent labor procurement. Here he shares some of the key take-aways.
Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.
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Senior Category Manager and SupplyExcellence contributor Pat Furey shared his analysis of the October ISM data for manufacturing and services.
Justin Fogarty is Managing Editor of Supply Excellence. For any questions or feedback on the blog or its contributors, Justin can be reached at jfogarty[at]ariba.com.
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Although there are many moving parts in the equation (especially around the health care reform package making its way through the US Congress currently), health insurance premiums, which doubled in the last decade, are on track to repeat that feat over the next ten years. From 1999 to 2008, premiums increased by a reported 119%. The average employer-sponsored insurance premium in 2008 was approximately $12,300, however based on current growth rates this figure is expected to be almost $24,000 by 2020. Some experts are forecasting even steeper growth, predicting an increase in excess of 150% over the next decade. If this growth continues at its current and/or projected pace, it will place an increasingly large burden on both families and employers. Employers have traditionally paid the majority of the premiums and will face tough decisions as to whether they are willing to primarily carry the load.
With the projection of increased insurance premiums, companies will have to make tough decisions in terms of the portion of the premiums they are paying, and how much of the increases they will pass on to their employees. Based on current growth rates, it is expected that most companies will switch a larger portion of cost to employees. As these costs continue to rise, large companies will focus more closely on their benefits administration and management services.
Prudent buyers should work with their current providers to develop creative solutions and work to reduce costs, while maintaining employee satisfaction with the overall benefit program. This can either be done through sourcing efforts or direct collaboration initiatives with incumbents.
Endre Støgård is a Category Manager for Services in Ariba’s Global Services Organization (GSO). In this role he provides commodity knowledge and strategic sourcing direction for a wide range of categories within the corporate services area, including Finance, Human Resources and Travel.
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Last week, we had a tremendous turnout to the Myths, Pifalls and Realities around Services Procurement webinar (click here for the replay) and there were some follow up questions from attendees that I thought everyone might be interested in. Please feel free to comment and add your insights.
Q: “Can you provide your position on whether Services Procurement differentiates from a Vendor Management System? If a company already has a VMS /MSP, is it beneficial to move to a Services Proc. system and what are the benefits?”
A: A Vendor Management System (VMS) is dedicated to contingent labor while a Services Procurement Solution includes VMS plus allows you to purchase contingent labor AND any other service such as Print, Market Research, Consulting, Installation, Promotional items and more. Each of these has unique attributes that must be recognized in the solution. For example with Labor you need to consider time tracking; Print, stock, color, formatting, etc.; Consulting, milestones, fixed fees, time and expense. On top of all this the Services Procurement really should be part of an overall eProcurement Solution that allows you to purchase goods as well. It doesn’t make sense for users to have to learn 2, 3 or more systems depending on what they are purchasing.
It is absolutely beneficial to move to Services Procurement from several points.
Dan Ashton is Senior Solutions Marketing Manager, responsible for Services Procurement & Content, at Ariba.
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