Supply Chain Management: Sourcing,Procurement,Contract & Spend Management Archives

Spend Management and Spending Cuts...

Reading about the Debt ceiling debate in the US Congress over the past few weeks, the one statement that consistently stands out is "Spending Cuts". The US sovereign credit rating has just been downgraded, the US debt is too high and suddenly everyone is looking at "Spending Cuts" as the silver bullet that can set everything all right once again.

Another example of what I find disappointingly commonplace: Organizations (a government in this case) cutting spending randomly as a last ditch effort to get out of difficult situation because of not planning and implementing a long term spend management program which would have:

Helped avoid reaching a stage where organizations are forced to make unplanned decisions around cutting spend
Ensured that spending cuts happen as a planned exercise rather than ad hoc, desperate measures.

Continue reading "Spend Management and Spending Cuts..." »

Posted by Sameer Prashar at 4:17 AM | Permalink | Comments (0) | TrackBacks (0)

HazMat in SCM Needs to Worry About New Tech Impositions!

During the last couple of weeks, I have been associated with the brainstorming around how best to manage Hazardous Waste or Material (HazMat) for a major US retailer. The client management team is focused on having a solution that covers HazMat of all kinds across the enterprise since that is the core KPI of the department. Most of our initial discussions have been around two threads:
1. Understanding our Point of View on Reverse Logistics (RL) since HazMat typically need to flow in the opposite direction of the regular product supply chain flow
2. Figuring out whether SAP EHS solution is the best bet versus IBM Sterling Commerce RL capability and IBM Maximo's work management capability.
Personally, I wasn't too keen on going for either of these approaches.

Continue reading "HazMat in SCM Needs to Worry About New Tech Impositions!" »

Posted by Gopi Krishnan at 1:46 PM | Permalink | Comments (0) | TrackBacks (0)

Trending in 2011 - Supply Chain as a Visible Differentiator

Just before boarding the flight to US for IBM Pulse, Bob Ferrari of Supply Chain Matters had a media interview with me. While the primary objective was to discuss about the EAM sector and what we plan to showcase at Pulse, conversation invariably moved over to a broader supply chain fabric.

Last year, for those who remember, as part of my SCM predictions for 2010, I had stressed on the need for convergence and integration across supply chain. For me, this was achieved through

Integrating disparate functions (forecasting with procurement, transportation with warehousing and work management with inventory)
Near real-time visibility across the supply chain (ideally - if not, at least cutting across business functions), via an alert and event management framework

This year, with SCM being in greater focus as a more visible partner in organizational strategy, my view was on how supply chain can be the driver for

growth (revenue impact)
cost (profit impact) and
differentiation (competitve strategy impact)

These are sometimes achieved through specific business functions, for eg: indirect procurement program focus on cost management while anything on the sell-side whether its enhanced B2B commerce features or store inventory visibility would drive revenues. How would you use supply chain to differentiate your organization vis-a-vis the competition - at the customer-side, supplier-side and partner-side?

More on my interview with Bob here: http://www.theferrarigroup.com/supply-chain-matters/2011/03/02/smarter-asset-management-interview-with-gopi-krishnan-of-infosys-technologies-part-two/

Posted by Gopi Krishnan at 7:41 AM | Permalink | Comments (0) | TrackBacks (0)

Smarter Commerce means more SCM than before!

Of late, via market hearsay, some level of intelligence gathering and straightforward google search, I've been trying to read up and wisen up on IBM's Smarter Commerce initiative. On first look, this may sound like another one of those attempts to prefix the word "smarter" with just about everything, but coming from an organization which has taken up the task for making the planet itself smarter, I was intrigued as to how the acquired companies (specifically Sterling Commerce) would stack up in this list.

Here's some webview on this:

Continue reading "Smarter Commerce means more SCM than before!" »

Posted by Gopi Krishnan at 3:50 PM | Permalink | Comments (0) | TrackBacks (0)

VSCOR: Measuring the Competetive Quotient of your network

Supply Chain managers constantly struggle to quantify investments and articulate the value for any reengineering exercise. A continuously learning organization, something exemplified by the likes of Toyota have taken articulation, assessment, measurement and insight generation to the next level by making it a part of their DNA. A widely accepted model for analysis of business processes is SCOR which lays out a methodology for organizations to view their supply chain in a different paradigm. The Supply Chain Practice at Infosys also has aligned its broad offerings based on the SCOR model starting with diagnostics and consulting to implementations. But talking about first measuring and then articulating realistically is something which has become an imperative in today's time when investments continue to be looked at under the lens.

Continue reading "VSCOR: Measuring the Competetive Quotient of your network" »

Posted by Dawn Mathew Varghese at 3:47 AM | Permalink | Comments (0) | TrackBacks (0)

SAP SRM and PLM integration

Recently we received a requirement for showcasing our credentials in SRM-PLM integration space, with the experience of being a part of the team who executed this assignment I would like to share the same with the functional and technical feasibility of the carryover of business turnaround especially the round robin procurement process in engineering projects. With this integration it gives leverage to the purchasers with a good sight for negotiating in a competitive environment

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Posted by Nilesh Dhoble at 5:24 AM | Permalink | Comments (0) | TrackBacks (0)

Selecting a right tool for your sourcing activity

Recently we were evaluating various sourcing systems and with varied discussions among the attendees enchanted me to pen down this blog.
Sourcing has become a very crucial process in a procurement life cycle, for a purchaser the organizations goals and direction should be set for placing to determine which services should be handled by others and what to look for in a service provider. These are some the important aspects aligned to the company's purchasing policy, now the question here is using the right tool for your suppliers and the organizations but from an organizational point of view the key goals should be clear enough to justify the coverage of all business requirements from a procurement standpoint.

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Posted by Nilesh Dhoble at 6:35 AM | Permalink | Comments (0) | TrackBacks (0)

Let's make it a little bit easier, a little simpler...for our suppliers!

Over the years, my assignments have taken me to multiple organizations which have been trying to streamline their sourcing processes. One congruous observation across all these organizations, which I made, was that the ease for suppliers to do business with them is pretty low. I have seen suppliers:

Having to fill out a flock of purposeless and complex product documentation
Being made to interact with numerous departments
Having to sign same contracts multiple times
Not being given any idea as to how the sourcing process is going to work for them

In fact in one of the organizations, some of their suppliers actually left in between the sourcing cycle because the overheads of dealing with the (sourcing) organization turned out to be enormous.

Continue reading "Let's make it a little bit easier, a little simpler...for our suppliers!" »

Posted by Sameer Prashar at 5:10 AM | Permalink | Comments (0) | TrackBacks (0)

Crunching Procurement Cycle Time Through Business Workflow Optimization

Business workflow plays a vital role and is one of the time consuming step in procurement life cycle. Shortening procurement life cycle has multi-faceted benefits such as faster procurement request processing, shorter procure-to-pay cycle time and processing cost, avail ling early payment discount enabling efficient working capital management, enhanced customer-supplier business relationship. Crunching procurement cycle time requires special attention in business workflow optimization and reduction in approval time.

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Posted by Gorachand Sau at 8:05 AM | Permalink | Comments (0) | TrackBacks (0)

Sourcing from China: Part-1: Testing your fishing skills: stages of your sourcing maturity

Sourcing is growing as the main highest growing profession in China. Even though the volumes are low but the growth factor of these professionals at above 20% is the highest among all professionals in China. But for companies to start sourcing from China, they need to go through a 3 stage journey to finally fully integrate China as an integral part of their sourcing decisions. Check out the stage where your company fits in, and you will know how much road is required to me covered to reach the final destination. But many would agree that sourcing from China is not a destination but a journey, as new challenges emerge as the progress continues. Sourcing from China is like fishing.... If you don't agree read on

Continue reading "Sourcing from China: Part-1: Testing your fishing skills: stages of your sourcing maturity" »

Posted by Sudripto De at 7:08 AM | Permalink | Comments (0) | TrackBacks (0)

Managing procurement for Projects

With variety of projects going all around, it is becoming very difficult to track procurement activities. Projects with varied nature like Investments, Marketing, Customer Projects, Services and IT Projects have different tasks and their tracking of procurement tasks is different . Procurement experts view:
"Project procurement management begins at the point when the new project is initiated and detailed decisions are starting to be made as to what portion of the project will be performed with one's own staff, and what portion will be sent to another company for performance."

Continue reading "Managing procurement for Projects" »

Posted by Nilesh Dhoble at 12:34 PM | Permalink | Comments (3) | TrackBacks (0)

How to set your Safety Stock Policies?

Every distribution warehouse in supply chain network holds inventory and has some safety stock maintained. How much safety stock or inventory should be kept at each warehouse is the topic I am going to address in this blog. In fact my focus will be on one common mistake that is made in the process of setting inventory and safety stock norms.

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Posted by Nikhil B at 5:26 PM | Permalink | Comments (1) | TrackBacks (0)

Reaping Benefits from Supplier Performance Management

Recently I attended one seminar on supplier performance management (SPM) wherein the audience seemed to have mix reactions on the topic have penned down some of my thoughts on the same. With inorganic growth in many organizations tracking supplier's performance at global scale is becoming a new challenge.

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Posted by Nilesh Dhoble at 4:42 AM | Permalink | Comments (0) | TrackBacks (0)

Would SCM be a differentiator in your Apps Portfolio?

Dennis Gaughan of Gartner in his blog dated 29-Jun-2010 wonders whether its time for corporations to rethink their enterprise applications portfolio strategy (http://blogs.gartner.com/dennis-gaughan/2010/06/29/is-it-time-to-rethink-your-enterprise-application-portfolio-strategy/). Well, I think organizations are thinking about it all the time, sometimes when they do their annual planning and are reminded of the morass in their application landscape and sometimes thanks to M&A (esp for financial institutions) forcing them to look at what to sunset and what to fold in.

Continue reading "Would SCM be a differentiator in your Apps Portfolio?" »

Posted by Gopi Krishnan at 10:13 AM | Permalink | Comments (3) | TrackBacks (0)

Contract Negotiations - The Trust & Technology factors!!

If government policies dictate supply chains, Contracts are the essential glue that keeps the supply chains chugging. After-all, without a contract in place, no sane buyer and supplier is going to transact for long. For the past two months that I have been swamped in contracts - one recently signed with a client and the second one currently under intense negotiations with a product vendor - I have realized how painstaking the negotiation process can be; particularly when the stakes are high, when uncertainty prevails due to complexity of work and geographical barriers and when you do not have a past relationship.

Continue reading "Contract Negotiations - The Trust & Technology factors!!" »

Posted by Amit Tambi at 11:30 AM | Permalink | Comments (0) | TrackBacks (0)

Is Service procurement a Big Challenge?

I was in a discussion with one of the customers for ERP Implementation and their main focus in implementing the procurement module was to achieve savings and the concern area that they identified was Service Procurement, so that thought created some anxiety in me why customers have started thinking on Service procurement to have an insight how service procurement can be managed.

Continue reading "Is Service procurement a Big Challenge?" »

Posted by Nilesh Dhoble at 9:38 PM | Permalink | Comments (3) | TrackBacks (0)

Reducing Healthcare costs - Digitization of Patient Records

Ever had a look inside the records store-room of your physician? When I got a peek into the record room for my healthcare physician sometime back, I was overwhelmed with the sheer amount of physical files and paper I saw. Took me back to my visits to government offices in India a long time ago, when paper files were almost ubiquitous in the recordkeeping stores, and the musty smell of paper was all pervasive. Recordkeeping in India since then has moved many echelons ahead, and computers have replaced those physical files.

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Posted by Sameer Prashar at 12:46 AM | Permalink | Comments (0) | TrackBacks (0)

Negotiating one of the key skills for procurement professionals

Apart from being skilled and experienced in managing relationships with suppliers and managing the resulting relationships in the same region, but Negotiating with suppliers in various global regions can bring unexpected challenges that can sabotage negotiations and relationships can challenge those are strong in domestic markets

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Posted by Nilesh Dhoble at 4:54 AM | Permalink | Comments (4) | TrackBacks (0)

Work Bench for improving Supply Chain Effectiveness

Work process effectiveness has direct impact on the profitability of the overall business it supports. As the saying goes, a good process is required to develop a great product; it is essential for businesses to review their current processes for improvements in areas like work style and collaboration, cycle times, accuracy, emotions and essentially TCO- Total Cost of Ownership.

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Posted by Shan Latheef at 2:53 AM | Permalink | Comments (0) | TrackBacks (0)

Supply Chain Predictions for 2010 - how far are we from our end-state vision?

Last month, Infosys got a call from Supply Chain Digest magazine, courtesy the editor-in-chief Dan Gilmore to air our views on the key trends for Supply Chain Management in 2010. Supply Chain Guru Predictions for 2010 published earlier this month covered a set of 5 other eminent folks from MIT, Gartner, Descartes and so on, so I was happy for the opportunity to be featured amongst these industry thought leaders.

As primarily a package supply chain enabler, I stuck to my knitting and covered my theme along two lines (a) Improving efficiencies in the back-end supply chain to reduce costs and (b) Enhancing end-customer experience by augmenting the front-end supply chain. People ask me where the relentless pressure to slay every efficiency killer would end up. What next after Multi-channel commerce, end2end procurement, green asset management... whither goes SCM end-state?

Continue reading "Supply Chain Predictions for 2010 - how far are we from our end-state vision?" »

Posted by Gopi Krishnan at 1:00 PM | Permalink | Comments (1) | TrackBacks (0)

Et Tu Toyota …

Reading about the Toyota Accelerator Pedal recall (around 2.3 million vehicles to quote a figure), one can’t help but wonder how a company with its squeaky clean quality and safety reputation, a temple of learning for supplier collaboration processes, could falter on such a grand scale.

Continue reading "Et Tu Toyota …" »

Posted by Sameer Prashar at 7:10 PM | Permalink | Comments (9) | TrackBacks (0)

...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: “The Implementation: What's the sandwich filling? ” – Part 4

In my previous Blog, I discussed about the Roadmap and the project kick-off, in this blog I would like to elaborate on what we actually crafted, “As a Solution for Plan Driven Procurement” and also the future functionalities fitment into the procurement landscape.

Continue reading "...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: “The Implementation: What's the sandwich filling? ” – Part 4" »

Posted by Tridip Chakraborthy at 2:26 AM | Permalink | Comments (5) | TrackBacks (0)

Part one – Strategic Cost Reduction: What is strategic about cost reduction?

Last year brought in difficult times for everyone. From individuals to small, mid size and large global companies’ echoed one sentiment – reduce costs to survive. We saw large scale layoff’s as knee jerk reactions. Not sure why companies saw their people costs as the first level opportunity to tackle and their only scope for survival. Buyers were beating down their suppliers to get the best price against target goals, 10% per annum over their scope of supply or haggling over the increasing the payment terms, not realizing that the suppliers were also going through the same issues on liquidity crunch. Net result, suppliers went bankrupt and along with them the entire industry started collapsing, e.g. automotive industry.

Things have started turning around now and we felt it was time to take the learning’s from these experiences and reactions to prepare a strategic response approach to the situation. Surely we need not wait for the next recession but get started on a systematic process of quick wins, tactical and strategic initiatives that can keep the organizations going strong at all times.

Continue reading "Part one – Strategic Cost Reduction: What is strategic about cost reduction?" »

Posted by Pradeep T Y at 9:13 AM | Permalink | Comments (0) | TrackBacks (0)

Part 3 -Is Supplier Relationship management a “technology need” or a “strategic business capability” for your organization?

I thought we would be nearer to the end my blog series on SRM with this one hoping to get onto the solutions, but it was not to be. I was in a couple of solution discussions in SRM implementation situations over last week and realized we were far away from getting to the solution discussions if we do not do more to confirm our understanding on this topic.

What is Supplier Relationship Management for you?

Continue reading "Part 3 -Is Supplier Relationship management a “technology need” or a “strategic business capability” for your organization?" »

Posted by Pradeep T Y at 9:03 AM | Permalink | Comments (2) | TrackBacks (0)

Part Two: SRM is Real

In my last blog “ Do we really understand SRM ( Supplier Relationship Mgmt)?” we defined Supplier Relationship Management" as a collaborative win-win business discipline of strategically managing the supplier engagement process to maximize the potential value of those relationships by providing seamless integration capabilities for smooth harmonized operations and aligned business goals with the partner supplier community”.

We had some valid questions coming up from the readers of how to address SRM in a bilateral relationship where the supplier is also a customer , how do we define a metrics model to track we are realizing what we planned etc but there were some very fundamental questions that needed answers to ensure the rubber meets the road. I have put my thoughts here to a couple of them for I believe this is essential to get to a solution which addresses this vision

Continue reading "Part Two: SRM is Real" »

Posted by Pradeep T Y at 8:51 AM | Permalink | Comments (8) | TrackBacks (0)

Customer benefits in Centralized Purchasing: A Case Study

Continuing from my previous blog, that described challenges and advantages through centralized purchasing, I would like to discuss this concept further with a real world example.Through centralized purchasing, the organization transformed its decentralized purchasing operation into a centralized structure so as to leverage its annual spend with suppliers.

Continue reading "Customer benefits in Centralized Purchasing: A Case Study" »

Posted by Nilesh Dhoble at 5:53 AM | Permalink | Comments (0) | TrackBacks (0)

Sarbanes Oxley (SOX) and the Procurement Function: Let Us View Compliance as an Opportunity

SOX, better known as Sarbanes Oxley is as dry as “the desert”, nevertheless I’ve seen people resulting in tears trying to hide a yawn whilst attending a SOX seminar. ….Don‘t laugh at me, that’s what you’d feel to sit through seminars or sessions related to it, that’s what public opinion is. I remember such a session where, I was the host …lets not get to the crux of “that initiative”, We’ll for me it was positive, Ram Bhaskara had me initiate working on the topic & as a follow-on Gopi GR pumped my enthusiasm to begin research on the SEC’s (Securities Exchange Commission) strategy and requirements for Sarbanes Oxley and the procurement function.
I don’t want to repeat the shady state of affairs that affected Enron and others, that’s a stale tale.

Continue reading "Sarbanes Oxley (SOX) and the Procurement Function: Let Us View Compliance as an Opportunity" »

Posted by Tridip Chakraborthy at 6:54 AM | Permalink | Comments (0) | TrackBacks (0)

Part One: Do we really understand SRM ( Supplier Relationship Mgmt) ?

I like statistics ……..Because it makes me think

1) 62% of Supply Chain operations did not have an accepted definition of Supplier Relationship Management in their organization

2) 50% of the companies having implemented SRM applications do not know how to measure the benefits of these initiatives.

I was equally confused as many others in the supply management function, of the various terminologies that are used interchangeably for the same sourcing and procurement processes e.g. supply management , supplier relationship management , strategic sourcing , spend management , supplier performance management .

Continue reading "Part One: Do we really understand SRM ( Supplier Relationship Mgmt) ?" »

Posted by Pradeep T Y at 6:33 AM | Permalink | Comments (4) | TrackBacks (0)

So is SCM Transformation an Oxymoron or a Holy Grail to aspire to?

Transformation is a much-used (abused?) word these days. So, when I read Bob Ferrari's guest column at our blog site (http://www.infosysblogs.com/supply-chain/2009/10/resolving_the_constant_debate.html), something I keep wondering periodically came to my mind again - Is SCM Tranformation an oxymoron or is it actually a valid proposition? The context the word "transformation" is used currently refers to mega-sized, multi-year, multi-million, global-scale, rip-everything-off & replace programs. Since SCM is inherently an outside-in domain, the typical definitions of transformation may not apply.

Continue reading "So is SCM Transformation an Oxymoron or a Holy Grail to aspire to?" »

Posted by Gopi Krishnan at 5:56 AM | Permalink | Comments (1) | TrackBacks (0)

Why do sourcing professionals overlook factors other than cost despite enormous consequences of potential failures in supply chain?

The current economic environment with looming bankruptcies in the automotive supply chain requires buyers to consider all elements of supplier performance in their sourcing decisions more than they ever did. The recent shutdown of Chrysler’s Jeep Wrangler plant due to parts shortage is an example of how supply chain failure can cause disastrous consequences. The evaluation parameters must include traditional factors like cost; often overlooked quality and delivery; and now the critical parameter of financial risk.

Continue reading "Why do sourcing professionals overlook factors other than cost despite enormous consequences of potential failures in supply chain?" »

Posted by Srinivas Koneru at 7:21 PM | Permalink | Comments (0) | TrackBacks (0)

Leveraging Centralized Purchasing for Customer Benefits

The inherent challenges on the supplier side coupled with the need for a cost effective procurement model poses major challenges for the procurement team in meeting their targets.

Continue reading "Leveraging Centralized Purchasing for Customer Benefits" »

Posted by Nilesh Dhoble at 3:26 AM | Permalink | Comments (4) | TrackBacks (0)

...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: “Roadmap -> SRM Journey Kick-off” – Part 3

In my previous blog, we discussed the Road mapping exercise in detail, in this blog we will discuss on what the Roadmap meant for them and how the SRM Journey was kicked off.

What it meant to the team and the gigantic tasks that lie ahead of their face for the days to come. It’s not necessary that every kick-off meeting calls for a champagne burst or a Donut offering or even a free lunch”, for most it starts with a Heavy meeting instead of a heavy meal. There is so much already on the platter to digest, that we have barely the time to breathe in these agile project situations.

Continue reading "...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: “Roadmap -> SRM Journey Kick-off” – Part 3" »

Posted by Tridip Chakraborthy at 10:24 PM | Permalink | Comments (0) | TrackBacks (0)

Perfect Order Execution

HOW TO ORDER SMARTER In two simple steps, Retailers can start transforming their Order Management practices to a notch up using principles of Perfect Order Execution.

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Posted by Shan Latheef at 1:53 AM | Permalink | Comments (1) | TrackBacks (0)

Travel and Expense Spend and Recessionary times…

Travel and Expense (T&E) spend is usually the first casualty in the battle to control spend in recessionary times. And the reason is not difficult to understand either. T&E is perceived to be relatively easy to control, and a lack of focus on this segment of spend during high growth periods, make it plum pickings for a recession-triggered spend management program. But while it is true that T&E spend is a low hanging fruit, it is also important for companies to understand that T&E spend cannot be brought under control overnight.

Continue reading "Travel and Expense Spend and Recessionary times…" »

Posted by Sameer Prashar at 11:51 PM | Permalink | Comments (0) | TrackBacks (0)

...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: “Sign-off the SAP SRM 7.0 Road mapping exercise for an Enterprise” – Part 2

The prelude blog of SRM 7.0 was a fair enough curtain raiser to demonstrate our intentions.
In this blog we will focus on what exactly goes in during the “Road Map exercise”, the length and the breadth of the exercise.
i.              Roadmap Scope Definition
ii.             Questioning the holy cows
iii.            Intent for a BPR (Business Process Re-engineering) initiative, YES / NO
iv.            Identification of an SRM council
v.             Pre-Blue Printing (powered by Workshops)
vi.            Revisiting the Roadmap Scope definition
vii.           Roadmap review and Sign-off
Most of these look repetitive, but believe me, these in itself are a masquerade if not dealt with properly.Lets try and understand what we do in each of these phases and the Exit Criteria for the exercise.

Continue reading "...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: “Sign-off the SAP SRM 7.0 Road mapping exercise for an Enterprise” – Part 2" »

Posted by Tridip Chakraborthy at 6:27 AM | Permalink | Comments (0) | TrackBacks (0)

...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: Is your On-boarding business case ready for the Roadmap exercise? – Part 1

SAP SRM 7.0 is here to stay. Shoulders high, collars up, head upright……. Here we go!!!!!!!!!! This 101 introduction blog is to set the context of SAP SRM road mapping exercise for an Organization that could be either stable / under crisis or even pushed with heavy cost reduction projects with IT landscape rationalization. In such bad weather it becomes very important for us to understand the emotions of a DECISION MAKING TEAM that could use an Application Framework to provide a 911 support to a falling business.

In the blog sequel 4 and above we will get into the Nerve of the Solution and evaluate the business benefit of every functionality, Scenario that’s delivered. Again re-instating, “Every Dollar Saved in Procurement -> Contributes to every dollar earned in Revenue”

Continue reading "...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: Is your On-boarding business case ready for the Roadmap exercise? – Part 1" »

Posted by Tridip Chakraborthy at 6:39 AM | Permalink | Comments (0) | TrackBacks (0)

SRM Implementations: Designing business solution for “predictable target performance”

I was reading on supplier relationship management (SRM) technology investments and came across industry numbers on implementation success mentioning of an average 25% of the indirect spend value and 7% of the supplier’s enabled through SRM investments. I smiled within. .. Least surprised. Wondered how the CFO’s / CPO’s would be justifying the benefits against the original business case they sanctioned for the investment.

Best in class implementations have benchmarked up to 98% enablement of procurement processes on SRM platforms.

Continue reading "SRM Implementations: Designing business solution for “predictable target performance”" »

Posted by Pradeep T Y at 8:07 AM | Permalink | Comments (0) | TrackBacks (0)

Let's Negotiate...

For me, the negotiations part of an RFx process has always been the most interesting and critical aspect of the Sourcing process. A well-orchestrated negotiation approach can bring about great value to an organization, while a confused and haphazard approach can bring pain for both, the buyer, as well as the supplier. In this blog, I have tried to capture some key points to be kept in mind for a fruitful negotiation, based on my experiences with a few sourcing organizations

Continue reading "Let's Negotiate..." »

Posted by Sameer Prashar at 4:14 AM | Permalink | Comments (2) | TrackBacks (0)

Handling Business Process Transformational Change during the lifecycle of an SRM upgrade – Part 2 (“Early stakeholder involvement and Supplier On-boarding” )

In my previous blog we had discussed on one area of focus that’s crucial during an SRM upgrade, which happened to be Readiness and Adaptability of the End User community – SRM Users, in this blog, we will discuss another important area that happens to be business driven, which is the involvement of business transformation team that rolls out the solution to the user community both internal and external, we will call this Blog “Early stake holder involvement and Supplier On-boarding” during the business process transformation coming off an upgrade program.

Continue reading "Handling Business Process Transformational Change during the lifecycle of an SRM upgrade – Part 2 (“Early stakeholder involvement and Supplier On-boarding” )" »

Posted by Tridip Chakraborthy at 6:43 AM | Permalink | Comments (0) | TrackBacks (0)

Beware! Do not mix Procurement and Marketing

Much has been said, written and debated about Procure-o-marketing. My friends in the procurement community have advocated the advantages of introducing procurement concepts in marketing. This group in procurement community has seen marketing spend with skepticism and disdain, as an overhead which needs curtailment. So, all these talks of Procure-o-marketing have come as a “novel concept”. The million dollar question, (and this is not figurative alone…) Is a natural “marriage’ of the two enterprise entities possible? I strongly advocate NO.

Continue reading "Beware! Do not mix Procurement and Marketing" »

Posted by Sudripto De at 2:32 AM | Permalink | Comments (0) | TrackBacks (0)

Part I: Winning over this "Tsunami" called Global Recession

Apply the balm where it hurts the most ...In the first of part of the blog series here, we are trying to understand the global economic problem through the the view that matters most for organizations , the lens of "Free Cash Flow", a measure of liquidty and business performance that most organizations operate on. In the interest of keeping this discussion focused, we have limited the point of view around the "procurement and supply management" processes and response strategies , but is well applicable across all operations . As we may still be getting over the worst of this " Tsunami " , wish if all of us could share the experiences and the survival stories for the benefit of the larger supply management community .

We keep getting lashed by these heavy waves of destabilization at frequent randomness, from Katrina, to Avian flu, to global recession and while we were still struggling on these, as if not enough, now the Swine flu. The USP of all these are that we don’t know what, when and how this hit us, when we were least expecting. It takes a good toll of all of us. The good thing about this is that it wakes us all from the slumber and complacency to make us take note and innovate.

The current economic crunch is one such great "Tsunami "which has jolted all the greats and spared none.

Continue reading "Part I: Winning over this "Tsunami" called Global Recession" »

Posted by Pradeep T Y at 8:18 AM | Permalink | Comments (2) | TrackBacks (0)

Video: Common Challenges and best practices in Contract Life cycle Management

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Video: Common Challenges faced by most enterprises in the area of Strategic Sourcing

Posted by Tridip Chakraborthy at 7:48 AM | Permalink | Comments (0) | TrackBacks (0)

Congratulations, Procurement professionals…

Procurement salaries on the rise - 7% increase in 2008 vs. 2007. I very much expected this and I am sure the percentage will go up in 2009 as well. Reason, I attribute to, is the “R” factor - Recession. Cutting cost and improving on savings target are on the high focus and is uniform across industries, enterprise size and global regions. Though procurement department is not solely responsible to achieve these targets in the rough time (all the departments in the organization are involved), but these professionals drive this cause across the organization.

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Posted by Raj Rajendran at 8:45 AM | Permalink | Comments (0) | TrackBacks (0)

Buyers & Suppliers - Time for redefined win:win practices

I just read Justin’s blog on “hammering suppliers on price”; Prof. Rob has a very valid advice for companies on early warning signs of danger from suppliers.

Hammering suppliers on price and payment terms “now” vs. “long” term relationship, is a very important aspect in risk management. When there is a financial crunch in the buying organization, their sales are hit and their bottom-line is impacted.... suppliers, as partners or extended community to their organization, are expected and should also be a part of this tough journey. (Hopefully, this is only for few more months) So "renegotiating price" and change in the DPO with the business partners are inevitable. But to what extend?

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Posted by Raj Rajendran at 3:30 PM | Permalink | Comments (1) | TrackBacks (0)

Handling Business Process Transformational Change during the lifecycle of an SRM upgrade – Part 1

….lets manage a few emotions
Buy side user community : How are we going to take this daunting task of managing change with the new system coming in, more templates new training modules, supplier readiness, end-user perception and acceptance of the new solution etc. ?
Sell-side / vendor community: In addition to the challenges that I’m given to face w.r.t delivery schedules, quality and being pushed to the limits to reduce costs, what’s this new concept of supplier enablement that am expected to onboard, is this another muscle power showcase?

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Posted by Tridip Chakraborthy at 10:54 AM | Permalink | Comments (0) | TrackBacks (0)

Notes from Ariba Live - 2

This is in continuation to my earlier blog which covered Day 1 of Ariba Live: http://www.infosysblogs.com/supply-chain/2009/04/notes_from_ariba_live_1.html#more

On the second day of “Ariba Live Virtual 2009”, presenters continued to build upon the “Spend Management: Time to be Hero” theme from Bob Calderoni’s Day 1 keynote. It was the turn of Kevin Costello, President Ariba, to solicit belief in the theme, by assigning numbers to the savings opportunity available. Some numbers that Kevin put forth are really interesting. As per Ariba research, Fortune 500 companies alone could save close to $300 billion through improved Spend management initiatives. Include the other companies as well, and that figure should go up to $500 billion in North America alone. As Kevin put it, this is a stimulus package organizations cannot afford to ignore.

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Posted by Sameer Prashar at 3:40 PM | Permalink | Comments (0) | TrackBacks (0)

Notes from Ariba Live - Part 1

It was a new look, online “Ariba Live Virtual 2009” that kicked off on April 28^th. Good to see a company in the business of selling Spend Management solutions, walk the talk, and leverage technology to deliver such an event at a reduced cost.

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Posted by Sameer Prashar at 4:21 PM | Permalink | Comments (0) | TrackBacks (0)

DNA Therapy for Strategic Cost Reduction in Supply Chains

My recent hunt for stem cell banking information in South India got me excited on a subject of high interest in the biomedical world. Stem cell therapy is the latest medical wonder discovery and supposed to be a cure for 70 odd complex maladies of humans, especially interesting because till late these ill’s were supposed be hard to win over with the conventional medical treatment methods - treatments which were more focused on treatment of the symptom or providing a patch solution for the life threatening diseases, not usually a permanent cure.

DNA is the building block of all life and living on this planet. They are the smallest finite elements which determine the characteristic and personality of any individual. DNA or gene therapy gets to the root cause of the problem. They provided the paradigm shift in medical treatment from the symptomatic treatment of the yesteryears to treating or correcting the diseases cells at source.

What has DNA therapy got to do with Supply Chain Management?

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Posted by Pradeep T Y at 5:15 AM | Permalink | Comments (8) | TrackBacks (0)

Reduce your TCO with migration to SRM MDM Catalog

How to optimize and to what extent? This is the need of the hour and terms that has been and will always be of interest to the CPO and CFO desk. It isn’t very difficult to conclude whether a catalog migration project is a “must do” for SRM customers, we will learn how the SAP on SAP advantage will benefit them from a TCO standpoint.In this blog I will discuss on my experience with a successful catalog migration project for a health and Beauty retailer and how it benefited the operational procurement team.

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Posted by Tridip Chakraborthy at 3:00 PM | Permalink | Comments (3) | TrackBacks (0)

Does the Procurement Boardroom wilt under supplier pressure in a downturn economy?

Well, this is a question most Chief Procurement officers (CPO) dread to dream and a hard fact most suppliers rejoice furtively. In an economic environment, where the manufacturers are under tremendous pressure to cut costs, their over-dependence on suppliers, tilts the balance of browbeating power in favor of the suppliers. Will the CPOs collaborate to beat the onslaught from their suppliers? The economic crisis is forcing manufacturers to redefine strategies for strategic Procurement.

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Posted by Sudripto De at 2:35 PM | Permalink | Comments (0) | TrackBacks (0)

Supplier Consolidation Vs Sourcing

In a Sourcing team meeting at a client I recently worked for, a senior Sourcing Manager lamented that instead of “Sourcing” they were merely consolidating suppliers. A pretty insightful statement! And it is true for many organizations where the central focus of “Sourcing” is just to achieve greater volume leverage during negotiations, and using that leverage to get a better purchase-price from a subset of incumbent suppliers. This pure ‘purchase-price reduction by supplier consolidation’ approach does have its merits, but is this what sourcing is all about?

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Posted by Sameer Prashar at 5:54 AM | Permalink | Comments (4) | TrackBacks (0)

This Pharma major is doing the right thing by “talking” to its suppliers

Pharmaceutical industry - defensive and an inelastic sector as far as demand is concerned - is known to be relatively less impacted by this recession. But then, it is far from remaining immune and certainly cannot escape unscathed. The lay-off announced by the leading pharma players (Sanofi 650 US sales reps, Novartis 550 US sales reps, Merck ~8000 jobs, AstraZeneca 1400, Wyeth ~5000 and GSK 1000) is proof enough of the problems present in this industry. Though the problems stem from poor drug discovery and expiration of patents, the recession is certainly compounding the situation. Naturally, belt-tightening is high on the corporate agenda with inefficient supply chains ranking at the very top among all the belt-tightening opportunities available.

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Posted by Amit Tambi at 2:36 PM | Permalink | Comments (4) | TrackBacks (0)

Is there confusion with SAP SRM suite positioning after acquisition of Frictionless commerce (now rebranded SAP E-Sourcing)? – Part 2

In my last blog, I discussed on the confusion with the Frictionless acquisition by SAP, now I would like to share the difficulties that I see to convince customer to have both these applications operational in the landscape.
Why is it difficult to convince customers to have both these applications operational in the same landscape?
-          Frictionless commerce (now SAP E-Sourcing) has overlapping functionalities with SAP SRM which happens to be its core SRM solution
-          Customers already using SAP SRM, would need a strong business case to convince CPO desk for SAP E-Sourcing licenses
-          Integrate the applications, as they don’t talk to each other still.
-          What is the ROI for such an integration
-          Is there a customer base that will really look forward to integrate these 2 applications

Continue reading "Is there confusion with SAP SRM suite positioning after acquisition of Frictionless commerce (now rebranded SAP E-Sourcing)? – Part 2" »

Posted by Tridip Chakraborthy at 3:20 PM | Permalink | Comments (2) | TrackBacks (0)

Is there confusion with SAP SRM suite positioning after acquisition of Frictionless commerce (now rebranded SAP E-Sourcing)? – Part 1

The last 7-8 months have been the most demanding phase for SAP to position the SAP SRM suite offering.
As a consultant, I am still trying to understand why this acquisition? Am trying to logically place these questions to arrive at an answer
Whats the confusion?
SAP SRM (version 5.0 and lower) was always ranked low in comparison to what “best of breed” offers for Sourcing and Contract management functionalities.
However, to overcome this, they acquired Frictionless commerce (now rebranded SAP E-Sourcing) to bridge this gap. They had a strategy to sell it as an On-demand solution only they have been successful in selling the on-demand solution. But they realized the need to make the on-premise solution available for customers who where skeptical in parting with data, but however the On-premise solution brought with it major confusion, leaving the suite offering with heavy questions, reasons stated below.

Continue reading "Is there confusion with SAP SRM suite positioning after acquisition of Frictionless commerce (now rebranded SAP E-Sourcing)? – Part 1" »

Posted by Tridip Chakraborthy at 3:13 PM | Permalink | Comments (0) | TrackBacks (0)

Get the Sourcing process in order first …

While Information Technology (IT) based sourcing solutions have revolutionized the way that organizations do Sourcing, it is also true that in the sourcing evolution of an organization, IT tools come second to the sourcing process they support. Many organizations make the mistake of hurrying onto the IT implementation bandwagon without giving a good hard look at the underlying sourcing process. More often than not, such implementations result in disillusionment for the stakeholders and blame for the solution vendor.

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Posted by Sameer Prashar at 10:09 PM | Permalink | Comments (0) | TrackBacks (0)

Supplier Enablement continues to be one of the top priorities as well as challenges

Supplier Enablement (SE) continues to be one of the top priorities as well as a challenge for organization looking at transforming their procurement office and gain better visibility into their supplier relationship by increasing their spend under management. With the meltdown in Global economy, challenges are doubled but still the priorities overweigh these challenges.

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Posted by Raj Rajendran at 2:54 AM | Permalink | Comments (0) | TrackBacks (0)

....Customer demands "Where is the tangible translation of my Compliance to revenue you promised from my SRM solution, show me? "

Has a post implementation experience ever hunted you down with such statements from the customer?
Are you ready with the metrics, have you even thought about how to have these metrics strategized and signed off even before you could possibly track them.
How can you measure it, how will you show that realization from day 30 post go-live, 1month would be a very tight time frame to really show benefits on the P&L, but today’s customers, for sure are going to.

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Posted by Tridip Chakraborthy at 1:39 AM | Permalink | Comments (3) | TrackBacks (0)

Automate, Integrate, Extend….err Exploit

Continuing from one of my previous blog post on the need to make Information Management central to spend visibility initiatives, I offer my views today on the pivotal role spend visibility initiatives play in Procurement transformational journey. And I do so, on the back-drop of three simple yet powerful words - “Automate, Integrate and Extend”.

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Posted by Amit Tambi at 9:08 AM | Permalink | Comments (0) | TrackBacks (0)

Aligning to the best practices for combating challenges faced in contract management

In my last blog, I shared my point of view about the importance of contracts during the “R” times. Now I would like to share my thoughts on the challenges in leveraging contract management and best practices in contracts management.

One of the major challenges is that Organization’s contracting principles are sketched around the package they use and not with respect to the way they would like to do their business. Late 90s and early 2000 is when organization started to invest on Contract Life cycle management packages / tools. This definitely provided a host of tangible business benefits to the end users and also to the buying organization. But, very soon, companies (esp. in Retail and Manufacturing) realized that the package is not flexible enough to manage the growing business needs such as Globalization, changes in business processes like invoicing against contracts etc.

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Posted by Raj Rajendran at 10:02 AM | Permalink | Comments (0) | TrackBacks (0)

Leveraging contract management in the “R” period

In this dynamic and challenging global environment termed also as “Recession”, I read a series of blogs

on ways to manage recession,
worst innovations mistakes in recession,
Is re-negotiating during these tough times ethical?
“R” word can be a boom to sourcing and procurement world etc (http://www.supplyexcellence.com/blog/2008/10/30/renegotiate-contracts-recession/, http://blog.sourcinginnovation.com/2008/02/25/the-10-worst-innovation-mistakes-in-a-recession.aspx)

The “R” word is probably not a welcome term for sourcing and procurement world – buyer as well as supplier, but it will definitely help in restructuring most of the processes. Contracts Management (with sourcing on the left side) plays a vital role in achieving this – Compliance, Collaboration, Commitment etc

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Posted by Raj Rajendran at 9:56 AM | Permalink | Comments (1) | TrackBacks (0)

Have we funneled out everything in the SRM space, or is there any more oil left in the lamp

……..Looks like we are reaching the saturation level in designing a Supplier relationship management system that can milk the supplier to the extent possible, thats what the enterprise expects the buy side to have on the top of their mind rather than looking at the bigger picture.

It’s a realm for the buy side to have it their way. Let’s listen to a small story.

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Posted by Tridip Chakraborthy at 12:58 AM | Permalink | Comments (4) | TrackBacks (0)

Black and White of Green Procurement – role of procurement professionals

Following up on my original post here, today I offer a look at the role Sourcing and Procurement can play in greening up the supply chain. These range from simple tweaks and easy to adopt changes to full-blown initiatives. Borrowing a leaf from McKinsey’s survey on Green supply chain (synopsis captured in SC Digest here ), it is evident that procurement’s success in reducing the carbon footprint depends largely on their ability to influence their suppliers. A disclaimer before I delve further: contrary to what the title suggests, this is not a tell-all list; there are bound to be additional innovative ways to save the environment; all ears for your views

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Posted by Amit Tambi at 12:13 PM | Permalink | Comments (0) | TrackBacks (0)

Procure - O - Marketing

Recently, I read in one of the analyst report that 40-50% of procurement directors (mostly in mid-market) have no clear spend visibility of marketing department. My experience - if you ask sourcing specialists to choose a complex category that they feel savings can still be achieved, the answer would be Procure-o-marketing (marketing spend - why???), esp. printed materials, branding or promotional spend and media space. Thanks to Infosys Procurement Knowledge Exchange meet, in the last few months, me and my colleague Anubhav were able to share our experience and brain storm on the reasons why there is a invisible marketing spend and the strategies that can be adopted to bring the marketing spend under management and eventually experience higher cost savings in this spend - procure-o-marketing...

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Posted by Raj Rajendran at 6:20 PM | Permalink | Comments (3) | TrackBacks (0)

The oft repeated problem: spend visibility

I remember organizations, in year 2002, raise spend visibility issues – “I do not know how much my company spends with supplier a”; “on what am I spending the maximum dollars?” Six years down the line, with the immense progress made in this field – variety of product vendors, ERP and best-of-breed alike, touting the latest in technology; the bouquet of service offerings including data cleansing and enrichment; the symposiums, seminars and analyst papers harping on the do’s and don’ts – one would expect to confidently bet his money on the demise of such issues. But why then do we still come across the same rues and cries?

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Posted by Amit Tambi at 11:19 AM | Permalink | Comments (2) | TrackBacks (0)

Overcome procurement challenges resulting through business expansion (M&A) - Part 1

Business expansion and growth, nowadays, through mergers and acquisitions are inevitable – Fact: 42 FORTUNE 1000 corporations were acquired in 2007, biggest buyout frenzy since 2000. Apart from managing the risk of workforce events and re-structuring (Human Resource Harmonization) caused by M&A, organization begins the journey with – “quickly integrate mergers and acquisitions into my enterprise processes and systems”. Talking about process consolidation and IT integration, Sourcing and Procurement processes and systems cannot be left behind. Please remember - Saving $1 in procurement equals $15 to $20 in revenue.

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Posted by Raj Rajendran at 11:13 AM | Permalink | Comments (1) | TrackBacks (0)

Supply Chain Management

September 8, 2011

Spend Management and Spending Cuts...

May 30, 2011

HazMat in SCM Needs to Worry About New Tech Impositions!

March 4, 2011

Trending in 2011 - Supply Chain as a Visible Differentiator

January 31, 2011

Smarter Commerce means more SCM than before!

January 17, 2011

VSCOR: Measuring the Competetive Quotient of your network

January 4, 2011

SAP SRM and PLM integration

December 8, 2010

Selecting a right tool for your sourcing activity

November 1, 2010

Let's make it a little bit easier, a little simpler...for our suppliers!

October 29, 2010

Crunching Procurement Cycle Time Through Business Workflow Optimization

October 22, 2010

Sourcing from China: Part-1: Testing your fishing skills: stages of your sourcing maturity

September 16, 2010

Managing procurement for Projects

September 9, 2010

How to set your Safety Stock Policies?

August 27, 2010

Reaping Benefits from Supplier Performance Management

July 8, 2010

Would SCM be a differentiator in your Apps Portfolio?

July 1, 2010

Contract Negotiations - The Trust & Technology factors!!

May 25, 2010

Is Service procurement a Big Challenge?

April 19, 2010

Reducing Healthcare costs - Digitization of Patient Records

March 9, 2010

Negotiating one of the key skills for procurement professionals

March 3, 2010

Work Bench for improving Supply Chain Effectiveness

February 24, 2010

Supply Chain Predictions for 2010 - how far are we from our end-state vision?

February 7, 2010

Et Tu Toyota …

January 28, 2010

...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: “The Implementation: What's the sandwich filling? ” – Part 4

December 22, 2009

Part one – Strategic Cost Reduction: What is strategic about cost reduction?

December 14, 2009

Part 3 -Is Supplier Relationship management a “technology need” or a “strategic business capability” for your organization?

November 23, 2009

Part Two: SRM is Real

November 20, 2009

Customer benefits in Centralized Purchasing: A Case Study

November 13, 2009

Sarbanes Oxley (SOX) and the Procurement Function: Let Us View Compliance as an Opportunity

November 2, 2009

Part One: Do we really understand SRM ( Supplier Relationship Mgmt) ?

October 28, 2009

So is SCM Transformation an Oxymoron or a Holy Grail to aspire to?

October 27, 2009

Why do sourcing professionals overlook factors other than cost despite enormous consequences of potential failures in supply chain?

October 23, 2009

Leveraging Centralized Purchasing for Customer Benefits

October 14, 2009

...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: “Roadmap -> SRM Journey Kick-off” – Part 3

October 13, 2009

Perfect Order Execution

September 29, 2009

Travel and Expense Spend and Recessionary times…

September 18, 2009

...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: “Sign-off the SAP SRM 7.0 Road mapping exercise for an Enterprise” – Part 2

August 27, 2009

...SAP SRM 7.0 is here to stay, available to Leverage your SRM footprint: Is your On-boarding business case ready for the Roadmap exercise? – Part 1

August 26, 2009

SRM Implementations: Designing business solution for “predictable target performance”

August 10, 2009

Let's Negotiate...

July 16, 2009

Handling Business Process Transformational Change during the lifecycle of an SRM upgrade – Part 2 (“Early stakeholder involvement and Supplier On-boarding” )

July 1, 2009