It all started in the attempt to understand the theoretical concept of servitization, i.e., the transformational shift from a product-centric to a service-centric business model and logic that we observe extensively in the area of IT procurement, in particular. In our earlier posts, we analyzed the notion of XaaS (Anything-as-a-Service) in the context of outsourcing.  Eventually, the research path led us to the notion of servitization, and we went even further this time.    IT servitization and procurement IT servitization has gained significant traction in the procuremen ..read more

We often choose products or services based on their value or price. Value can be found in savings, efficiency, or competitive advantage.  On the other hand, price is a standard measure that indicates the competitive market for such a product. We select from a few available options by comparing their prices.  This post suggests we use a similar approach when purchasing SaaS (cloud software). We propose looking at SaaS from two angles: product differentiation and pricing method. SaaS Negotiation Matrix Among many available pricing methods, we selected the value- and competitor-based ..read more

My online course, "Modern Approach to Cloud Software (SaaS) Negotiations," is live on Udemy.  Please follow this link https://www.udemy.com/course/cloud-software-saas-negotiations/ and get closer to becoming the SaaS negotiation expert. Software as a Service (SaaS) procurement refers to acquiring cloud-based software applications on a subscription basis rather than through traditional software licensing models.  One of the critical specifics of SaaS is its flexibility. Businesses can select from software solutions tailored to their specific needs without physical owners ..read more

The source link. How could you describe your career path in a few words?  I worked in procurement for 22 years - telecom, airline, railways, public infrastructure services and consulting industries, and multiple geographies. I’m a Fellow of CIPS and an author of “The Technology Procurement Handbook,” where I tried to share my passion for what we used to call “IT Procurement.” This is where I started digging deeper into the Agile agenda, thinking of finding repercussions with our professional life and blogging on related topics.    How do you think agile practices have tr ..read more

SaaS procurement negotiations in today's business ecosystem have evolved to encompass multifaceted strategic considerations beyond traditional software purchases. The advent of cloud-based services, subscription-based models, and a greater emphasis on agility has reshaped the negotiation landscape. Understanding Modern SaaS Procurement SaaS procurement negotiations extend far beyond cost considerations.  They now encapsulate critical aspects such as  customization,  scalability,  data security,  compliance,  service level agreements (SLAs),  integration,&n ..read more

This post will review a research study addressing the procurement challenges of the information asymmetry between buyers and suppliers in digital transformation.   In this scenario, traditional procurement approaches relying on well-known information about suppliers become inadequate due to the lack of accessibility to crucial details. Information asymmetry The traditional buyer-supplier relationship is often complicated by an unequal distribution of information, hindering well-informed decision-making. This challenge intensifies as we delve deeper into the digital ag ..read more

Integrated solution as a guarantee of competitive advantage A significant difference in IT procurement is associated with a change in the paradigm of competitive advantage in the conditions of Industry 4.0. Growing competition has increased customer expectations for meeting their needs thanks to high-tech and knowledge-intensive solutions. To do this, suppliers have begun to combine products and services into integrated solutions that provide a higher total value than the sum of the values of the individual components. Such customized offerings meet the customer's complex needs and are desig ..read more

In our earlier posts, we used to praise strategic sourcing. The concept is not new, with its routes in the Buygrid framework (1967), but still, many companies are working on embracing it.  A sourcing strategy is at the core of strategic sourcing. I recall some of my former colleagues disliking it and perceiving it as a bureaucratic process element. This post will look at a sourcing strategy from an uncommon perspective, trying to prove its vital importance for the procurement profession.  The sourcing strategy definition and overview  A sourcing strategy is a structured and ..read more

This article suggests a practical procurement case from the infrastructure company (e.g., water transmission and distribution.)  One of their top-spend items is a high-density polyethylene (HDPE) water pipe. Let's look closer at the sourcing strategy for this category. HDPE pipe sourcing strategy Suppose you analyzed all the "usual suspects": unit price, delivery terms, and payment. Is there anything else we need to look at? The basic idea is that polyethylene (P.E.) is derived from ethylene, a crude oil or natural gas product. As crude oil prices rise, ethylene production costs also t ..read more

Supplier Relationship Management from Day One The good news is that our management knows Supplier Relationship Management (SRM.) Some consultants and public speakers did their job well. The flip side is that they want us to get there immediately. Instead of the long and boring general fitness improvement, we must build an impressive muscle base from day one. How realistic is that? Climbing Two Stairs at a Time Building up the SRM resources and processes from scratch is like attempting to jump two stairs simultaneously. It's not healthy for unfit individuals. "Climbing two steps at a time wi ..read more