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Exclusive: Digital Procurement: Leave the Traditional Method Behind



Digital Procurement: Leave the Traditional Method Behind

#Digital #Procurement #Leave #Traditional #Method

The software procurement process has come a long way since software was mailed on CDs. 

Today, thousands of specialized software-as-a-service (SaaS) products offer solutions for almost anything implemented immediately via the cloud. In fact, cloud companies recently saw a record-breaking market cap of over $2 trillion, exemplifying how SaaS technology is moving forward, and fast.

However, the digital procurement process isn’t evolving at the same pace. Many procurement leaders still hold on to traditional procure-to-pay processes. Software is implemented digitally but, in many ways, still treated as the old CD method.


There are a few reasons for the hold-up. Most procurement leaders express low confidence in their change management skills, and others are simply unprepared to choose and implement the right technology for their business.

This can no longer be an excuse. It’s time for companies to transition from traditional buying processes toward digital procurement. Only then can they use trailblazing technology for proactive, predictive, and automated purchasing.

Here’s a deeper dive into how buyers can keep up with the industry and become digital procurement leaders.


What does traditional procurement look like? 

Traditional procurement was molded by an IT landscape where product options were limited, and a few vendors dominated the market. Enterprises often first onboarded a vendor and then figured out what products to buy, relying on product suites from a handful of popular companies like Oracle, Microsoft, and SAP.

Since then, procurement has lagged behind other departments and is taking the longest to transition to a fully digitized operating system. Only 15% of companies believe they’re either “best in class” or “industry leader” when digitally transforming their procurement processes and operating models.

A typical traditional procurement process often looks like this:

Source: Quolum

  1. A business user identifies a problem to solve, then sends a request to IT.
  2. The IT team researches available options via Google or visits software-review sites like G2 to understand the vendor landscape and selects based on a list of features.
  3. The IT team chooses a few different options.
  4. IT submits expense receipts.
  5. The vendor renews the subscription, and the company is charged again.
  6. The process repeats from step 4.

Each of these steps is isolated rather than integrated. For example, the IT team is responsible for vendor selection. Once IT has its recommendations, it hands off the process to the procurement team, who then makes decisions based on cost and business needs. Technical and business requirements hardly align in this process.

Once IT picks a tool, traditional procurement teams only focus on getting paid, not optimizing their tools’ value. They also don’t measure consumption or track return on investment (ROI). Worse, the IT team is no longer involved at all and may not even know about the purchase for months.

What’s changed? The winds of SaaS

The SaaS world changed significantly while procurement methods lagged. In particular, the move to the cloud disrupted the way sales, marketing, engineering, and all other departments manage their day-to-day work. More than $1.3 trillion in enterprise IT spending will likely shift to the cloud in 2022 – a number expected to grow to $1.8 trillion by 2025.

With this shift, the way companies buy digital tools is also changing, and lately, they’re buying a lot. In 2021, companies worldwide used an average of 110 SaaS applications. Purchasing today faces completely different challenges than it did five or ten years ago.

Here are three ways SaaS helps mitigate procurement challenges.

1. SaaS is now decentralized – anyone can start using an app 

Buying software is no longer a centralized IT decision. Every other team in the company can easily research, test, and buy products online. Rather than waiting months or years for IT to decide on a vendor, select integration partners, and implement solutions into their tech stack, teams can choose the tools that meet their unique needs.


Decentralization also comes with unexpected consequences, such as the proliferation of shadow IT, where employees make purchases IT doesn’t know about, are off-the-shelf, and never used.

2. No more vendor bundles; it’s all about best-in-breed products 

Rather than choosing additional tools based on your vendor’s limitations, buyers now select from hundreds, if not thousands, of best-in-class products to fit their needs. The popularity of plug-and-play software and ease of implementation has led to an explosion in SaaS purchases and usage. 

The competition is fierce, so providers no longer hide their pricing plans from their websites. They need to be very transparent about their functionality, features, and security measures.

3. Freemiums, premiums, and more: everything is a subscription

Digital procurement software has an entirely different contract and payment model than traditional procurement. It’s called the subscription model. Instead of on-premise solutions, procurement can buy and own, typically with a maintenance contract.

Subscriptions offer flexibility. Procurement can decide when to change vendors based on how much value they deliver instead of focusing on the sunk cost. This enables companies to stay nimble, especially with month-to-month subscription agreements. Companies can move quickly to another platform rather than pulling out of an entrenched legacy system. 

Subscriptions can also be quite problematic. Anyone can create a seven-day free trial, but that doesn’t mean people actually use the account. It’s easy for an employee to purchase on behalf of their company and then exit the tool and forget their contract.

We typically see this with freemium business models. Procurement should be wary of “free” trials that require buyers to enter credit card information before activation. Businesses can commit to a subscription contract for a month or even a year.

How is digital procurement different from traditional procurement? 

Now procurement teams are faced with two choices: either acknowledge and adapt to the new digital procurement methods or stick with the old traditional methods, which no longer make sense.

Here’s how you can make the right choice.

Digital procurement complements the new SaaS buying process. A good digital procurement platform creates a central place to monitor every application and subscription.


Vendor management lowers overall costs and helps determine which tools offer the right value for their cost and can be removed entirely from the tech stack. It also helps consolidate data across the organization so leaders can analyze how tools interact with each other across their technology stack.

Modern procurement also sees decision-making repeating itself month after month and year after year. You can think of almost any subscription renewal as an autonomous purchasing decision.

The result? Smart buyers who want to optimize their spending at every stage of their buying journey. Digital procurement also mitigates risks stemming from what we call “rogue digital procurement”.

The risks of rogue digital procurement

While purchasing SaaS tools is easier than ever, it can become somewhat free-for-all without a digital procurement platform.

Employees can implement SaaS tools themselves at the click of a button – all they have to do is accept the terms and conditions (which, of course, most of us read in full, right?). This can pose security risks and generate hidden costs, also known as shadow IT and dark billing.

Shadow IT

Shadow IT is software purchased without the involvement of the IT team. With so many SaaS tools available and without a central SaaS management system, shadow IT can quickly accumulate, creating significant risk for the company. This means the money goes out the door undocumented, leaving organizations vulnerable to security breaches.

Decentralized SaaS purchasing further makes it even easier for shadow IT to sneak in. Centralized teams usually buy tools like Google Suite, Slack, Zoom, and payroll providers. But the employees directly purchase hundreds of other tools that don’t undergo compliance checks before being integrated into the rest of the tech stack.

This exposes organizations to regulatory and security compliance risks. Many tools don’t comply with data privacy policies, such as System and Organization Controls (SOC), the General Data Protection Regulation (GDPR), and the Health Insurance Portability and Accountability (HIPAA). 

Even if these regulations are not relevant to a specific solution, employing non-compliant solutions puts a company at risk of data leakage. Furthermore, employees can leave behind orphaned applications when they leave the company. Or worse, they still have access to these applications.

All of this points to the need for a digital procurement management tool.


Dark billing

SaaS waste is another major problem for companies without a centralized procurement process and system. This can lead to hidden expenses through dark billing patterns. With many technology vendors sticking to aggressive annual business metrics, such as increased net dollar retention, they resort to questionable billing practices to meet annual goals, including:

  • Not informing customers when a free trial converts to a paid account. A credit card is usually required when signing up for a free trial in hopes that users won’t miss the deadline and automatically switch to a paid account. The conditions accepted for using the trial version often make it impossible to withdraw from the contract.
  • Silent and recurring transactions. Most SaaS providers sell subscription services that require monthly, quarterly, or yearly upfront payments. While they should notify customers each time an upcoming charge is pending, they often don’t send any notification. These fees can go undetected if businesses don’t verify their bank and credit card statements.
  • Prorated billing. With subscription services, companies agree in advance that they will, in any case, pay a minimum amount for the year. Subscription can be based on licenses, API calls, or data consumption. If the company doesn’t use all of the units purchased, it still has to pay for them. Also, they have to pay additional fees if they exceed the contracted units.

Why you need a digital procurement platform 

A digital procurement platform ties traditional procurement to the modern SaaS world. It provides an overview of all purchases, tracks usage to determine which tools are valuable and when they need to be trimmed, and provides a central location for enterprise teams to securely manage and view all SaaS tools.

With a digital procurement platform, you can optimize every aspect of the procurement process, especially in the following four areas.

Optimized tools 

Most companies adopt optimized tools for their daily work or fully switch to them. Proper sourcing and cost management is the next step. Process automation software helps streamline your procurement tool stack by tracking all costs, purchases, and suppliers, and reducing the manual work associated with orders, approvals, invoicing, and more.

Optimized costs

One of the most disorganized aspects of large-scale procurement is spending oversight. Businesses can optimize their costs with an up-to-the-minute view of the money spent and budget available, reducing redundant systems and contracts.

One of the easiest ways to optimize costs is tracking software consumption. Modern financial leaders treat every expense as an investment and measure usage and results. Don’t be surprised if more organizations start tracking how many Zoom meetings are held per paid license!

Optimized growth 

Centralized procurement tools make companies more flexible in purchasing by offering predictive and proactive sourcing. Most importantly, organizations can better partner with their vendors to fund strategic investments that move the business forward rather than deploying point solutions across the enterprise.

Optimized ownership 

As businesses grow, centralized procurement can become an obstacle, slowing teams’ ability to purchase and implement strategic systems. A procurement management platform can support teams through the procurement process while meeting policy and budget requirements. By freeing up staff and moving away from tedious approval workflows, companies can focus on what really matters – the work itself.

How to set up a successful digital procurement process

By now, you know what the modern procurement process looks like. But where and how do you begin? Here are some best practices to help you shake off traditional CD sourcing methods and become a digital procurement expert.

digital procurement process

Source: Quolum


1. Prepare in advance

Businesses can keep track of all digital purchases with SaaS spend management platforms. These platforms can support three specific areas:

  • Software license management: Monitor user license adoption and consumption metrics for each SaaS provider. Know when a tool is used or wasted.
  • Software vendor management: Instead of bringing in SaaS vendors only during a problem, such as overage charges or acceptance issues, build a strong vendor relationship that will help your business get the best prices, leverage all features, and seamlessly renew your agreements.
  • Software spend management: Control costs and plan for strategic investments. IT centralizes spend management for every software connected to your technology stack, making it easier for different business units to buy what they need. 

2. Assess your current SaaS spend

The next step to successful digital procurement is auditing your existing technologies. Find out what your teams use with these steps:

  • List your applications.
  • Identify new applications since you last checked your tech stack.
  • Track logins and usage. For example, the licenses and functions used.
  • Measure changes in logins and activity over time to determine each application’s value.
  • Plan and visualize software renewals to identify where cancellations or downgrades can save money.

3. Involve the right stakeholders

Digital procurement cannot take place in isolation. It’s important to have stakeholders from each team involved when deciding the tools to buy, how much to buy, and whether to renew your agreement. These stakeholders are:

  • CTO or CIO
  • Procurement team
  • Finance team
  • Legal team
  • Department leaders
  • IT manager or SaaS manager
  • End users for validation 

4. Prioritize contract negotiations 

You can purchase digital products in two ways. The first is click-through agreements, and the second is contract negotiations. Click-through agreements don’t offer concessions on prices, fees, payment plans, or security commitments.

By negotiating a contract directly with a vendor sales representative, organizations can validate compliance requirements, secure rebates, and mitigate data breaches and indemnity.

Adapting to the SaaS world

Traditional procurement processes are no longer compatible with the cloud-based SaaS world. Forward-thinking leaders can take full advantage of the best proactive and predictive technologies by moving away from outdated, unregulated procurement to digital procurement. 

After all, we live in a world of endless SaaS solutions and tools with incredible potential for growth and problem-solving. It’s time for procurement methods to catch up.

Is software spend burning holes in your wallet? Find out why companies struggle with software inventory and avoid overspending on SaaS products.


Exclusive: Spirit delays shareholder vote on merger hours before meeting to continue deal talks with Frontier, JetBlue –




Spirit Airlines says it will decide on competing JetBlue, Frontier bids before the end of June

#Spirit #delays #shareholder #vote #merger #hours #meeting #continue #deal #talks #Frontier #JetBlue

A Spirit Airlines plane on the tarmac at the Fort Lauderdale-Hollywood International Airport on February 07, 2022 in Fort Lauderdale, Florida.

Joe Raedle | Getty Images

Spirit Airlines on Wednesday delayed shareholder vote on its proposed merger with Frontier Airlines until July 8, hours before a meeting scheduled for Thursday so it can further discuss options with Frontier and rival suitor JetBlue Airways.

It is the second time Spirit has delayed a vote on its planned combination with Frontier and extends the most contentious battle for a U.S. airline in years.

Spirit originally scheduled Thursday’s vote for June 10 but had delayed that for the same reasons.

Both Frontier and JetBlue have upped their offers in the week before the scheduled vote approached.

“Spirit would not have postponed tomorrow’s meeting if they felt they had the votes,” said Henry Harteveldt, a travel industry consultant and president of Atmosphere Research Group. Spirit didn’t comment on whether that is the case.

“We compliment the Spirit Board for listening to their shareholders, who clearly were not supportive of the Frontier transaction, and adjourning the Special Meeting,” JetBlue CEO Robin Hayes said in a statement later Wednesday.


“It’s clear that Spirit shareholders have now handed the Spirit Board an undeniable mandate to reach an agreement with JetBlue.”

“This is like the end of a soap opera episode,” Harteveldt added.

Frontier and Spirit first announced their intent to merge in February. In April, JetBlue made an all-cash, surprise bid for Spirit, but Spirit’s board has repeatedly rejected JetBlue’s offers, arguing a JetBlue takeover wouldn’t pass muster with regulators.

Either combination would create the United States’ fifth-largest carrier.

JetBlue has fired back at Spirit, saying it did not negotiate in good faith, setting off a war of words between the airlines as they competed for shareholder support ahead of the vote.

Frontier didn’t immediately comment about the postponed vote.

Spirit shares were up about 2% in afterhours trading, while Frontier was up more than 1% and JetBlue was down 1%.

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Exclusive: Get hype for the first images from NASA’s James Webb Space Telescope –




Get hype for the first images from NASA’s James Webb Space Telescope

#hype #images #NASAs #James #Webb #Space #Telescope

Very soon, humanity will get to view the deepest images of the universe that have ever been captured. In two weeks, the $10 billion James Webb Space Telescope (JWST) — NASA’s super expensive, super powerful deep space optical imager — will release its first full-color images, and agency officials today suggested that they could just be the beginning.

“This is farther than humanity has ever looked before,” NASA Administrator Bill Nelson said during a media briefing Wednesday (he was calling in, as he had tested positive for COVID-19 the night before). “We’re only beginning to understand what Webb can and will do.”

NASA launched James Webb last December; ever since, it’s been conducting a specialized startup process that involves delicately tuning all 18 of its huge mirror segments. A few months ago, NASA shared a “selfie” marking the successful operations of the IR camera and primary mirrors. Earlier this month, the agency said the telescope’s first images will be ready for public debut at 10:30 AM ET on July 12.

One aspect of the universe that JWST will unveil is exoplanets, or planets outside our Solar System — specifically, their atmospheres. This is key to understanding whether there are other planets similar to ours in the universe, or if life can be found on planets under atmospheric conditions that differ from those found on Earth. And Thomas Zurbuchen, associate administrator for NASA’s Science Mission Directorate, confirmed that images of an exoplanet’s atmospheric spectrum will be shared with the public on July 12.

Essentially, James Webb’s extraordinary capacity to capture the infrared spectrum means that it will be able to detect small molecules like carbon dioxide. This will enable scientists to actually examine whether and how atmospheric compositions shape the capacity for life to emerge and develop on a planet.

NASA officials also shared more good news: The agency’s estimates of the excess fuel capability of the telescope were spot on, and JWST will be able to capture images of space for around 20 years.

“Not only will those 20 years allow us to go deeper into history and time, but we will go deeper into science because we will have the opportunity to learn and grow and make new observations,” NASA deputy administrator Pam Melroy said.

JWST has not had an easy ride to deep space. The entire project came very close to not happening at all, Nelson said, after it started running out of money and Congress considered canceling it entirely. It also faced numerous delays due to technical issues. Then, when it reached space, it was promptly pinged by a micrometeoroid, an event that surely made every NASA official shudder.

But overall, “it’s been an amazing six months,” Webb project manager Bill Ochs confirmed.


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Exclusive: Fight for Spirit Airlines goes down to the wire with competing bids from Frontier and JetBlue –




Fight for Spirit Airlines goes down to the wire with competing bids from Frontier and JetBlue

#Fight #Spirit #Airlines #wire #competing #bids #Frontier #JetBlue

The most heated airline battle in recent years comes to a head on Thursday when Spirit Airlines’ shareholders vote on a proposed tie-up with fellow discount carrier Frontier Airlines while rival suitor JetBlue Airways circles with increasingly sweetened takeover bids.

Spirit has repeatedly rebuffed sweetened, all-cash bids from JetBlue, arguing that such a takeover wouldn’t pass muster with regulators, and has stuck with its plan to combine in an also-sweetened cash-and-stock deal to combine with Frontier, first announced in February.

JetBlue’s surprise all-cash bid in April set off a fight over Spirit that last month turned hostile.

If Spirit shareholders vote in favor of the tie-up with Frontier, it would put the carriers on the path to creating a budget airline behemoth. The two carriers share a similar business model based on low fares and fees for almost everything else from seat selection to carry-on bags.

A Frontier Airlines plane near a Spirit Airlines plane at the Fort Lauderdale-Hollywood International Airport on May 16, 2022 in Fort Lauderdale, Florida.

Joe Raedle | Getty Images

If shareholders vote against the deal it opens the door for a takeover by JetBlue, which would retrofit Spirit’s yellow planes to look like JetBlue’s, including cabins with seatback screens and more legroom.

“JetBlue does not have many options to achieve a step-change in growth, and that explains why JetBlue has pursued this deal so doggedly,” said Samuel Engel, aviation consultant at ICF.


JetBlue and Frontier have each argued their proposed transactions are key to their future growth, helping them better compete with large U.S. carriers and get fast access to Airbus narrow-body planes and pilots.

Either deal would create the fifth-largest U.S. airline.

Late Monday, JetBlue said it would raise the reverse breakup fee if regulators don’t approve a JetBlue takeover of Spirit to $400 million from $350 million. It also raised the amount it would pay up in advance to $2.50 a share, from $1.50 and added a 10 cent-a-share monthly payment to shareholders starting next year until the deal is consummated or terminated.

JetBlue previously offered to divest some assets in crowded markets to calm antitrust fears, but hasn’t said it would give up its alliance with American Airlines in the Northeast U.S., which Spirit has called out as a sticking point in that deal.

JetBlue’s latest offer came after Frontier late Friday raised the cash portion of its offer by $2 per share to $4.13 and increased the reverse breakup fee to $350 million to match JetBlue’s then-offer.

Spirit has stuck with the Frontier deal. CEO Ted Christie on Tuesday called the Frontier offer “very compelling” and told CNBC the airline wants to “focus our efforts on convincing the shareholders it’s the right thing to do.”

Proxy advisory firm Institutional Shareholder Services on Tuesday said that “the enhancements by JetBlue may be enough to offset the potential upside of the proposed merger with Frontier” but said it didn’t want to change its recommendation in favor of the deal with so little time before the vote.

Spirit postponed the vote from June 10 to continue deal talks with Frontier and JetBlue.

War of words

For weeks, JetBlue has argued that Spirit’s board hasn’t negotiated in good faith or fully considered its offer. It has repeatedly urged the budget airline’s shareholders to vote against the Frontier deal.

“The Spirit Board consistently ignored or refused to engage with JetBlue until faced with certain defeat on the original shareholder meeting date and then, in an attempt to avoid the widespread perception of its poor corporate governance, pretended to engage with JetBlue,” JetBlue said in a letter Wednesday again urging Spirit shareholders to vote against the Frontier deal.

Spirit has repeatedly denied claims that it hasn’t engaged with JetBlue in good faith.


“Our board believes [the Frontier merger] is the most financially and strategically compelling path forward for Spirit with a greater likelihood of closing,” Christie said in a video message addressing shareholders on Wednesday.

All three carriers have traded heated words as they try to win over Spirit shareholders before the shareholder vote.

JetBlue late Monday wrote a letter to Spirit shareholders detailing its latest sweetened bid and accusing Spirit of making “misleading statements” regarding its antitrust doubts.

Frontier fired back in a lengthy news release Tuesday saying that “a Spirit acquisition by JetBlue would lead to a dead end — a fact that no amount of money, bluster, or misdirection will change.”

The high drama is coming from an already-consolidated industry that hasn’t seen a major airline deal since 2016, when JetBlue lost out to Alaska Airlines for Virgin America.

“This is as much as a potboiler for the summer than any trashy novel,” said Henry Harteveldt, a former airline manager and president of of Atmosphere Research Group.

High regulatory bar

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