Media News Group Chief Procurement Officer Jeff Ball is using spend analytics and Suplari to renegotiate spend and payment terms with his top one hundred suppliers amidst 2020’s coronavirus crisis.  Understanding spend across the enterprise puts him in a better position to negotiate terms.  Suplari insights also enable Media News Group to capture rebates from suppliers in a time when cash flow matters more than ever.

Jeff Ball is the Chief Procurement Officer of private equity backed Media News Group (also known as Digital First Media), one of the largest publishers of locally based print and online media in the U.S.,and the third largest newspaper group in the country. Jeff has deep experience in supply chain, procurement and strategic sourcing from his time at 21st Century Fox, News Corp, KPMG and Mitchell Madison Group.  He is a strong advocate for zero-based budgeting as a critical component to a tactical procurement and sourcing strategy.

The following interview with Jeff Ball was conducted by Nikesh (Niki) Parekh, CEO of Suplari, the leading spend analytics and insights platform for modern procurement teams.

Nikesh: You’ve mentioned data being core to your operating approach. Can you talk a little bit about how you view spend analytics, what your team looks like, what the cadence around data is and how you leverage data and empower the organization with data to make better decisions?

Jeff: Well, without a spend analytics tool, you are operating blindly because the very first thing you need to do when you’re about to enter a sourcing event or negotiation is understand the fact base from which you’re operating. You better understand how you spend. I won’t say every dollar with the company, but you better know how that spend is distributed across maybe different functional areas, different product and service areas, different clusters, different geographies. And you better know it to the penny because I guarantee you there is going to be some disparity between what the vendor thinks they’re getting from you versus what you know they’re spending, and the lifeline is when you take that data and couple that together with information that resides in your contract, you’ll be able to answer negotiations from a position of strength. 

I’ll harken back to an engagement that I’ve done in a former role. When I was the head of procurement for a grocery retail chain — and a lot of folks that manage the different divisions and in a grocery retail chain like fresh product or meat and poultry and things like that, believe me, they have far from what’s considered an analytical approach to the relationship. So in one particular sourcing event, I think it was involving sausage, of all things. I was able to show with data, with invoices how the vendor was not abiding by the terms of the contract, because I simply plotted the underlying commodity indices on which the contract was based against our historic spend, and it showed a huge amount of deviation. From the onset of the negotiations, I had the vendor right where I wanted them because I was eventually able to say that, “Okay, you owe us two hundred fifty thousand dollars. Mr. Vendor, before we even start about any contract renewal discussions or anything else like that, you have not been abiding by the terms of the agreement and I have the data to back it up.”  That’s why you’ve got to know your baseline. And that comes from the spend analytics tool. If you can’t answer that question across your company — who’s spending what, with whom and for how much — they’d be able to query a database that is interconnected, that is real time and robust and query it, as I said, in multiple dimensions, then you are not going to be able to have that fact base from which you can operate.

Nikesh: How do you use the spend analytics tactically? Is it prior to negotiation? Are you putting together a category plan? Do you use it during budgeting? How do you use data in a day in the life of Jeff Ball?

Jeff: Yes, yes, yes. And yes, I inform stakeholders whenever they’re about to enter meetings that may have nothing to do with contract renewal or sourcing. People want to know what the spend looks like if the board has questions about top vendor spend. In the case of the current pandemic, we’re looking at our top vendors and figuring out how to restructure agreements. And obviously, when you speak about the top vendors, you’d better be able to say who the top vendors are and show the historic spend. So we certainly use it in that way in advance of budget meetings, and we will show the different clusters and functional areas where their top vendors are. We’ll make sure that all the contracts are accounted for. Well, we’ll have a call for contracts — we have a robust contract management process — just in case something has slipped through the cracks or there’s renegade spend out there. We’ll catch that, too. So we do a lot of ad hoc work. We do a lot of budget prep work with the tool. And of course, whenever we’re going to engage in a sourcing event like the one I just mentioned before, we’re going to rely on the spend analytics tool Suplari. We use it all the time. All the time.

Nikesh: How have you used Suplari at Media News Group?

Jeff: Well, first of all, the team is fantastic, and I think that makes the product fantastic. The team and the folks I work with at Suplari are excellent listeners. They’re empathetic. They understand the problems that I’m facing. They ask questions. They’re amicable.  They really understand the nuances of a blind organization, how I’m trying to help the CFO and how we’re doing zero based budgeting. We’ve just had a call last week about mapping our spending. Those 14 different spend areas I mentioned that we group our spend into as part of zero based budgeting. So the team is very receptive to the tool belt. 

Suplari is wonderful because it provides these dashboards that I give them access to beforehand. The most striking and current example is when we showed the CFO, a certain dashboard. We had multiple instances of the same vendor taking P-card payments and taking ACH payments. We love that report because that’s an opportunity to drive more volume through our P card, which gives us a better chance of getting repaid rebates with a P-card. And the fact that you have like 28 or 30 of these dashboards. It’s amazing.

The better we get with spend classification, the better we’re able to inform the home zero based budgeting initiative, the stronger the relationship will grow. And I think the need for more dashboard’s and more and different types of querying will ultimately evolve.

Nikesh: What is your future vision for the role of data in procurement?

Jeff: My dream, if you will, is to have this. I don’t know if I’ll call it a mega model or a mega system where you have the spend analytics tool tightly integrated with your contract database in such a way that contracts are mapped into the spend cube using optical characters. And all this tied into a framework for not only picturing your supply chain, but a picture of all the commodity indices that drive your spend base so that events are triggered almost robotically or automatically, so that, oh my gosh, there’s an event like COVID. What does that mean? Yeah, the price of aluminum. What does that mean for the price of fuel oil? What does that mean for the price of certain dyes that go into our ink? All of which comprise a large portion of our spend base and events. Sourcing events will then be automatically triggered. And then as they are triggered and executed, then that goes back and maps into the sourcing tool. So it all becomes this almost “plan-do-check-act” kind of process. Again, it’s a grand vision. I don’t think the technology is there yet, but I see Suplari being an integral part of that kind of procurement ecosystem.

Nikesh:  Any perspectives on how it’s kind of changed your world at Media News or, how it’s changed your perspective on supply chain and procurement?

Jeff: Well, that puts the generally murky problem of hold up costs into a very specific light. You quickly realize where vulnerabilities lie in your supply chain. Surely that’s that’s one aspect. More importantly, I’ve been focused on making sure that folks are safe and that they have the personal protective equipment and the hand sanitizer that they need. So I know everybody is going through that challenge, but it’s top of mind, of course, employee welfare. And secondly, I also see it as an opportunity to restructure agreements and reinforce or create case studies, exportable case studies for the zero based budgeting efforts. Because if you’re forced to talk to suppliers not only about strengthening the supply chain, but looking for pricing concessions and improved payment terms to ensure that the unique opportunity exists to do that and restructure the relationships in the right way. Not just, give me a better deal now because… But give me a better deal now because — by the way, not as a quid pro quo — I’m not going to do anything foolish on the back end and sign a 20 year agreement with you just so you can give me a 20 percent pricing concession. Now, let’s again go back to the zero based budgeting perspective. Let’s think about what we truly want to get out of this agreement or this set of vendors. So I’ve been very focused on our top 100 vendors, reaching out to them proactively and talking about the impacts of the crisis along these terms.

Nikesh: Are you starting by just leveraging spend analytics going down the list with the top 100 vendors, or are you going category by category? Are you looking at other data? 

Jeff: We have to look at it from the top 100 because, going back to knowing when and how you spend your money — that’s the way to do it. You know, sitting back and thinking, I’ll do this category because it’s easier and then I’ll do this category. No, no, no, no. I neglected to mention earlier that, you know, unless I’m doing something that’s focused on driving top line growth or improving the bottom line or improving cash flow with financials, I’m not really doing my job. So, you know, this comes into focus when you’re working for a private equity firm — very cash flow driven, very EBITDA driven — you know, in our case, it helps us create a war chest for acquisitions down the line. So we’re very focused on the financials. So we get to look at everything through a financial lens. I’m not saying that you disregard a company’s obligations to the community or to delivering your particular product. And ours is deemed a critical, necessary industry. We’re news-gathering. So we take that very, very, very seriously. So, none of this is to say that it’s just all about EBITDA, everything else be damned. Nothing could be further from the truth. It’s all about EBITDA so we can get the news out in time, so we can put content in from the paywall, so we can live to fight another day and grow the company and provide the customers with the right content and unique content at the right time, right place, while still offering a good advertising value proposition along the way.

Nikesh: Have you made any changes around spend or cash flow management because you’re private equity backed and very cash flow focused?

Jeff: It’s just kind of business as normal. Well, it’s business as normal, but with a bit of an edge. More of a mandate or a rationale to go back in and push the problem upstream. I’m having these conversations with members and I’m seeing some folks who, interestingly enough, on LinkedIn, talk about, “woe to the poor supplier and you need to partner with your supplier now more than ever and take care of them.” That’s all well and good. And it’s certainly true for smaller suppliers.

We don’t want to endanger anybody. We understand everybody’s in business to make money, and we want to keep our ecosystems intact and preserve and protect the small vendors so they can live to fight another day, too. But I don’t take the “I love my supplier” approach either. I’m a believer in pushing the problem upstream, particularly with some of the larger vendors who are in a much better position to weather this kind of crisis than we are. So if someone says to me, “I’m in the same boat as you, Joe, I can’t reduce your pricing. You’ve got a good price.” I don’t abide by that argument, and I insist they push the problem back upstream and better manage their own supply chain.I even volunteer to help them if they’re having trouble doing that.

Nikesh:  Any final thoughts, Jeff, around sort of procurement zero based budgeting during coronavirus?

Jeff: Well, as long as procurement keeps going out and elevating the function and touting the function and making sure everybody realizes how uniquely positioned it truly is, it becomes really, really a critical strategic function during these kinds of very trying demand-side economic shocks. 

Interested in seeing for yourself how Suplari’s powerful AI-driven spend analytics and insights can help you renegotiate with suppliers in times of crisis? Get a free demo now!