CPOstrategy’s cover star this month is procurement transformation expert, and CEO and Co-Founder of Tropic, David Campbell…

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Right now, procurement excellence is blooming. Experts determined to create change are coming to the fore and aligning procurement with SaaS to bring an end to the do-it-yourself way of working that decimates technology budgets. Tropic is one such game-changer, providing the tools to navigate software procurement’s complexities for competitive advantage.

Read the latest issue here!

The CEO and Co-Founder of Tropic is David Campbell, a born entrepreneur. He grew up on a cattle ranch in California and has always had at least one side-hustle on the go. Even as a child, he was running some form of money-making venture at any one time – but he didn’t necessarily consider that entrepreneurial pursuits were his calling until later.

CEO and Co-Founder of Tropic, David Campbell
CEO and Co-Founder of Tropic, David Campbell

Campbell studied English at UC Berkeley, and on graduating assumed he’d go into the arts. He’s a lifelong musician and writer, and he moved to a cabin in the woods to write the ‘next great American novel’. This venture, while it didn’t have the exact results he had hoped for, planted the seed in his mind that perhaps entrepreneurialism was for him because he loved setting his own hours and vision, creating a strategy, and executing that…

Elsewhere, we have exclusive interviews with supply chain and procurement leaders at the City of Edmonton and QSC, as well as the results of our first Sustainable Procurement Champions Index. We also have some exciting news from DPW too, ahead of its conference later this month.

Enjoy the issue!

There is an urgent need for the digitalisation of the procurement function, according to a new report from leading smart sourcing solutions organisation Globality

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There is an urgent need for the digitalisation of the procurement function, according to a new report from ProcureTech and leading smart sourcing solutions organisation Globality.

The report, which can be read in full here, states that 9/10 of global procurement leaders are committed to the urgent transformation of their operations and processes to become more resilient, agile and future-proofed in these uncertain and volatile times.

The report, which surveyed 170 global procurement leaders, claims that innovative and emerging technologies are being harnessed in order to better arm CPOs as they face global inflation, COVID-19 and geo-political crises such as the war in Ukraine.

Those surveyed also cited the growing need to fully digitalise operating processes in order to improve efficiency and boost cost reduction, while enhancing agility, resilience and value. 90% expected operational transformations within the next three years.

The report covers:

  • Digitalisation drivers
  • Future procurement operating models
  • Digital work in the future
  • Procurement process digitalisation
  • Digital supplier management
  • Challenges to progress
  • Value of digital adoption
  • Change manifesto

“Everyone recognises this shift, 99% of companies plan to make changes to their operating model over the next three years,” says the Globality report. “In 2020 and 2021, change has been thrust upon us all. In 2022 and beyond companies are owning the shift. In our research, we have seen the procurement leaders outperform their peers through a focus on resilience and cost in the short term. However, to maintain this competitive advantage in the long term, they need to adopt a new digital-led operating model.”

That said, 81% cited a lack of organisational support with regards to digitalisation, indicating a need for further engagement at some enterprises. 68% say that digitalisation will continue to increase business self-service, while 50% of organisations aim to move to a business procurement-centric organisation, acting as advisors and business partners versus executing transactional processes.

Content Credits: Globality & ProcureTech

Designed By: CPOstrategy

EyeCare Partners works in partnership with clinicians and healthcare leaders to achieve the best patient and business outcomes and this…

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EyeCare Partners works in partnership with clinicians and healthcare leaders to achieve the best patient and business outcomes and this has had dramatic results, such as a 1,500% revenue growth since 2015.

EyeCare Partners is growing through acquisitions, by providing strategic capital and operational support to its network of partner practices in 680 locations across 18 states. In February 2020, this growth was boosted when Swiss private equity firm Partners Group acquired a controlling stake in EyeCare Partners. “They’re a very interesting group,” he says. “They’re very heavy on investment, plus they have a very, very impenetrable and robust sustainability platform too, which is very near and dear to my heart through my time at Unilever,” This level of growth is fuelled significantly by increasing demand for eye care over the longer term, driven by an ageing US population and an increased incidence rate of eye diseases. But this level of growth requires an agile and resilient operational enterprise.

Our cover story reveals a massive procurement transformation programme at Zendesk

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Procurement transformation is the hot topic this month as we speak to Rendi Miller, VP of Strategic Sourcing and Procurement at Zendesk. Miller is a procurement evangelist and transformational leader who is clearly energised as she delivers meaningful change to the function at Zendesk.

“What I’ve always enjoyed about procurement is the visibility into what the entire company is buying, from Marketing creative services to IT and Engineering technology to office furniture and everything in between.”

“Procurement has insight to trends before they become mainstream that gives us the ability to research new partners, technologies and solutions to start addressing the needs of the business early on. Being in procurement offers an awareness to nearly every aspect of the company.”

Read the latest issue here!

According to Miller, trust is absolutely critical to success because without that, “there is no reliability, there’s no confidence and there’s no relationship”, says Miller. “That’s something I emphasise with my team. Trust must be earned, but trust is also given. I empower them to be the leaders that I’ve hired them to be…”

Elsewhere, we sit down with Procurement Excellence Lead at Antofagasta Minerals, Christophe Le Flech, to discuss the state of procurement in the South America mining industry, and the work he’s doing to make a difference. We also talk to Convex Insurance’s Head of Procurement & Tactical Change, Vivek Pai… and discuss diversity in the workplace with Silvia Simon, LATAM Procurement Senior Manager at Mercedes-Benz Brazil. Plus, we look at 10 ways to optimise your digital procurement scouting approach with ProcureTech.

Enjoy the issue!

Andrew Woods

Bringing a wealth of experience to the table, Kuvesh Ayer, CPO for the New York Metropolitan Transportation Authority discusses procurement transformation and being prepared for anything…

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Bringing a wealth of experience to the table, Kuvesh Ayer, CPO for the New York Metropolitan Transportation Authority discusses procurement transformation and being prepared for anything…

Tell us about yourself and your current role…
I’m currently the chief procurement officer for the New York Metropolitan Transportation Authority (MTA). The MTA embarked on a huge transformation effort across all its operating divisions to transform the organization into a more efficient, effective one.

I got a call one day asking if I’d be interested in this position and I decided, “Okay, it sounds interesting and very challenging,” and decided to throw my hat in a ring. Lo and behold, it’s two years down the line – it’s gone like a flash. Overall, my responsibilities include managing the MTAs procurement and sourcing operations, which also include the logistics, warehousing, and distribution aspects...”

Procurement transformation is at the heart of our chat with Tod Cooper, Director Procurement at the Department of Corrections in New Zealand

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This month’s exclusive cover story features Tod Cooper, Director Procurement at the Department of Corrections in New Zealand, who reveals all regarding the strategic restructure of the procurement function.

Read the latest issue here!

Procurement transformation is at the heart of our chat with Tod Cooper, Director Procurement at the Department of Corrections in New Zealand
Procurement transformation is at the heart of our chat with Tod Cooper, Director Procurement at the Department of Corrections in New Zealand

Most of us like to think that if we were presented with the chance to do something positive and societally significant for our country and its indigenous people, in particular, we would.

And that’s exactly the opportunity Tod Cooper, Director Procurement at the Department of Corrections in New Zealand, has grasped with both hands, with the department’s dedication to supporting Māori. 

Business transformation through leadership has been a major part of Cooper’s working life, preparing him for the challenges he’s faced at the Department of Corrections.

“It’s a big personal passion for me,” he says. “I’m not a guy who likes to sit still. Continuous improvement is a big thing. I’m always asking myself how we can make things better, looking at new ways of re-engineering, and getting good people around me who can enact my vision of things.

I’m a typical extrovert who’s easily distracted by the next thing, so it’s really important to have a good leadership team around me that understands the vision and can pull me back in.”

Elsewhere, we also speak with Dean Bennett, VP of Procurement, and Mike Cowling, VP of Global IT at BeiGene, about the benefits of a strong collaboration between procurement and technology, and what makes the company so special. Plus, we have an exclusive ‘provenance in the supply chain piece’ from IBM’s Blockchain Leader, Winston Yong.

Enjoy the issue!

Andrew Woods, Editorial Director

Welcome to the first CPOstrategy of 2022! We decided to kick off the new year in style with our best…

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Welcome to the first CPOstrategy of 2022!

We decided to kick off the new year in style with our best issue yet!

Our exclusive cover story features a fascinating discussion with Sean Park, CPO of software organisation Splunk, talks us through transforming the procurement function from one that was deliberately immature, to the powerhouse of efficiency it’s now becoming.

Read the latest issue here!

When Splunk brought Park in to join the team, he knew it was time to make a change and get serious about the bottom line. The decision was made to put in place a more centralised procurement and sourcing function; Splunk was rapidly growing, and it didn’t want friction, but rather controls and guardrails in place to scale the company. It was very much a natural evolution for the business – a pattern Park has watched occur before. This put him in an ideal position to push the new vision forward.

“The first step was to undertake an assessment of the function,” he says. “What are our strategic objectives? How does that fit in with the corporate objectives, or those of the finance team? What are our processes and policies? How are we resourcing the organisational structure? How do we source? Do we want a category management structure or a business unit focus?”

Elsewhere, we have an incredible rollcall of equally fascinating articles on Atotech, Beeline, Delivery Hero, plus an engrossing selection of Procurement Leaders’ procurement transformation success stories. Plus, much, much more.

Enjoy the issue!

Andrew Woods, Editorial Director

Nick Pike, Chief Revenue Officer at Vizibl discusses how companies should find their new normal, build supply chain resiliency and innovation and how there are no second chances if your supply chain is not reliable.

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Innovation in procurement technology has not moved on much in the past decade, however the impact of COVID-19 and supply shortages expected as a result have certainly focused minds and shone a light on procurement sourcing. In fact, according to the UN’s Deputy-Secretary-General, Amina J. Mohammed: “Companies should focus on scaling up production, making sure supply chains are reliable.”

Finding the route to the ‘new normal’

What we are seeing is that organisations are trying to get a handle on the route back to the ‘new normal’ and emerge out of this crisis stronger than before. This means we will see a couple of years of real accelerated change, in fact according to Arvind Krishna, CEO of IBM, COVID-19 is likely to push companies to speed up their adoption of modern technologies like artificial intelligence and cloud.

For many procurement and supply chain professionals, the dramatic events of the last couple of months – including lockdowns, quarantine, production stops – were a wake-up call. Following the firefighting mode during the pandemic, companies have realised that they can no longer afford to be unprepared for such an event in the future.

Building resiliency into the supply chain 

Securing the supply chain to ensure that it is not negatively impacting the ability to meet customer commitments will be crucial. CPOs & CSCOs will want to know if there are any supply chain issues so they can quickly source alternative solutions. They also want to know what projects they need to prioritise following the crisis because, compared to earlier in the year, priorities have more than likely changed.

CPOs will be keen to understand what key projects they need to undertake to drive the organisation’s revenue and success. Outside of this, CPOs & CSCOs will also be looking at how to extend and enhance their supply network and how they can better understand their dependence on that network. Ultimately, short term they will be looking at how they transform their supply chain risk management processes and build in resiliency to not only survive but thrive. 

To this point, Deloitte recently published an excellent overview around managing supply chain risk during COVID-19, and I would highly recommend this report to anyone involved in developing improved supply chain practices for their business.

Resiliency will be the post COVID-19 watchword

This need for resiliency provoked us to develop a bespoke version of our Vizibl Supplier Collaboration and Innovation solution (Vizibl Resilience) that focuses on the need for companies to address these issues. We expose the critical projects that customers need to work on in the supply chain and have easy to use dashboards to be able to report critical information to the Board.

It is important to ensure that everyone is sharing information in an efficient way rather than individual-by-individual via email or phone. Businesses need to have the right collaboration technology to underpin their procurement sourcing, to solve problems faster. For many CPOs working remotely with their teams, perhaps for the first time, this level of shared visibility is vital.  

Vizibl Resilience ensures that all communication, actions, and results from vendors working throughout the supply chain are captured in real-time within a single, easy-to-navigate platform. Dashboards give the leadership team transparency around where the business is at in any point in time on any number of projects. This enables the organisation to identify any issues within those projects and quickly triage those that need attention.   

Building supply chain innovation

Of equal importance to visibility, collaboration and control is building innovation into the supply chain. 

If we look at an industry such as telecommunications and take Vodafone as an example – historically, generating revenue for the business has been very network bandwidth-orientated. Now Vodafone and its peers are required to build additional services on top of these networks, enabling them to differentiate. We are working with Vodafone looking at the new projects and innovations which are coming from their suppliers such as Huawei, Google, Nokia and establishing how Vodafone can bring those to market faster. We have been helping them to identify which ones are aligned to their business goals and how they can accelerate these projects.  

Removing costly duplication  

But what we have seen historically is that as companies start to do this, so duplication creeps in. Often, we find that a very similar project is happening in a different part of the organisation at the same time. By deploying Vizibl, we are able to shine a light on the duplication and show that elsewhere in the organisation there are two or three projects which are the same or very similar, which could be brought together.    

While saving money is one aspect, the other aspect is about getting various project teams to collaborate and get projects to market faster. 

No second chances

In just a few months, COVID-19 has triggered sweeping changes in how we all do business. This massive scale disruption created a succession of different supply chain issues. These issues are not necessarily new, but what has changed is that, going forward, not being prepared for such issues is no longer an acceptable position. With supply chains firmly in focus boards are pushing for a more proactive approach and level of insight and visibility.

Now the CEO will be asking the CFO, COO and CPO: is the supply chain prepared? During the pandemic, companies scurried to secure supply. During recovery, the CPO needs to initiate measures that lead to preparedness. They’ll be no second chances for CPOs going forward. This means being prepared must be an integral part of sourcing and supply chain management.

Trying to keep pace with new technologies is one of the biggest challenges that most businesses are currently facing. Trends…

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Trying to keep pace with new technologies is one of the biggest challenges that most businesses are currently facing. Trends in digital transformation such as AI, the Internet of Things (IoT), 5G networks and the proliferation of chatbots are impacting businesses of all shapes and sizes. Even procurement, a department traditionally found knee deep in paper-based spread sheets and contracts is embracing these innovations and are using them to automate manual, laborious processes improve supplier relationships and improve transparency over organisational wide spend.  

So, as procurement takes advantage of the digital era, what’s likely to come next for the business function focused on delivering value and saving their organisations money? Will procurement finally get the business recognition it deserves? Here are my predictions on what’s to come for procurement:

  1. Quality data

Businesses are already making key decisions based on data analytics; however, data quality remains an ongoing challenge. In the future expect to see machine learning automatically cleanse data, ensuring that any errors or anomalies are corrected. For example, it will monitor and maintain supplier master data from contracts and the data used in pay runs.

  • Procurement to drive competitive business advantage

Thanks to new technologies providing greater business insights, procurement will have more influence than ever before on overall business strategy, growth and competitive advantage. Procurement teams will be required to move their focus from spend and cost control and focus more heavily on facilitating innovation, business agility and continuity of supply.

  • A move towards more agile procurement

Are we likely to see more departmental purchasing and procurement become a more centralised business function? I think so, and as a result we are likely to see better collaboration take place across the entire business. We could even see category managers become procurement specialists in their business units and build a network of gig workers to help satisfy their operational needs.

  • IoT, data and stock tracking

More and more businesses are likely to take advantage of IoT to enable ‘touchless’ procurement where stock levels can be monitored automatically. It can help businesses track items in their supply chain in real time and enable asset-intensive industries to link data across the business to their suppliers. Businesses will benefit from an enhanced data platform as it informs decision-making around spend and purchasing patterns, catalogue content, supplier portfolios and contract fulfilment.

  • RPA to go mainstream

Taking full advantage of Robotic Process Automation (RPA) procurement will be able to completely eradicate many of its day-to-day manual, high volume repetitive tasks. The procurement team can also say goodbye to hours spent compiling manual reports and instead use their valuable time more effectively and deliver real value to the business.

  • Improved insights into the potential for supplier risk

Procurement teams will have better insights than ever before into their suppliers thanks to a clearer understanding of data. Internal data compiled by procurement, supplier information, market and analyst data on supplier performance will be aggregated and analysed to deliver a true 360° view of supplier performance.

  • Procurement best practice to include Blockchain

We’ve seen Blockchain, the technology behind digital currencies starting to find its way into the procurement space over the past few years. I think in the future we’ll see it used selectively by procurement teams as it is expensive to develop and deploy. However, I think increasingly we’ll see it used in scenarios where there’s a need to track and trace to stop counterfeiting or a need for operational integrity.

By Daniel Ball, business development director, Wax Digital As a new year gets in full swing, there’s no better time…

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By Daniel Ball, business development director, Wax Digital

As a new year gets in full swing, there’s no better time for businesses to refine processes in need of improvement, and procurement shouldn’t underestimate the power of bolstering its own processes. Any attempts to make buying operations smoother, more efficient, and cost-effective are likely to play a part in wider business success.

When it comes to achieving personal goals, the key is to break it down into more manageable steps, and the same is true in business. Here are some targets procurement should set itself to get 2020 off to a blinder:

  • Get your contracts in order: The average organisation has 20,000-40,000 contracts, but what happens when the agreement needs to be reviewed or renewed quickly? How easy is it to obtain files regarding these arrangements as and when you need them? What’s more, businesses that are unaware of renewal dates or don’t have full visibility of supplier T&Cs risk putting themselves at serious financial and legal risk. Procurement teams should make a business case to introduce contract management software so that they have a single, secure portal that they can use to quickly access information such as expiry dates and service level agreements (SLAs). Not only that, the software will alert the procurement team when contracts are due for renewal, enabling the business to check if prices will go up and whether alternative suppliers should be found. The software is also crucial for verifying that contractors have the necessary certifications in place to ensure the business remains compliant.
  • Stop late payments: UK SMEs with late paying customers now have to wait on average 23 days to receive funds, doubling from early last year, according to finance company MarketFinance. The government is cracking down on late payments to SMEs, for example by empowering trade bodies to highlight organisations that are good or bad at paying promptly. To ensure invoices are paid on time, businesses should introduce a system, for example purchase-to-pay software; which automates the procurement process from ordering products or services through to making the payment.
  • Build better relationships with suppliers: Every procurement professional knows that supply chains can be complex and risky due to the uncertain economic landscape we currently operate in, particularly due to Brexit. That’s why it’s crucial to form close relationships with suppliers to mitigate the impact of unpredictable scenarios such as financial crises, weather disasters or political unrest. Using supplier relationship management software, the business will have a clearer view of the supply chain and is more likely to spot potential issues before they escalate into something catastrophic.
  • Bolster digital transformation programmes: Businesses will only reap the benefits of new procurement software if it’s underpinned by a clear digital transformation strategy. We surveyed 200 senior figures across many businesses and found that 72% of procurement professionals feel that the training they received after new technologies have been implemented was insufficient. Procurement should consult with senior managers and the IT department when new technology is introduced. They should work together to embrace the technology and ensure all users receive the training and guidance they need to use it effectively.

There is a lot of scope in procurement to take advantage of technologies that digitise laborious processes and increase visibility on costs and operations. With some clear goals that aim to improve different aspects of buying activities, businesses can make 2020 the year they free themselves from the shackles of paper-based spreadsheets and supplier contracts and use their time to add greater value to the business.

Eight out of ten procurement professionals claim that in the past decade, their role has changed because of new digital…

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Eight out of ten procurement professionals claim that in the past decade, their role has changed because of new digital transformation technologies implemented within their businesses.

Research from eProcurement specialists, Wax Digital, shows that 60% of respondents claim that technologies to automate slow and labour intensive processes has enabled them to be more productive in their job role. While less than a quarter (22%) said that it had made little difference to their overall efficiency.

Over half of procurement professionals (54%) claim that digital transformation has made improvements to their businesses by eradicating or streamlining traditionally manual processes. Just under a third (30%) of those surveyed are yet to experience any benefits or consequences from the implementation of digital technologies.

Nine out of ten respondents believe that there’s room for improvement when it comes to digital transformation projects within their industries. 40% suggested a need for digital experts to help their organisations deliver training, 26% would have preferred a longer roll out time for the technology and 18% thought better communication should have taken place while the technology was being introduced.

Daniel Ball, business development director at Wax Digital said: “Procurement professionals have seen significant changes in their job role over the past ten years due to the impact of digital transformative technologies. For example, many organisations, paper-based contracts, supplier records or even invoices have been digitised, saving businesses time and man-power resource and enabling all this information to be available at their fingertips.”

“In addition, supplier auctions and tenders are now also more automated than ever before – RFPs are sent out automatically while eAuctions allow procurement professionals to extract more savings within an automated auction setting to drive savings.

“With eProcurement tools generating more data than ever before, those working in the procurement industry have seen their roles become more strategic rather than just solely operational. These professionals are now required to have strong analytical skills, negotiation abilities and excellent stakeholder management”.

The full findings of the research can be found at: https://www.waxdigital.com/resources/digital-transformation-report

Almost three quarters (74%) of procurement professionals admit that their transition to eProcurement technologies could have been smoother if they’d…

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Almost three quarters (74%) of procurement professionals admit that their transition to eProcurement technologies could have been smoother if they’d had more support from a dedicated expert according to exclusive research from Wax Digital. 

The eProcurement specialists, surveyed over 200 senior professionals in IT, HR, Finance and Procurement and nearly half of the buying professionals quizzed believe that more training would have boosted their business’ digital transformation experience. And just over a quarter think it would have been better to introduce these new technologies over a longer period of time.

72% of procurement professionals have received either partial training or no training in new technologies after the digitisation of manual processes within their businesses. Yet, 28% said they have received enough training, with one in ten claiming that the process could not have been improved.

The study results also suggest that procurement’s roles and responsibilities have changed now they’re increasingly taking advantage of digital technologies. Eight out of ten procurement professionals claimed that new technology has changed their job role over the past decade. However, 60% believe that the adoption of digital technologies has increased their overall productivity.

88% of procurement professionals said that their company benchmarks either as average or below the industry standard for digital implementation. This viewpoint differs considerably from the responses from IT and finance as the research shows that they believe their businesses are meeting or exceeding standards.

Daniel Ball, business development director at Wax Digital, said: “It’s great to the see productivity gains being achieved by procurement through the adoption of digital technologies. Streamlining slow, laborious manual processes will simplify tasks such as invoicing, supplier sourcing and contract management; freeing up time for the team to work on other projects across the business.

“Any organisation going through the digital transformation process needs a dedicated expert on board to help champion all things digital in the business. Their role would be to support other employees as they get to grips with new technologies and help them to embrace the digital transformation process by offering first-hand experience and expertise, as well as coaching them on best practice. This approach can help organisations make the most of their new digital technologies and help ensure the transition is a success, improving productivity and efficiency across the organisation”.

With constant innovation and marketplaces changing faster than ever before, procurement is undergoing its own transformation. Increasingly, companies are looking…

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With constant innovation and marketplaces changing faster than ever before, procurement is undergoing its own transformation. Increasingly, companies are looking to support faster, decentralised procurement functions that will in turn allow for decentralised decision making. Here we look at 5 key shifts in procurement for 2020, as detailed by Gartner.

Value Drivers: From risk mitigation to leveraging knowledge

Businesses have been investing in new technologies in order to better understand their operations. Data capture and analytics have allowed companies to make informed business decisions, based on insights from data analysis. In recent years, the focus of this analysis has been on risk mitigation and cost reduction. Over the next year, business will begin to leverage the knowledge it has gained on spend, suppliers and markets in order to better identify new sources of value and eliminate inefficiencies.

 The role of procurement: transactional to strategic

The very perspective of procurement has changed radically over the last decade. Companies have almost begun ‘waking up’ to the notion that procurement is no longer a simple cost centre and in recent years, more and more of them have placed procurement at the heart of their operations. Over the next year, procurement will continue this evolutionary journey as businesses will shift it further, taking on more high-value work and focusing more and more on ‘top-tier’ buys. This will see experienced category managers spending more time developing category managers throughout the business, with the skillsets changing to include process expertise and coaching others.

 Business role: business partners enter the game

With the role of procurement becoming increasingly strategic, the lines between traditional procurement professionals and separate business units are blurring. More and more business units are aligning to the procurement function, taking on more responsibility and combining their specific expertise with that of the procurement role. As a result of this, procurement will enhance its training and coaching capabilities to help ease business partners into a position where they can source on their own. New tools and processes will be defined in order for business partners to execute sourcing events independently and mechanisms will be put in place for evaluating sourcing discipline executed by the business.

Delivery model: a centre of excellence

The very model of procurement will change, shifting towards a model defined by a CPO, Category Manager and Procurement process experts. What this ultimately means is that experienced procurement managers will conduct the most important purchases/buys and the procurement process experts will provide guidance to the business units. Overall, procurement will develop a better understanding of the varying levels of business partner sourcing discipline, meaning that the overall team will focus on process excellence and less on specific category knowledge.

Resources:  investing in people and technology

Investing in people, skillsets and talent is nothing new, but the way in which procurement will invest in its people and its technology will change. Reallocating budgets from outsourcing and corporate overhead will see procurement look towards professional and analytics skillsets. Technology investment on the other hand will shift to include robotic process automation software and customer experience technology. This will see greater use of customer experience experts and an increase in professional advisory skill sets.

Listen to the podcast here! In the latest episode of The Digital Insight, George Booth, Chief Procurement Officer at Lloyds…

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Listen to the podcast here!

In the latest episode of The Digital Insight, George Booth, Chief Procurement Officer at Lloyds Banking Group explores risk assurance and whether it’s become a top priority for the CPO of today. 

George also talks about how big data, AI, and blockchain are redefining the sourcing function and in turn, redefining the role of the procurement professional. We also discuss how, in the digital age, balancing the need to identify and onboard new fintechs with a need to protect the business from inherent risks cause significant challenges, but also opportunity.

Written by: Eman Abouzeid, Global Procurement and Supply Chain Professional Negotiation is a two-way communication skill. One person has one…

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Written by: Eman Abouzeid, Global Procurement and Supply Chain Professional

Negotiation is a two-way communication skill. One person has one price or idea in mind, while the other person has a different price or idea. Therefore, negotiation is defined as a discussion with the aim of ultimately agreeing on a price or outcome that is acceptable to both parties.

It may be that both parties get 100% of what they set out to achieve, or that one person gets exactly what they want and the other person does not, or that a third outcome is agreed that goes some way to meeting the requirements or expectations of both parties. Of course, there will also be situations where the parties cannot agree and the deal is not done.

As a procurement professional, you would probably associate negotiation with commercial negotiations of price and other contract terms (payment, delivery, quality, and so on). However, negotiation is a fact of life, everyone negotiates something every day. Negotiation is a basic means of getting what you want from others, it is a back-and-forth communication designed to reach an agreement when you and the other party has some interests that are shared and others that are opposed.  

Negotiation is partly an internal process (e.g. when buyers negotiate with user departments over the details of a requisition), and is partly external process (e.g. negotiations between buyers and external suppliers).

In this article, we will explore the process of negotiation and some of the techniques that can be implemented, in order to ensure having an effective and successful negotiation process with different parties.

Negotiation typically follows a set process with the following five key steps:

1. Preparation and planning

Both parties will prepare and research the information needed to confirm their position. They also need to consider the history of the negotiation – how they got to where they are today. It is important to consider what the desired outcome will be but also to consider the starting position for the negotiations – price, terms, etc.

2. Defining ground rules

Each party needs to know what is expected of them, for example, by deciding:

  • Where the negotiations will take place.
  • If there are any time constraints.
  • If there are any issues not for considerations or off limits.
  • What will happen if an agreement is not reached.

3. Exchange information: clarification and justification

Each party explains their position. In the case of a supply contract negotiation, the buyer will describe what they want to purchase, and the seller will describe what they offer and what the benefits will be for the buyer. Having prepared thoroughly for the negotiations each party should have all the information required to educate the other party.

4. Bargaining and problem solving

This is where the ‘give-and-take’ of negotiation happens. It needs to be an open exchange with both parties seeking a solution that will be worthwhile for each other.

Eventually, they should agree on an outcome.

The ideal solution should be a ‘win-win’ situation where each side feels they have achieved something that satisfies both parties’ interests; in this case, they may build a lasting and productive relationship.

However, where the buyer has the power and there is an alternative supplier that will fully meets the buyer’s needs then there is nothing wrong with a win-lose for the buyer. Not all transactions require collaborative and long-lasting relationships.

5. Close: commitment and implementation

This step is about clarifying the agreement and starting to put in place what has been agreed by recording the details, including the timescale, and how it will be implemented.

In a business environment there is likely to be a contract which each party will need to sign. There may be some further negotiations over detailed terms of the contract that may not have been covered in the main negotiation process.

Negotiation personalities:

In your negotiations with others you will encounter several different approaches, which may be related to the negotiator’s personality, or related to the context and circumstances of the negotiation. You can consider these as being on a scale of hard and soft, and open and closed as demonstrated below:

  • Hard: tough and challenging negotiator.
  • Soft: easy to get along with but may say ‘yes’ just to avoid conflict.
  • Open: very trusting and open – and assumes others to be the same.
  • Closed: may be cautiousandapprehensive about sharing any information.
  • Open, hard: will listen to the other party, but may still stick to their position.
  • Open, soft: will trust and follow the other party.
  • Closed, hard: may stick to a rigid stance.
  • Closed, soft: cautious but willing to listen.

It is important to be aware of your own style as well as that of the person you are negotiating with, when you are willing to adapt, you will achieve the best rapport.

How to handle negotiations successfully:

When negotiating, keep in mind the following advice and tips on how to deal with the negotiation process.

Listen:

  • Listen carefully and observe the other side’s point of view.
  • If you do not listen carefully, you could miss opportunities.

Analyse:

  • Analytical skills are helpful for assessing the situation as negotiation progress.
  • They are also useful when problem solving if negotiations reach a blockage.

Be professional:

  • Keep careful control of your emotions even if other negotiating parties become upset or annoyed.
  • Never promise something that cannot be achieved.

Communication:

  • To succeed you must be able to clearly and effectively put across your position to the other party.

Patience:

  • Always respect the other party and be patient with them, even if they are not patient with you.
  • The other party may need to take more time than you would like to consider your proposal.
  • Remain calm and in control of the situation to maintain a good business relationship.

Problem solving:

  • Identify problems, issues, risks and challenges when they arise.
  • Do not try to evade them – work out a solution.

Persuasion:

  • Getting someone (or a group) to do something that you want them to do.

The main criteria of effective negotiations:

Negotiation is considered as an “effective negotiation” if it has the following four criteria:

1. The negotiation has produced “a wise agreement” – one that is satisfactory for both sides, and divisive issues are satisfactorily resolved.

2. The negotiation is “efficient” – no more time-consuming or costly than necessary.

3. The negotiation is “harmonious” – fosters rather than inhibits good interpersonal relationships.

4. “Working relationships or business partnerships” are preserved or even enhanced.

In conclusion:

Negotiation is “the art of letting the other person have it your way!” you should get the deal you want whilst making your opponent feel the same.

Short-term victories will not create long-lasting business relationships. Both sides must leave the negotiation table believing that they have gained. Therefore, no skill is more central to your professional career than the skill of negotiation, and as negotiations expert Chester L. Karrass famously put it, “In business, as in life, you do not get what you deserve, you get what you negotiate”.

I hope this has been of interest to you and furnished you with some knowledge to consider.

Read the latest issue here! This month’s exclusive cover story features an interview with Joseph Lee, Vice President of Procurement…

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Read the latest issue here!

This month’s exclusive cover story features an interview with Joseph Lee, Vice President of Procurement and Subcontracts at AECOM Management Services, who tells us how the company optimises its procurement to become a strategic sourcing organisation.

Lee leads all procurement and subcontracting for AECOM’s Management Services Group — an organisation with more than US$4 billion in annual revenue and operations in more than 25 countries. Joining the business in early 2017, Lee was tasked with creating a plan to transform the procurement organisation and to assess it in its existing format. Here, he found that procurement was still viewed as something of a cost centre.

“They received requirements and executed them. That was it,” he explains. “There was little value-add; no metric, performance or accountability to the team. After assessing, I recommended we stand up a strategic organisation; one more forward-leaning that could negotiate long-term agreements in order to create efficiencies in our transactions…”

We also feature an incredible article with Maytham Al-Khairulla, VP of Business Support at OSN, while negotiation techniques in procurement are discussed by Eman Abouzeid, Global Procurement and Supply Chain Professional.

Enjoy the issue!

By Daniel Ball, business development director at waxdigital.com Ever heard the joke that the only way to be popular in…

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By Daniel Ball, business development director at waxdigital.com

Ever heard the joke that the only way to be popular in procurement is to buy a dog and take it in to work? Well, times are changing, and procurement’s popularity is on the ascent as it is recognised for its positive contribution to both the environment and society. Many of today’s savvy procurement professionals realise the advantages of adopting new approaches to how they buy goods and services.

Once perceived as the team that simply saves the business’ money, procurement’s role is changing, as both sustainable and ethical purchasing practices increasingly become business priorities.

Legislation such at the UK Climate Change Bill is forcing procurement to address environmental issues such as plastic reduction and biodiversity. And, more and more customers are now making their buying decisions based on their suppliers’ sustainability credentials.

While sustainable procurement can make a big contribution to an organisation’s Corporate Social Responsibility (CSR) efforts, some businesses are making change of a different kind through their purchasing.

Ethical sourcing is a way for organisations to make positive societal change by choosing to buy from social enterprises which support those most marginalised from the workforce. According to Social Enterprise UK there are over 100,000 social enterprises in the UK. They employ two million people, contribute £60 billion to our economy and offer their services across most sectors. Just like traditional businesses, social enterprises work to make a profit but use it to help create positive social change for those most in need of support.

As well as contributing to good causes, engaging with social enterprises can also have a positive impact on the external and internal perception of a company. According to an Ipsos Mori poll, 84% of consumers believe that companies should do more for society. And, working with social enterprises can have a positive impact on staff morale too with 75% of millennials claiming they would agree to a pay cut to work for a more socially responsible company.

From bathroom soap to recruitment services, the UK’s social enterprises are well-equipped to support numerous business needs. Here are a few examples of social enterprises supplying to businesses throughout the UK:

Soap Co. is an ethical brand that creates cruelty-free body care products, including soap for office washrooms. It provides training and work opportunities for people who are visually impaired, or with other disabilities.

Graduate Planet, is a recruitment business which reinvests it profits into local environmental initiatives. 

Auticon is a national IT consultancy exclusively employing autistic adults as IT consultants.

Recycling Lives is recycling and waste management company that supports charity programmes for ex-offenders.

Working with social enterprises can sometimes be as easy as changing office supplies provider. Another business dedicated to changing lives, is WildHearts Group, a leading UK B2B social enterprise. It encourages businesses to make a positive social impact simply by coming to them for office supplies. Providing 35,000 everyday products that businesses need to buy anyway at competitive prices, its profits help funds the work of the WildHearts Foundation who support struggling female entrepreneurs in Africa and young people affected by social immobility in the UK. 

One CPO who works with the WildHearts Group, told us about the impact this approach to procurement is having on the organisation: “Social enterprises have revolutionised the scale of conversations procurement now has with key stakeholders in the business.

“We’ve found an effective way of making people feel good about procurement. We now have case studies demonstrating how we are contributing – for example, we’ve helped a Ugandan mother set up her own business. Borrowing just £40 enabled her to set up her own fruit and vegetable stall.  It’s no longer a conversation about a ream of paper but one about helping someone educate their kids. What’s not to like about that?”

As well as helping facilitate social mobility, there are many more benefits this ethical approach to procurement can bring to the business. Working with social enterprises doesn’t have to mean compromising on cost or quality, with many suppliers credited for their excellent customer service, competitive pricing, and innovative products and services. 

Crucially, it’s also becoming increasingly common for customers to only want to work with businesses who support social enterprises. WildHearts Group say  they often see organisations highlight their association with them in tenders to help them win the business.

Both sustainable and ethical procurement practices not only deliver both environmental and societal benefits but contribute to the success and motivation of the wider business too. But don’t underestimate the impact these approaches to purchasing can have on the procurement team too.

Another CPO told us that he’d met more senior managers at his business through working with social enterprises than he ever would have done so previously. Perhaps now CPOs can raise their profiles without having to buy a dog after all.

In a world awash with a seemingly never-ending list of technology buzzwords such as automation, machine learning and Artificial Intelligence…

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In a world awash with a seemingly never-ending list of technology buzzwords such as automation, machine learning and Artificial Intelligence (AI) to name a few, AI is one such technology that is moving away from simple hype and stepping closer to reality in procurement.

Here, CPOstrategy looks at 5 ways in which AI is being utilised in procurement…

This featured in the August issue of CPOstrategy – read now!

Efficiency and accuracy

Procurement, by its very nature, is tasked with handling huge quantities of spend and with spend comes spend data. Often described by leading CPOs as a repetitive task, understanding and sorting that spend data is now being achieved through the implementation of AI.

Through the use of AI, procurement teams can remove human error, increase efficiency and realise greater value from spend data.

Chatbots

One of the biggest ways in which AI is being implemented around the world is in the customer interaction space. In telcos, for example, customer support can now be handled via a highly developed AI chatbot that uses legacy data and context to provide real-time, and unique, solutions for customers.

In procurement, chatbots follow a similar path for both internal and external customers.  With tailored and context-aware interactions, chatbots create an omni-channel user experience for all stakeholders in the procurement ecosystem.

Supplier risk identification

Procurement and risk go hand in hand and one of the biggest risks is identifying and working with the right partner. Working in partnerships, which ultimately proves to be a failure, can be extremely costly and so AI is now being used to reduce the risk of failure.

Machine Learning technology, powered by AI, captures and analyses large quantities of supplier data, including their spend patterns and any contract issues that have emerged in previous partnerships, and creates a clearer picture of a supplier in order for the procurement teams to be able to identify whether this particular partner is right for them – without spending a penny.

Benchmarking efficiency

Benchmarking is key to any organisation’s ambition to measure and continuously improve its processes, procedures and policies. In procurement, organisations such as CIPS are used as examples of best practice in which procurement functions all over the world can benchmark against and identify any gaps.

Similar to supplier risk identification, AI can be implemented within ERP systems to analyse the entirety of data that passes through procurement and present this key data in easy to digest formats.

Examples include data classification, cluster analysis and semantic data management to help identify untapped potential or outliers in which procurement teams can improve their processes.

Purchase order processing/Approving purchasing

Procurement has evolved from its traditional role as simply managing spend into a strategic driver for a number of organisations all around the world.

As the role of the CPO has changed, technology such as AI has been implemented to free up their time from the menial tasks (such as PO processing and approving purchases), allowing them to spend more time in areas of growth. 

AI software can be used to automatically review POs and match them to Goods Receipt Notes as well as combining with Robotics Process Automation (RPA) to capture, match and approve purchases through the use of contextual data. This contextual data allows AI to identify and make decisions based on past behaviour.

Liked this? Listen to Natalia Graves, experienced Chief Procurement Officer, discusses the complexities of digital transformation in procurement!

Part four of a six-part supply chain masterclass with Frank Vorrath, Executive Partner of supply chain at Gartner. Frank explains…

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Part four of a six-part supply chain masterclass with Frank Vorrath, Executive Partner of supply chain at Gartner. Frank explains how to build a supply chain excellence operating system, enabled by a centre of excellence.

Prefer this in an audio format? Listen to the Digital Insight podcast!

Frank Vorrath, Executive Partner of Supply Chain at Gartner
Frank Vorrath, Executive Partner of Supply Chain at Gartner

One of the key things identified within your concept of a supply chain excellence operating system is two-directional thinking, where you’ve got people working in the business and people working on the business – could you elaborate on that, please?

Transformations are really driven by future growth ambitions of those organisations, or if they are looking and expanding into new areas and new business models. Lots of things are changing very fast and exponentially. If you look at that, that sets limitations for organisations to actually do the same things as they did in the past. From a structural point of view, your current capabilities won’t allow you to compete in the future. You have to think about how you are going to approach that.

There’s also a limitation in terms of resources. The concept of perform and transform is simple to understand, which means you still have to focus on your core business and create results and good performance, while at the same time transforming. The concept is almost like running a sprint and a marathon at the same time. If you think about what you can do with the same setup and structure you have without investing, and potentially a different set of excellences, then it’s probably stretching your current resources to a limit.

If you think about the transform activity you have to do as an organisation, you think more about what you need to do to be successful in the future. If you think about the sprints, you still have to focus on your core business and on day-to-day good performance, and you also need to think about what enables you to perform day to day, running these sprints, making sure you keep and stay focused on delivering performance end results to your business and to your customers as well meeting their objectives and needs, but also transforming the organisation at the same time and building the new muscles you need in the future related to the capabilities.

What sort of challenge does this balancing act, between the two areas, present?

If you do that with your current resources you have available in your business you may find yourself in a position that is too much a stretch for your resources: to be able to deliver on your expectations. Somewhere, you need to balance it. The question is can you balance that with your existing resources and the existing structure you have, or perhaps you have to set up a different structure – where you have people working in the business and people working on the transformation. Both are equally important to you as a business because one is really keeping the lights on and delivering the performance you need today, which is finding the capabilities you have to build for the future. That needs to be balanced. Is it easy? Probably not. But is it required? Absolutely.

Where does change management come into the equation?

With change management and transformations, it’s really shifting the mindset and the behaviour and actions towards generating more an improved and sustainable business performance and results. It’s about having clarity of the destination, and a clear understanding of why are you doing this, and what you want and need in order to transform.

The next important part of change management is role modelling. Your leadership plays such an important role here in championing the transformation with clear and defined specific communication and milestones. Taking people along with you on this journey and having an understanding of ‘walk the talk’, and being visible and aligned on a leadership level creates the pull in an organisation.

There’s also organisational capabilities, the resources I need, the financial commitment that an organisation has to make to transform, because it can be dependent on the maturity of that organisation. Sometimes you have to be able to invest first to generate the benefits later on. You have to be able to have governance in that model, which is strictly focused on priorities for the business as an outcome and is steering the organisation through that transformation. The culture and the mindset of the people, the knowledge and skills have to be in place, and it has to be somewhere measured and sustained.

Also, you have to be able to reinforce. How do you align your goals and objectives and your incentives structures on the two important activities, perform and transform, in a balanced way? Not just incentivising generating results today, but also incentivising transforming the organisation to be able to compete in the future. It’s not just continuous improvement. It’s building an operating system, considering what drives change, creating push and pull in an organisation, and really with the mindset of the future to improve, as well as building muscle, creating sustainable business performance and end results, and meeting the never-ending customer expectations in future.

How does a role model approach help overcome the challenges in change?

It has to start at the top of an organisation, which means you have to be very clear, very concise and compelling. People need to understand why you are doing this, and be very clear about the outcome, when you want to do certain things, and what it’s actually going to do for the organisation. Take people along the journey and bring them in a way in that they have a stake in the game, so they are able to participate and provide their input into the transformation. That’s really important when you start your change management and transformation.

You also have to somewhere create an excitement factor for your people to believe that the future you’re going to create for them is a future where they want to be part of, where they want to be proud of, so they are excited to actually take you as an organization forward into that future.

How do you bring the customer into the conversation?

It’s key to incorporate customers into it. Don’t be shy in asking your customer how can you serve them better. How can you create more a collaborative joint partnership together? It’s no longer about vendor and supply and customer relationship, it’s about a partnership on a more strategic level. As a business, if you’re able to figure that out and bring your key customers in, listen to them and make them part of it, or even make them a joint development in terms of building an operating system, even better. You may want to consider joint investments into building the capabilities you need in future, especially in areas when it comes to looking into talent related to emerging technologies, data, data scientists, etc.

You really have a scarcity and you have to build and think about how you want to build these kinds of talents in your organisation from a different perspective and different ways. You may want to do this jointly together with your customers, because they probably have the same needs like you have in their own business, and the same kind of limitation and challenges to find the right talents. Instead of just doing it on your own and being completely internally focused, combine the inside out with the outside in. The key in that is your customer or your customers.

How important is it to develop an end to end supply chain IT strategy and technology roadmap so that the technology and the procurement transformation are aligned?

You have to have an end-to-end view of your technology. Technology can’t be seen in isolation with what you are trying to accomplish with the strategic objectives of your business related to the value proposition you have. Technology and digitalisation, you can be taken from two angles and that’s what I’m seeing currently happening in the marketplace. On the one side, you see companies focusing and creating new business models through digitalisation related to their products and services, selling outcomes and solutions instead of selling products and devices.

On the other side, you see a lot of activity in terms of digitalisation in the supply chain. These two things are connected, but we also know that 70% of the initiatives currently in the marketplace are disconnected. Technology is creating new business models, using data to access and provide insights to your business for better and informed decision making. Data could also mean monetising that data and creating new business models. Technology, from your business process optimisation point of view, can create a new level of maturity in terms of efficiency.

That’s where a lot of companies are focusing on and deploying new technologies because they want to figure out if there are business benefits they can introduce to the business and to harness new capabilities and with automated processes that reduce time, errors, cost, and also increase the efficiencies they have in their business. To be able to do that, you need to have a blueprint and an understanding of where you are at currently with your technology landscape and your applications, and also where you want to grow in the future.

What is the overall journey of this centre of excellence system, where it starts with developing infrastructure, building supply chain excellence capabilities, and then reaching a stage where that supply chain excellence is woven within the organisation’s DNA?

The ideas of transform and perform, and the resource constraints that organisations are having by using the same resources has been recognised in the market widely and you have seen over the last couple of years more and more organisations actually building a centre of excellence. With a centre of excellence, you have to consider that there are different centres of excellence. Now you have to have a functional centre of excellence where you just focus on building the maturity in certain areas of your supply chain.

You could also have a logistics centre of excellence. You could have other centres of excellence, like a manufacturing centre of excellence. The goal is to design your centre of excellence and be aligned with the main activity across your whole value chain, which means if you are a manufacturing organisation and a supply chain organisation or procurement, you would organise your centre of excellence in a way that would incorporate the strategy element into that. There are different ways of structuring a supply chain centre of excellence.

My recommendation, if a business can afford it, would be to focus on end to end, rather than just functional, because if you just focus on functional excellence, again, your integration and collaboration across the different functions might be a bit of a challenge.

Is excellence an ever-moving target?

You always have to work on that. You’re never done.  If you really think about your plan of a transformation, does it stop after three years? No, it’s not going to stop.

What you’re hoping for when you had enough momentum, excitement and generated the results, is the building of a culture and a DNA. That is probably the longest part of a transformation which is never-ending, because if you think about it from a leadership point of view, when you build it with your team and operating system, you want to build something which is sustainable and not dependent on you as a leader or your team. It should be there, even if you move on. It should be part of the culture so that people and generations after can still build from what was built, to make it better.

Read August’s issue of CPOstrategy!

Our exclusive cover story this month features a procurement transformation at Aldar Properties, one of Abu Dhabi’s leading property developers….

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Our exclusive cover story this month features a procurement transformation at Aldar Properties, one of Abu Dhabi’s leading property developers. We caught up with Musbah Abu Jarad, Senior Vice President of Corporate and Assets Management Procurement to explore how Aldar Properties utilises procurement excellence.

Read the issue here!

Abu Jarad joined the business in late 2018 and did so at a time of procurement transformation for Aldar. “The procurement function within the company has evolved at Aldar from a cost function into a partnership function,” he says. “What this means is that we no longer look at suppliers as just suppliers to come in and provide services or goods and then leave. We look at them as partners, and ones who share our same environmental responsibility.” Over the last year, Aldar has invested significantly into its procurement function to define a clear strategic function.

Elsewhere, we have a revealing interview with Sammeli Sammalkorpi, the co-founder of Sievo, the world’s leading company focused on procurement analytics, exploring how it achieves this through AI and a client-focused approach.

Plus, features on ethical procurement, AI as utilised by CPOs and a supply chain masterclass with Gartner’s Frank Vorrath. And… our essential guide to all the best conferences and events from around the globe.

I hope you enjoy the issue!

Andrew Woods

By Alex Saric, smart procurement expert at Ivalua Organisations are under more pressure than ever before to innovate at speed,…

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By Alex Saric, smart procurement expert at Ivalua

Organisations are under more pressure than ever before to innovate at speed, ensuring they remain relevant in an increasingly competitive business environment. However, one of the barriers to achieving this is the constant drive to cut costs.

In today’s procurement landscape, cost reduction and innovation can no longer be viewed as mutually exclusive. Instead of focusing solely on remaining profitable, organisations need to view cost reduction as a sustainable practice that doesn’t block innovation. This misalignment between objectives means organisations must take more consideration when it comes to supplier management and adopt a more collaborative approach, investing in the right tools to help ensure innovation isn’t stifled by an overarching focus on cost reduction.

Innovation has become a top priority for organisations, but in order to deliver ground-breaking new developments, they must take steps to ensure they have effective supplier management that encourages and enables innovation.

Tapping into supply chain innovation

Suppliers should be a key resource for organisations looking to develop innovative ideas. According to the Institute for Supply Management (ISM), up to 65% of organisational innovation is sourced externally through various partners and suppliers. This means, in order to increase innovation, organisations need to better understand their supplier capabilities by tapping into the skills and knowledge base which will help to drive the business forward.

Despite organisations having access to this supplier information, many don’t use it. In fact, most organisations typically don’t get out enough to explore new ideas from their suppliers. They would much rather keep the innovation and creative thinking in-house with the marketing or planning department. Capgemini research on Supply Relationship Management reveals 60% of procurement departments do not interact with their suppliers through any source of social medium. This signifies a considerable amount of potential for growth and shows that resource is going to waste.

The report also found a severe lack of supplier relationships within organisations, with only 16% of Capgemini’s respondents having a corporate strategy and process in place to manage supplier relations. These organisations are failing to utilise the knowledge of their suppliers, resulting in missed opportunities to discuss new strategies or possible product ideas.

Lack of scalability limiting collaboration

The barrier to working alongside suppliers and putting processes in place is often due to a lack of scalability, with too many organisations collaborating via email or verbally with a handful of existing, strategic suppliers. By digitising supplier engagement, collaboration can scale across more suppliers and products for greater overall benefit. Poor technology adoption is a common barrier. Forrester research previously found that over three-quarters (82%) of organisations switched or are considering switching technology providers due to poor level of supplier onboarding (30%) and poor user adoption (27%). This has prevented suppliers from easily communicating with procurement teams or even bidding for contracts.

It is impossible to unlock innovation if the means are not provided to help suppliers get involved with innovation initiatives or suggest ways to sustainably cut costs or improve designs.

Currently, there are organisations that use recognition and collaboration to develop highly effective supplier relation programmes. General Motors (GM) are known forfrequently praising suppliers who have excelled or have a successful collaboration with GM to produce innovative technologies through their supplier programme. This system has helped GM to promote innovation and incentivise suppliers so they can feel rewarded and motivated to share their latest ideas and breakthrough technologies. Organisations that have a supplier relationship management programme in place are able to efficiently measure target outcomes, which promotes continuous improvement in collaboration with their suppliers.

Building a supplier ecosystem to foster innovation

In order to strike a fair balance between cost savings and other objectives such as sustainability and new product development, organisations need to move away from their cost-focused approaches and must instead adopt an entirely new way of managing their suppliers. It’s time for a more measured approach to supplier management, one that will help enterprises focus on diversity and innovation, and which will ultimately encourage sustainable cost savings driven by the supplier rather than the buyer.

However, this will be impossible to achieve without a reliable data foundation, to help organisations make accurate and informed decisions and weigh up their options effectively and accurately. By implementing smart procurement technology to clean up supplier data from multiple sources, organisations can gain 360-degree visibility across the entire supplier base. This will help to unlock a wealth of insights into contracts, orders, and invoices, as well as detailed information on suppliers such as risk factors, relationships and performance evaluation.

Organisations under pressure to innovate at speed can utilise this visibility to build deeper, more meaningful relationships with suppliers, allowing them to collaborate to create sustainable cost savings while also creating new products and services to satiate demand. As the speed of innovation increases in the future, savvy organisations must ensure that conversations about cost don’t become a barrier; otherwise, they risk more savvy rivals utilising their supply chain to rapidly deliver new products to market, leaving those that don’t in their wake.

Welcome to July’s packed edition of CPOstrategy! Read the latest issue here! Our cover story this month, features David Medori,…

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Welcome to July’s packed edition of CPOstrategy!

Read the latest issue here!

Our cover story this month, features David Medori, Chief Procurement Officer at William Hill who reveals how strategic procurement is aiding the global gaming giant…

During 2018, 600 million bets were placed with William Hill, further establishing its reputation as a world leader in gaming. Employing more than 15,500 people in 10 countries, the 85-year-old bookmaker and games provider is continually innovating new and engaging ways to bet and game, whether in shops, sports books, online or mobile devices.

Leading a procurement function in this world-renowned brand and operating on varying platforms in differing geographies is no easy task, whether your requirement is software, hardware or professional services. William Hill’s Chief Procurement Officer, David Medori, is responsible for procurement of all third-party goods and services, covering indirect and direct procurement. We met up with David at William Hill’s brand-new headquarters in Tottenham Court Rd, London, to see how the procurement function is transforming under his leadership…

Elsewhere, we spoke to Edgar Lim, Vice President of Technology and Procurement at EnterSolar to explore how a sound procurement philosophy achieves growth in a “solar-coaster” market. Jon Hansen tells us the 3 Obstacles To Digitally Transforming Your Supply Chain and we also catch up with Tradeshift co-founder Gert Sylvest, and CPO Roy Anderson, who reveal how their global open business platform is transforming the future for buyers and sellers.

We also list the top 5 key influencers in procurement and reveal the biggest events and conferences from around the globe.

Andrew Woods

With direct access to audiences across a global stage, social media has redefined the idea of influencers. Looking to tap…

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With direct access to audiences across a global stage, social media has redefined the idea of influencers.

Looking to tap into and explore this ever-growing resource, industry giants have their very own influencers steering and engaging the conversation. CPOstrategy looks at 5 leading procurement influencers as ranked by ProcurementiQ

Kelly Barner, Owner and Managing Director – Buyers Meeting Point

As the owner and manager of Buyers Meeting Point, Barner has spent the last decade providing the procurement industry with an unmissable events calendar, a blog that captures the current procurement discourse, a huge social media network, and a uniquely engaging podcast. Barner is the voice and the influential figure behind one of the most trusted sources of information for procurement practitioners and solution providers alike.

https://www.linkedin.com/in/kelly-barner-6884443/
http://www.buyersmeetingpoint.com/news
https://twitter.com/BuyersMeetPoint

Lora Cecere, Founder – Supply Chain Insights
Supply Chain Insights, of which Lora Cecere is the founder, is one of the most trusted resources of independent, actionable and objective advice for global supply chain leaders. Since the foundation in 2012, Cecere has sought to pave a new direction in building thought-leading supply chain research.

https://twitter.com/lcecere
http://supplychaininsights.com/
https://www.linkedin.com/in/loracecere

Tom Derry, CEO – Institute for Supply Management

CEO of one of the largest not-for-profit organisations in the supply chain world, the Institute for Supply Management (ISM), Tom Derry oversees the provision of market intelligence, certification, training and professional development to procurement and supply chain practitioners from all over the world. Derry also sits on the board of the Society for Human Resource Management (SHRM), a leading voice in addressing the evolving challenges in today’s workplaces.

https://www.linkedin.com/in/thomasderry/
https://www.instituteforsupplymanagement.org/index.cfm?SSO=1
https://twitter.com/ism

Omid Ghamami, CEO and Chairman of the Board – Center for Purchasing and Supply Chain Management Excellence
As CEO of the Center for Purchasing and Supply Chain Management Excellence, Omid Ghamami is the spearhead of the world’s most advanced, interactive and prestigious purchasing & supply chain management certification system. Calling on his extensive experience in managing purchasing and spend for global tech giants Intel, Ghamami works with some of the biggest companies in the world to foster a new order of supply chain management, one that sees organisations recognise the true value-added centre of profit that it can be for their business.

www.PurchasingAdvantage.com 

www.CenterForPSCMExcellence.org

https://www.linkedin.com/in/omidghamami/

Dawn Tiura, CEO & President of Sourcing Industry Group (SIG)

The CEO of Sourcing Industry Group (SIG), Dawn Tiura drives the vision of creating a premier global sourcing association that provides thought leadership and networking opportunities to executives in sourcing and procurement from Fortune 500 and Global 1000 companies. Tiura describes herself as a passionate leader of SIG, going above and beyond to raise the executive presence of sourcing, procurement and outsourcing professionals. Since joining SIG in 2007, Tiura has truly “revolutionised” the group in order to establish itself as the premier global sourcing association.

https://www.linkedin.com/in/dawntiura/

https://sig.org/

Tradeshift co-founder Gert Sylvest, and CPO Roy Anderson, reveal how their global open business platform is transforming the future for…

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Tradeshift co-founder Gert Sylvest, and CPO Roy Anderson, reveal how their global open business platform is transforming the future for buyers and sellers. By Elliot Francis

Tradeshift was founded in Denmark in 2010 by Gert Sylvest, Mikkel Hippe Brun and Christian Lanng. The trio’s ambition was to connect organisations across the world with an open business platform capable of transforming the way buyers and sellers interact by digitising and connecting every process. With over 800 staff based in 13 countries worldwide, Tradeshift helps businesses connect with all their suppliers digitally; remove paper and manual processes across procure-to-pay; seize early payment discounts to save money and buy what they need while managing supplier risk.

Sylvest’s vision is clear: “Marrying social technology with hard transactions will change the way the world thinks about business and finance, and allow us to bridge major digital divides.”

The Tradeshift Platform

Our platform allows you to run applications to meet the needs of what you’re doing when you’re doing it,” explains Tradeshift’s CPO Roy Anderson. “Different roles, such as advertising, legal services, facilities or engineering, have different requirements, requisitioning means and connections to their suppliers. They want a system that works for them. Tradeshift creates a user centric model – versus a procurement centric or IT centric model – providing different tools for different skillsets.” Tradeshift’s platform can connect the dots digitally offering a breakthrough in use-ability. “The key element of procurement is penetration,” he adds. “Getting all of your customers on board is a lot easier with this user centric tool.”

Anderson’s career path included the role of CPO at MetLife where he managed close to 20,000 suppliers. With just a few hundred of those automated, his resources were tied to managing the risks and costs of unconnected services tied to an IT-centric model. Today, he identifies three areas where Tradeshift can drive transformation in procurement… The aforementioned deep penetration of connectivity with suppliers digitises the supplier base. Secondly, the platform allows for user centric applications. With the penetration and platform established the third key benefit for users is access to a growing marketplace of products and services. “It becomes something that can work for a CPO very effectively,” he maintains. “You can tie into the Tradeshift marketplace and be able to buy your product at your price, and use the services without having to do the enormous work of setting up and running through the business case and the IT resource plan and the implementation efforts.”

Innovation

Since 2010 Tradeshift has been targeting the Fortune 5000 companies and branching out to cover the whole Source-to-Pay cycle, moving inside organisations and onboarding employees for accounts payable automation, and increasingly for procurement alongside services offered via the marketplace. This innovation has helped define the company’s strategy on AI, blockchain and IoT. “We started to implement Machine Learning and AI back in 2012 and created CloudScan, an industry first scan and capture for the accounts payable process. What differentiates those who profit from Machine Learning is the ability to solve the network layers. Being a cloud-based network platform, we have the ability to learn from both the individual company’s best practice – procurement, invoice approvals, product classification – and how it works across the network. This has helped us develop automatic invoice coding and approvals based on existing patterns.”

Challenges

“It’s always an educative journey,” believes Sylvest. “We’ve been approaching things from a new angle since we went 100% network first in the cloud. Customers that are successful on our platform buy into the bigger vision… When we use apps on a phone, everything is connected by default. Companies get that. After 40 years there is only one way to go, greater digitisation of the supply chain and the collaboration between companies. The challenge for them is to embrace ways of breaking down data silos to leverage the benefits of AI. Big players like Google and Facebook are driving this and putting out their technology as open source and using engineering communities to develop this at breakneck speed. The issue lies in how you adapt and use the technology, so most enterprises today are embarking on that learning process to make sure they reap the benefits.”

Automatic success

The automation of e-invoicing has been a resounding success for the company. Tradeshift Pay is now utilised globally by hundreds of businesses and was recognised in the Gartner Magic Quadrant for Procure-to-Pay Suites in 2018. “Tradeshift’s model is to do digital by default,” confirms Anderson. “We work with suppliers to be able to get their documents digitally ripped to start, moving away from paper that needs to be scanned. It’s always going to be a tailored activity, but ultimately suppliers can see that by embracing a digital network, accurate invoices make for accurate payments. Finance teams can manage their working capital more efficiently, suppliers can be paid faster while cash be used more effectively…” Anderson reckons what’s good for the supplier is good for the client. “This is an enormous value proposition to many of our customers,” he adds. “The next step is to digitise the front end – the sourcing of the data analysis and spend analytics; the contract requisitioning, catalogue, and all of the services linked with that.”

Partners delivering applications

The Tradeshift platform is home to more than 300 visionary applications, like FRDM, which allow users to make purchases that elevate both profits and people by offering supply chain transparency from supplier down to raw materials level. “With the FRDM application, you can target the areas where slave labour is prevalent. If the product or service you buy has the potential to be at risk, you can mitigate that risk and aim to eliminate it.” Allied to this are sustainability apps such as Eco and tools for a multitude of tasks from background checks and spend analytics to requisitioning and forecasting.

Tradeshift on trend

Anderson notes that as supply chains digitise, clients are demanding speed, ease of use and a lower cost of implementation. He recalls that in previous roles, as CPO at MetLife and Fidelity, he would create a marketplace inside the company of trusted suppliers with the right risk portfolio that was sustainable, to allow internal customers to get the job done. This could take months – even years in some cases – to set up the suppliers and relevant content, contracts and technology. “My goal now is to be the CPO of an entire network of companies,” says Anderson of the Tradeshift marketplace. “There are organisations out there that separate you from your supplier. I consider that bad business. Our platform will give companies the flexibility to have products and services readily available to capture and curate their own solutions in a matter of days. Now they’re going to get aggregated buying opportunities, but still be able to have their relationship with their manufacturer or supplier.”

Predictions on Procure-to-Pay

Sylvest believes the marketplace embodies the idea of the network, rather than the traditional one-to-one procurement model which misses out on the economics of scale. It’s a place where Tradeshift’s app strategy (300 and counting) will flourish. “When we founded Tradeshift, we chose to make all of our interfaces open source for third parties to develop services,” he explains. “B2B spending is very complex and for every category, especially materials, third parties will bring specialism that can enhance services across different geographies. What will set us apart in the market will be the ability to combine the procurement process with product formation, fulfilment, payment and the financing of the physical goods or based on the invoice.”

Sylvest is most excited about the work Tradeshift is doing with ten of the largest banks (HSBC, CitiBank etc) to provide supply chain financing and discounting in the App Store. “They’ve chosen to have a presence in a competitive marketplace where it’s up to users to decide which financial services suit them best. For me this is proof that our network strategy is working.”

New frontiers for Tradeshift

Tradeshift Frontiers is the company’s digital innovation arm working on two major themes: the future for FinTech and how to connect the physical supply chain with the financial supply chain. Both of these are looking at ways to integrate Blockchain. “Tradeshift Cash was launched in 2018. With half a trillion dollars flowing through the network in receivables, what if you could take those receivables and tokenise them? By turning them into a digital asset you use the Blockchain as a marketplace where invoice tokens are for sale amongst financers. Instead of a traditional sale of invoice volumes over six months, we envisage a much more fluid process where invoices are tokenised in real time and out up for sale. In this competitive model financers compete based on their appetite for risk and knowledge of an industry.” Tradeshift is also working on Ecosystem Finance – extending credit for outstanding receivables between two parties down the supply chain with further tokenisation.

Goals

Faster and friction free financing is the ultimate goal for Tradeshift as it bids to make B2B buying as simple as using a consumer credit card. A key part of its development over the next 12 months will be onboarding partners to deliver critical mass with SKU development for products on the shelf.

“Once you’re digitally connected, then you start to build the value from there,” adds Anderson. “But suppliers don’t necessarily see that value on day one, it takes them time to be able to turn that into an ROI… But, if we look into the future, the only suppliers you’ll want to deal with are those that are digitally connected; more accurate, complete, compliant and transparent in their process. The alternative will be risks in the cost structures.”

Over the next 12 months, the goal for Tradeshift is to add more suppliers to its marketplace, and grow the digital ecosystem. “We’ll build the tools and the connectivity to be able to add a massive amount of value,” pledges Anderson. “It will open people’s minds, just like they did with Y2K when they had to invest in new ERP systems, and they’re investing in this digital environment. This is not an evolution, this is a revolution in how supply chain thinking will be done.”

DCT Abu Dhabi, has achieved the Chartered Institute of Procurement and Supply, CIPS, – Corporate Platinum Award, according to state…

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DCT Abu Dhabi, has achieved the Chartered Institute of Procurement and Supply, CIPS, – Corporate Platinum Award, according to state news agency WAM.

The award is the highest certification in the procurement profession globally that can be reached by an organisation. DCT Abu Dhabi is the only organisation to have jumped from CIPS’ Standard Level, directly to CIPS’ Platinum level in a record time of only two years. Traditionally, this process takes four to six years with both Silver and Gold levels in between.

Speaking on the occasion, Saif Saeed Ghobash, Undersecretary of DCT Abu Dhabi, said: “Undertaking the CIPS Procurement Excellence Programme has been incredibly beneficial for DCT Abu Dhabi’s procurement function, and by achieving its highest Platinum Award, we have proven that through commitment, hard work and skill, great things can be achieved. The process has been an invaluable way to assess performance, enabling us to measure our work against the internationally recognised benchmarks set by CIPS. This award puts DCT Abu Dhabi among rarefied company, and will boost DCT Abu Dhabi’s reputation globally.”

The CIPS Procurement Excellence Programme is the only independent, comprehensive, procurement-specific assessment of its kind, which measures the procurement function against world-class standards. It is a globally recognised award that demonstrates how well an organisation is performing whilst building a competitive edge and driving world-class service delivery.

The CIPS Platinum Programme covers five areas of the procurement function and organisation, i.e, Leadership and Organisation, Strategy and Policy, People, Process and Systems and Performance Management.

CIPS is the leading professional organisation in procurement and supply chain management and aims to promote and develop high standards of professional skill, ability and integrity among all those engaged in purchasing and supply chain management globally.

In this article, Jon Hansen examines two opposing elements of the digital procurement paradox, including what organisations can do to…

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In this article, Jon Hansen examines two opposing elements of the digital procurement paradox, including what organisations can do to begin to address the stalemate… 

You are likely familiar with the phrase about irresistible force meeting an immovable object.

When it comes to procurement in the digital age, the same paradox applies to technological advancement and the need for greater security. In other words, technological advancement is the irresistible force that promises to transform procurement and business in general.

While there are several obstacles to the adoption of technologies such as the absence of “clean data” within an enterprise, security is the immovable object that executives cite as being their greatest concern.

The current lay of the land

In my paper Digital Transformation in Procurement, I referred to a McKinsey survey of 1,600 incumbent global companies. In the survey, 23% of the responding executives report having a digital strategy in place. Of those, just 2% have a strategy that includes their supply chain.

While the above numbers are in and of themselves noteworthy, in the context of the 2%, the results of a second survey are even more surprising. In that one, 70% of the respondents say that the supply chain is essential to delivering on the digital promise.

Think about this revelation for a moment. Respondents to a second survey state that the supply chain is essential to realising their company’s digital aspirations. With the first survey, only a small number of organisations have a strategy for digitising their supply chain.

The obvious question is, why?

The risk side of reward

Earlier this year, I had a chance to sit down and talk with the Director, Cyber Security for Cisco Michael Tryon. The focus of our conversation was on how organisations must have a “sure and safe pathway” towards achieving their digital objectives. 

It was an interesting discussion on many levels. What stood out to me the most was Tryon’s reference to an article he had written in which he discusses a report from North Carolina State University.

According to Tryon, the findings from the University’s report show that the top concern of executives in the study was an inability to manage a new risk. The risk to which they are referring to is those associated with rapidly evolving technological advancement.

What is it about evolving technologies that have executives stuck in a holding pattern between the recognition of digital’s importance and the realisation of its promise?

The Amazonisation effect

From the standpoint of procurement, concerns with risk start and end with the Amazonisation of the supply chain, including increasing decentralisation.

One of the great things about Amazon is the ease at which someone can buy a product online with little to no difficulty. Purchasing is a simple exercise that is becoming progressively easier as the platform leverages RPA and AI to provide a seamless and intuitive experience for the buyer at home.

The Amazon experience at home raises the question; why can’t the same buying process exist in the work environment? The answer; decentralisation and independence and the potential risks associated with each.

Independence on the Edge

In another interview I did with the President of Hewlett-Packard Enterprises, there was the suggestion that the success of a digital strategy was dependent on going beyond the cloud to work at the edge.

HPE President Paula Hodgins referred to a study indicating that by 2020, each person globally will have up to 10 IoT devices at their disposal. We are no longer talking about a BYOD to work scenario. We are talking about individuals having incredible computing power at their fingertips all the time – buyers included.

According to Hodgins, this personal digital capability provides tremendous opportunities to maximise efficiency. By dealing with data (or requests) at the point of capture as opposed to pushing everything back to the cloud for processing saves time and money.

Like the Amazon experience, the consumerisation of the procurement process in business is a reality that all organisations need to recognise and embrace. Otherwise, they may not remain competitive in a demanding global economy.

But through the above decentralisation, the vulnerability of working on the edge, i.e., having many access or entry points to a company’s internal information through a myriad of personal IoT devices poses some risk. How do you control access? How do you protect against unauthorised breaches?

Based on the findings of the North Carolina State University report, the best way to address these as well as other concerns regarding securing the supply chain is to wait.

But is this the best option?

Getting to the reward of risk

Overcoming the above challenges comes down to two things.

The first is a willingness on the part of executive leadership to change their way of thinking about how procurement “works.” The second is the development of a viable security strategy.

A January 18th, 2019 Clint Boulton article in CIO magazine sums up the need for executives to align their thinking with the realities of an emerging digital world. In the article, Boulton writes; “your digital transformation is doomed unless you empower employees to succeed in the digital era.” He then goes on to say you must “craft a workplace that boosts engagement and agility.”

Engagement and agility come with decentralisation. It is providing all buyers (not just procurement people) with the ability to conduct transactional business at “the edge” leveraging new technologies. The new technologies to which I am referring include mobile devices, computers and personal analytics.

Once executive leadership not only recognises the tremendous competitive advantages of a digital procurement strategy but that they have to take action to make it a reality, they can then turn their focus to securing their supply chain.

A sound strategy

Securing the supply chain is critical. Especially in an age where with increasing frequency organisations are already sharing more and more information with third parties such as suppliers, business partners, and even customers.

Referring, once again to my talk with Michael Tryon, you need to respond to the “pervasive threats that are inherent in this exciting new world.” The best way to do that is through “a comprehensive cybersecurity strategy. One that focuses on prevention, detection, response and recovery.”

It is in this area that the CIO can take the lead. Within the framework of a collaborative environment that includes the key stakeholders, the CIO can create a strategy that adapts to the new technologies and the way they work.

For example, one organisation suggests using a distributed Security model in which they deploy and interconnect security controls at “points of digital engagement,” i.e., on “the edge.”

A final thought

When it comes to procurement working on the digital edge, it is important to recognise that all buyers do not have to be procurement professionals. Nor should they be.

In other words, people at a department level can leverage RPA and AI technology capabilities to do direct purchasing. Procurement professionals can then focus on the more strategic and complex supply chain acquisitions.

From a procurement standpoint, the effective utilisation of resources both within and external to the procurement department is how organisations will realise the greatest return on their digital strategy.

CPOstrategy met with procurement leaders from banking, utilities, consulting, solutions providers and financial services. Taking the temperature on the latest…

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CPOstrategy met with procurement leaders from banking, utilities, consulting, solutions providers and financial services. Taking the temperature on the latest trends and predictions for the future we spoke with Barclaycard, Enel, Bain, Coupa and Legal & General.

Barclaycard

Rob Tuckwell, Director of Partnerships & B2B

Barclaycard is building an ecosystem of P2P software providers (including Coupa and Amadeus) with the aim of bringing payments and procurement closer together for B2B. “We’ve got to make sure that our payment products are embedded within those ecosystems,” says Tuckwell who is keen for Barclaycard to tackle “horrendous inefficiencies” for its customers… “Digital payment products work in the consumer space. Why is that not filtering through to business? Our strategy is to go from Procure-to-Pay to ‘Procure-and-Pay’. It’s a really key difference that they’re not separate processes anymore and the future for payments and procurement is going to be the convergence of these areas.”

Enel

Salvatore Bernabei, Head of Global Procurement

Enel is among the world’s leading integrated private utilities with a presence in over 40 countries and more than 70 million retail customers. Bernabei is focused on developing relationships to enhance flexibility, minimise time to market and add value. “We welcome innovation by vendors,” he says. “We say: I have a challenge here, I am not capable, with my knowledge, to solve it. It’s a very precise case study. I invite suppliers, offer a case with one month to provide a solution before I select the best idea. We offer the possibility to experiment, on our plans and assets before a contract is awarded.” To support this approach Enel has an agreement with crowdsourcing platform Innocentive.

Bain & Company

Borja Tramazaygues, Procurement Leader EMEA & Gerry Mattios, EVP, APAC

Consulting firm Bain & Company’s Performance Improvement Practice advocates targeted solutions for immediate impact combined with broad transformation programmes to redefine how work gets done. “Once we have helped implement technology to optimise tactical processes in procurement, such as invoicing and purchase orders, we have to address the broader digital struggles of an organisation,” explains Mattios. “Procurement tends to be a back-office activity linked to savings,” agrees Tramazaygues. “There’s a big opportunity for procurement to be a real part of the business; it can play a big role in rebuilding the supply chain to make it more agile, opening the best markets and bringing innovation through from suppliers.” Tramazaygues and Mattios believe new approaches are vital in the current inflationary environment.

Coupa

Rajiv Ramachandran, Product Strategy Management

Coupa offers an all-in-one, end to end, business spend management platform. “Coupa provides users the richness of insights, based not just on their own data but truly normalised, and anonymised data across all the buyer, supplier relationship that exist on our cloud-based platform,” says Ramachandran who cites the need to be able to use consolidated data to chart the efficiencies and risks of suppliers. It’s a “game changer” he sees customers greatly benefiting from when analysing B2B data on a platform holding approximately one trillion dollars of spend. Coupa believe the ability to match your progress against the community of the platform, and take efficiencies from it, points to the future for agile procurement as part of an ecosystem.

Legal & General

Maarten Ectors, Chief Innovation Officer

Legal & General is focused on disrupting procurement from the inside out. Ectors stresses the importance of allowing ecosystems to generate innovative solutions for its customers. “You need to get everybody at your organisation excited about innovation,” he advises. “You can’t innovate on your own and if you don’t collaborate with the challengers in the market they can only disrupt you, but not in a positive way.” Ectors highlights an important trend, the need to optimise the cost of failure: “Our Beta programme runs four-week trials with new companies to assess potential new partners,” he explains of a process which allows L&G to remain agile in its approach to innovations that can speed up claims handling from days to minutes.

By Kevin Davies Listen to the podcast here! In your career you’ve identified some serious unlocked strategic potential in the…

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By Kevin Davies

Listen to the podcast here!

In your career you’ve identified some serious unlocked strategic potential in the supply chain, what first alerted you to this?

I have been working for some time with Dr Bram Desmet and he wrote for me, one of the most profound and excellent business and supply chain strategy books called “Supply Chain Strategy and Financial Metrics”. Now, while I was actually in contact with him, I had the privilege to contribute to the book with the forward, and also with a business case study on my previous work with a company called Johnson Controls.

That encouraged me to look into the concept of everything involved in business transformation and supply chain and the idea of taking a more strategic approach to it. Leading up to Bram and myself, working on a concept called “Strategy Driven Supply Chain” and also the “Strategy Driven Value Planning and Execution” model.

In your white paper, The Concept of the Strategy Driven Supply Chain,  you explore the current trend of businesses putting their supply chain front and forward It highlights some of the issues that companies are going through…

There’s an enormous amount of change. We know that probably 63% conform, but their CEOs are going through a business model change over the next couple of years. Now, what we are also highlighting is that lots of companies are overly focusing on gross and margin improvement, and have a somewhat  lack in focus on shareholder value. That’s measured in a metrics called Return on Capital Employed (ROCE). Another problem is that companies don’t have enough understanding of the true complexity of their supply chain and how to balance service costs, and capital employed within what Bram calls the ‘supply chain triangle’.

Having a better understanding would lead to sharper strategies and stronger execution. This would lead to more sustainable performance and results. So it’s really that sustainable performance and results aspect which comes through, and we believe that it looks like a perfect storm. Supply chain is at the front of it. A supply chain that is seen from an entity point of view, and not just a functional point of view, is really important to companies. Companies have different supply chains and each of the supply chains needs to be strategy driven. Then, different strategies lead to different supply chains with different targets and different trade-off, for service cost and capital employed. There’s also a belief that supply chain strategy is simply following a business strategy or from the business strategy. We do believe that, but it is not a sequential process and the value proposition, and the supply chain are the ying and the yang of the business strategy. Only together can they define how business generates shareholder value and is measured by ROCE.

So, it’s about looking into supply chain from the perspective of driving value for customers, and for the business. Supply chain delivers on the promise that businesses are making through their value proposition.

Does this represent an evolution from the traditional operational back-end supply chain function?

Absolutely! It’s an evolution defined by asking the question as to what supply chain management actually is. We believe that supply chain management is more about balancing the supply chain triangle of service cost and cash. It is also about facilitating the internal debate between sales operations and finance. It somehow takes on the role of balancing these kind of trade off decisions.

Now that also proves that the supply chain is coming from the back room into the front room. It is becoming an equal partner around the C-suite, hence we are also talking about putting the supply chain or Chief Supply Chain Officers (CSCOs) into a more strategic role. That would require people operating on that level with more financial and strategic skills instead of in the past, having just operational skills. They will be measured on their operational skills and their execution.


Are you seeing examples of that in action now?

Companies are now taking a more strategic approach. We also see companies promoting people who have lead the supply chain become the Chief Executive Officer. You’ve seen other companies in the US like Apple. Tim Cook, who had been leading the supply chain for Apple for many years under Steve Jobs, is now the one leading the organisation. Now that’s a very good example when you look into how supply chain becomes a more competitive advantage for an organisation that has and understands the importance of having a great supply chain. It also shows how important it is to have somebody leading the organisation that he has an operational, financial and strategic skillset. The future skills requirements of the CSCOs in many companies will follow this path.


Would this require quite a substantial cultural shift? How important is change management to an evolution of this kind?

Yeah, absolutely. We say that it takes a bit of a leap in terms of maturity of organisations, and also changing and shifting the paradigms from where they are today to where they need to be in the future. Now that requires a value creation and that is why we actually started to work on the concept of the strategy driven supply chain. Even knowing that this is maybe five to ten years out. But starting the debate and starting the value creation really helps to facilitate and move the needle up. It’s enabling organisations to have  a more serious look into their strategic supply chain and what it means to them as well as what it means to the overall strategy employment process in the organisation.

Some organisations took the approach of being driven by gross initiatives, without truly understanding the strategy behind them or the value proposition and even the complexity of the business. How do they want to differentiate themselves in the marketplace and what does it mean in terms of the service they have to deliver, the corresponding cost as well as the capital employed in their environment? We are looking at how we can help organisations by highlighting the problem or the potential issue. More importantly, it’s about finding a solution and an approach, and taking a different more strategic approach in future. We’re highlighting how the supply chain triangle can be balanced differently by promoting the CSCO into a more strategic role.

Would that result in the CSCO reporting on a peer-to-peer basis to a CEO?

It’s an equal partner in the business, and with the same level of importance  as the C-suite, (CFOs, CEOs etc.) The CSCO becomes the ring man. They will help the CEO, and the entire leadership of the company, including board of directors, make more informed decisions, or as I would call it ‘deliberate choices’.


So the key to this is that the supply chain function has a wealth of data and knowledge and insight readily available to use?

It’s also about the reality of balancing the triangle. When you think about a supply chain, and the mission of a supply chain, it’s often about delivering the right product at the right time, at the lowest cost, at the lowest inventory. There is conflict in the triangle all the time. It’s about a service you want to give to your customers. When you talk about service, it’s not only how you move your products and deliver them but it’s also the complexity of the product. It’s about the order flexibility you want in order to give you the product portfolio as such, but also having an understanding of what it means in terms of cost you’re going to have in the organisation and the capital employed.

When we talk about the capital employed, it’s really about two elements: a working capital (the decision you have to make to strategically keep a certain inventory level in your organisation) or it’s how you deploy your assets in a fixed asset structure. How this applies to the conflicts and the triangle and the critical stakeholders in your business. The VPO of sales, as an example,  what does he really care about? It’s probably the sales top line and market share. The COO or Head of Production? The primary concern is probably efficiency, as efficiency drives cost. But if you think about the VPO sourcing of purchasing, it’s the spend and how the company can buy more volume at a lower cost. That’s conflict. 

So the question then becomes;  who is best positioned in a company to balance that? Decisions and people being driven differently in terms of service cost and cash and the best positioned person to do that would be the CSCO. Now that’s the best thing for organisations to understand and if they do so, it can really set them up for a very successful future or operating on a new competitive level.

Do you envision a situation where a CSCO could evolve and transition
into a successful CEO?

Yeah, absolutely. That’s a prediction Dr Bram Desmet and myself are making and we believe you will see it happening more and more in the future, and in organisations where successful CSCOs who have those operational skills, financial skills and strategic skills are the best people for taking the job at the top of the house.

If a supply chain function is evolving in this way it would have to shed some of its traditional operations, is it true to say that some of this could be liberated through technology?

Yes you are right. You see the merge between the physical worlds and the digitalisation of the digital world, and enabling technologies. Companies are not only selling products and services, they sell solutions and outcomes. That is a new complexity that organisations are dealing with that requires certain changes and like I said before, be crystal clear about the value proposition you’re going to have or want to have as a business, and what it means in terms of the corresponding supply chain, and now your supply chain or different supply chains are delivering on the promise you made. The question is now about how you deploy your resources in your organisation more efficiently and effectively. That’s what we are talking about.

Do you think this would affect, going forward, the training of supply chain officers?

I believe it goes deeper than that. I believe if affects structures, it affects roles and it affects your whole recruiting process in terms of the discourse you would need as an organisation. It would also impact talent development.  Going back to the example of the CSCO, in the past he has probably been promoted based on his ability to bring in results based on how the organisation performs. Now in the future I think it would be more about the balance between how he is actually contributing to the overall results of that organisation based on a strong operational performance. It’s also about financial results of an organisation being top line, bottom line and results or returns and what kind of strategic skills he has in terms of taking the organisation forward.

So that’s what we are talking about and that requires a new skillset and new talents in the organisation. There will need to be new training which needs to be provided and opportunities for people to move into these kind of roles.


What would you say are some of the obstacles to the evolution of this role?

Probably mindset and the culture of an organisations where they have traditionally rewarded their people differently in the past. They need to overcome that and look at what that change means for them. They need to be ready with their maturity and company culture to move and shift the paradigm to a more strategy-driven supply chain and value planning and execution model. So culture probably is the key obstacle in the evolution of the role.

In your vast knowledge, do you see any industry sectors where it’s accelerating more than it is in others?

Well that’s a very good question. I would say, from my own perspective it is that you see some of industries a little bit ahead.  Technology companies for example would be ahead in terms of looking at that from more of a strategic point of view. Overall I would say that more and more companies are at the starting point of truly understanding that change needs to happen.

Click here to read it! The latest issue of CPOstrategy is live and this month’s cover story features Natalia Graves,…

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Click here to read it!

The latest issue of CPOstrategy is live and this month’s cover story features Natalia Graves, VP Head of Procurement at cloud management giant Veeam Software who discusses its recent procurement transformation. “We looked at simplifying our processes and putting systems into place that allow Veeam teams across the globe to move even faster,” she explains.

Elsewhere, we speak to Dr. Preston Butler JR, on achieving procurement excellence at Vinnell Arabia, which provides logistics and training to the National Guard of Saudi Arabia. We also spend time with Mahmoud Al Alawi, Director of Procurement and Contracts at Higher Colleges Technology (HCT), who discusses the organisation’s digital journey in procurement. While Frank Vorrath, Executive Partner Supply Chain at Gartner details the hidden potential of a strategy-driven supply chain. We also provide five big takeaways from World Procurement Week and list the best procurement events and conferences from around the globe.

Enjoy the issue!

Kevin Davies

The Chartered Institute for Procurement and Supply (CIPS) has released its Procurement Power List, which recognises those leaders in the…

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The Chartered Institute for Procurement and Supply (CIPS) has released its Procurement Power List, which recognises those leaders in the profession pushing the field of procurement forwards. 

CIPS and Supply Management asked for nominations from a panel of experts and created a long list of candidates, including the CPOs of FTSE 100 organisations and significant public sector organisations.  These names were debated during a panel with leading executive search agencies and industry experts, to create a list of 30 names, plus 10 ones to watch.

The following criteria were used for nominations: 

  • Employment status. Candidates must be employed practitioners and not working as interims or consultants. They must be of a significantly senior level (CPO and above) and have a successful track record from previous roles, as well as being their current role long enough to have achieved significant outcomes.
  • Geography. CPOs based in Europe, or those who work for global organisations but have responsibility for European procurement teams.
  • Internal influence. They sit in a prominent place in the company hierarchy and are actively involved in board and ExCo level discussions in their organisation.
  • External influence. They have non-executive board positions in listed, private or public bodies.
  • Influencing the wider profession. They share their knowledge with the profession via trade magazines, blogs, social media and speaking at events.
  • Developing others in the function. They give back to more junior procurement and supply professionals, for example mentoring or speaking in schools.
  • Depth and breadth of experience. They have responsibility for other areas of the business beyond procurement and supply.
  • Their relationship with CIPS makes no difference to their inclusion, or not, in the list and they do not have to be CIPS members.
  • No professional with an official connection to CIPS can be on the list, for example, board members or committees. 

The Procurement Power List will change and evolve annually. 

THE LIST 2019

The Procurement Power List for 2019 (in alphabetical order):

Ones to Watch 2019:

by Mike Dickinson – SMMT Industry Forum General Manager, automotive and supply chain   Up until recently, supply chain managers…

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by Mike Dickinson – SMMT Industry Forum General Manager, automotive and supply chain  

Up until recently, supply chain managers have called the shots when it came to supplier relationships. Suppliers were dictated to when it came to products and the quantity required, with contracts won or lost on price alone.

It was also standard practice for problems with supply to result in suppliers being reprimanded – either fined or presented with less favourable terms or treatment. In turn, customers had prices dictated with little negotiation on other key areas such as service, MOQs and delivery time frames.

Nowadays, suppliers are part of the business, and that previous management style, especially in emerging sectors or new, innovative businesses, just isn’t conducive to a healthy supply chain. 

In order to improve and maintain a good relationship with suppliers, supply chain managers need to move away from an outdated business culture of finding someone to blame, and towards a more modern, collaborative approach. 

Top five tips for maintaining good relationships with suppliers

  1. Communication: Talk to suppliers regularly
  2. Teamwork: Plan for contingencies and accept accountability
  3. Understanding: Have a working knowledge of a supplier’s business and/ or operating procedures
  4. Stay flexible: Adapt to everyday issues as they arise and resolve them quickly
  5. Feedback: Encourage open discussions around how to work together more efficiently in the future

How millennials will manage suppliers

This ‘resolve and improve’ mentality looks likely to become standard practice, as according to Relate* by 2025 75% of the workforce will be millennials (those born between 1981- 1996). Due a shift in working behaviours, this generation looks likely to have a greater impact on supply chain relationships than their predecessors

A recent article in Forbes** stated that, “millennials will only interact with brands that are open and transparent, stand for more than their bottom line, and address environmental and socioeconomic issues in the community.” The desire to see suppliers as part of the team, rather than a customer and provider relationship, will better suit a changing supply chain culture.

The management styles of previous generations – such as Baby Boomers (1946 – 1964) and Gen- X (1965 – 1980) – tended to be more aloof, with a focus on the bottom line and an ability to confront problems head on. While there are benefits to that approach, it just won’t work for millennials who have a need for social responsibility, constant communication and teamwork.

Prices, scaled discounts, collaboration through planning, rebates, commitment to buy, returns acceptance for new range releases, VMI, consignment stock agreements – are already common for those who actively manage their relationships with suppliers.

Different sectors also differ in their changing approach to supply chain relationship management. Heavy industrial areas such as Automotive, Industrial Machining and Aerospace, are lagging with the new approach to supplier management, while the more public-facing industries – particularly sectors with a strong consumer reach where their customer base demands high quality, responsible, efficient supply – such as Technology, Fashion and Fast-Moving Consumer Goods, are pushing the boundaries of what was once standard practice.

Technology is lifting limitations

These forward-facing industries are also more likely to embrace new technology and be willing to apply it to their management strategies. Technology which can help to lift the previous limitations of supplier relationship management is already available. For example: Blockchain promises to allow visibility throughout the supply chain, making it easy to view key factors such as: current stock, production, shipping information, quality issues and pricing of raw material data.

Transitioning from a one-sided supplier management approach, to a joined-up partnership means that measuring a full range of services (price, lead time, quality, customer service, environmental sustainability, CSR) is essential if technological advancements are to be adopted. 

In process crucial areas of business, such as supply chain, good relationships are key to delivering to targets, and no supplier will sign up to sharing data (honestly) if there is the fear of punishment as a result.

Relationships don’t break down overnight

Healthy working relationships are built on trust, mutual respect, mindfulness and communication, however, when we neglect one or more of these areas, the relationship suffers.

Usually there are a number of errors which result in the erosion of trust and respect over time. These errors usually fall into one of the following categories: Pre-contract mistakes, contract errors, termination issues and the breakdown of relationships.

Businesses who rely on an efficient supply chain to remain profitable know that the relationships with those within the chain are paramount.  It is essential for these businesses to build and maintain high performing relationships with customers and suppliers. The inability to maintain an effective working relationship can have a huge impact on the entire supply chain, causing issues such as:

  • Stock availability problems due to poor performance
  • Obsolescence issues due to variability in supply
  • Being stuck holding excess levels of stock to buffer the impact from suppliers
  • Little to no support to manage changing demand patterns
  • Increasing supplier costs with no negotiation

Training is available

Companies who feel they need support can turn to analysts such as SMMT Industry Forum, who helps global manufacturers understand, optimise and improve both manufacturing capability and business performance. SMMT Industry Forum was created by the UK government, the Society of Motor Manufacturers and Traders, and vehicle manufacturers in order to improve the competitiveness of the UK’s automotive supply chain.

Mike Dickinson has over 25 years’ experience in supply chain and manufacturing leadership roles, having worked for Nissan, General Motors and Qoros Automotive. He has managed global operations including greenfield build-ups and brownfield transitions, in Asia Pacific, Germany and Shanghai. He was trained in lean manufacturing techniques by Japanese Master engineers in the 1980s.

* https://relate.zendesk.com/articles/millennials-as-managers/

**https://www.forbes.com/sites/jefffromm/2017/12/13/why-label-transparency-matters-when-it-comes-to-millennial-brand-loyalty/#782843563dac

A global leader in procurement and supply chain, Sam Achampong is Head of CIPS MENA, and responsible for influencing supply…

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A global leader in procurement and supply chain, Sam Achampong is Head of CIPS MENA, and responsible for influencing supply chain and procurement transformation across the region.

Listen to the podcast here!

So, could you give us a brief outline of your role at CIPS MENA?

CIPS works in a number of ways. I guess if you look at a triangle, there’s three main areas we work in. One is education, and that’s around our qualifications. Another is around thought leadership in terms of the events and social networks we create. The other is around our B2B operations where we work directly with organisations to work on the capability development of their own procurement teams, and their procurement organisation.

The operation in the Middle East has been around for about 10 years now. In terms of the region, I think we acknowledge that the level of maturity in procurement is in many ways a little bit behind more established areas of the world. But over the past 10 years that gap has been closing. So, we’ve seen some significant strides in terms of how people view procurement, and how strategic people see procurement. However, there remains a lag in recognising it as a strategic function. We continue to work with organisations and individuals in this region to improve that.

What are the challenges procurement is facing in MENA at the moment? Skill shortages or technology uptake?

So, it’s a bit of both. There are skills shortages, because there is a lack of people who have those commensurate professional and strategic skills in procurement in the region. So, let’s call them licensed procurement professionals; people who are actually qualified in procurement practice, and who have the skills in that function. So, that’s a skills gap that only CPOs in the region will acknowledge.

The other thing is the recognition of the profession itself. So, when you go above the actual stakeholders around procurement, your CFO, CEOs, the C-suite and others, the recognition of procurement as a strategic function is lacking in many ways here. So, what that means is, you find that a lot of procurement departments are being used as transactional departments, who are either performing a compliance role, or a simple transactional role. So, that obviously diminishes the role of procurement and diminishes the effectiveness of what procurement can deliver in this region. really is a lack of depth in the market of people who have those skills when they are called upon. So as a result, you cannot look to a major organisation or a particular job description, procurement category manager, for example, in a major bank and assume that they have the necessary skills that you would expect a procurement IT category manager to have. Because there just isn’t that depth of skills in many areas.

However, as I’ve said, there have been big strides over the past five to eight years to improve that. So, there are real centres of excellence around the region who have been working for a long time to overhaul their entire departments. You’re talking about some of the major organisations like ADNOC, the major oil company, or SABIC in Saudi Arabia, around to Etihad Airways in Abu Dhabi, who’ve been working very hard for a few years to ensure that procurement becomes a strategic function, and that the people who work in it are professionals.

Would you recommend more professional qualifications being introduced in the region?

Yeah, that’s the other side of it. So, there is looking for people in the market who already have those skills, that’s one side of it. The other side is putting together the infrastructure, whereby people are able to get hold of those skills. So, that’s the backbone of what we’re trying to do. We set up several study centres across the region where people can go and study CIPS qualifications anywhere around the region from Lebanon, to Bahrain, to Saudi Arabia, to the United Arab Emirates, to Egypt. In addition to that, we’ve worked very closely with a lot of organisations to set up in-house procurement academies, whereby we work directly with them to upscale their teams to the highest level over a period of time. There are two areas in which we work. One is the B2B, and the other is just for the B2C where you have the student network and the individuals who want to attain those skills.

We’re working with a lot of the educational establishments to work with them to ensure that procurement qualifications, skills and standards are available in the local university network. So, we’ve done that across the region, where we work with centres of education, to help them put in place skills and qualifications that are commensurate with leading procurement practice.

I guess, the other side is away from the people. It’s a case of how people actually do procurement. So, what are the strategic games, what are the processes, practices? We’ve also worked with several organisations to provide advisory services to look at how they actually do procurement and guide them into putting into place procurement practices that are leading practices to help achieve value. You’ll see organisations like the Dubai Expo 2020 project, who have recently gone through what we call the CIPS Procurement Excellence Program, where we review how they do procurement and guide them towards best practice.

Have you encountered a stark contrast between, broadly speaking, the Middle East and the North Africa region?

In the Gulf, you will find real centres of excellence and some real heavyweights in the public and private sectors, who have invested in putting together skilled procurement professionals, and invested in how their departments manage procurement strategically. So, you will find some very educated and strategic people.

When you look more to North Africa, Egypt is a very populous and academic country. So, you do find a lot of people from the academic perspective, who have come through a level of education to attain procurement skills; maybe not to the highest level, in terms of strength and depth, but that’s the angle that happens in North Africa rather than companies sponsoring people to go through qualifications.

West Africa, again, is slightly different. You have countries in West Africa, like Ghana, who are working very hard now to establish procurement centres of excellence among the public sector. So again, we’re working very hard with them to put in place structures that defend how they build up the reputation of good public procurement within those areas.

So, there are differences between the Gulf, North Africa and West Africa and several subtleties between the public and the private sector. But interestingly, I think what’s happened over the years is that there’s always been a gulf in the maturity levels of the practice of procurement and many other professions. What’s happened over the last two or three, or three or four years is the advent of technology. So, there’s an element now where people are looking to leap frog the long route of getting people highly qualified and educated in procurement and are instead trying to invest in technology to do that procurement for them, which makes sense to a certain perspective. But obviously, the caution has always been to make sure that whoever is working on procurement for you, in terms of people, are highly skilled commercial managers, because it’s clear that you cannot rely fully on technology.

I can recall one particular instance where the prerogative was to try and eradicate as much as possible, the ethics and procurement fraud from the procurement life cycle. So, the solution that was being implemented was a whole-scale eSourcing suite, which is a good idea in terms of transparency. But of course, the fact is that probably 80% of procurement fraud is carried out at the specification stage. So, you still do need to work on the people, otherwise, you’re not really eradicating the problem.

You touched upon ethics, and obviously transparency within the supply chain is a hot topic globally, so I guess within MENA, building trust is a very important part attracting foreign investment, for example…

I think you’re right, and for any country or region that’s looking to attract foreign investment, it’s incumbent on them to create an environment conducive to that investment coming in. And key to that is procurement, the reputation of how business is done, and how supplies interact, and how organisations are gained through those transactions across the supply chain to obtain value is absolutely crucial to attracting investment.

So, ethics is key. We work with a number of organisations across the region, specifically on that subject. In fact, there are several organisations who now have the CIPS Ethics Kite Mark where all of their team have, specifically on that subject, been trained in ethics. The organisation can demonstrate that people within their team, as long as they procure anything, they have a full knowledge of what the subject is. Now, if you look at some statistics, and in terms of the effect on procurement, I think procurement fraud is like taking up 20% of the cost of doing business in developing countries, and 10% of the cost of doing procurement anywhere else. So, I guess for those areas of those countries who can ill afford it, that becomes a really, really important topic to address because it directly affects their affordability to invest in infrastructure and other areas, as it’s adding to the cost of doing business.

Technology is driving a lot of the procurement transformation stories at the moment and obviously MENA has had sort of issues such as the uptake of technology in the past and concepts such as cashless banking, plus they’ve had cyber security weaknesses. What kind of challenges have you seen there with regards to the technological side of it?

People have access to the latest technology, and people do have access to, and are able to purchase, the best solution they can afford. So, if there is an issue that it’s sometimes a case of people over specifying what they want. So, an organisation may have acquired the latest ERP or eSourcing suite, or solution, that is applicable to their operations, and to a certain extent, other organisations have seen that and said, “Okay, well, we’ll have that as well,” without aligning it directly to what they need.

So, there has been, to a certain extent, some over specification, which procurement transformations are now addressing. There are an awful lot of procurement transformation going on, where organisations are actually really looking at what they’ve done over the last 18 months and sizing or repointing how technology is adding value.

So, you have people looking at developing marketplaces, where they haven’t thought about it before. A lot of organisations are creating their own marketplaces where everyone could be a buyer, rather than continue to centralise procurement across the procurement team. So, they are making use of those cloud-based systems and those marketplaces enabled by some of the technological solutions out there.

Do you see blockchain playing a bigger part in procurement transformation?

There’s a lot going on around blockchain at the moment. We have the UAE government, for example, who have said that they will become the first blockchain government by 2020. And there are several practical examples of how blockchain is used around scanning trans-shipments etc. There are many other examples from around the world and the region. I think the reality is that blockchain is not yet an end-to-end solution. I think when it is, then you’ll see the benefits of the really embedded end-to-end blockchain solutions where people either have an in-house blockchain or a localised blockchain across groups of businesses; a corporate blockchain.

I think that’s where regions like the Middle East will come to the fore, because they are perfectly positioned to be leaders in the adoption of this technology. Because they don’t have a lot of legacy systems and practices to hinder their adoption of new technologies. They also have very strong advocacy at government level. If the UAE government, for example, says that they will become the first blockchain government by 2020. Well, that means that everyone’s going to have to participate in that transformation. Because if the government will make that a priority, then certainly everyone else does it. So, there’s a great opportunity for wide scale adoption of blockchain technology, when end-to-end solutions are implemented. Companies out here are very, very open to the technological changes.

The latest International Data Corporation (IDC) Innovators report highlights five companies who are disrupting the procurement world with their use…

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The latest International Data Corporation (IDC) Innovators report highlights five companies who are disrupting the procurement world with their use of technology, with a particular focus on improving and streamlining supplier relationships. Here is our round-up of who they are and why you should be checking out their offerings.

Written by: Lucy Dixon

FairMarkIT
Boston-based FairMarkIT offers a tail spend management platform that uses machine learning to take charge of procurement. In other words, it will save time and money on the significant amount of expenditure that is not already actively managed by procurement processes – the sourcing and buying of low-value items that can make up the majority of an organisation’s purchases. It is a web-based SaaS platform that offers an alternative to outsourcing and integrates with ERP and P2P. FairMarkIT’s customers typically see between six and 12 percent in cost savings.
fairmarkit.com

LVRG
LVRG promises easier and stronger supplier relationships, and it delivers on this by freeing up more of your time to work on those relationships rather than supplier research or data entry. The system builds up summary snapshots of all your suppliers using available data and integrates with existing software, from Asana and Slack to Dropbox and Salesforce, which will help give the full picture of your suppliers. Security is a top priority for LVRG, and it is committed to getting the right balance between transparent communications and privacy concerns.
lvrg.ai

SirionLabs
SirionLabs is shaking up the procurement world by using technology to disrupt how businesses think about contracts. Its contract management software offers supplier governance, revenue assurance and enhanced visibility. It automates traditional governance processes end-to-end and delivers real-time data-driven analytics, which will streamline contract management and automatically generate new contracts, while tracking the real-time performance of existing contracts. Its latest innovation is SirionBI, which enables real-time access to big data generated during large services engagements between organisations, including data for obligations, service levels, invoicing, issues, actions and spend.
sirionlabs.com

Tealbook
This Ontario-based company is a global network of buyers and suppliers, created using software developers, machine learning engineers and procurement experts. Machine learning and analytics give the user a transparent view of every supplier, with more valuable insights produced as usage increases. Tealbook’s in-house data scientists support procurement teams with constantly evolving technology to drive change. It invests heavily in research through a partnership with the Vector Institute for Artificial Intelligence and has a growing partner community of innovative companies working together to transform procurement.
tealbook.com

Vizibl
Vizibl is all about growth through supplier innovation and collaboration – harnessing the expertise of all the organisations in your network. It is a cloud-based system with the ability to help you manage all supplier relationships, and at the same time bringing the benefits of enhanced collaboration, improved speed, transparency and efficiency. Vizibl is built with input from specialists in procurement, innovation, strategy, marketing, manufacturing and finance, with a focus on building software that enables companies to create more valuable relationships with their partners.
vizibl.co

More than three quarters (81%) of B2B organisations are witnessing a decrease in profits due to online order errors, causing…

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More than three quarters (81%) of B2B organisations are witnessing a decrease in profits due to online order errors, causing significant repercussions on wider business growth, according to new research out today. 84% of businesses have witnessed a decrease in efficiency due to order errors, while 81% saw a drop in productivity and a further 81% saw a decrease in profitability. The survey of 560 global B2B buying professionals found that 44% of organisations have witnessed a decrease of more than 11% in sales, productivity, efficiency or profitability due to errors during the purchasing process. Some are seeing a decrease in excess of 25%.

The majority of B2B buyers place orders weekly, often daily, which means the opportunity for errors to occur is high. 44% of individuals experience errors with online orders at least once a fortnight, while a fifth encounter issues weekly and 9% experience issues on a daily basis. With the majority of B2B buyers preferring to buy online (75%) it’s critical that e-commerce platforms can reflect current and accurate sales information, such as pricing, shipping and stock as a way to help reduce errors.

The research found that user entry was the top reason for problems occurring during the online buying process. 28% however, felt that incorrect product information is causing errors while 28% said it was incorrect purchase entry. Other reasons for errors include incorrect inventory display (27%), incorrect shipping information (25%) and incorrect pricing information (23%).

Online order errors appear to be most frequent in Benelux with 55% of buyers experiencing problems at least once a fortnight and 25% on a weekly basis. 48% of businesses based in Germany, Austria and Switzerland also experience errors once a fortnight and nearly half (46%) of British or Irish businesses face the same problem. Yet order errors in the US and Canada appears to be less frequent, with the majority (51%) witnessing order errors at least monthly.

B2B buyers purchasing automotive parts appear to be the most susceptible to errors when making purchases online, as 54% experience problems at least once a fortnight. This is closely followed by those purchasing building materials (53%) and food & beverage products (52%).

Michiel Schipperus, CEO and Managing Partner at Sana Commerce comments: “B2B organisations have embraced e-commerce as a route to market and as a way to remain competitive and reach new markets. But our research highlights the need for e-commerce platforms to deliver accuracy across all buying channels. Ensuring that the e-commerce system is integrated into the organisation’s ERP platform to provide a single source of truth at the point of purchase goes a long way to ensuring that customers have the correct information needed to make an informed purchase decision and reduce order errors.”  

The survey of B2B organisations in Europe and the US was undertaken by independent market research company Sapio on behalf on Sana Commerce. The survey sample covered food and beverage, electronics, building materials, medical supplies and automotive parts. For more insights download the report here.

Written by: Eman Abouzeid, Global Procurement and Supply Chain Professional The theory of stakeholder relationships is an increasingly significant area…

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Written by: Eman Abouzeid, Global Procurement and Supply Chain Professional

The theory of stakeholder relationships is an increasingly significant area in the procurement and supply field. Identifying and defining who the stakeholders are is vitally important in any business scenario and equally so in procurement and supply, in order to perfectly understand how they are involved and what influence they can bring as a direct impact on the work and success of procurement and supply. 

The theory of stakeholder relationships is an increasingly significant area in the procurement and supply field. Identifying and defining who the stakeholders are is vitally important in any business scenario and equally so in procurement and supply, in order to perfectly understand how they are involved and what influence they can bring as a direct impact on the work and success of procurement and supply. 

A stakeholder is an individual or groups of people who have an interest in an organisation; these may be colleagues in other parts of the organisation, as well as people and groups outside the organisation. Stakeholder groups can be profiled into three different categories:

1. Internal stakeholders group; such as directors and senior managers, the technical/design function, manufacture/production/operations function, sales and marketing function, finance/admin function, storage and distribution/logistics function.

2. Connected stakeholders group; such as shareholders, end customers, intermediary customers (e.g. agents/distributors/retail outlets), suppliers, financial institutions/lenders.

3. External stakeholders group; such as government and regulatory bodies, pressure groups (e.g. Greenpeace), interest groups (e.g. consumer associations and trade unions), community and society at large.

Why is stakeholder profiling important?

It is worth taking the time to profile your stakeholder groups for these reasons:

1. Decision Making: profiling provides an insight into how much influence stakeholders have over decisions. Moreover, it helps you to allow time for responses while working with stakeholders who tend to be slow to act.

2. Communication: profiling helps you to identify the best way to share the features and benefits of your products and services. In addition, it enables you to include stakeholders’ needs in a communication strategy.

3. Understanding: profiling enables you to be aware of what stakeholders’ needs, wishes and priorities are, also it makes it easier to keep track of changing needs and requirements, and it helps you to see the market from stakeholders’ points of view. Likewise, a clear understanding of your stakeholders can help you to deliver more acceptable solutions that more closely fit their needs.

Approaches followed to build rapport with internal and external stakeholders:

Effective communication with stakeholders in any project or business relationship is important as there needs to be an exchange of information between the parties. People will be engaged at various stages in the process and any communication blockages may result in incorrect assumptions and decisions.

Considerably, it is important for the organisation and stakeholders to get to know each other and understand each others’ motivations. This helps to build a relationship where each party is happy to deal with the other, and then, eventually, learn to trust one another. Trust is established when each side has shown themselves to be reliable, consistent, and able to keep promises.

Building rapport with internal stakeholders:

In a business, everyone needs to feel part of the same team and that they are all working towards achieving a common goal. If management do not communicate their expectations to everyone then staff or whole department may go in different directions and lose track of the organisation’s overall goals.

Internal stakeholders feel more engaged with the business if they are kept informed of where the business is heading and what its significant aims and achievements are.

Building rapport with external stakeholders:

Building rapport with external stakeholders takes a little more effort as they are not involved directly with what is going on in the business.

It is vitally important to keep external stakeholders updated with the business’ products and services, goals and achievements. They do not need to know the details of how the business runs, but they do need to understand the aims of the business.

Key techniques and strategies to develop, maintain, and improve relationships with your internal and external stakeholders to promote an effective procurement and supply function:

Having established a connection with stakeholders, to ensure future success you must build a trusting and lasting relationship with them. Whoever they are, whether senior to you or outside your organisation, you can use similar key techniques to help you strengthen these relationships:

1. Be honest and open: being honest and open with stakeholders makes them more likely to be the same with you. If you need help, ask for it. Stakeholders will appreciate your honesty and value the opportunity to assist before a situation escalates.

2. Be proactive: dealing with risks and issues straight away helps you to spot challenges before they become a problem. You cannot control what crops up but you can control how to respond.

3. Be positive: no matter the challenges in your relationship with stakeholders, remaining confident that you will find a solution helps solutions to be found.

4. Listen to others: make an effort to engage with your stakeholders and listen to what they have to say. Understand others’ points of view before you try to get them to understand yours.

5. Have empathy: gain a clear understanding of the stakeholders’ needs and wants. How would you react if you were in their position? – look for a solution that will benefit all parties (win-win).

6. Set a good example: build trust and respect and aim to be professional. It takes a lot to build a reputation, but it can be lost very quickly.

Maintaining relationships with stakeholders:

The better your relationships with your stakeholders are, the more likely it is that your will be able to overcome challenges as they arise.

Involve stakeholders: Do not lose sight of your stakeholders over time. You built good relationships at the outset and it is easy, under the pressure of work, to forget to maintain those relationships. Maintain regular contact and keep the communication channel open so the stakeholders can also contact you.

Keep your word: Maintain truth and honesty throughout the relationship. You are accountable for what you are responsible for. If you say you are going to do something, then do it. If the stakeholder feels you are not keeping your word they will begin to lose respect for you and feel that you do not respect them.

Keep an open mind: Challenges will happen so you need to consider all options when trying to resolve an issue. Be open to the other person’s input – it may be the solution you seek.

Address issues as they arise: Often issues are side-lined in the hope that they may resolve themselves miraculously, but they usually do not! Deal with them straight away, discuss them, agree on a course of action, learn any lessons and move on. The relationship will be stronger as a result.

Improving relationships with stakeholders:

Occasionally, you will encounter stakeholders with whom you find it difficult to develop a good relationship. There may also be times when a previously good relationship becomes less successful. In these situations, it is important to maintain a professional attitude toward the relationship.

Additionally, you can make a renewed effort to get to know and understand the person. Try to uncover what resistance there is, and why they are behaving as they are. There may well be a simple issue that can be easily resolved.

In conclusion:

Within an organisation, and between the organisation and its suppliers and customers, there needs to be effective and transparent engagement and communication. Therefore, building rapport and developing relationships with all groups of stakeholders are considered the core of building valuable long-term business partnerships.