How to change the world…like a procurement pro!

If you’re bored of cutting deals and meeting with the same old suppliers you might be starting to wonder, “what’s next?” 

ThinkstockPhotos-534717017

This article was originally published on LinkedIn.

The good news is, as you’ll see in a moment, there’s a simple way to re-energise your procurement career. The even better news is, your boss will love it because you will be delivering tons of value for your organisation and making the world a better place.

If you haven’t already, it might be time to think about social procurement.

Social procurement has nothing to do with buying stuff on Facebook. (Having said that, I believe social media has a massive role to play in procurement so please, join me on Procurious to see why!)

No, social procurement is where social impact and procurement meet. By directing even a small portion of our organisation’s spend, towards social enterprises, we can make a real difference in the lives of marginalised groups such as the long-term unemployed.

According to Social Traders, a leader in the development of social procurement in Australia:

A social enterprise is an organisation that; is driven by a public or community cause, be it social, environmental, cultural or economic; derives most of their income from trade, not donations; uses the majority of their profits to work towards their social mission.

With social enterprises now operating in a vast array of industries from facilities maintenance and cleaning to printing and web design, it is no longer a question of if you will do business with them, but when. It is also easier than ever, with intermediaries like Social Traders providing valuable services that help bridge the gap between large government and private buyers and social enterprises.

So where to start? Most procurement professionals I know aren’t sitting around looking for something to do and social procurement can seem like that ‘nice-to-have’ project we just don’t have time for. In reality, many organisations are already doing social procurement. The opportunity for procurement professionals is to Find it, Flag it and Facilitate it.

Find it: Identify social enterprises in your spend and supply base

One of the most important roles for any procurement professional is providing useful intelligence to the organisation regarding its suppliers. Often this means analysing spend data and interpreting it to provide meaningful insights that inform better decision-making.

In the case of social procurement, simply being able to identify social enterprises, particularly within the long tail of vendors that characterises most spend profiles, can mean the difference between creating and destroying social value for your organisation. Again, intermediaries like Social Traders have large databases of social enterprises that can assist with this task.

Flag it: Promote the value of social enterprise suppliers

As leaders in the organisation, particularly when it comes to supplier relations, procurement professionals have to take a position on value. If all we talk about is savings, then that is all that will be expected of us. People will look elsewhere for other forms of value.

Social value is still a source of competitive advantage in many industries, but increasingly it is becoming an expected norm, by customers, employees and shareholders alike. Promoting the role of social enterprise suppliers and measuring social impact as part of our decision making, positions procurement professionals as key contributors to organisational strategy.

Facilitate it: Make it easier to do business with social enterprises

Sometimes the best thing a procurement professional can do for the organisation, is get out of the way! Particularly with smaller suppliers (which social enterprises often are) the role of the procurement professional is more ‘facilitator’ than ‘manager’.

The day to day operational relationship with the supplier likely sits elsewhere in the organisation, but the policies and process set by Procurement can either help or hinder these relationships. Rather than treating all spend outside of Procurement’s control as ‘leakage’ or ‘maverick spend’, acknowledge that social enterprise development is a strategic objective.

Providing policy exemptions or tweaking procurement processes to make it easier to do business with social enterprises, can promote social value with minimal resource effort from Procurement.

So, if you’re ready to start using your procurement super-powers for good, then I have an invitation for you. There’s no catch and it won’t cost you a cent.

Please join me at the upcoming launch of Social Traders Connect. It’s a great opportunity to find out more about social procurement, meet with social enterprises and hear from peers who are using procurement to create social value in their organisations.

But don’t stop there. If you have social procurement questions or experiences of your own that can help others, please share them via the comments below or reach out to me via Linkedin or Procurious for a confidential conversation.

Is Twitter losing its ‘Star’ Quality?

Twitter’s latest change to its user interface, replacing its ‘Favourite’ star with a ‘Like’ heart has raised the ire of its community. Has the social media giant made a huge misstep in the battle to remain relevant? Twitter-Heart-1

To the casual user, this might not seem like a big deal, but to seasoned users of the social media platform, it represents a change that no-one expected, or even wanted.

The chances are fairly good that the furore about the change will die down in the near future as users become accustomed to it, but there is also a chance that a very human resistance to change could ultimately cost Twitter some users.

New Users

In an explanation of this move, Twitter posted a blog stating that the change was to “make Twitter easier and more rewarding to use” and removing any confusion about the star for newcomers to the site.

The heart, in contrast, is immediately recognisable for what it signifies, has the same meaning in many different cultures and Twitter also stated that the new idea had gone down well in testing.

And it is new users that Twitter is aiming for in what is becoming a fiercely competitive social media market. It might seem strange that a company valued at approximately $22 billion, with over 1.3 billion accounts and over 300 million monthly active users, would be worried about its user base.

However, for many people, Twitter is actually falling behind in the market, with user numbers actually in decline. Twitter is also falling behind Instagram (now owned by Facebook) in terms of active users, while lacking the development of other sites (think Facebook ‘Dislike’ button).

Changes at the Top

Twitter permanently re-appointed Jack Dorsey as its Chief Executive back in June, and he immediately set about making changes, including letting go 8 per cent of its workforce.

Twitter also appointed Omid Kordestani, a former Google Executive and the Internet giant’s 11th employee, as its Executive Chairman in August. Both men have been charged with turning the platform around, increasing profitability and gathering new users.

It is thought that Mr Kordestani will look to target countries where Twitter is currently unavailable or blocked, such as China, in order to boost the site’s user numbers.

Simplicity vs. Usability

The major challenge Jack Dorsey appears to have, is in making the platform more user-friendly and accessible for its members. When even your Executive Chairman says they find the platform “intimidating” and has only ever sent 9 tweets, you know you have a problem.

For many, the simplicity of a chronological news-feed in 140 character bursts is also the biggest drawback of the platform. By presenting the tweets in chronological order it doesn’t show the information individual users want to interact with or value being able to see.

There is functionality to create lists, as well as use tools like Nuzzel and Tweetdeck, to organise tweets into a more valuable resource format, but users want the same functionality on the site itself, rather than having to set up accounts elsewhere.

It remains to be seen what impact today’s change to the interface will have, if any, in the long run on active users, and if it will ultimately be a success.

As active Twitter users ourselves at Procurious, we would love to see the platform develop, while still retaining the essence of a short-message news feed. Just as procurement professionals are beginning to see the benefits the platform offers, it would be a shame to see it fall by the wayside.

If you want to join the debate, follow Procurious on Twitter – we don’t mind a few extra likes!

Jamaica Invests in Procurement Capability

2

400 procurement professionals from the Jamaican public sector have undergone extensive training in procurement practices. Some of those involved in the initiative were sent as far away as Canada and the United Kingdom to receive their education.

The move comes as part of a concerted effort from the Jamaican government to transform its procurement operations and ultimately deliver a more effective and efficient public service.

Of the 400 people trained, 300 received instruction under a certification series delivered by the International Procurement Institute, 40 received training in procurement law from the Osgoode Hall Law School, York University, Canada, while another 60 people were trained in E-procurement by Crown Agents and European Dynamics in the United Kingdom.

Certification Critical for Reform

Malisa McGhie (Senior Procurement Analyst in the Procurement and Asset Policy Unit in the Ministry of Finance and Planning) discussed the training as critical for the ongoing development and success of procurement and the public service in Jamaica, claiming that the certification of procurement officers is a key component of the reform process.

“Procurement practitioners must also be trained in what the standards are and understand how to actually execute, those types of procurement, to meet international standards,” said McGhie.

Echoing discussions both here on Procurious and in the procurement media in general, Senior Director in the Procurement and Asset Policy Unit, Cecile Maragh, highlighted the importance in improving the profile of the procurement profession in Jamaica.

“We have to make sure that public procurement is seen as a profession and not a clerical function.  It is not just something that you receive specifications and go to tender. It requires analytical thinking, it requires market research, so persons undertaking this function must understand that public procurement is in fact, a profession, and it should be treated as such,” she said.

The Finance Ministry has committed to training a further 500 procurement professionals over the coming three years.

Gender Balanced Leadership – Affirmative Action

Affirmative Action, and the use of quotas and targets in business, creates stigma and erodes merit. Fact or fiction?

affirmative action

Read the first part of my update here.

Affirmative action measures such as quotas and targets are seen to be problematic for many reasons. Perhaps the biggest concern is that women will be selected for roles based on their gender alone.

This leads to a double negative. First, there is a perception that women themselves will suffer the stigma of being in a role under false pretences. Second, that merit is eroded leading to a performance deficit, as women selected under these conditions are not deemed suitably capable.

What’s the evidence for stigma?

Numerous studies led by Heilman and others between the mid-1980s and mid-2000s explored the idea of stigma. Their research showed that women hired and explicitly identified as being hired under affirmative action programmes were generally seen to be less competent and less deserving of their positions.

This applied even where it could be demonstrated that they were as competent and qualified as male colleagues. (It’s something of a conundrum that women as competent and qualified as male candidates had to be hired through an affirmative action programme…).

Both men and women assessed the women described in this way as less capable. The women appointed through these processes themselves held these views, even in the face of contradictory evidence about their competence!

They also went on to take less credit for successful outcomes and indicated less interest in continuing in leadership roles.

More recent meta-analysis of this same databank, as well as more recent research, creates a more refined view that points to a fundamental problem with how we see affirmative action.

Why Affirmative Action?

Affirmative action is designed to ensure proactive investigation of whether or not equality of opportunity exists. And if it doesn’t, to take steps to eliminate barriers and establish real equality.

Quotas and targets are amongst such measures, in recognition that women and men of equal talent and skill tend not to be appointed to roles with the same frequency, as noted above.

The more refined view reinforces the importance of the language we use. Unzueta and his colleagues found that women’s self-image benefited generally from affirmative action policies, so long as they did not think they had personally benefited.

Other studies have shown that those who benefit from affirmative action recognise the success of such policies, see them as providing them with opportunities, and enjoy working for employers with affirmative action policies. Where women are told their qualifications are high, they do not experience the same negative effects.

Feeling Stigma?

In summary then, stigma may well occur under certain conditions, and how women’s success is described is a critical factor. If women are told they have won their role solely because they’re women, they are more likely to feel stigma.

Where there is a general environment that opportunity is being re-balanced and women move into senior leadership roles, there seems to be no stigma.

Where women are told they have won their roles because they are competent and capable, whatever the affirmative action landscape, there appears to be no stigma. (And this happens not just for women, but for any group in the minority, including male nurses working in a predominately female working environment.)

As it is so unlikely that women will be placed in roles solely because they are women, and as long as women are not described as winning roles solely on the basis of their gender, stigma should not be an issue.

Is Merit Eroded?

Merit is often discussed as if it were an absolute. As if there were perfect standards and assessment tools that allow raters to make unequivocal judgments about individuals. There is however clear evidence that measures of merit include subjective elements and are influenced by stereotypes. The testing community willingly admits to the challenges of making fair assessments of individuals.

Test construction and conditions remain open to bias, and plenty of research supports this. Given that implicit beliefs that associate men with leadership and women with support roles are held at least slightly by the greater majority of the population, it is clear that even those of us with good intentions may not be able to suppress these when we are  assessing capability.

And according to Crosby, most people just don’t notice persistent injustices unless they have access to systematic comparative data. At individual decision level, and even within departments, and even by those attuned to such discrepancies, discrimination between different demographic groups isn’t discerned.

Detecting Different Patterns

It is only when reviewing large amounts of aggregated data comparing smaller groupings across a larger collection, that people are able to detect different patterns in hiring women and men.

Crosby and her colleagues put this down to a fundamentally human need to believe we live in a just world. When we perceive difference, we would rather put it down to a random quirk than to intention (discrimination), and so we miss the pattern.

Because observers are not always able to detect unfairness in processes, valid assessment of the merits of women are harder to achieve than valid assessment of the merits of men.

In Crosby’s words, “the main reason to endorse affirmative action … is to reward merit. Without the systematic monitoring of affirmative action, one can maintain the fiction of a meritocracy but will have difficulty establishing and sustaining a true meritocracy”.

What to do:

  • Prime women for competence
  • Prime others for women’s competence
  • Take care in choosing assessment methods, and as far as possible structure assessment processes to avoid priming on gender lines
  • Increase transparency of the numbers.

Dr Karen Morley is an Executive Coach, Associate Dean at Mt Eliza Education, expert on gender-balanced leadership and registered psychologist.

Austrian Wastewater Solution Wins Procurement Innovation Award

This year’s Public Procurement of Innovation Award has been won by the Austrian Federal Procurement Agency for its work in delivering a ground breaking wastewater solution.

RTEmagicC_PPI-Platform_star_award__Elnur_01

The award, which was presented to the Austrian delegation at a ceremony in Paris, aims to recognise successful public procurement practices that have been used to purchase innovative, more effective and efficient products or services.

This year’s finalists included entries from Sweden (medical imaging for optimisation of care flows), Italy (integrated energy service framework contract), Netherlands (learning space self supporting river systems) and Spain (Galician Public Health Service).

Innovation led to Sustainability

Ultimately it was the Austrian solution that came out on top. According to the Awards panel, the project, which recycles wastewater by vaporising it to remove waste particles, was chosen as it not only involved the application of innovation-friendly procurement procedures, it also ensured increased resource efficiency and improved environmental sustainability.

“We felt that the procurement of the vaporising system best showcased the impressive work being carried out, as well as the type of solution that public procurement of innovation can achieve, the procurement brought together the institutional knowledge of public procurers with the ingenuity of the private sector” said Wouter Stolwijk, Director of PIANOo, the Dutch Public Procurement Expertise Centre, who presented the award to the Austrian delegation (pictured below). 

21923714803_fe9ae61dd1_k-2

The solution, that will be used to clean the residual water left over from the production of coins and notes at the Austrian mint, is said the reduce the amount fresh water used in the process by 97 per cent. It is believed that the machine could also have uses in other industry sectors.

 

 

2015 marks the second year of the PPI award with last year’s award being won by an impressive robotic bed washing facility at the Erasmus Medical Centre in Rotterdam. That innovative solution reduced bed-washing costs by 35 per cent and cut the CO2 footprint by 65 per cent.

See the full list of finalists here.

“And the winner is…”: Supplier Award Schemes

Award schemes come in a considerable variety of shapes and sizes. Likewise the concept of ‘developing’ your suppliers leaves a wide spectrum of potential, with a carrot at one end and a large stick at the other.

39425_316

The Set Up

Start with defining the effect you want the scheme to have on your suppliers. Are you looking to genuinely reward the best suppliers? This could be by giving them something meaningful, or by using the process to give them contacts and insights into your own company.

On the other hand are you looking to use the process to highlight to non-winners that they are losing out – perhaps that they may even be under threat as a result. Both of these are possible to achieve, but you may set the process up differently depending on your needs.

Establishing Criteria

Next consider how the awards may fit into other measurement programs. If you have an existing appraisal process then it must be related to the awards scheme – if not then one or other of them will suffer a serious credibility crisis. If you don’t have an established scheme, then an awards ceremonies can be a good launch pad to announce them, and to show that there will be winners from the process.

There is a second strong connection between award schemes and supplier ratings – they both only really generate value over time. Suppliers will need to see that the success criteria are not just one-off political choices, and the process is really about developing them – not just an excuse to tell them all to reduce prices or leave the room. It will probably take two or three years to properly establish an event as a key focus for your supply base.

Behind the Win

The most effective awards schemes use the event to genuinely share learning across the supply base. This can be a two edged sword. You want to reward your best suppliers, and you need to make sure you are not asking your best performers to simply give away their competitive advantage in public. With this in mind, get them to share by focusing more on the ‘how’ and ‘why’ of their performance.

In too many ceremonies they simply tell a chronological story, which is not nearly as helpful to others as learning what the drivers, attitudes and obstacles were to success. Also ensure that your suppliers speakers are well practiced, that you have worked together on not only the content, but also the style of any presentations made.

Slick and Well-Staged

This last point confirms that it should be a well managed, well prepared, and a well staged process. The winners would know in advance and can work on helping the development messages. It is not necessary to have fanfares, glitter and repeat sound blasts of Queens’ ‘We are the champions’.

It is important to fund it well, making it slick and professional. Brief your own senior managers who may attend so that they both give a consistent message – and you can use it to engage in a subtle bit of supplier conditioning. External speakers are very effective, they can add a new dimension to the process and give it a ‘special event’ feel.

All suppliers should have some chance to contribute. Don’t just talk ‘at’ your suppliers, make opportunities for them to feedback. Having done this also ensure you manage expectations on how you are going to use this feedback – this will be an important convincer that the process is one to be taken seriously.

Supplier events therefore can be an excellent tool to develop your supply base, and like any tool, planning and practicing its use will make it that much more effective.

Are Supply Chains Taking IT Security Seriously Enough?

The IRS, the CIA, Sony Pictures, TalkTalk, Kaspersky – what do all of these organisations have in common? Security

If you said that they have all been victims of cyber attacks during 2015, you would be right. With each high-profile incident, the profile of IT security and cyber crime is raised further.

For procurement and supply chain, this is something that needs to be considered, but is it being taken seriously enough?

Supply Chain Security

A recent poll carried out at IP Expo Europe by cyber security firm Tripwire, revealed a startling statistic when it came to IT security. Nearly a fifth of respondents to the poll said they would be prepared to use IT suppliers who do not meet their IT security standards.

Additionally, nearly half of the respondents (47 per cent) admitted that they currently do not carry out audits before working with suppliers, although 23 per cent did say they were planning on introducing this in the near future.

This is not a new issue, as this 2013 article highlights. So why, in 2015, are so many organisations not taking this issue seriously? With brand, reputation and share price at risk, not to mention potential regulatory fines, what should organisations be doing?

As simple as it seems?

While these statistics do not exactly paint a rosy picture, the truth is that the reality is not as simple as it might seem. One of the victims of a hack this year was Kaspersky, an Internet security and anti-virus software organisation.

Symantec, a global provider of Cloud, mobile and virtual security, was held to account by Google this month for issuing fake security certification for websites. These certificates could be used to intercept and subvert SSL/TLS protected traffic, which underpins e-commerce, banking, government and other important services.

Following two audits, Symantec has uncovered an incredible 2458 certificates for unregistered domain names, and Google has demanded an explanation and resolution to the issue.

Even the US Senate, taking action to pass a version of the Cybersecurity Information Act (CISA) that allows companies to share any and all information about their user base with the Department of Homeland Security, has come in for criticism.

John McAfee, founder of the IT security and anti-virus software company that bears his name, points out that while this Act helps the cyber security fight within the US, it doesn’t help with attacks from foreign soil, where the majority of the US hacks in 2015 are believed to have originated from.

What’s to be done?

If you weren’t already aware, the UK Government released new training in June this year to help procurement professionals stay safe online. The training is free and can be accessed via CIPS.

The Chartered Management Institute has also offered these tips to business leaders, which can be implemented in every organisation:

  • Understand the potential threats – review any internal and external vulnerabilities in business web systems, such as any easy entry points for hackers
  • Integrate cyber security policy within corporate culture – security policies must permeate throughout every process and decision with a company. This includes audits of suppliers.
  • Practice an incident response plan – have a ‘go-to’ plan of action for responding to a cyber incident

Good IT security comes down to good education, not only employees, but also stakeholders and suppliers, as well as good communication. Equally, one of the best ways to beat the cyber threat is by collaboration – with governments, regulators and even rival companies.

If organisations put their differences to one side and work together, there may be light at the end of the tunnel yet.

We’ll leave the last word to Jeh Johnson, the United States Secretary of Homeland Security – “Cyber security is a shared responsibility and it boils down to this: in cyber security, the more systems we secure, the safer we all are.”

Do you work in IT procurement? Do you have any good tips that you could share with your fellow professionals? Let Procurious know and we can spread the word.

We’ve scoured our sources to come up with the key headlines in procurement and supply chain this week…enjoy!

Boerum Showcases Supply Chain Transparency

  • Boerum Apparel, a clothing company based in Brooklyn, has released a sweatshirt which shows off its entire supply chain
  • Each garment’s journey from plant or animal to the finished product is is written on its label, and includes where the raw materials were sourced and where it was turned into a sweater
  • The organisation is working hard on its “radical transparency” programme, and hopes that it will lead others to follow suit
  • You can get more information by search for the Twitter hashtag #knowyoursources

More at Treehugger.com

Toyota Breaks with Supply Chain Tradition

  • Japanese car manufacturer Toyota launched its new Corolla model this year, but departed from their traditional supply chain process of keiretsu
  • For the first time, Toyota chose to source a key component, a crash prevention system, from German manufacturer, AG Continental, rather than a Japanese-based firm
  • The decision is regarded as a symbol of Japan’s automotive suppliers falling behind the rest of the world when it comes to cutting-edge technology
  • Toyota plans to keep its keiretsu, but wants suppliers to be more globally successful and spend more on technological development

Read more at the Wall Street Journal

Living Wage on the Rise

  • The voluntary living wage in the UK is set to rise by 40 pence per hour, rising from £7.85 to £8.25 per hour in London
  • The rise is set to be officially announced this week, with organisations having six months to implement the changes
  • The move follows a report from KPMG that claimed almost six million workers in the UK were paid less than the living wage
  • In the last Budget the UK government announced a new compulsory National Living Wage that will come into force from April 2016, starting at £7.20 per hour

Read more at The BBC

Volvo to Test ‘Kangaroo Avoidance’ Technology

  • Around 20,000 kangaroo collisions are reported on Australian roads each year
  • Volvo has conducted a trial in Canberra last week aimed at adapting and using existing technology to help avoid the creatures on the nation’s roads
  • The technology uses radar and cameras to sense kangaroos along the road ahead and automatically brake as necessary
  • The technology has been used in the past for cows, moose and reindeer but requires calibration due to kangaroos’ more erractic behaviour

More at The Verge

Procurious Big Idea #46 – Shift Perceptions Of Contractors

Samantha Coombs, Consultant at Procuri, talks about why procurement managers should change their perceptions of contractors.

Samantha argues that by communicating better with these workers, managers can stop them being a transient workforce and start to benefit from their knowledge.

See more Big Ideas from our 40+ influencers

Like this? Join Procurious for FREE and meet like-minded procurement professionals from across the world.