The Smart Way to Buy Your First ERP System

You might not realise it, but you could be making a common mistake when buying your first ERP system.

ERP System

When should a growing company start thinking about a formal, automated spend management program? At the same time you get your first ERP system. The two go hand in hand, but most companies put an ERP system in place and then, when they get to about 800 or so employees, they start thinking about automating spend management, starting with e-procurement and e-invoicing.

A little further down the road, they start thinking about systems for budgeting, travel, employee stock administration and maybe analytics.

The problem with thinking about all these systems separately and sequentially is that instead of thinking about the optimal way to handle each function, you’re thinking about how to solve each problem within the constraints of the systems you already have.

It’s like building a house without a set of plans, one room at a time. It’s an inefficient way to build, and you’re going to end up with a pretty funky floor plan.

You can save time and money, and gain a competitive advantage, by thinking about your finance system as a whole, and drawing up a set of plans for building it from the foundation up, starting with ERP and spend management.

It all starts with invoicing

Your finance system really starts when you start paying invoices. What most growth companies do is buy QuickBooks or some other inexpensive entry-level software to do that, and then shift their focus back to sales and revenue.

As the company grows, it becomes evident that this entry-level system is no longer meeting the company’s needs so they start thinking about an ERP system. These days that doesn’t have to be a multi-million dollar undertaking. Cloud ERPs such as NetSuite can work for businesses as small as 40-50 people, and they can scale up to work for as many as 100,000 people.

So, the CFO or Controller spearheads an effort to get an entry-level ERP system to address core financials, and then, once again, they shift focus back to sales and revenue.

The ‘flip the switch’ myth

Spend management – most notably, e-procurement and e-invoicing – are what people typically tackle next, but most postpone thinking about them until they get there. Or they think, “the ERP system has some requisitioning and invoicing functionality. We’ve got the license and we’ll just flip the switch on those when we need them.”

If only it were that easy.

Yes, many ERP systems do some basic requisitioning and e-invoicing. But their functionality will not come close to satisfying requirements for effectively managing spend, and there’s too much they don’t do, such as sourcing and contracts.

Flipping the switch will only expose those decisions you didn’t make at the outset. Don’t fall into the “flip the switch” trap. Nobody intentionally uses the requisitioning in their ERP to manage spend – they settle for it.

Or, they figure out they need more functionality than the ERP provides and launch an entirely new initiative to vet spend management solutions. But it could have all been figured out at the point where you went from QuickBooks to NetSuite, without taking too much more time, money and resources.

ERP and those first pieces of spend management should be done all at once, so bring procurement and AP to the table for that discussion. Not only will you make a better buying decision, but you’ll have an opportunity to streamline the implementation process.

It will only take fractionally longer to implement both at once, but if you do your ERP implementation and then come back later to implement spend management, you’ll end up doing a lot of the same work over.

A Biggish Bang

There might be reasons to do it that way, but those have to be weighed against the fact that when it comes to your financial management system, it’s not “if” but “when.” It makes more sense to implement ERP and spend management solutions together in a biggish bang because like peanut butter and chocolate, they’re even better together.

Spend management is a low impact, high return insertion that will make your ERP implementation better. The procurement piece can create all the purchase orders that get pushed into the ERP, where you’ve already got the right categories and accounting codes.

Why wouldn’t you want to feed your ERP good, clean data to begin with, in an easy way that people can use and understand? With the cloud, it doesn’t matter if you only have twenty people buying things, or if you’re only doing a few hundred invoices a month.

You probably won’t automate your whole financial system right out of the gate, but you should still think it through and draw a set of plans with the end goal in mind. So, think thrice before you buy that ERP system. Think about the next imminent piece, which is spend management. Think about how you build out from there. You’ll be way ahead of the competition that’s doing it the way we’ve always done it.

You’re not going to have a lot of messes to clean up because you set it up right from the outset, and you’ll be paying a lot less for transactional processing than the competition.

World Sleep Day – Why Sleep is Important in Business

Today is World Sleep Day, a good excuse to grab some extra Zs. Research has found that poor sleep is impacting over 5 million UK businesses.

 World Sleep Day

  • The Average UK employee misses 8.5 days of work a year due to poor sleep
  • 1 in 3 people in the UK currently suffering from sleep problems

World Sleep Day is today and recent research has shown that one in three people in the UK currently suffering from sleep problems. It’s time for people to wake up to the impact poor sleep is having on the UK’s 5.4 million businesses.

Not only has poor sleep been linked with mental health conditions such as anxiety and depression, but also decreased productivity and concentration in the workplace.

The Cost of Poor Sleep

Information from the World Sleep Survey by Big Health, creators of the clinically-proven sleep improvement app Sleepio, reveal that the average UK employee loses 8.5 days of work a year due to poor sleep. Sickness absence and working-age ill-health, including poor sleep, currently costs the UK economy £100 billion a yearwhile sleeping pills alone cost the NHS nearly £50 million a year.

‘Poor sleepers’ (those who rated their sleep quality as below average) missed 14.6 days of work per year. Alarmingly, 60 per cent of these poor sleepers don’t seek to fix the problem and did not consult their doctors about their bad sleep.

Sleepio help some of the world’s leading companies, such as LinkedIn and Ford, to improve employee wellbeing and boost productivity in the workplace. The app creates personalised sleep improvement plans featuring Cognitive Behavioural Therapy (CBT) techniques to help sufferers overcome poor sleep without pills.

The 2,500 British participants in the World Sleep Survey stated that the top three personal impacts of poor sleep are a decline in energy levels (60 per cent), mood (48 per cent) and relationships with others (35 per cent). These repercussions affecting their work with a reduction in: concentration levels (46 per cent), ability to complete work (38 per cent) and ability to stay awake during the day (27 per cent).  

Addressing the Sleep Issue

“Poor sleep is the unspoken productivity killer in the workplace and it has been ignored for too long”, said Peter Hames, CEO and co-founder of Big Health. “Now is the time for employers to wake up to the problem of sleep – improving employee’s sleep positively impacts workplace effectiveness and general wellbeing.

“Big Health are working with some of the world’s leading companies to help them improve the sleep of their workforces with Sleepio, and seeing huge improvements in productivity and overall health as a result.”

Colin Espie, co-founder of Big Health and professor of sleep medicine at the University of Oxford, added, “World Sleep Day is the perfect time to acknowledge the widespread effect poor sleep has on our lives.

“Sleep is not an optional extra in life, it is a fundamental requirement. The consequences of a bad night’s rest affect us not only physically but also mentally and emotionally, seriously impacting our performance at work. Physically we will feel lethargic, mentally we become slowed down with poorer concentration and memory, and emotionally we may become irritable and rather down, with bursts of hyperactivity. In terms of daily life, no aspect of daily functioning is unaffected by sleep – least of all our jobs.”

Sweet Dreams

So, what better time than World Sleep Day to start thinking about your own sleeping patterns, and what you can do to improve this. Why not check out some gadgets that might help you sleep better, or get some tips from the sleep and productivity experts?

Whatever you do, make sure you sleep well this weekend!

5 Ways Slack Can Help Build a Better Procurement Function

Charting the stratospheric rise of Slack, and investigating how it can be used to increase collaboration and conversation in procurement.

slack icon macro

For those who don’t know, Slack is an online communication tool, built around both group and a one-to-one chat. But it’s much more than that. Unlike any other system, Slack can talk to pretty much any other tool through the magic of APIs and webhooks.

These integrations make it a mind-numbingly powerful tool, because it becomes a platform for pretty much anything you need, and can be the focal point of many aspects of your business.

It drastically reduces the number of systems you need to consult to get the information you need to do your job. If something is noteworthy, it should be pushed to Slack.

This incredible value has allowed Slack to grow very fast. We don’t have any startup in our surroundings who doesn’t use it. But it is also increasingly used in larger organisations, for example, NASA, Dow Jones and Salesforce. Plus, all the major news outlets talk about it or even use it.

Their progress is staggering. After less than 2 years there are more than 2 millions active users of Slack globally. And it’s only the beginning.

Slack usage

Does Procurement really need it?

Does Procurement need to collaborate or be more nimble? Can it use Slack as part of its digital transformation?

Yes, of course! And here’s why:

1. Collaborate, Collaborate, Collaborate

With your team, your stakeholders and your suppliers. It’s easy to create topical channels and invite people to join them. Even if they are outside of the company.

Imagine: you no longer have to ask IT to create a dedicated section on the intranet, or setup a “secure room” to exchange documents. Slack can host everything from documents to discussions, and it’s available for anyone with access to the channel. It’s the end of information trapped in someone’s mailbox.

That’s how you’ll get smooth collaboration with your stakeholders or your suppliers.

2. Make Life Easier by Knowing What Happens Everywhere

Slack has this incredible ability to integrate easily with pretty much anything.

Twitter, Dropbox, Google Docs, or anything that can respond to a URL, can be integrated with Slack. This means that when something noteworthy happens, you get a notification in Slack and not cluttering your inbox. One more step towards inbox zero!

And a new range of Procurement tools can also be integrated and send notifications to inform you about new purchase orders or new negotiation projects.

Soon, the days of email notifications and logging into 5 different systems to know if something has happened, will be gone.

3. Kill (internal) emails

This is probably the last step towards inbox zero. We have set a rule in our company that basically says, “if there is no recipient outside of the company, then don’t send an email. Use Slack instead”.

You have no idea how much this reduces the number of emails we receive on a daily basis. If the information is meant to be shared with one person only, you can use the direct messages, otherwise, it can be posted in a relevant channel. Easy!

The Per Angusta Team's Slack
The Per Angusta Team’s Slack Channel

4. Towards “Conversational Procurement”?

Recently, there has been a lot of talk about the concept of conversational procurement. In essence, people in your company would no longer visit your e-Procurement tool to buy things, but would instead talk to an automated system that would understand their needs, gather relevant information and run the process of validating and ordering.

Think of it as Procurement meets Siri, or Google Now if you’re an Android person (or Cortana if you’re…oh wait no-one is a Windows Phone person…).

And that’s exactly what bots are in Slack. An interface for the user to interact with a system in a loosely structured way. Of course, this would mean that a system in the background would have to understand your request, but at least the user-facing part is taken care of.

5. Have Some Fun

Besides all the serious things you can do in Slack, there is also the #random channel, which acts as a sort of virtual water cooler,  a place to just relax and post some funny stuff.

Again, the fact that Slack is so easily integrated with a number of services will let you post nice animated gifs everywhere.

So what are you going to do next?

We suggest you register with Slack and create a room (or possibly talk to IT first…). Don’t worry, it’s free, and you will only start paying if you have more than 10 integrations. And if you reach that point, then it probably means that you will be happy to pay for the service.

Just be aware that Procurement and Digital Procurement are already taken!

Innovation and the Shifting Technological Landscape

Innovation is more important than ever before. The technological landscape is currently undergoing a shift three times the size of the industrial revolution.

Lego Car Innovation

This is according to Steve Sammartino, an expert on the digital revolution and disruptive technologies. Steve has worked in marketing for the world’s largest companies, founded and sold his own start-ups, is a business journalist, and thought leader in the start-up & technology arena.

And amongst all this, Steve still found time to make news headlines by designing and building a fully functional, air-powered, 500,000 piece Lego Car!

Ahead of his keynote address at this year’s CPO Forum event in Melbourne, Steve talks about the changing structure of the economy and the Supply Chain, and the importance of innovation to procurement and its future leaders.

Why is focusing on innovation more important than ever before?

We are living through a radical change 3 times the size of the Industrial Revolution. It’s 3 times bigger because this time it involves the entire globe, not just the developed economies. Here’s a fact to blow your mind in this regard – there are currently more mobile phones in use around the world than toothbrushes!

Technology and access to it is now seen a primary life improver for people in developing countries. It means that what worked and what mattered yesterday, won’t be a valid strategy today. Innovation is not just a matter of a company’s survival in disruptive times, and not just a way to outgrow your competitors.

And the thing that is different is that it isn’t just at the consumer end that innovation needs to occur. It’s an entire supply chain reset. A new infrastructure is being built, and major innovations are happening in areas customers never see. 

What are some of the ways multinational companies can adopt a ‘start-up mindset’?

More important than anything else, big companies need to learn how to fail, and that failing is not bad. They key to startups is that they move quickly, and cheaply, to find out what works.

Big companies also need to decentralise decision making, as many of the Industrial era efficiencies are now being usurped by nimble and local connections. In a world where one size no longer fits all, we need to remember that this applies to local operations as well. Lots of small mistakes lead to better outcomes in a connected world. 

How can businesses cultivate a more innovative and collaborative workplace culture?

Businesses just need to do one thing – remove the layers of authority, and become a horizontally focused organisation, not a vertical, hierarchical one. This will help to create an environment where frequent small risks are rewarded.  

What tips do you have for current and emerging leaders to stay ahead of the curve, and be equipped to lead their companies to future success? 

Staff need be interested in change. Be students of change and be the person who introduces ideas to colleagues, don’t wait for management to know what is coming. The other thing to remember is that being innovative isn’t about inventing the technology, but more about working out how to benefit from the changes. It’s not a technological process, but one of courage and creativity.

We need to love our customers more than we love our infrastructure, especially in times when infrastructure is reset. We can do this by thinking of applications to serve our customers, rather than ourselves.

Also, given most large companies are fearful of change, it only takes an open mind to get a few steps ahead. It’s not about guessing what’s next, but adapting faster when ‘next’ arrives. 

Why should businesses invest in social impact and change?

It’s vital because it is what we value as a society. But it needs to be more than donating to charity, or triple bottom line reporting. Our responsibility needs to be designed into our supply chain. Businesses need to go to market with a net positive social outcome, not white-wash bad behaviour after profits are made.

It’s a very important part of brand building. Organisations that make products that benefit society save costs on things like advertising. Just look at Tesla – a $30 billion company that doesn’t spend a cent on advertising.

You can hear more from Steve on these topics at the CPO Forum 19th of May in Melbourne. At CPO Forum 2016, the line-up of inspirational speakers will reveal how procurement leaders can “crack the code” and harness the game-changing power of supplier innovation.

For more information, including how to register for CPO Forum 2016, visit the website.

Does Your CPO Have Big Ideas?

Is your Boss a Perfect Fit for the Big Ideas Summit 2016? Nominate your CPO to attend this unique event.

Big Ideas CPO

At Procurious we know people don’t leave companies, they leave bosses. So we want to reward great bosses – procurement leaders who are leading by example, keeping their teams energised, investing in individuals’ careers, and continuously pushing procurement to excel.

On April 21st in London, Procurious will connect 50 top executives, thought leaders and CPOs, with its 12,000+ worldwide members to forge new ground by solving the thorny issues in, and harnessing new opportunities for, the procurement profession.

Only 5 places remain in our London audience. And here’s how you can help your CPO attend

Nominate your CPO

As we’ve said, there are only 5 places left, but we’re giving the Procurious community the chance to help fill them. You’ve already read plenty about the Big Ideas Summit, found out how to get involved as a Digital Delegate, and get involved by submitting your own Big Ideas.

What we’re offering here is the chance for your CPO to attend the event in London in person, rubbing shoulders with representatives of some of the world’s biggest organisations, such as Facebook, the World Bank, the BBC, and AstraZeneca.

The nomination process couldn’t be any easier either. All you need to do is fill in a short form with your and your CPO’s details, telling us why you think they are deserving of a place in the Big Ideas delegation.

Is Your CPO a Perfect Fit?

So, how do you know that your CPO is the right person. Well, picture them and think about the following points. These attributed are what we are looking for in our CPOs who are attending Big Ideas:

  • Progressive – your CPO is ‘on trend’ and always up to date with the latest key themes and issues in procurement.
  • True Influencer – your CPO shares their knowledge freely and widely, has had something they have written published and shared, or has a particular area of expertise. This could be within your organisation or the broader profession.
  • Big Thinker/Creative – your CPO is creative and likes looking at the bigger picture. But they’re also open to other people’s big ideas too.
  • Wants to expose his/her team to opportunity – your CPO wants to give their team the chance to access thought leadership from some global experts.
  • Tech savvy – this is a digitally-led conference, so we want our attendees to be advocates for technology, including social media, for procurement.
  • Committed to diversity and promoting young talent – makes sure that their team reflects diversity and is full of opportunities for the next generation of talent.
  • And, of course, an Awesome Procurement Boss – and because you want to reward them for being awesome!

How to Nominate

If your CPO meets most, or all, of the above attributes, then nominate them now!

To be eligible to attend, your CPO needs to be in London, in person, on April 21st. Procurious will be extending the invitation, but the cost of the ticket and travel is down to them.

To nominate your CPO, simply click here, tell us your CPO’s details, and why you think they should be at Big Ideas. Let us know your details too, so we can get in touch if we need to.

Nominations close on Tuesday the 29th of March, with CPOs contacted following this date.

We look forward to hearing from you!

Want to know more about Big Ideas 2016? Then visit www.bigideassummit.com, join our Procurious group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

Don’t miss out on this truly excellent event and the chance to participate in discussions that will shape the future of the procurement profession. Get Involved, register today.

Successfully Procuring Social Value

If procurement is going to get serious about social value, then it needs to ensure that it is fully integrated into strategic plans.

Social Value

Public spending through procurement practices and contracts can be shaped in a way that benefits both the economy and society – but too often this is not the case.

Since the implementation of the Public Services Social Value Act 2012, not enough has been done by commissioning organisations to ensure they are obtaining maximum social value from contracts.

What is Social Value?

Social value is a way of thinking about how scarce resources are allocated and used. It involves looking beyond the price of a contract, and prompts organisations to consider the collective benefits a contract could deliver.

Implementation shouldn’t be a trade off against cost or quality. It is possible to deliver a triple bottom line through procurement activity. A combination of three factors – social, environmental and financial – should improve the quality of delivery, which in turn will almost always result in an improvement in efficiency.

It’s essential that when commissioning services, organisations are focused on achieving the best value, as opposed to focusing solely on cost. The strategic power of social procurement can be extremely influential, particularly when decisions are aligned to a business strategy which supports an organisation’s wider corporate mission and values.

How can social value be achieved?

There are a number of ways to ensure that social value can be fully integrated as a part of procurement plans. The Public Services Act 2012 asks organisations to only consider it at the point of commissioning. However, to realise maximum benefits, social value should be considered past this point.

Fusion21 delivers procurement services for built assets to over 180 public sector members, and we ensure social value is delivered through our programmes by measuring the performance and delivery on contracts.

To date £56 million of social impact has been delivered, and over 2400 jobs have been created. Last year alone we achieved over £13 million of efficiency savings for our members.

So, at the point of commissioning, how can you ensure considering social value will make a difference? Including it within the award criteria, and assigning weighted sections as part of a supplier’s quality submission during a tender process, is one option.

Fusion21 attribute a proportion of a tender evaluation to social value – resulting in this having a direct impact on the final scoring. This approach ensures that social enterprises, SME’s and socially driven suppliers, stand a better chance of winning work through the procurement process.

It also provides an opportunity for organisations to demonstrate the added value they can deliver on a contract, and enables the commissioner to evaluate this based on project objectives.

Avoid Best Endeavours

Organisations should always avoid a ‘best endeavours’ approach to social value implementation within contracts. Instead, commissioners should stipulate how their objectives will be managed, and consider how performance will be evaluated. One way to do this includes asking successful bidders to produce SMART action plans, listing the outputs they can generate.

Once this is complete, social value performance should be integrated into standard contract management procedures.

Fusion21 also issues Regeneration and Local Economic Benefit Plans to every member who has commissioned a contract through us. These plans contain clear objectives and set targets – in addition to providing analysis and detailed progress reports.

By placing a financial figure on the value generated, our members can see the clear benefits of social value activity.

Finally, if social value can become engrained in a supplier’s contractual obligations, it is easier to ensure that goals will be met. At Fusion21, we put a contract in place between our member and supplier, which states an employment opportunity, must be created for every £500k of contract value.

It’s fair to say that procuring for social value needs to have a higher priority in the public sector – and to retain competitive advantage, suppliers should be considering their approach to delivering this.

Fusion21 is an award winning social enterprise who’ve gained national recognition for collaborative working with suppliers and members. We provide a wide range of procurement services and procurement frameworks for built assets that meet the unique requirements of public sector organisations.

Samurai & Cowboys – Cultural Perspective on Management Styles

Whether you support or detest change, it is happening. But how much impact do management styles in different cultures have on change?

East vs. West Management Styles

Do you have a Smartphone? Do you use Google? Do you use global internet sites to get information on clothes, food, travel, music, research, work opportunities? These sites influence people and bring countries closer together, especially countries that share a lot of trade and commercial contact.

These factors influence what you and your colleagues may see as the norm. You are open to influence whether you know it or not, to leading thoughts, persuasions, technologies, arguments, speeches, TV adverts, products. Nothing stands still.

Management Styles – East and West

Could all of this affect management styles? If you compare Japan and the USA there are, of course, differences. However, countries will find it difficult to maintain existing management cultures in the face of fast-paced change, and as technology makes the world smaller.

There is a belief that you can group countries with similar management styles – the USA, UK and Australasia in one group, and Japan and other East-Asian countries in another. Traditions, national roots and leadership are different, and this difference should be cherished. But could this have a negative effect on business?

When a multi-national company starts operating in Japan, Directors “back home” will see differences in culture. A Japanese firm, starting operations in the USA, is going to experience a culture shock when they hire local staff. Because of this, management styles cannot stay the same.

So which culture is better and will things change?

Values, Norms and Variances

There is a widely held belief that traditions and leadership styles in each country lead to the development of styles. National values, norms and education are instilled from an early age. These can lead to national variances such as:

  • Power of leaders to influence citizens
  • Pressure on a corporate employee if an error is made, and the outcome
  • Time scale to make decisions in a company, and by whom, a person or a group

Most will agree that management styles in some counties have changed over the years. People believe if you treat your staff well, they will perform better and go the extra mile. This is seen by customers, who tell others, and the company prospers. The ability to complete work to ‘best endeavours’ is initiated or halted by management – despite their wish to ensure good company performance.

But what or who influences the Directors and the Managers?

In a ‘Top Down’ style, the manner of the CEO is reflected across the organisation. But the leadership of a country can be influential too. Comparing Japan and the USA again, both have similar approaches and beliefs when it comes to market share, commerce and winning business. But there are variances that have evolved, which are more effective in their own regions.

Japan and the USA have traditionally strong trading links. Is there an argument for finding a cultural ‘middle ground’, where the best of both cultures are adopted by both parties in order to prosper? Is it a case of change and adapt, or fail commercially?

Power Distance

Current legal systems and education in each country lead to different responses by managers. Let’s take the concept of leadership and ‘power distance’ – the level of acceptance by society to the distribution of power. In some countries, an order might be met with “You must be joking!”, whereas in others the response will be “Yes, sir”.

It is said that ‘power distance’ and the process of decision making are inversely proportional. So, the more a person is deferential, the more that person looks for consensus before any decision is made.

If the citizen feels less influenced by their country or company leader, or traditions, they can make decisions faster, are able and prepared to take risk, and feel empowered to innovate and adapt rapidly to market forces.

In these countries when the economy thrives, the countries’ leaders tend to take the credit themselves, while, where there is a consensus or group response, leaders congratulate the group and see this as a mutual success.

Risk Avoidance

There are further differences when looking at risk taking or uncertainty avoidance in the USA and Japan. In Japan, the concept of a ‘job for life’ means there is traditionally high uncertainty avoidance.

In the USA, people will generally take these decisions, so when the company thrives, the employee receives the praise. Even if it turns out to be a bad decision, and the employee loses their job, a new employer may look favourably on the courage and innovation in the decision.

People don’t get it right every time – Thomas Watson, former Head of IBM, said in 1943 that there was a “world market for maybe five computers”. But if we don’t try, we will never succeed. The key is balancing the risk.

Long-term vs. Short-term

Gadget makers take ideas and concepts from multiple sources in order to make a better product, so too can management style benefit from taking the best from other models.

In any industry, there are people who are in for the long-term, and others who are in only for the short-term. In Japan, companies look at the long-term picture, and employees at the long-term ‘loyalty’ to a company, while in the USA, there is more focus on the short-term and individual careers.

However, this is changing in Japan, with candidates publishing Portfolio Career CVs showing skill sets, and not necessarily their list of corporate positions.

To take a simplistic view, we have one culture where short-term planning, individual confidence and easier movement between jobs, while the other focuses on long-term planning and thinking, collective confidence and the job for life.

But in 2016, the tide is changing, and a global perspective is required. Where the prevailing culture will end up is open to discussion but change is constant and more important, the pace of change is exponential – the rate of change is getting faster.

Transforming the Procurement Function from Within

It’s a tall order to come in and completely transform the procurement function within an iconic global company.

Kelly Irwin - Head Procurement Function Holcim

But Kelly Irwin didn’t beat around the bush when she started as Head of Procurement at the Australian subsidiary of Swiss group at Holcim (which has since merged with the French group LaFarge) five years ago.

The company, which is a leading supplier of aggregates, concrete and concrete pipe and products, had plenty of room for improvement. In fact, the company’s procurement department was mostly handling complaints, rather than handling strategic buying for their future.

The 20+ year procurement industry veteran soon realised the magnitude of the role, so set about implementing improved systems and processes for the procurement function. The first step was to establish a centralised purchasing model, then build a talented procurement team to support her role.

“It was a very dysfunctional team that had little direction, that wasn’t aligned with the company’s strategic directions,” Irwin says.

Building an Effective Team

Today, Irwin heads of a team of 34 people and manages a mind-boggling AUD $900 million budget. She has implemented and centralised structure and processes within the procurement function. She has previously worked in procurement for Qantas and building firm Boral, though this role with Holcim Australia is her first where the procurement buck stops with her.

With those changes bedded down, her remit is again broadening, and she will now handle all buying across New Zealand for the company, with a recent trip across ‘the Ditch‘ to establish processes there.

Not only this, Irwin has developed a highly effective procurement team, which has been awarded the Internal Customer Excellence Award for Holcim Australia for three years in a row.

Her approach has transformed the procurement function for the company, with her team has an 80 per cent engagement score, which was the highest in Holcim Australia in 2015.

Irwin has strong capabilities in building effective working relationships with teams, development of Procurement strategy, management of supplier and keyholder expectations, highly developed negotiating skills, contract management, risk management and compliance expertise and operational experience through the implementation of change initiatives and process improvements.

Irwin was also recently awarded the CIPS Procurement and Supply Chain Management Professional of the Year.

Building Individual Engagement

Irwin keeps staff informed on all aspects of the business, has an open door policy, and doesn’t mind being contacted after hours.

“I recently read that people play harder when they know the score. This is something Holcim Procurement do well. Not only do we have clear goals, (quantitative, savings targets), but we have the measurement tools the accountability element to keep score on how we are tracking.

“I believe this shared goal, as well as individual accountability to reach this goal builds individuals’ commitment to team uniformity direction, and overall engagement,” she says.

To emphasise her point, she recalled talking to someone in procurement who had major issues trying to speak to the head of the department. This was slowing down their ability to tackle their own role.

“This person would need to book a meeting with their superior two or three weeks ahead, and it was usually a walking appointment as he was always in between meetings. I honestly don’t know how someone can be that busy, that they’re practically unavailable for their own staff. You’ve got to make sure your staff feel engaged and supported, and that you’re a team.”

Nearly 70 per cent of her team is degree qualified, though that wasn’t a prerequisite when she entered the industry more than two decades ago.

“I always look to hire people that complement the skills we have, and find people who have talents in areas we need to improve in.

‘Be Inquisitive Problem Solvers’

Like so many working in procurement, it was never a deliberate decision to follow this career path.

Irwin deferred university and entered the workforce before stumbling into a procurement role, with the sound of buying things for a living appealing to her. She’s since completed a number of qualifications, certificates and management courses that support her role.

“Procurement is one of those professions that you’ll excel in as long as you’ve got the right soft skills.”

Irwin describes herself on being approachable, down to earth and honest. And she doesn’t take herself too seriously.

“Though depending on where you’re standing, that can be a bit rough as well,” she admits.

Procurement professionals need to be inquisitive problem solvers with strong communication skills, she says.

“While your superiors might be great at what they do, with all due respect, they don’t necessarily know more than you about your function within the business. Realising that you could well have a far better idea of the best approach than other senior people within your business can be professionally liberating.”

As far as the future goes, Irwin says the procurement function has an increasingly broadening remit.

“Procurement was entrenched in a brown cardigan mentality in the past, but that’s changing, and we’re now a business function that’s well respected across the globe.”

Kelly Irwin is one of the leading Australian professionals to speak at the second annual Women in Procurement 2016 event, which inspires leadership, advances careers and drives innovation in procurement, and supply chain function and practice. The event will be held in Melbourne in 21-23 March. Book your ticket here.

Crowdsourcing Big Ideas on the Future of Procurement

Through an unequalled think-tank event powered by social media, Procurious will enable the global procurement community to crowdsource their thinking on the future of procurement during the second annual Big Ideas Summit on April 21, 2016.

Big Ideas Summit 2016-logo

As the leading free online business network for procurement and supply chain management professionals, Procurious will connect 50 top executives, thought leaders and CPOs, with its 12,000+ worldwide members to forge new ground together.

Every delegate’s big ideas will contribute to solving thorny issues, and harnessing new opportunities. All are invited to participate by going to bigideassummit.com — where they can register for Procurious and then join the Big Ideas Summit Group.

“Procurement needs to start thinking the unthinkable and rethinking the possible – we can’t be constrained by our current paradigms. With social media allowing every one of us to have a voice, a digital conference helps us involve the whole world in the conversation, and enables access to diverse views and experiences,” says Tania Seary, Founding Chairman, Procurious.

“Our goal is to empower a new generation of business intrapreneurs – people who can think outside the box – to ignite change even in times of ambiguity. We hope to seed an innovation movement that knows no boundaries.”

Sponsored by IBM, the Institute for Supply Management (ISM), The Hackett Group, and Coupa, the Big Ideas Summit will feature several provocative sessions. Leaders from these organisations, as well as the Economist, Facebook, AstraZeneca, The World Bank, and more, will discuss:

  • Thinking the Unthinkable: How the global business environment is changing, how to spot trends and disruptions, and ‘unthinkables’ to prepare for.
  • Rethinking the Possible: Today’s megatrends, from ethical supply chains to the Internet of Things.
  • The Conversation Century: How leaders are using social media to attract and retain the best and brightest talent, and maintain a career edge.
  • Procurement’s Blind Spots: How procurement is applying key agile capabilities, and addressing “unthinkable” risk mitigation issues.

Find your voice – the conversation has already begun! Participants are already asking hard questions, vetting their big ideas, and reading exclusive, advance insights from the presenters.

On April 21, when they log on to Procurious, they will also be able to exchange viewpoints on the proceedings, shared by video, and get involved in real time via social media, on Twitter, LinkedIn or Facebook, using the hashtag #BigIdeas2016. Members will also be able to access more rich content in the days and weeks after this gathering.

Join the global movement now. Visit bigideassummit.com and register today.

Tweet this: Join the global conversation with your ideas for transforming #procurement at our #BigIdeas2016 Summit, April 21 www.bigideassummit.com

About Procurious

Procurious is the world’s first online business community dedicated to procurement and supply chain professionals. It’s a hub to advance your career, develop your skills and expand your global professional network. With 12,000+ members across the globe, Procurious aims to empower procurement leaders to connect, collaborate and take a more innovative professional outlook.

Think of Procurious as a professional network, news and knowledge hub, learning and career center, all in one place. Join now at www.procurious.com – it’s free to register and participate.

Here’s what else has been going on in the procurement world this week.

Primark’s Sustainable Cotton Programme

  • Under the Primark Sustainable Cotton Programme, women in Gujarat, India, are trained to improve cotton yields, increase their incomes and introduce sustainable farming methods.
  • A pilot, launched three years ago, saw 1,251 women smallholders increase their average profits by 211 per cent and yields by 12.6 per cent.
  • The pilot also saw a 5 per cent cut in input costs, a 12.9 per cent reduction in water use and fertiliser and pesticide use fell.
  • To coincide with International Women’s Day, the retailer has announced the programme will be extended by six years to an additional 10,000 women.

Read more at Supply Management

Amazon Plans Major Logistics Network

  • In order to reduce dependency on third-party freighter services, Amazon is building its own logistics network to keep up with customer demand.
  • The planes will be leased for five to seven years and run by various divisions of Air Transport Services Group, allowing Amazon to run its own logistics network in the US.
  • With this, the retail giant would be able to meet the demand of same- and next-day delivery for its customers, particularly Prime members.
  • Dave Clark, Senior Vice President of Worldwide Operations and Customer Service at Amazon said “We offer Earth’s largest selection, great prices and ultra-fast delivery promises to a growing group of Prime members, and we’re excited to supplement our existing delivery network with a great new provider.”

Read more at Supply Chain Digital

E-procurement in the UK Could Save a Fortune

  • The UK government could save up to £10 billion per annum through a reformed e-procurement platform by placing a greater emphasis on administrative efficiencies and market competition.
  • By using e-procurement models championed by the likes of South Korea and Estonia savings of 25 per cent could be made to the present £40 billion procurement bill.
  • Estonia currently attributes roughly 50 per cent of its expenditure through e-procurement platforms, saving an estimated 30-40 per cent on the cost of administering procurement.
  • However, the potential of e-procurement can only be achieved in the UK if trends accelerate.

Read more at Business Cloud News

Sustainable Palm Oil Production in Indonesia

  • The world’s second largest palm oil producer, Golden Agri-Resources (GAR), has mapped its supply chain to 489 individual mills in Indonesia.
  • In 2014, GAR extended its sustainability policy to its entire supply chain.
  • Paul Hickman, GAR’s head of global vegetable oils and oilseeds, said “We see a clear industry trend where buyers want more information on the impact of the palm oil they purchase.”
  • Indonesia’s Astra Agro Lestari has signed the Indonesian Palm Oil Pledge (IPOP), along with GAR, whose signatories promise to eliminate deforestation, peatlands conversion and human rights abuses from their supply chains.

Read more at Supply Management

Shark Warning! UK Energy Markets Explained

There are two types of shark – the ones in the water, and the ones that reside in the murky waters of the UK energy markets. It’s time to bring some visibility into these waters.

Sharks in the UK Energy Markets

It is common knowledge that sharks are dangerous. But are they? I have scuba-dived with real sharks, and swum with the sharks of the UK energy markets for many years.

The vast majority of real sharks are harmless and will swim away if approached by an over excited diver. Sharks are curious animals and will slowly and carefully approach divers that are calm and motionless. However, there is no doubt that some sharks are dangerous, but if a diver understands shark behaviour, then any danger is minimised.

Unfortunately the sharks swimming in the UK energy markets are very different beasts. These sharks are uninformed, unpredictable and deliberately target the unwary without mercy.

There are hundreds of these sharks waiting to strike. As procurement professionals, how many calls a day do you receive promising cheaper energy and services that are far superior to any offered by the competition? 

Smoke and Mirrors

A buying group I’m working with has been investigating the potential for purchasing energy for its membership. Their first comment to me was, “We cannot get a straight answer from anyone about anything in the UK energy markets.”

My response was, “Correct! Because most of the people you are dealing with don’t understand the energy markets, and use ‘smoke and mirrors’ to hide their ignorance and substantial profits.”

Many procurement professionals see energy purchasing as a dangerous and mysterious world full of sharks, and for good reason.  If I put my cynical hat on, then is the fear of the unknown driving procurement professionals to outsource the blame by engaging an energy broker?

Clearing the Waters

OK, let’s bring some visibility into this dangerous world and start to understand the feeding habits of the sharks.

Let’s start with the basics. The electricity and gas received at your premises does not change no matter which supplier is billing for its consumption. 

What characteristics does an energy supplier need to meet your procurement objectives?

1.            Hold a supply licence.

2.            Financially stable.

3.            Bill accurately and on time.

To understand if an offer from an energy supplier is a fair price what do you need?

1.            A clear view of the cost to a supplier in providing energy to your premises.

2.            The supplier’s real profit margin. 

This is starting to look simple isn’t it now the ‘smoke and mirrors’ have been removed?

At this stage, all you need is to make sure that the supplier’s terms and conditions allow sufficient flexibility for you to decide when to purchase wholesale energy, without any hidden profit for the supplier.

There is the complication of what is happening in the wholesale energy market, but that will be tackled in a later article. The next article, “Visibility and Feeding Habits of Sharks”, will get into more detail of transparent energy purchasing.

4prime Limited specialises in bringing transparency to energy costs to ensure value for money.  For more detail have a look at our web site www.4prime.co.uk#1PRO or for more information email connection@4prime.co.uk