This Little Procurement Pro Went To Market…

How do you know when you should  go to market? ThomasNet discuss strategies for three common sourcing scenarios. 

Strategic sourcing is all about generating a return on investment for every sourcing initiative. However, different sourcing scenarios require different levels of investment – in terms of time, effort and resources. Therefore, it’s important to approach each situation differently as well in order to produce the best results.

Here are three common sourcing scenarios, along with proven advice you can use to ensure an optimal return.

Scenario 1: Reducing Costs With A Strategic Partner

Your current supplier is deeply involved in the design, engineering, and process improvement of your product. You rely on them for the success of your day-to-day operations, and they have invested heavily in technology to ensure the success of your product. However, you are exploring ways to reduce costs.

When your incumbent supplier already acts as a strategic partner, the potential return on investment from pursuing alternate suppliers is significantly reduced. In fact, pursuing alternative suppliers can actually yield greater risk than reward. That’s because the supplier has provided you with capital investments that they have engineered and maintained, and the transition costs are likely to exceed the cost savings opportunities available with an alternate vendor. In addition, your current supplier has a comprehensive understanding of your product design, so they are less threatened by outside competitors who are likely working with imperfect information, and therefore less likely to reduce their pricing.

The Strategy

Rather than pursue alternative suppliers, you should engage the incumbent supplier in direct negotiations. Leverage the value your business brings to their operations; be upfront with your desire improve pricing; and be transparent about your procurement goals. Should negotiations prove unsuccessful, that may be a flag that your supplier is too complacent in the relationship, and alternate options can be explored at that time.

Scenario 2: The Unsolicited Proposal

Before reviewing a purchasing category, you reach out to suppliers within that category to notify them about your initiative. One supplier responds with an unsolicited proposal that reduces costs or otherwise increases value.

As a Supply Chain Project Analyst at Source One, this is a situation I encounter often. After a supplier realizes that their spend is being reviewed or a sourcing initiative is being considered, they attempt to get ahead of the process by offering up a proposal. The proposal typically includes a cost reduction in exchange for a longer contract or additional business.

The Strategy

The supplier is aware that their costs are not market competitive and are adjusting accordingly. However, while it may be tempting to award your existing supplier and reap the savings, it’s better to conduct a full sourcing initiative through an RFP, eAuction, or even an RFQ. At worst, you will have alternative bids to use as leverage with your incumbent supplier. At best, you can save a substantial amount of money. In fact, in my experience, the savings you can realize from alternate suppliers is often greater than the cost reduction proposed by the incumbent.

Scenario 3: Tactical Versus Centralised

Your business has been purchasing tactically in a particular category. The overall market basket is high mix, low volume, with very few recurring purchases to leverage for specialized pricing.

This is a common occurrence in indirect categories such as industrial supplies, industrial hardware, safety supplies, and office supplies. Employee preferences and unique company needs can influence purchasing, and standardization of products is nearly nonexistent.

The Strategy

 In this scenario, the continuation of tactical purchasing may seem like the most appealing option, as prompting a centralized supplier to bid on such an immense market basket would likely result in poor pricing and participation. However, it’s almost always prudent to conduct an RFP. Invite suppliers that can cover all required geographies and product categories. Focus on leveraging the overall value of the market basket to establish discount structures, rather than having suppliers exhaust resources pricing out an extensive product list.

To gauge the potential savings available, examine a random sampling of products and ask suppliers to apply the proposed discounts to those items to compare to your baseline price. If you do eventually move to a centralized account, lean on the supplier to drive product standardization and compliance. This will give you the opportunity to further refine pricing and terms down the line.

Other Strategies


Granted, not all sourcing events will fall into one of these three scenarios. However, there are some principles that can be applied universally:

  • Closely monitor the relationships with current suppliers
  • Don’t be afraid to shake up the status quo if a competitive event can yield cost savings or product improvements
  • Maintain clear and consistent communication between procurement and other departments
  • Above all, remember that the strategic sourcing process does not begin with the identification of an initiative, it thrives on the constant analysis of the current state of purchasing

Jennifer Engel is a Supply Chain Project Analyst at Source One Management Services, responsible for executing strategic sourcing and process improvement initiatives for Fortune 1000 clients.

This article was orginally published on the ThomasNet blog. 

Procurement Is Everywhere But It Wears Hundreds Of Disguises

When procurement wears a mask, layers of stage make-up or one of its other many disguises, you might find it tricky to identify. But, as Daniel Ball explains, procurement is everywhere and in all of our organisations- it might just be presenting itself in a different way…

It’s fair to say that, as a concept, procurement tends to be associated with large businesses.

However, any organisation from the smallest to the largest buys things that they need from chosen suppliers. And, however small the organisation, they face much of the same procurement challenges that we all do. So why do we not consider them all to be ‘in procurement’?

The many disguises of procurement

In reality, the entry point starts when a business begins and evolves in sophistication and complexity with their growth. Although we think of procurement in terms of an established function, role or set of rules, much of the practical procurement going on out there is actually in a formative or evolutionary stage, depending on the maturity and needs of the organisation in question.

This is a vital insight for those of us working to support the procurement profession. We have to remember that we’re not dealing with a perfect procurement-badged world, nor one which conforms to all of the industry buzzwords and ‘best practices’.

In most cases, we’re dealing with people in a state of flux, who might well not call themselves procurement professionals; after all, there are hundreds of different guises in which procurement presents itself. This is particularly prevalent in high growth mid-sized businesses who are feeling the pain of change or ‘growing up’ more severely than most.

What challenges do mid-sized companies face?

Wax Digital wanted to find out what kind of challenges mid-sized companies are faced with during expansion.  We asked 200 senior business management and procurement professionals at fast-growth, mid-sized UK businesses about the pain points they have experienced as their organisation has grown.

Without giving too much away, here are 3 of the key highlights our research uncovered; demonstrating the kinds of procurement-related issues hampering their ability to support business growth.

  1. 83 per cent of respondents surveyed said they didn’t challenge their suppliers on cost or performance adequately, whilst 78 per cent struggled to control spend, citing departmental purchasing autonomy as a problem. Three quarters also said that they don’t have sufficient purchasing technology or systems in place to keep up with the pace of growth.
  2. UK mid-sized businesses have a broad range of growth challenges that are all linked back to both upstream and downstream procurement needs. Even though they’re not yet talking procurement these businesses are dealing with procurement’s problems and need a solution.
  3. In fact, mid-sized businesses are perhaps the segment of the UK economy most in need of professional procurement practice. Their reasons for, and rate of, change are so extreme they must get their house in order before it becomes too unwieldy and difficult to control.

The results of the research will be revealed in full next week via Wax Digital’s website.

What are your media consumption habits?

Wax Digital are conducting a quick survey to understand more about how procurement professionals use media for work. If you’ve got a few minutes spare to tell us how you stay on top of latest industry news and trends, we’d love to hear from you!  It’s just a few simple questions on your media consumption habits. And, to say thanks, we’ll put your name into a draw to win a £200 donation to a charity of your choice.  Complete the survey here.

Order Up! 5 Supply Management Capabilities You Can’t Leave Off The Menu

When it comes to supply management, are you managing your customer orders effectively? Dave Food discusses Order Management and five more capabilities you just can’t go without.

Last week, Dave Food talked us through five of the key supply chain capabilities that everyone needs. This week, he’s come up with five more!

From order management to shop floor execution and supply chain visibility, these are the things procurement and supply chain professionals should be on top of.

1. Order Management (OM)

Knowledge and skill necessary to manage the receipt and scheduling of customer orders. An integrated OM system may encompass these modules:

1) Product information (descriptions, attributes, locations, quantities)

2) Inventory available to promise (ATP) and sourcing

3) Vendors, purchasing, and receiving

4) Marketing (catalogues, promotions, pricing)

5) Customers and prospects

6) Order entry and customer service (including returns and refunds)

7) Financial processing (credit cards, billing, payment on account)

8) Order processing (selection, printing, picking, packing, shipping)

2. Shop Floor Execution

This is the area in a manufacturing facility where assembly or production is carried out, either by an automated system or by workers or a combination of both. The shop floor capability may include equipment, inventory and storage areas. You can create customer orders and shop orders for each product manually or import shop orders from an ERP system. When this shop order authorisation is created or received, it contains a specified quantity of the product to be built on the Shop Floor.

Once you define your production work floor processes and rules, the platform to optimise operations can be implemented. Real-time status updates can be provided to your organisation and your customers as they need them. A SF provides an on-demand view of bill of materials, routing details, work instructions, material availability, part and product images and programs, to develop optimal SF processes. These should match your business needs, increase view production work orders at any stage of manufacturing, and rework instructions are sent directly to the factory floor to coordinate processes efficiently and improve customer service.

3. Supply Chain Continuity Planning

This is the process that seeks to optimise Supply Chain strategy, processes, human resources, technology and knowledge. Supply Chain Continuity Planning controls, monitors and evaluates Supply Chain risk, which serves to safeguard against new uncertainties that may emerge affecting profitability. The continuity of the company is vital for the long-term success of the business, in today’s world; all aspects of the functioning of an organisation are vulnerable to disruptions and risks. Supply Chain Continuity Planning controls, monitors and evaluates Supply Chain risk.

4. Supply Chain Visibility

Supply chain visibility (SCV) is defined as the ability of parts, components, or products in transit to be tracked from the manufacturer to their final destination. SCV enables you to perform “what-if” scenarios. Visualising these different scenarios can help you predict issues and problems that may arise, and then plan for them and their solutions.

Visibility allows people in the supply chain to see problems before they occur and take necessary steps to avoid the expense in real time. Visibility also provides insight to make more intelligent decisions early in the order cycle (just in time inventory) and perform more intelligent audits in the distribution centres on inbound shipments. Finally, visibility can also be a major driver increasing throughput in the existing distribution network and thus delaying the need for costly new DCs

5. Supply Chain Network

The collection of physical locations, transportation vehicles and supporting systems through which the products and services firm markets are managed and ultimately delivered; it can be manufacturing plants, storage warehouses, carrier, docks, major distribution centres, ports, intermodal terminals whether owned by a company, suppliers, a transport carrier, a third-party logistics provider, a retail store or an end customer.

Emerging technologies and standards such as the RFID and the GS1 are now making it possible to automate these SCNw in a real time manner making them more efficient. A SCN can be strategically designed in such a way as to reduce the cost of the supply chain. Designing a SCN involves creating a network that incorporates all the facilities, means of production, products, and transportation assets owned by the organisation or those not owned by the organisation but which immediately support the supply chain operations and product flow.

There is no definitive way to design a SCN as the network footprint, the capability and capacity, and product flow—all intertwine and are interdependent. Following on from this, there is also no single optimal SCNw design, in designing the network there is an apparent trade-off between responsiveness, risk tolerance and efficiency.

Dave Food is a supply chain innovator, a passionate educator, a futurist, a trend-watcher, an insightful consultant and a marketing strategist. This article was originally published on LinkedIn.

Raising Procurement’s Image – One Person At A Time

Who’s willing to stand up to bear the flag of procurement pride and improve our image? Elaine Porteous wants reinforcements to help raise the function’s status up to where it belongs.

We’re still hearing comments like “we only involve procurement because it’s the policy” and “procurement slows down the sourcing process”.

There are some lonely but passionate practitioners out there waving the flag and highlighting pockets of excellence, but we need reinforcements.

The image problem

Procurement has traditionally been poor at championing its successes and promoting a positive image of its contribution. Perception is reality. There’s no shortage of published articles and news about fraud, corruption and litigation involving purchasing people and their organisations. So where is the good news? Maybe we could all benefit from a lesson in public relations; in reality, procurement is not so different from sales.

Five ways you can raise the status of procurement yourself

  1. Develop better listening skills

The only way to understand what internal stakeholders, suppliers and customers currently expect from procurement is to listen well. Too often, procurement teams complete projects in a poorly-informed vacuum, failing to get solid input from key stakeholders. By asking for stakeholder feedback on sourcing plans we can reach agreement on success factors and manage their expectations. We have two ears and one mouth for a reason. Hear what your customers need and work with them to deliver it.

  1. Focus on encouraging innovation

We engage with suppliers every day, so what are we doing to get them to offer ideas that add value rather than asking them to just cut costs? Many suppliers complain about their improvement ideas getting lost somewhere in your organisation, let’s make sure that it is not procurement that is the black hole.

  1. Take the lead on sustainability initiatives

For most companies, taking a ‘green decision’ often means increased costs. It could also mean a compromise in quality or a slower speed to market, but it doesn’t have to be so. Eliminating waste, finding alternative energy solutions, managing the cost of utilities and reducing packaging are all sustainability goals. It will immediately enhance your position if you can apply best practice in sourcing to your company’s sustainability strategy. If there is no strategy yet, there’s your opportunity to contribute.

  1. Talk in the language of the listener

We are guilty of talking in our own shorthand using expressions like strat sourcing, catman, SRM and RFX, which only serve to irritate. Internal customers appreciate receiving communications in terminology they understand. In some high-tech and specialist categories, stakeholders, also known as customers, will suspect that you may not have the depth or breadth of knowledge required. Talk their language to let them know that you are fully up to date on trends and immersed in their technical detail. This way you can prove that you are worthy of dispensing advice and providing guidance.

  1. Highlighting our successes

Easier access to information is changing the way we work; we can see what other people are doing and they can see what we are doing. Not many procurement teams use a well-thought-out internal media strategy to highlight their achievements. Communicating and celebrating individual and team wins are all important steps to ensuring that your internal customers stay on-side. Tracking of cost savings and reporting the results in a digestible way can show the positive impact that procurement has made to business success.

Could we learn something from the Human Resources (HR) function? Applying the tried-and-tested HR business partner model could work well in tricky situations and traditionally out-of-bounds functions. One person is directly allocated to be the enabler between the customer and, in this case procurement, with the main aim of removing process obstacles and smoothing the way for others.

Gender Diversity: Would You Leave $12 Trillion On The Table?

Anne Tesch is one of those professionals who has facts and figures at her fingertips to back up every point she makes. As she tells Procurious, it’s vital that supply managers have the facts in their possession when pursuing a goal as important as increasing gender diversity.

Why should gender diversity be high on every company’s agenda?  

Where should I start? There’s a vast amount of global research and evidence on the importance of women’s economic empowerment and the benefits of hiring women-owned businesses. To list a few key studies:

  • McKinsey’s Global Institute report found that $12 trillion could be added to the Global GDP by 2025 by advancing women’s equality. Economies most impacted (with GDP gains) would be India (16%), Latin America (14%), China (12%), and Sub-Saharan African (12%);
  • Another McKinsey survey found that 34% of companies said working with women-owned suppliers had increased their profits;
  • Women perform 66% of the world’s work, produce 50% of the food, but earn only 10% of the income, and own very little of the world’s private property;
  • There are approximately 187 million women entrepreneurs worldwide who own between 32% and 39% of all businesses in the formal economy;
  • Women dominate the global marketplace by controlling more than $20 trillion in consumer spending that will rise to $30 trillion in the next decade; and
  • According to research conducted by WEConnect International, women-owned businesses globally earn less than 1% of the money spent on products and services by large corporations and governments.

What are your recommendations for supply managers looking to increase their engagement with women-owned businesses?

1. Know your numbers

Firstly, it’s important to know the percentage of women-owned businesses in your supply arrangements.  Why not do some research and ask suppliers if they are “women-owned” which, by definition, means that they are at least 51% owned, managed and controlled by one or more women. Furthermore, why not consider tracking tier 2 spend, as smart companies will often increase spend with women-owned businesses to win large contracts.

 2. Spread the word

Convince others in your team that working with women-owned suppliers is good for business. A recent McKinsey survey indicated that working with women-owned suppliers increases profits, while the Hackett Group’s research last September shows 99% of diverse suppliers meet buyers’ expectations, with nearly 25% exceeding expectations.

Though improvement to the bottom line is always important, incorporating women-owned businesses in your supply chain also provides an opportunity to grow your customer base, attract and retain talent, and enhance your branding – all while increasing profits and reducing costs.

 3. Network, network, network

Accessing networks of women-owned businesses, even just to participate in RFPs, is a critical success factor but one of the more difficult parts of starting and managing a supplier diversity program.  Engaging with third parties that specialise in connecting buyers with diverse suppliers, such as WEConnect International, can assist this process. Our organisation certifies women-owned businesses through a rigorous, globally accepted process, and provides access to these organisations through our eNetwork.

What are the proven benefits of having more women in your supply chain?

Women influence the vast majority of purchasing decisions globally, but they are significantly underrepresented in global value chains. Even though more than one third of private businesses are owned and controlled by women, on average, women earn only 1 percent of large corporate and government spend globally. Benefits of having more women in your supply chain include:

  • Mirroring your diverse customer and employee base – it’s important to reflect the communities around the globe where you operate, not only with staffing, but also with your supplier base;
  • Supporting your corporate clients – more corporates are growing their tier 2 inclusive sourcing programs and requesting reporting from their prime suppliers;
  • Supporting business growth in new markets;
  • Accessing innovation and securing competitive advantage from new SMEs offering more creative options;
  • Reducing costs through competitive bidding;
  • Accessing local networks and knowledge; and
  • Enhancing the company brand and community engagement by promoting success stories about working with women-owned businesses.

Anne Tesch and other leaders in the profession will be speaking at Quest’s Women in Procurement 2017 event in Melbourne on 26-27 April. Visit Quest Events to download a brochure and find out more.

WEConnect International is a global network that connects women-owned businesses to qualified buyers around the world.

Best Of The Blog: The Top 5 Ways To Stand Out In Procurement

There are millions of procurement professionals in the world. How do you make sure you stand out from the crowd?

Everyone loves a good throwback article, which is why we’re hopping in our time machine to bring you back some of the biggest and best Procurious blogs. If you missed any of the golden oldies, look no further!

This week, we’re revisiting an article by Anna Del Mar who explains how to stand out from the crowd!

Stand out from the crowd

There are millions of procurement professionals around the world. And every single one is different.

Which is fortunate, given the range of activity which Procurement has to undertake, and the different characteristics which are necessary to succeed in those roles.

In amongst that diversity, there are a number of characteristics which the most successful can display. These characteristics are ones worth cultivating in our careers.

There is no particular order here. But our top five ways to stand out will always contribute to success, both when working in the organisation and when we’re seeking to develop our careers.

1. Communicate like a Professional

This is true in many parts of the business, but is absolutely critical for Procurement. We’re often trying to sell hard ideas, to get concepts across, to change opinion and views, and to do all of that we need to be excellent at communication. Not just Powerpoint, but using a wide range of media, types of communication, styles and messages.

We also need to be excellent at preparing and rehearsing our communications, getting them on point and noticeable, able to stand out above the in-company noise. To do this, we need to spend time practising and getting our messages right.

As Mark Twain once said, “I didn’t have time to write you a short letter, so I wrote a long one instead.”

Be hard on yourself, and seek to improve. Being able to prove your understanding of the way Procurement needs to communicate and influence upwards with examples, will impress any recruiter.

2. Take the Wider View

Procurement can be accused of being one dimensional. We can get sucked into delivering price based targets, and loose sight of the bigger picture.

To operate effectively, we need to be excellent at maintaining a broader commercial perspective for the organisation, and making sure we’ve got both the short view and the long view in our sights.

The best in Procurement stand back and take in what the business really needs to achieve. They seek a balance between often conflicted requirements from different stakeholders. If we can maintain that overview, we will often deliver far more than if we get sucked into a one dimensional view.

Showing business aptitude and seeing procurement in terms of solving business problems, is an extremely valuable asset to any procurement function.

3.Bounce Like a Rubber Ball

Procurement can be tough. As the people on point for delivering value from the supply chain, we often can feel the weight of the business on our shoulders, while still trying to get through to a value improvement we can see but can’t quite reach.

To maintain a high degree of performance we need to have a high degree of resilience, to be able to bounce back and keep going. Holding onto our core beliefs, keeping going when it’s being sought and getting to the outcomes we want to achieve are great outcomes all by themselves.

There is no doubt that Procurement requires tenacity. Be able to prove your ability to stay the course for long term sustainable results rather than short term glory.

4. Network

The technical stuff is often less of an issue than the people stuff. This means that we need to network hard, identify the decision makers and opinion formers, and be aware of their issues and agendas.

Knowing who people are, what their concerns and needs are, and being able to reach out to them to both influence but also to offer support, is a massive help when trying to progress our own agendas.

It isn’t a one way street of course. These relationships are precious. We need to make sure we’re managing our relationship resources, just like we should be protecting our time. Show how you value your network and how this helps improve the positive effect of procurement.

And finally…

5. Know your Stuff

There’s nothing better than watching someone with a fantastic grasp of category and business issues making a case.

Having a broad grasp of what is happening in a market, how it relates to the business overall, looking at short and long term effects, providing imaginative solutions which test the range of what is possible, with stakeholders aligned or at least neutral, with a thought through plan of action. Those are the days when the future of Procurement looks brightest. The individuals delivering that insight will look like stars in the organisation.

Whilst you may not need to have deep category knowledge to get your dream job, having an understanding of procurement excellence and the challenges of buying in markets is key to bringing true expertise to the function and will be seen as an asset.

None of the above happens by default. It requires personal insight and understanding to make sure that skills and attributes develop in these areas. Spending time in each area is extremely worthwhile. Taking time out appraise ourselves in these areas, or get feedback from others, will give a big step up in how we’re viewed.

Good Luck!

Fancy Sharing The Procurement Workload With AI?

Technology will help procurement pros to do their jobs faster and more efficiently, lessening their workload. What are the key AI trends we can expect to see in the coming months?  

Nearly every day we encounter stories and predictions about how artificial intelligence (AI) will fundamentally change a variety of industries. The challenge is explaining what this type of technology could do to improve certain functions and jobs. Let’s take a look at the trends we can expect over the coming months.

Artificial intelligence will expand in analytics, intelligence gathering and visualisation

We’ve already seen speculation about the industries who will benefit the most from AI, and we’ll continue to see improvements as more and more companies adopt the technology. We will further see the expansion of the way humans in the workforce interact with AI-based solutions.

When it comes to the analysis of data, especially unstructured data, AI can be taught the nature of words and sentences and string together concepts and gists within the text. This goes far beyond the basic keyword search functions most people are familiar with. AI can then present the information to business users, and not just highly trained data scientists, in a format suitable for them. In understanding the contents of extremely large numbers of documents, AI can take a huge workload off human reviewers and help them do their jobs faster and more efficiently.

Through the use of AI, companies will have an advantage on a competitive global stage, without sacrificing the well-being of their employees, and these applications alone will be the first area of widespread use this year.

M&A activity in 2017 will rebound with a record year

Last year was a disappointing year for mergers and acquisitions. Between the broken deals with Allergan and Pfizer, Halliburton and Baker Hughes, and many more, investors and companies alike were starting to panic about the future of the economy. This year things will quickly change and we’ll be on the rebound with a record M&A year.

According to a new Deloitte report, 86 per cent of private equity and 71 per cent of corporate dealmakers are expecting to close more deals in the next twelve months. While many people feared the uncertainty of major events like Brexit, it will present a whole new opportunity for M&A deals in 2017.

Contract intelligence solutions can help to alleviate some of the challenges M&A brings. By gaining a much stronger insight into the contract portfolios of companies they are targeting for acquisition in the due diligence phase, they dramatically reduce the risk and liabilities they may be acquiring. This insight is fast and efficient, and provides significant transparency in to contract obligations while keeping the deals on track.

Contract Management – CLM will need to change

Contract lifecycle management (CLM) vendors manage contract processing through technologies such as document repositories, workflow, and authoring. It has been recognised that the utilisation and ROI provided by these CLM technologies is not where it needs to be, and they are lacking in the management of contract data. These systems provide user defined fields, and users must manually input this data to manage obligations and run analytics on key fields such as term, renewals, counterparty information, pricing and incentives. The data manage with CLM is generally inconsistent, error prone, and inefficient, and organisations with CLM systems will clearly struggle with understanding the data in their existing contacts as they go into the CLM, but also new contracts.

This year, organisations will realise CLM only solves part of the problem they are working to solve, and complement CLM with contract discovery and analytics tools — based in AI technologies. The combined solutions will create the needed efficiencies in the contract lifecycle, but also allow them to dynamically extract the data they need from contracts, when they need it, allowing for deeper analytics and increased insight into critical business relationships. The old way of data management with contracts will be considered obsolete this year, and richer analytics will become the norm.

Contracts – the “new source of Business Intelligence”

Right now, businesses spend a lot of money and time extracting insight from structured data. The current “big data” solutions process sales data, manufacturing data, financial data, social data, etc., but not the data buried in unstructured documents. Solutions exist now to analyse data from large quantities of documents and provide very valuable insight that can be used for effective decision making.

This is especially important when it comes to contracts. Instead of legal teams reviewing contracts to ensure an organisation is complying with the law or with new or changing regulations, contracts will be seen as a valuable new source of business intelligence.

Dashboards are now being created that bring together structured and unstructured data to provide new views into the business that were not possible before. Contracts will be appreciated as a new, and untapped source of business intelligence that a new generation of technology can now mine in a very intuitive and cost effective way.

This article was guest-written by Seal Software, a leading provider of contract discovery. Seal Software uses artificial intelligence and natural language processing to help companies efficiently uncover what’s in their contracts.

Forget the Bus, I’ll Travel To My Meeting By Drone!

What will business travel look like in 2017?  We’re not going to see people riding around in personal drones (yet) but it’s starting to look more like The Jetsons all the time.

Technology is having a big impact both on the way employees travel and how managers help them move around the world with ease. Sunny Manivannan and Ethan Laub of our travel and expense team, and Jack Miles, a long-time procurement executive and business advisor share their thoughts on what the year may bring.

1.    Travel and expense management goes mainstream

For firms with good governance and a cost management mindset, travel and credit card spend has always been a focus. Due to rising costs, and a new generation of technology for automating in this area, we will see laggards start to pay attention and begin to focus here as well. –Jack Miles

2.    Loosening of T&E policies

Companies with modern automated tools will relax their travel and expense policies, paradoxically because they now have so much granular T&E data. This might come as a surprise, but we see the T&E spend culture at customer organizations undergoing a once-in-a-generation shift. Given the rise of knowledge workers, the competition for talent and the focus on employee happiness in today’s leading organizations, companies are trying to find ways to give their employees more flexibility. With the data now available to administrators, companies can relax their policies in certain areas and give their employees more flexibility while still protecting the organization from fraud. -–Sunny Mannivanan

3.    Savvier negotiations as hotel costs rise

Travel costs–typically one of the top four expense categories in most firms–will rise as consolidation in the hotel industry continues. Given Marriot’s acquisition of Starwood and other hotelier consolidations, expect to see an increase in average room night cost. Companies with a focus on sourcing for this category will use their data to look beyond room night cost and add in ancillary costs such as food and beverage, parking, and conference and event spend if they have it to give them more leverage in negotiations. –Jack Miles

4.    Airbnb makes inroads with corporates

Airbnb will continue to grow share in business travel as its integrations with corporate travel agencies and booking tools starts to pay-off. Three major travel management companies (TMCs) signed partnerships with the homesharing platform last year, driven at least in part by corporates expressing interest. According to Lex Bayer Airbnb head of global payments and business travel, Airbnb’s average business trip booking is six days. Again, it’s about giving employees options, and a home may better suit travelers in town for a longer-term project than a hotel room.  –Ethan Laub

5.    Ground travel prices fall

Ground travel (Uber, taxis, limos) is one area where prices will decrease. Black car services will continue to lose share to Uber and Lyft, as the car sharing titans roll out more corporate-friendly controls and reporting. Gaining corporate clients has been harder for pink-mustachioed Lyft, according to sharing economy expert Arun Sundarajan, but it scored a major win when Apple announced them as a preferred partner last spring.

Besides increased competition, lower costs are also driving prices down. Newer, more fuel-efficient cars make up a bigger share of fleets, and fuel rates are currently low. There’s one thing that could cause rates to plummet, rather than just tick down: driverless cars. Fuel isn’t the biggest cost. Neither is the car–cars these days are made so well they can easily last for ten years or more. The biggest cost is the driver. Without drivers, rates for rides could fall by as much as 90 percent over the next two or three years, some analysts say. –Sunny Manivannan and Ethan Laub

6.    Expensing of a driverless ride

 Speaking of driverless cars, here’s a bold prediction: 2017 will mark the first time we see an expense line filed for an autonomous car ride. While Uber had to halt its test of autonomous vehicles in San Francisco last December, there are more than a dozen companies either publicly or secretly working on autonomous vehicles. It’s only a matter of time before this technology makes it to the business market. Our question is, what will this expense line look like? What will the amount be? Who will be the vendor of record?

Perhaps there’ll be a time in the not-too-distant future where transportation isn’t something employees even expense. It will simply be a public utility like electricity, where every company simply pays per employee-mile at the end of each month. –Sunny Manivannan 

7.    Virtual assistants everywhere

Since we’re getting all futuristic here, we’re going to go out on a limb and predict that in 2017, every employee will have an assistant, not just executives. These assistants will be virtual, not physical. With Apple’s Siri, the Google Assistant, and the Amazon Echo, consumers have been exposed to the grand idea of a digital around-the-house helper a la Rosie the Robot. And, many business travelers have already experienced a degree of this with mobile apps that do things such as automatically fill out your expense lines based on geolocation data.

This concept will really take off in 2017, with employees having access to really intelligent, self-learning assistants, no matter where they are. And, we will be able to call on these assistants with the touch of a button, a few taps on our keyboards, or simply our voices.

Sunny Manivannan is senior director of special projects at Coupa. Ethan Laub is director of product management. Jack Miles is principal consultant at Mainspring Advisors, a business strategy consulting firm. This article was originally published on the Coupa blog

Women in Leadership: Don’t Make The Mistake Of Behaving Like A Man

Women in leadership: Have you ever had to “behave like a man” to get ahead in the workplace? As part of the Bravo campaign, Procurious will be hearing from a number of high-profile procurement leaders on the topics of diversity, equality and women in procurement.

This week, Procurious caught up with M.L. Peck, Chief Content & Engagement Officer at the Institute for Supply Management (ISM), who is concerned that even in the modern workplace, many women still feel they have to behave like a man to succeed.

She’s the man 

Remember Twelfth Night? Shakespeare’s comedy featured a shipwrecked woman (Viola) who disguises herself as her lost twin brother (Sebastian) to find work in the service of Duke Orsino. If you’re not a Shakespeare fan, you may have seen the 2006 adaptation She’s The Man (starring Amanda Bynes), where teenager Viola Hastings disguises herself as a boy in order to play on the all-male soccer team. Both Violas have to learn how to behave like a man, with their accidental lapses into femininity providing many of the plot’s gags.

Don’t change

“Women shouldn’t have to change who they are in order to be taken seriously. Nobody should”, says M.L. “What we absolutely don’t want is to create a mold of how to be strong leader. Our differences are what make us an asset to the teams we work in.

“I’ve had the fortune to work with women who brought an inherent, feminine ability to collaborate, empathise, multitask and problem-solve to their teams. These qualities are often overlooked and under-represented in the workplace, where we expect our leaders to be hierarchical and dictatorial in approach. In procurement, particularly, collaboration is key. The characteristics attributed to women are the ones that all of our future leaders will need – you can bet that millennials and generation Z won’t want to work in a male-dominated environment.”

But what does “behaving like a man” actually mean? Stereotypical male qualities might include strength, dominance, bullish confidence and as little display of emotion as possible. M.L. comments that when women find themselves in a male-dominated workplace, “We can make the mistake of trying to behave like a man by adopting the characteristics typically associated with men.”

Workplaces still have a long way to come in accepting that people, and leaders in particular, are able to display emotion. Men and women are taught that leaders must be “strong”, which means emotions such as compassion and empathy are redundant. “We’ve still got some of these issues in 2017”, says M.L. “Men who show empathy are thought of as weak, while empathetic women get labeled as emotional. If you choose to lead a team without resorting to an authoritarian style, it doesn’t mean you won’t be able to add enormous value in your own way”.

This, in a nutshell, is the power of diversity in our organisations. Building a diverse team of people from different genders, backgrounds and experiences will add new perspectives and insights, which ultimately leads to a better decision-making process.

Working twice as hard to be thought of as half as good

M.L. remembers her mother’s experience in the workplace, citing her as one of her inspirations. “My mum was a pipefitter and really lived in a man’s world. She was the first female on the refinery fire-fighting team. I was raised with my mum’s understanding that women needed to work twice as hard to be thought of as half as good.

“In this scenario, it’s easy to feel victimised; to think ‘I’m different, and people are perceiving me that way’. This makes it all the more tempting to conform to certain workplace behaviours, but my mum always retained her own identity.”

3 ways to encourage more women into procurement leadership roles

  • Initiatives that advocate for diversity are vital, particularly in supply management where there aren’t nearly enough women in leadership positions. Procurious’ Bravo campaign is a great example, as is ISM and THOMASNET’s 30 under 30 Rising Supply Chain Stars award, along with ISM’s annual Diversity conference.
  • Providing access to female role models and mentors will help organisations attract and retain women from entry-level through to senior positions. Organisations that want to attract top female talent need to have a diverse and inspiring leadership team.
  • Shout about what you’re doing to address gender disparity in the workplace. Companies that hold special events for women or minority groups really do see a difference – events give people an opportunity to build their networks, and provide direct access to the C-Suite who make the important decisions about diversity and inclusion.

Get involved with the Bravo campaign via our Women in Procurement group. Join M.L. Peck and other members of the ISM Leadership team at ISM2017.

Contingent Workforce: Why Procurement Still Hasn’t Found What It’s Looking For

In some ways the procurement profession is in a stronger position than ever before. But in others, in the words of great philosopher Bono, we “still haven’t found what we’re looking for” when it comes to the contingent workforce.  

Different Categories, Different Organisations, Different Value

Is our role really about cost reduction when it comes down to it? Or are we moving into a brave new world where the small, but perfectly formed, procurement function is focused on extracting innovation and competitive advantage from key supply markets?

Clearly, “value” is a word that has to feature, but saying procurement is about value is a bit of a truism;  of course it is! And so is everything else that an organisation does.

This in itself doesn’t help us to progress very far in the debate but one useful thought might be this: Every spend category within our organisation contributes value to the organisation in a different way; and for any given spend category, that value will differ from organisation to organisation too.

The Evolution of Procurement and What it Means for Managing Contingent Labour

In our new paper, The Evolution of Procurement and What it Means for Managing Contingent Labour, written in conjunction with Spend Matters, we look at this issue and also touch on other aspects around where procurement might be heading, including the fashionable idea of “procurement as a service”.

Using contingent labour as an example it is possible to illustrate how procurement has evolved and how a category can create value in various ways.

In some organisations, obtaining the right contingent labour, such as highly skilled technicians, creative folk or IT experts, might be a direct source of innovation and, as such, competitive advantage. In other cases, cost reduction and operational efficiency through a super-slick engagement processes for contingent workers might be the key factor.

The key point, however,  is that every procurement professional needs to understand the contribution for their categories in their organisation.

Procurement Must Take A Multi-Pronged Approach To Contingent Labour

(An Excerpt from The Evolution of Procurement and What it Means for Managing Contingent Labour

Any analysis will immediately confirm that procurement must follow different approaches depending on both the category of spend being addressed, and the nature of the business and the drivers of success.

Are the ingredients for a food product important to its success, or is it enough that they are safe to eat? If we spent more on a better quality purchase, would we sell more or be able to charge a higher price?

Considering services spend categories, how important, for instance, is marketing to the success of the firm? If innovation and new products are key drivers, then supporting that by identifying and working successfully with the very best external marketing services providers will be more important than haggling over their margins.

Contingent labour spend may simply be a case of minimising cost at an acceptable level of risk, or it may be much more strategic, with access to hard-to-find talent, and speed of engagement critical to the business.

That was reflected in our roundtable last year when we heard several excellent examples of how the use of contingent labour was truly linked to organisational strategies. “We are looking at scenario planning and resourcing models to help predict blue collar contingent labour requirements.” And the days of the contingent workforce being purely low-level blue-collar or administrative staff are long gone.

“Some of our contingent workforce are key to how we win business from our own customers; they are a strategically important and also scarce resource”.

You can download the full white paper for free here.

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