6 Reasons It Pays To Care In Procurement

“Do good, feel good” or “Do good, and save lots of money”? Whichever  you find the more enticing, we can certainly conclude that it pays to care in procurement!

Pat McCarthy, SVP and GM, SAP Ariba North America, is one of the driving forces behind SAP Ariba’s Business with Purpose initiative. Over time, he’s noticed how business attitudes have shifted as corporations become more socially aware. “For companies in the past it was pretty simple, the charter was pretty simple – increase profits for their shareholders or their owners. But today we find that many companies are taking on a higher mission to make the world a better place to live and work and to run their businesses with a higher purpose.

Of course, you don’t need Pat to tell you that sourcing from minority owned businesses, eradicating slave labour or watching your carbon foot print is a good thing. No one would try to contest that. But aside from the “do good, feel good” ideology, is Business with Purpose actually good for your business, or is it going to cause your procurement team a whole lot more – in money and stress!?

“We know that purpose driven companies out perform the market by almost 5 per cent” says Pat. “In other words they can do good and do well. Procurement has a unique opportunity to lead the way.”

And so it would seem that there’s a strong business case far beyond the moral imperative to embrace a higher cause in your procurement team.

Peter Holbrook, CEO Social Enterprise UK, gives six reasons why this is the case.

1. It’s cost effective

“We’ve undertaken research with PwC to look at what social value means for people within procurement departments” begins Peter. “We see that in the majority of cases when you take a social value or an environmental lens to procurement your new suppliers coming in to support your business are in most cases creating value add but are actually cheaper. [You will find] suppliers are much more cost efficient as a result of being more socially and environmentally imaginative.”

2. It brings in top talent

Attitudes of the millennial workforce is a significant factor for organisations to consider in today’s world if they want to recruit and retain the best talent. Employees, for the most part, want to feel as though they are working for companies who care for more than simply profit, who are making the right decisions for the world around them as well as the right decisions for the business.  As Peter explains “the good work your business does can give you the cutting edge or differentiation to bring in the very best talent.  When [organisations] take these approaches and staff believe they are authentic they are more likely to stay in the business in the long term.”

3. It makes suppliers more responsive

The research Social Enterprise UK carried out with PwC revealed that in two thirds of cases  suppliers were more responsive in purpose led companies. This, Peter explains, is due to the relationships created that meant suppliers “were more responsive in terms of responding to the changing needs of companies buying from them.”

4. It makes your organisation more innovative

Purpose driven companies, according to Social Enterprise UK’s research carried out with PwC,  “brought on new products and services to market, which is the traditional way we assess innovation.”

5. It keeps you ahead of the game

“We all recognise that businesses have to change and adapt to help meet the challenges that we all face. Using supply chains as a way to do this is a way of really being cutting edge, staying ahead of the pack and building brand differentiation that all companies increasingly need to be able to define themselves.”

6. It gets your customers on board

“We have researched customer loyalty” says Peter, “And whether it’s members of the public or in B2B relationships – [people] are more likely to remain with companies that are also creating a social benefit.

Peter has some reassuring advice for anyone feeling overwhelmed by the challenge of becoming a purpose-led procurement team. “The risk is that we overcomplicate it. There’s something to be said for proportionality. Start small and start easy- culturally within a company you’ll get much greater buy in if it feels as if its accessible and something that can be achieved relatively simply rather than an additional burden you’re putting on everybody.

“It’s about starting a journey and taking small steps to evolve your methodology and your approach and being fairly honest about where you are succeeding and where some of the challenges exist. No one is assuming and no one should assume that when a company starts embarking on this route that they will come to the ultimate solution within weeks months or even a couple of years!”

Sign up for #FeeltheLove, the first Procurious and SAP Ariba Procure with Purpose webinar, which takes place later today  at 10am EST/ 3PM GMT.

How To Conduct A Cognitive Symphony

If cognitive technology is not normally your forte, let us be of assistance. In one week we’ll have you conducting a cognitive symphony! 

There are many factors that require careful consideration to bring about effective, scalable and sustainable analytics and cognitive solutions.

Intelligence is the conversion and enrichment of data into meaningful business insights.

It’s akin to conducting a group of musicians – it might be easy to get a pleasant sound from a solo instrument but, if expertly managed, you can avoid falling flat and accomplish a symphony from the entire orchestra!

Conducting a Cognitive Symphony

From the 26th February let Procurious and IBM guide you through the five steps required to conduct a dazzling cognitive symphony as we present a new five-part podcast series. 

Day One: Building Your Orchestra

Procurement process and acquisition of data need to evolve to meet data needs. How should procurement teams embark on their knowledge journey to Cognitive and analytics transformation?

Day Two: Orchestrating Your Melody

It is not sufficient to know that you are buying software or how you are buying software; you need to know what software you are buying. So how do you implement an effective taxonomy strategy?

Day Three: The Rehearsal Room

Automation is a buzzword of the moment and fast becoming a business necessity. How can procurement professionals achieve a happy balance and effectively implement transaction automation.

Day Four: Getting the brass on Board

How procurement leaders works with their teams to remove barriers will ultimately have a huge influence on the rate and pace of adoption of cognitive and analytics solutions.

Day Five: The Conductor

In a fast-paced and ever-changing environment, some instability and churn is inevitable, which is why all these data instruments need a decent conductor and a single data strategy.

Podcast Speakers

Marco Romano Procurement Chief Analytics Officer, Global Procurement, Transformation Technology, IBM

Marco applies more than 15 years of experience as a procurement practitioner and project manager to understand complex environments that separate the noise from real issues and determine near-term and strategic solutions in realising business value. He leads a team that has saved IBM Procurement a significant amount in third-party costs and efficiencies through analytics data solutions and innovative sourcing strategies over the past three years. His team is also developing commercial analytics and cognitive procurement offerings leveraging data and technology for IBM clients’ competitive advantage.

Anna Madarasz Analytics & Cognitive Lead IBM

Anna has 14 years of procurement experience, out of which 12 is in project leadership. She is a master at change management, and loves working in a complex, cross-functional environment. She is an expert at procurement taxonomy in support of increasing companies’ negotiation power. Anna is a certified Lean Six Sigma Black Belt.

Peter Hrabovski Analytics and Automation Lead, IBM Global Procurement

Peter is the leader of the Analytics and Automation organisation at IBM Global Procurement. He has a masters degree in economics, in the field of business and administration. He has more than 5 years of experience in managing the data analytics and robotics process automation teams in IBM procurement globally. Being a technology and data enthusiast his focus is on applying the latest technologies in solutions being developed. This enables procurement in delivering exceptional value to IBM and its clients.

How does the podcast series work?

This series will run for five days with a daily podcast released from 26th February.  Each morning, we will deliver the new podcast straight to your email inbox.

If you’re a little late signing up to the series, don’t panic! We’ll still be sure to send you all five podcasts so you can listen at your leisure.

How do I access the podcast series?

Simply register for the series via this link and you’re good to go!

From the 26th February we’ll deliver a podcast straight to your doorstep.*

*straight to your email inbox!

Are the podcasts available to everyone?

Anyone and everyone is welcome to sign up and it’s totally, 100 per cent free to do so- simply sign up here and we’ll handle the rest.

From 26th February, Procurious present a new five-part podcast series – Conducting a Cognitive Symphony – sponsored by IBM. Sign up here (it’s free!) to access the series. 

Warfare Just Got A Whole Lot Cheaper

The US Navy’s recent purchase of two drone-incinerating laser cannons signals a turning-point in the ever-rising costs of sourcing – and firing – high-tech weaponry.

Remember the USS Zumwalt? Launched with much fanfare in 2013, the guided missile destroyer was equipped with 155-millimeter advanced gun systems, designed to fire the Long Range Land Attack Projective, a GPS-guided shell with a range of 60 miles. At an eye-watering $800,000 a round, however, the guns were simply too expensive to fire, and were soon replaced with a more affordable system.

Zumwalt provides an extreme example of the prohibitive cost of firing a weapon at sea. At its cheapest, a typical shipboard gun and missile arsenal costs $5,000 per shot.

That’s why the US Navy’s procurement of two high-powered lasers – developed by Lockheed Martin at $75 million each – will change the game for the expense of firing weaponry. One of the lasers is designed for testing on land, while the second will be installed aboard an Arleigh Burke-class destroyer by 2020.

The lasers are so cheap to run because firstly, solid state lasers run on electricity rather than chemicals, and secondly, they do not fire a projectile at all. A pulse of directed energy costs under one US dollar each – that’s $799,999 cheaper than the Zumwalt rounds. At present, the lasers are primarily defensive, with the magazine limited only by the amount of energy pumped into it. Using 150 kw of power per shot, they are able to destroy small boats and shoot down unmanned aerial vehicles (drones). Upgrading their power to 300 kw could allow them to destroy fast-moving anti-ship missiles, while 1000 kw (one megawatt) worth of power could burn through 20 feet of steel in one second, easily enough to neutralise a fighter jet.

The Navy is clearly anticipating ordering more lasers. The contract with Lockheed Martin includes options worth an additional $800 million (nearly $950 million in total) to buy another 10 weapons and equip over 10% of the fleet’s destroyers with high powered lasers.

The lasers were purchased against the background of China’s reported testing of a ship-mounted rail gun, a weapon that uses powerful electromagnets to accelerate projectiles to over 3km/s. Again, these weapons are expected to be cheaper to fire than conventional guns as they will not require explosives or propellant to launch ammunition.

Several US contractors have attempted to build a rail gun including BAW Systems, which created a prototype, but the project was scrapped due to budget issues.

Chinese rail guns aside, observers have speculated that the 300 kw laser’s ability to destroy small boats is a direct response to Iran’s use of “swarm boat tactics” in the Strait of Hormuz. Iranian fast boats, typically armed with anti-ship cruise missiles and torpedoes, set off in an asymmetrical, dispersed fashion from hidden harbours in the Persian Gulf and then converge to surprise-attack an enemy ship. Laser weaponry has been mooted as the most promising solution to ward off this form of attack.

Meanwhile, Lockheed Martin has developed a ground vehicle-mounted laser system that can burn through tanks, and is working on an anti-missile laser that can be mounted on fighter jets. Defence contractor Raytheon built a laser that could be fired from a moving helicopter, along with a drone-destroying, laser-mounted dune buggy. Similarly, Boeing has developed an anti-drone laser cannon.

In other news this week:

Japan launches its own Belt and Road Initiative

  • Tokyo is deepening economic ties and security cooperation with multiple countries in an apparent bid to counter China’s Belt and Road Initiative.
  • Japan’s Foreign Minister Taro Kono has recently completed a tour where Japan made investment announcements in areas including Southeast Asia, Sri Lanka, Pakistan and the Baltics.
  • Tokyo has launched a US$200 billion infrastructure plan as they actively propose an alternative to the Chinese Belt and Road. Previously, the single biggest competitor to the Belt and Road Initiative was the Trans-Pacific Partnership trade pact, which collapsed after Washington withdrew.

Read more: http://www.scmp.com/news/asia/article/2132811/japan-takes-lead-countering-chinas-belt-and-road-initiative

Hummus crisis!

  • Drought in India, the world’s largest producer of chickpeas, has resulted in several years of poor harvests and rising costs of products such as hummus globally.
  • India has had to buy chickpeas from growers in other countries, putting pressure on supply and driving up prices. British supermarkets have reported a 12% rise in a single year.
  • The unexpectedly severe drought has affected hundreds of million of people who rely on the harvest in India itself.

Read more: https://www.nytimes.com/2018/02/08/business/hummus-chickpeas-prices.html

FAA Drone Licensing Unpopular

  • According to a report from Gozmodo, the US Federal Aviation Administration has only acted once to enforce its licensing requirements for the operation of commercial drones.
  • The FAA began requiring licenses in 2016 for people operation drones for commercial use, including photographers, crop-sprayers, and pilots delivering goods via drones. Hobbyists are exempt from the license requirement, although all drones need to be registered. The licensing system is unpopular, with drone pilots having to pay $150 and pass a 60-question test with a 70%+ score.
  • Goods delivery via drones is an area of key interest for supply managers worldwide, along with associated regulatory and cost burdens.

Read more: https://www.gizmodo.com.au/2018/02/basically-no-one-is-getting-fined-for-flying-drones-without-a-license/

3 Essential Ways to Motivate Staff and Improve Morale

Want to lead a happy and productive workforce? When it comes to improving staff morale, you need to focus on three key factors. 

As a leader, you have several concerns and major responsibilities that all need your attention. This means you must be able to focus on the big picture: if you constantly have to look over the shoulders of your employees, it is going to be difficult for you to manage the larger matters that can affect the success of your organisation.

You may worry that employees will have trouble staying on task and meeting goals if you are not there to supervise. While keeping your team motivated is important, you don’t have the resources to hand out huge bonuses and you don’t want to try to rule your business through fear.

The answer to this problem is to build a culture of accountability: express the value of accountability and integrity in the workplace, have time to communicate with your employees, and make sure that you are giving regular performance reviews to let your employees know that you value their contributions.

Trust is Better Than Fear

Fear can seem like an effective tool for getting more out of your employees. It is common for some leaders to believe that they need employees to fear the potential outcome of a mistake. The problem is that fear does not build authentic motivation. The person is not performing because they want to, but rather in order to avoid an unfavorable reaction.

If you want to inspire true motivation, you need to build trust with your employees. Much of this trust building comes from open communication. In a survey of 1,000 US workers, 91 per cent said that communication issues can negatively impact the effectiveness of a leader. This includes things like not giving clear directions and not having time to meet with employees.

As a leader, you need to make sure there is time to communicate with your employees. Make sure they understand their responsibilities, ask them questions about their work, and encourage them to talk about their successes.

Set an Example

You want your employees to be responsible and to act with integrity, but these values have to come from the top. If leadership does not demonstrate these values in their work, it is going to be difficult to get employees to accept them as their own.

Furthermore, as a leader, you have to be willing to admit when you made a mistake. If something fails on your end, you can’t pass the blame onto those who work for you. If employees see their leaders are unwilling to hold themselves accountable, they are not going to accept responsibility either.

Promote the Positives

Since fear is not a good motivator, you should look to the positive side of work as a source of inspiration for your employees. According to a study from the Boston Consulting Group, appreciation for the work done is the top factor that affects employee happiness.

Let your employees know that you appreciate the work they do. You should even give compliments for minor accomplishments–employees perform better when they know they are appreciated. The simple act of showing recognition can increase happiness, motivation, and productivity in the workplace.

You don’t need to give out extravagant perks to motivate your employees. By promoting the right values and communicating with employees in the right way, you can motivate people without having to resort to punitive measures or handing out bonuses that you can’t afford.

Read more on 15Five

This article was written by Rae Steinbach. Rae is a graduate of Tufts University with a combined International Relations and Chinese degree. After spending time living and working abroad in China, she returned to NYC to pursue her career and continue curating quality content. 

Procurement with Purpose: Beyond the Bottom Line

How can you embrace the notion of procurement with purpose authentically and in ways that are consistent with your core beliefs and ideals?

Sustainability improves the bottom line, and companies can do good while doing well.

In fact, research shows that purpose-driven companies with strong performance in environmental, social, and governance outperform the market by 4.8 per cent. But this is not “new” news.

So what is different now that makes purpose more vitally important? It comes down to transparency and trust.

In many segments of life, trust is at an all-time low. The swarm of misinformation, slanted stories and editorials, and paid reviews have continued to foster these low levels of trust. This presents a unique challenge to companies.

How do companies and we as leaders embrace the notion of purpose authentically?

How do we do so in ways that are consistent with our core beliefs and ideals?

How do we “walk the walk” and not just talk the talk?

In the past, business leaders might have defined their goals as “increasing profits for shareholders and owners.” Now leading companies are beginning to recognise that this is only part of the equation. They see the bigger picture and are taking on a higher mission to make the world a better place to live and work. They are finding new ways to solve the world’s most pressing challenges. Gaining (or regaining) trust will happen through transparent action that demonstrates a commitment to creating a more purpose driven business environment.

Purchasing with Purpose

Those of us in procurement have a unique opportunity to lead the way. With increasing frequency, companies are redefining their supply chains and buying from suppliers who support, for example, people with disabilities or are female led. Companies want to know that no forced labor is being used by their suppliers, and their supplier’s suppliers, and all the way back up the value stream. Procurement is in the unique position to address these issues and have an incredible impact.

Collectively, the Global 2000 spend $12 trillion on goods and services annually. By tying their purchases to purposes, these companies can take a stand and drive ethical behavior across the supply chain. And technology exists to make this possible. The key is to get started. Business networks, for instance, provide transparency and insights into supply chains that enable companies to ensure they are acting in responsible ways.

Take SAP Ariba, the world’s largest business network. Leveraging historical and real-time purchasing data, supplier intelligence, and network insights, along with data and services from third parties like Made in a Free World, procurement can shine a light on materials, regions, and suppliers to ensure they are meeting the organisation’s standards.

Through a link between SAP Ariba Discovery, a global business matching service, and the ConnXus Database, buyers can tap a wider pool of minority, woman, LGBT and veteran-owned businesses and enable global supply chains that are more responsible, sustainable and inclusive. Extending our network even more, we’ve partnered with Nicole Verkindt, founder of OMX, to help our customers analyse the economic impact of their spend in industries such as international defense, aerospace, oil & gas, mining, automotive and construction industries.

But it doesn’t stop there. SAP Ariba is a sponsor of the UN Global Compact’s Decent Work in Global Supply Chain Action Platform. The UN developed the Action Platforms to accelerate the achievement of the Sustainable Development Goals. Action Platforms offer a systematic solution to sustainable development challenges through new fostering innovation, developing new financial models, and identifying sustainable solutions across a range of issues. As a Platform Sponsor for the Decent Work and Global Supply Chain Action Platform, SAP Ariba has deepened our commitment to driving purpose across the global supply chain.

Procurement professionals will always be responsible for doing more with less and for delivering value to our organizations. And we can do even more than that.

There’s real power in purpose. It inspires us. It moves us. It enables us to reimagine and to reinvent what is possible and to achieve great things. It is also one of the greatest challenges issued to business leaders today. Join us in taking it up. Together, we can make a difference.

Sign up for #FeeltheLove on 14th February – the first Procurious and SAP Ariba Procure with Purpose webinar .

Procurement Agility in the Age of Digitalisation

How can your procurement team embrace the age of digitalisation  and develop an effective roadmap that ultimately puts you in the driver’s seat?

The digital enablement field is wide open, with no single right answer on how to proceed.

However, there are ways that can help organisations plot a way forward. CPOs must define a roadmap for change and align it with enterprise-level digital transformation initiatives.

Procurement think tank 2018

This year marks the fifth year that we have held our Procurement Think Tank. Throughout our work in the procurement field, we have strived to create an environment of real learning and interaction with business peers over topics that can be investigated in a deep way in an environment of open exchange through spaced-out gatherings to discuss a singular topic.

This blog is the summary of this year’s series and an excerpt of the article published in Procurement Leaders magazine. While many of the insights, and perspectives come from a small group of practitioners and may vary from company to company; nonetheless, the insights obtained can be applied across many organisations and industries. The complete article and related graphs can be read on Medium here.

2017 Focus On Driving Efficiency And Increasing Agility

As we wrapped up last year’s discussion, the group pressed us into looking at the area of procurement efficiency in context of the coming digital revolution. Most members conceded that their ability to learn about and master digital tools was inadequate, and they needed time to prepare.

The need to improve procurement efficiency (doing more with less) and at the same time master changes in technology (specifically the impact of digitalisation) are two very different objectives. They demand different resources, different thinking and different leadership, leaving procurement teams in an untenable bind; needing to contribute more but without the capability to assimilate new technology that might be a remedy for that problem.

The 2017 EU Think Tank Series theme was “Growing Digital And Agility Capabilities To Drive Efficiency In Procurement” to investigate the following issues:

  • What is the burning platform for Procurement Agility?
  • What are the major dimensions of growing agility?
  • Does growing a digital capability answer the issue of procurement agility?
  • Deep dive on key topics in the digital sphere:

1. How will Big Data and IoT technologies impact procurement activities?

2. What is AI and how can Procurement leverage the opportunity?

3. What is RPA and will it replace most procurement operational tasks?

  • Where is procurement now on the journey to a digitally enabled future?
  • Who are the leaders in procurement digital enablement?
  • How to assemble a digital roadmap?
  • What talent is needed to drive digital forward?

Agility – Making flexibility look like the plan

We probed the issue of Agility and the key elements must procurement teams master. The deep reflection on agility reveals that it is not just about flexibility, but rather a never-ending cycle of thinking-planning-action all in a devolved approval matrix (see my blog Agility – Making flexibility look like the plan).

The group recognised that while digitalisation might be a foundation, in and of itself, digitalisation is only an enabling tool of agility. When viewed in this context, the rush to become ‘digital’ is less of a frenetic all out race to do something ‘digital’ and more of a ‘pick-and-choose’ from a menu of enabling technologies that will most help achieve a business strategy.

However, while procurement is tasked with dealing with a broad range of new technologies, it also must deal with its traditional mandate. Bertrand Maltaverne, JAGGAER’s ‘Procurement Digitalist’, challenged the group with his perfect storm analogy. As procurement continues evolving toward digital mastery it still must manage increasingly complex supply chains, reduce risk, become more efficient, expand its influence and become a trusted business advisor. The enormity of these tasks has created a conundrum for procurement teams regarding which priority to tackle first.

Depressingly, procurement teams have not taken a leadership position with respect to digital technologies, opting instead for being a receiver of whatever mandates are forthcoming from broader implementation efforts. The data shows that most procurement organisations are either unprepared or have taken a ‘wait and see’ approach to digital technologies, often adopting them in a haphazard or uncoordinated way. The sheer number of available technologies that must be evaluated for their usefulness has stymied procurement organisations from building an effective path and being able to move forward.

The issue, of course, is two-fold. First, there must exist specific knowledge within the procurement teams about the technologies that are available, and secondly, leadership awareness of those technologies and how they fit together in the strategic landscape. Then and only then can a framework be developed that prioritises how and when to implement the chosen solutions. Today, most procurement organisations are not rising to the challenge in either of these areas.

While many new digital technologies are fast becoming standard, often, the solutions that promise the quickest way of making transactional processes more efficient are no longer within the purview of procurement. These activities have been subsumed into other, often larger, Business Services functions. While we have long been advocates of moving transactional activities to other functions, one can see the writing on the wall. The continued erosion of the procurement remit combined with automating technology, could easily foretell the doom of the function as we know it. The logical outflow of this, is that procurement is evolving towards a two-tier function; one where an enhanced set of operative activities is managed largely through digital technologies and another that is much more strategic, managing issues such as supply continuity, risk management, collaborative value creation and sourcing innovation.

How does a procurement team who is embracing the digital revolution develop an effective roadmap that ultimately puts (and keeps) them in the driver’s seat as to what technologies to adopt and at what rate to adopt them?  Our membership vigorously challenged us build a real-world model of how organisations must construct a digital path forward. A particularly useful insight was that no organisation can progress purely through a technological journey without fully understanding how that technology contributes to better strategy and insights. This relationship between new technology and better insights progresses through the entire digital journey. Thus, procurement teams must be in the decision chair as to which technologies get purchased.

So What Skills Are Required To Drive Digital?

Very few Procurement organisations have a digital strategy and roadmap, partially due to the broad range of technologies available. Simply put “there are too many digital options to know which to tackle first”. Even fewer organisations have talent and leadership to run their digital transformation. It is imperative that Procurement build its own digital roadmap that addresses specific technologies in a sequential format that is aligned with the company’s over digital strategy. We need to understand, recruit and develop specific digital skills at all levels recognising that the senior leadership is often most lacking. We grew fond of The Hackett Group’s conclusions in this area, pointing to four key attributes required to adequately embrace and drive the digital transformation:

· Intellectual curiosity: To deliver faster insight and build sophisticated models for business decisions.

· Technology savvy: Professionals don’t need to become data scientists or programmers, but they do need to be familiar with new technologies so they can have intelligent conversations with their IT peers and quickly adopt new tools.

·  Business Acumen: Staff needs to have a thorough understanding of the company, its operations, its value drivers and competitive environment. The imperative for the Business Partnering capability was amply covered in the output from last year’s Think Tank in this article.

·  Storytelling skills: Data is the mechanism that makes digital business possible, but the delivery mechanism is a “story.”

The Way Forward

1)  Define a digital roadmap and vision

Strategy needs to support organization’s overall approach to leveraging digital technologies to transform its business model and ensure that each investment in a digital capability must have beneficial business outcome. Favourable business benefits will help drive a new cycle of technological investments that in turn create greater benefit.

2)    Align with organisational strategy

On their own, big data, predictive analytics, or any of the other so-called ‘digital’ enablers are not valuable as stand-alone technologies. Outcomes need to help the business make decisions and drive actions that are consistent with the overall company objectives and digital plan. Any discrepancies between the two can create “technology islands” and put procurement at odds with corporate objectives.

3)    Build a Digital competency within procurement…

…to understand, master and lead the prioritised acquisition and implementation of digital tools.

We closed out this year’s series acknowledging that most organisations are at the very beginning of their digital journey, and it also left us with a strong impression that procurement teams have an intense desire to lead this effort in collaboration within the organisation’s overall digital strategy and not be a victim of it. Ceasing the leadership of this effort is the challenge.

Stay tuned for Think Tank 2018; we will drill down from the strategic level to one where we can examine how individuals and teams build knowledge and capability to bring digital insights to their organization and wider ecosystem.

This article was orginally published on LinkedIn.

Four Essential Capabilities For Your Procurement 2020 Roadmap

Procurement 2020 will look a little different with new skills, knowledge and tools to address entirely new challenges. Procurement has seen rapid change in a relatively short span, the value creation of this function has increased multi fold becoming more strategic, collaborative and technology driven. This momentum is expected to continue and quicken in the coming years. Procurement will emerge in the forefront as an important and integral function of an enterprise.

The Hackett Group’s research showed that 85 per cent of the procurement organisation believe that digital transformation will change the way they deliver services over the next 3 -5 years. To stay competitive, procurement needs to embrace disruptive effects of technological innovation in conjunction with organisation which is lean, agile and responsive to stakeholders and suppliers.

It is imperative for the procurement function to develop journey roadmap on four essential capabilities that are vital for future – Digital Transformation, Supplier Relationship, Stakeholder Engagement and Talent. The first step in this journey will be to fully understand how the procurement landscape is shifting.

Procurement in 2020 will look very different with new skills, knowledge and tools to address entirely new challenges. Organisations that fail to embrace new procurement models may fall behind the competition, jeopardising overall competitiveness and viability.

Digital Transformation

Procurement is effectively positioned to join the Digital revolution. It can offer a radically different value proposition to the organisation as Robotics Process Automation, cloud based applications, Big Data analytics, Artificial Intelligence and Mobile Computing begin to converge. These smart tools will improve service delivery, reduce errors and free procurement staff for higher value work.

Technology provides dual track opportunities to support ‘upstream’ or Source to Contract (S2C) and ‘downstream’ or Procure to Pay (P2P) which predominately consists of operational, repetitive and transactional activities.

Technologies like Artificial Intelligence, Crowd Sourcing, Live Digital Dashboards can be effectively used for decision making accurately and with speed to support ‘upstream’ while Robotics Process Automation is widely used to drive efficiency and effectiveness ‘downstream’.

Robots interact with different IT applications to enable transaction processing, data manipulations and communication across multiple IT systems. In effect, multiple Robots can act as virtual workforce to process operational and transactional activities. This could allow CPOs’ to rebalance their functions upstream and reducing the focus on downstream activities.

Supplier Relationship

With the advent of technology, the organisations have started to realise the growing importance of suppliers in terms of innovation, security of supplies, corporate social responsibilities, risk mitigation and cost savings. Strategic partnership will be at the top of the corporate agenda and Supplier Relationship Management will be seen as significant differentiator.

Supplier Relationship Management is systematic approach for developing and managing partnership. It is focused on joint growth and value creation with limited number of suppliers based on trust, open communication, empathy and win – win orientation.

The 4C’s model will govern the future of Supplier Relationship Management – Capabilities, Continuous Growth, Customer of Choice and Creating value.

The speed of business continues to accelerate, market expectations are higher, product life cycles are shorter, turnaround times are faster and the risks are wider and deeper. Clearly organisations rely on suppliers to bring innovative and new products to their markets.

Essentially procurement will have sound understanding of supplier market across the world and be able to link their potentials and limitations. Demands on procurement to become more business oriented, more mature and integrated in its ways of working. All of these reinforces the need to re-invent robust supplier relationship management.

Suppliers are increasingly being looked upon as trusted business partners and engaging early and ensuring all parties are on track will propel procurement organisation to  greater heights.

Business Stakeholders

Procurement has been rapidly evolving to keep pace with the changing trends.  The procurement profession has made significant leads moving from price management to category management and in the future it becomes very clear that procurement will move from category management into value creation.

Becoming a trusted business advisor is a long drawn process and time consuming, it varies from person to person. The individual has to not only understand stakeholder needs but go beyond to understand the breadth of business challenges and develop deep personal relationship.

Most stakeholder relationships are at service provider and enhanced service provider level providing answers, sharing expertise and resolving business related problems. Relationship with stakeholders are usually good at a business level but have no real depth at a person level.

The challenge seen by many procurement professionals is to move from been seen as just a service provider into being recognized by stakeholders as a trusted advisor

Elevation to consultant requires more insights and ideas into the stakeholder organisation on broader business issues and also building a stronger personal relationship. This level of relationship could be achieved through focus, time and effort.

Few people achieve the trusted advisor relationship, where there is a comprehensive understanding of all the stakeholder needs and they look up and reach out as first person to help them tackle the difficult issues they are facing.

As the procurement function changes, it will need people with new skills. Apart from being comfortable with data, future procurement professionals will need to be prepared to lead rather than simply serve their business.

CPO’s should fundamentally rethink regarding their organisation and capabilities both of which needs to be reshaped over time. Companies have to create new job profiles such as buyer for new categories, contract experts on intellectual property or Data scientist for data maintenance, analysis and mining. Only if the procurement personnel are digitally capable can a company fully benefit from opportunities provided through digitalisation.

Procurement functions must follow Seven fundamental steps to manage Talent – Plan, Attract, Recruit, Assess, Develop and Retain.

The team must be digital savvy, ability to collaborate and build relationship with internal stakeholders as well as suppliers from diverse array of geographic and cultural backgrounds.

Negotiation skills and market insight will continue to be the fundamental skills but TCO across product lifecycle, cost structure analysis and game theory will emerge highly important skills in this field.

The professional credentials will be measured by their ability to influence, persuade, and provide vision, the mind set must be strategic, global, collaborative and above all commercial.


Shifting the procurement team from being tactically devoted to strategically focused can be a long journey for a company. But this journey can literally make the difference between company’s definite success or failure. There are still several actions to be tackled in order for procurement to gain deep business insight, react quickly to the changing needs, drive higher overall value and greater stakeholder satisfaction. Investing in activities to elevate the role of procurement within an organisation, moving beyond the traditional role of gate keeper and cost hunter will definitely bring added value to the organisation.

Procurement in Twenty 20 will mean developing new value propositions, meeting new business needs, and integrating data across functions. It will call for using data pro-actively and intelligently. Perhaps more important, it will require fundamental reshape of procurement organisation and its capabilities to take on new challenges.

This article was written by Kumaralingam MC, Director, Global Procurement Centers – IBM. It was orginally published on Shared Services Forum. 

From Cannonballs to Mobile Apps: The Fight Against Modern Slavery

Disney, Walmart and other big players have partnered with Humanity United to launch Working Capital, a $23 million early-stage venture fund aimed at creating scalable, ethical supply chain innovations.

Image: Royal Navy Brig “Acorn” chasing a slaver vessel in 1841, by Montague Dawson.

In 1808, the Royal Navy established the Preventative Squadron, tasked with suppressing the Atlantic slave trade by patrolling the coast of West Africa. By 1860 the Squadron had captured 1,600 slave ships and freed 150,000 Africans. In the meantime, America fought a long and bloody civil war before the Emancipation Proclamation could finally be enforced through all regions.

Abolition in the 19th century – in the very simplest terms – was driven firstly by a change in the law, then enforced with the barrel of a British frigate’s cannon or a Union Army soldier’s rifled musket.

In today’s fight against modern slavery, we’re seeing a new wave of legislation, including the UN Global Compact, the UK’s Modern Slavery Act, France’s Duty of Vigilance law, Holland’s Child Labour Due Diligence law, and similar legislation being considered in Switzerland and Australia. Yet, as we know, the insidious nature of modern slavery means the perpetrators are considerably more difficult to identify than they were 200 years ago. That’s why modern slavers must be fought not with guns, but with tech solutions that remove their sources of income.      

Big names behind venture launch

Working Capital was launched by Humanity United last week with the goal of “accelerating supply chain innovations to enable corporations to operate more transparently and ethically around the world”. The launch made headlines due to the leading brands that are on-board with Working Capital, including: Walmart Foundation, C&A Foundation, Stardust Equity, Open Society Foundations (Soros Economic Development Fund), The Ray and Dagmar Dolby Family Fund, and The Walt Disney Company. The fund also received £2.5 million in sidecar grant funding from the UK’s Department for International Development.

Ed Marcum, Managing Director at Working Capital, said in a statement that “There is a growing market demand for more transparent and responsible corporate supply chains. We see an opportunity to invest in emerging solutions that will meet the demands of large multinational corporations while also benefiting millions of vulnerable workers.”

A press release from Humanity United says the fund focuses on product traceability, worker engagement, sourcing platforms, risk assessment, and ethical recruiting tools by investing in emerging technologies such as blockchain, machine learning, artificial intelligence, digital identity and Internet of Things (IoT) solutions. 

Two tech platforms that are about to be scaled up

 At present, Working Capital’s portfolio of slavery-fighting tech solutions lists two organisations:

Provenance: Described as “Fairtrade on the Blockchain”, Provenance is a technology platform that uses blockchain to enable brands, suppliers, and stakeholders to trace products along their journey from producer to consumer.

Ulula: A software and data analytics platform that allows organizations to engage with workers in real time to measure and monitor labour-related risks, creating more responsible global supply chains.

Watch this space

As companies such as Provenance and Ulula use this cash injection to maximise their impact, be prepared for the appearance of anti-slavery plug-ins to existing systems or even mobile Apps that rate and lock-out the use of risky suppliers.

While 19th century slavery was fought on the battlefields and on the high seas, the 21st-century frontline exists on the smartphones of procurement professionals around the globe. 

In other Procurement news this week:

 Germany’s biggest trade union strikes

  • About 260 companies were affected by thousands of striking metal and engineering workers in Germany last week.
  • The IG Metall union wants an 8% pay rise and reduced hours on full-time pay to enable workers to care for children or elderly or sick relatives. The IG Metall union has 3.9 million members.
  • The companies involved are currently willing to negotiate on pay not on reduced hours.

Read more: https://www.reuters.com/article/us-germany-wages/german-industrial-workers-start-24-hour-strikes-in-row-over-pay-hours-idUSKBN1FK0GA


Bananas threatened with extinction as history repeats itself

  • The Cavendish, the world’s most popular type of banana, is facing extinction as a fungus known as the Panama Disease takes hold.
  • The first strain of Panama disease, known as Race One, wiped out the Gros Michel banana in the 1950s, previously the world’s most popular banana.
  • The current strain (Race Four) now attacks Cavendish and other cultivars. 47% of bananas grown worldwide are Cavendish, with 55 million tonnes grown per year.

Read more: http://www.bbc.com/news/uk-england-35131751


Facebook reports more active users, less time spent on site

  • Users spent approximately 5% less time on Facebook, which translates to around 50 million hours a day, from October to December 2017.
  • Facebook’s Mark Zuckerberg commented that the priority was encouraging more personal interaction among users. Active users rose 14% to 2.13 billion people in the same three months.
  • Facebook’s annual advertising revenues jumped 47% to over $40 billion, while profits jumped 56% to $16 billion. Despite these figures, the company is adjusting its News Feed to prioritise posts from friends and family and make sponsored content less prominent.

Read more: http://www.bbc.com/news/business-42893051

Megatrends Shaping the Future of Finance

Disruption, innovation, transformation, change – the watchwords of modern business. But how do these apply to Finance and Procurement? What are the trends that are likely to shape your role? And how do you prepare to adapt to the opportunities that these bring?

Barely a day goes by when the headlines aren’t doom-mongering about “the machines taking over” and displacing human labour. But modern-day fears associated with the rise of disruptive innovations such as artificial intelligence and automation barely differ from the objections of workers at the turn of the 19th century whose jobs were threatened by the machines of the industrial revolution. Change can be scary, or it can be exciting, but the one thing it is for sure is inevitable.

Sir Jack Welch, whose tenure as CEO of General Electric spanned 20 years, famously observed: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.” So as the mega-trends of RPA, AI and Blockchain make it into everyday language, all of us need to pay attention to what’s going on beyond the four walls of our business rather than hoping they are merely passing technology fads.

“If the rate of change on the outside exceeds the rate of change on the inside, the end is near” – Jack Welch, Former CEO, GE

Robotic Process Automation

RPA is the use of rules-driven software ‘robots’ to perform high-volume, manual, repetitive tasks by mimicking the actions of a human being interacting with the user interface of a computer application. For example, they can scrape structured data from a PDF document to speed up transaction-matching.

Robots are tireless, completing their activities faster than people with zero errors. However, their role is not to eliminate the need for human capital, but to free up humans to focus on higher-value, more purposeful activities. In fact, RPA is touted as “helping humans become more human at work”. RPA isn’t AI – robots have to be explicitly programmed with instructions and can’t “think” for themselves. And RPA is not the answer to all of your problems, either – you can’t fix a broken business process simply by giving it to a robot. That’s where business process automation (BPA) should be applied to overhaul and streamline processes for maximum efficiency and value.

Artificial Intelligence

AI is the new electricity. You’re already experiencing AI at work whenever you use social media, search engines, online shopping recommendations or virtual digital assistants like Siri and Alexa. There are four different levels of AI.

Level 1 – Reactive machines are rules-based and simply recognise patterns – they have no ability to form memories or to use past experience to inform current decisions. Examples of level 1 functionality in Basware AP Automation include automatic coding templates, recurring invoice recognition and best-fit matching.

Level 2 – Limited memory systems can look into the past. This is where machines start to get smarter, building on rules-based information by applying context, such as identifying specific objects and monitoring them over time. An example of this is the self-driving car, which observes other vehicles’ speed and direction, and decides when to decelerate or change lanes. But this information is only transient and isn’t saved into a library of “experience” the way a human driver learns. Smart coding of invoices is an example of level 2 functionality in Basware AP Automation.

Level 3 – Machine learning enables computers to teach themselves without being explicitly programmed, using algorithms that grow and adapt when exposed to new data. While learning, they collect further data to expand their insights and use these to formulate predictions.  Basware Predictive Analytics is an example of level 3 capability.

Level 4 – Systems that learn can execute processes much more dynamically, creating their own algorithms and taking decisions based on these self-developed algorithms in a similar manner to humans. They apply what they’ve learned from existing data to forecast future behaviours, outcomes and trends and make better decisions. At Basware, we’re currently working on Insights-Based Guidance, which falls into this category.


Blockchain is a digital medium of exchange that involves sharing a distributed ledger database – a common version of the truth – which is updated simultaneously to all members of the Blockchain, accelerating the consent and validation of work orders and invoices. It was designed in the aftermath of the financial crisis of 2007/8 to deliver transparency, security and efficiency in transactions, particularly international payments.
Today’s P2P processes require a ton of back-and-forth interactions and opportunities for the process to break down. With Blockchain, the steps of validation and authentication, purchase order management, invoice processing and settlement are vastly simplified, enabling instantaneous transactions, diminishing the need for enquiries and process status follow-ups, and providing a tamper-proof audit trail.

Capturing data (lots of it!)

Whatever digital technologies you propose to adopt, the bottom line is that you have to capture data – and lots of it – in a centrally architected manner. Not just your own transactional data, but complemented by that from other organisations along with publicly available data. Machines cannot learn or predict without data to draw on, and worse than no prediction at all is taking the wrong direction based on incomplete data.
The key to realised value throughout the chain is not simply to have an integrated source-to-pay system, but to get everyone using it and everything going through it. That means:

  • Adopting 100 per cent of your suppliers – from big corporations to Mom ‘n’ Pop businesses
  • Capturing 100 per cent of your spend – you can’t just repeat the mantra “no PO, no pay” so the solution must be the path of least resistance for all users
  • Automating 100 per cent of your invoices – not just invoices that match against indirect POs, and everything must run through one unified system

Only once you have achieved this holy trinity, can you make 100 per cent of activity visible through analytics. An example of this working in practice is a Basware customer that manufactures heavy machinery. Having grown through organic and inorganic means, they had accumulated a patchwork of ERP and AP systems and were suffering from all the classic AP failures and frustrations. Now, with Basware, they have every single invoice from 50 different countries flowing through the system, and 100 per cent spend visibility, which has not only allowed them to meet their cost savings business case but, more importantly, gain competitive advantage.

To learn more about how Basware can help you gear up for the future of finance, get in touch.

What’s Coming To Procurious in 2018

What’s around the corner in 2018…? There’s a whole host of exclusive procurement content and events for you to get your teeth stuck into!

The Procurious community, at 26,000+ members,  is growing faster and providing better networking opportunites than ever before.

To keep pace with our growing membership, we’ve planned out the most exciting year yet on Procurious. From our now-famous global Big Ideas Summit series; to procurement webinars; Career Boot Camp 2018 and this year’s Gen NEXT survey, we can guarantee there’s something for everyone.

So make yourself a cuppa, open up your online calendar and let’s get some dates in the diary!

#FeeltheLove Webinar

On the 14th February 2018 – 3pm GMT/ 10am EST – we present #FeeltheLove.

NEWSFLASH: Being world-class today doesn’t mean being the best in the world. It means helping the world run better.

In 2018, you should be working beyond cost savings and process efficiencies. You should be committed to making a positive impact on the communities in which you operate by eradicating slave labour, creating ethical and sustainable supply chains and levelling the playing field for all.

Thanks to the awesome power of social media and our interconnected world it’s easier than ever before to make that happen. But the challenge procurement pros still face is kick-starting, and measuring the impact of, their purpose-led work.

This Valentine’s Day, SAP Ariba and Procurious will present #FeeltheLove – the first Procure with Purpose webinar.

Sign up for #FeeltheLove here. 

Conducting a Cognitive Symphony – Podcast Series

From 26th February, Procurious present a new five-part podcast series – Conducting a Cogntivie Symphony – sponsored by IBM.

There are many factors that require careful consideration to bring about effective, scalable and sustainable analytics and cognitive solutions. Intelligence is the conversion and enrichment of data into meaningful business insights. It is a little like an orchestra: you can get good sound from one instrument, but correctly managed, you get a symphony from the entire orchestra.

Marco Romano Procurement Chief Analytics Officer, Global Procurement, Transformation Technology, IBM; Anna Madarasz Analytics & Cognitive Lead IBM Global Procurement and Peter Hrabovski Analytics and Automation Lead, IBM Global Procurement will guide you through the steps required to conduct a dazzling cognitive symphony!

Stay tuned for sign up details later this month.

Big Ideas Summits 2018

The Big Ideas Summit is the world’s first digitally-led procurement event. With a global reputation as the most innovative leadership event for the profession, Big Ideas 2018 once again promises to light up social media, spark vigorous discussions and crowd-source ideas for the future of the profession.

The Summit is an interactive, online event where up to 50 senior executives, industry thought-leaders and CPOs come together to connect with digital delegates from across the globe via our social media platform to discuss and test strategies and solutions for real world change.

2018 will once again see the Big Ideas Summit go global, with events in London, Sydney, Chicago and Munich.

Attendees and digital delegates will be joining a community of 26,000+ procurement professionals from 140+ countries to connect, learn, discuss and innovate together.

Big Ideas Summit London 2018 26th April 2018

This year, we’ve assembled some of the most energising and fascinating speakers: from IBM’s CPO to a Chicago-based Futurist and a former Las Vegas Poker Extraordinaire – it’s certainly one procurement event you won’t want to miss!

This year, our Big Thinkers will tackle:

  • Engineering Serendipity: Workplace of the Future
  • Understanding Risk, Reward and ROI
  • AI: How your human touch will win the day
  • Why Design Eats Discipline for Breakfast
  • Procure with Purpose: The power in your hands

We are also hosting:

  • Big Ideas Summit Chicago 2018 27th September
  • Big Ideas Summit Sydney 2018 30th October
  • Big Ideas Summit Munich 2018 29th November 

Find out more here  or email Olga Luscombe via [email protected] to request an invitation to London. 

London CPO Roundtables

Following our very successful Big Ideas Summits in London and Chicago, Procurious are hosting a series of London CPO roundtables. These provide a more intimate setting for our attendees to get to know their peers through working sessions and the chance to hear from some inspiring speakers.

Wednesday 7th February – Sponsored by Basware

At next week’s event we’ll be joined by Charlie Wigglesworth –Deputy CEO, Social Enterprise UK; Elizabeth Linder – Founder & CEO, The Conversational Century; Paul Clayton – Head of New Service Development, Basware and Jonathan Harvey – Global Head of Talent & Culture, Barclays PLC.

We will, of course, be reporting on the day’s dicussions for the Procurious blog but if you’re a CPO and would like to attend in person please contact Olga Luscombe via [email protected] to request an invitation

Interested in joining but can’t make it on the 7th? We’re also holding CPO roundtables on 30th May, 19 th September and 14th November –  email Olga Luscombe via [email protected] to request an invite.

Career Boot Camp 2018

Career Boot Camp  is a global professional development event for procurement and supply chain professionals. Each year the series, features five, fifteen-minute podcasts,  designed to help the most ambitious professionals put their career fitness first and upgrade their skill-sets.

It’s an opportunity to hear from the brightest and the best in the industry in a format that is FREE and easily accessible; on the go or in the workplace, providing answers to the most common procurement questions you’re desperate to have answered!

The 2018 series will kick off in September.

Stay tuned for more information and check out the full series  from 2017 here. 

Gen Next Survey 2018

When Procurious put out a call in 2017  for procurement survey participants, we were delighted that 500+ professionals across more than 50 countries shared their insights and wisdom.

The results revealed some fascinating information about the current climate in procurement and the attitudes of professionals working within the function.

We discovered that:

  • 55 per cent of procurement professionals either don’t hold memberships in professional associations or do not regard membership as benefiicial to their career development
  • Over half of those surveyed don’t trust their boss to be proactive about their career progression
  • 77 per cent of global procurement professionals have never crowd-sourced a solution to a business challenge on social media
  • 48 per cent of professionals intend to move on from their current role within two years

We’ll be launching the survey and Gen NEXT report again in 2018 and we want YOU to be involved. Stay tuned for more information and.

In the meantime email us to request your copy of the 2017 report – packed with data, insights, recommendations, and links to over 20+ Procurious articles that further explore many of the findings that are raised in the report.