Gaining Entrepreneurial Experiences In An Enterprise Environment

Look out ‘blockchain’ and ‘transformation’, there’s a new hyped word quickly rising through the ranks – and it may soon eclipse you both: ‘intrepreneurship’.

Intrepreneurship is a philosophy or set of experiences that allow a professional to combine the authority and accountability of entrepreneurship with the (relative) safety and job security of a corporate gig.

There is nothing easy about being an entrepreneur, despite the glamor assigned to meteoric success stories like Apple, Tesla, Uber, and Facebook. The high point and low point of entrepreneurship are actually the same: at the end of the day you are responsible for everything that happens – good or bad – even if it seems beyond your control. This accountability drives healthy risk-taking and builds a sense of ownership that is often missing in corporate roles that provide a soft landing.

Being an entrepreneur sounds like a great idea, but what if it were possible to get that experience without taking on the risk of leaving a position with a guaranteed salary and benefits? That’s where intrepreneurship comes in. Functions like marketing, sales, and operations seem like a natural fit for the intrapreneurial movement, but so is procurement! We just have to be prepared to either seize the opportunity or create one of our own.

Build a better mousetrap…

“…and the world will beat a path to your door” as the aphorism attributed to Ralph Waldo Emerson goes. No one has built more ‘mousetraps’ than procurement, nor have they contracted for mousetrap maintenance services or optimized relationships with mousetrap manufacturers. This knowledge and perspective is priceless to a company trying to create something new that they can introduce to market. The right incremental improvements can turn whole markets upside down. Procurement should have a voice on every corporate innovation council or ‘lab’ and should participate in those experiences as an absolute equal – not a courtesy invite. Realizing how valuable our perspective is, and putting that into words, becomes a ‘business’ plan that procurement can use to drive top line growth.

Identify unaddressed needs

“Wouldn’t it be cool if…?” Procurement spends so much time trying to fulfill defined business requirements that we can often spot unaddressed needs before the company and its suppliers do. Many times, these needs are just to the right or left of current supplier offerings. An intrepreneurial procurement professional will seize this opportunity and partner with a supplier to make it happen – taking on both risk and vision definition and seeing the R&D process through. Procurement’s company is then the first to benefit from the new offering, and may have a stake in the associated intellectual property.

Look, learn, and listen

Procurement’s mandate – in the broadest conceivable sense – is to ensure that the company derives the greatest amount of value, and assumes the lowest level of risk, from every dollar they spend. The projects that might fall under that sort of an umbrella are far more expansive than traditional spend analysis and strategic sourcing. Anything unique going on at the company should include strong representation from procurement.

That includes mergers and acquisitions, new product development, strategy planning, etc. Depending on the project type, there may be an ‘organic’ beginning. Procurement should always be on the lookout for opportunities to take on more responsibility and join in on unique projects – without waiting for a formal invitation. After all, very few people are ‘invited’ to become entrepreneurs. Most chart that path forward on their own.

Once you’ve walked a mile in an entrepreneur’s shoes, it is hard to imagine ever going back and working in a traditional enterprise setting again. And who knows? Maybe the next round of wildly successful, disruptively innovative startups will be founded by former procurement professionals.

How Digital Transformation Will Shake Things Up In Procurement

Some of the gains brought about by digital transformation will be immediate – including its impact on that all-important bottom line…

Throughout the past few years, many organisations have undertaken a strategy of digital transformation.

These transformations step-change many processes for businesses in order to take advantage of embedding faster, more collaborative and more analytical ways of working to better understand and serve both the business and customers to gain competitive advantage.

By leveraging this, businesses across the globe can enhance their productivity, their agility and in turn, their profitability. Indeed, digital transformation offers the potential to significantly reduce inefficiencies across the entire supply chain.

Let’s take e-commerce as an example. By improving the efficiency of a supply chain beyond brick-and-mortar retailers, wholesalers and manufacturers, it’s possible to collectively obtain a larger profit than each working in silos. By boosting the supply chain at every touchpoint, companies can reduce the overall cost as well as the opportunity loss, and crucially achieve a greater customer satisfaction rate.

On average, 60 per cent of an organisation’s costs are made up of spend on third-party suppliers of materials, goods and services. In turn, these suppliers have suppliers of their own, and so on and so forth. Essentially, everything that an organisation owns or buys is impacted by procurement teams, which means we as a function stand to benefit enormously from digital transformation.

The opportunity for procurement

Far from the persistent fear-mongering that digital transformation will be the death of procurement; this is an incredible opportunity for the function.

Digital transformation is making it easier than ever before for procurement teams to effectively play a significant role in optimising business and its supply chain, while delivering tangible cost savings.

According to The Hackett Group’s recent study, digital transformation reduces strategic sourcing costs and cycle times by 30 per cent and reduces data-collection errors, utimately leading to cost savings.

Automation also helps category managers obtain deeper spend reductions in specific areas and identify fresh opportunities for savings. It helps organisations identify sources of additional value, i.e., through its third-party suppliers, and retain it within the organisation. This translates into further value-add for the business.

Doing more with less

With a better supply chain, determined through strategic procurement technologies, organisations can reap the benefits, from manufacturing to processing.

To return to the e-commerce example; an enhanced supply chain allows for the physical delivery of a product at higher quality and with faster delivery times. This is especially valuable in this instance; as consumer demands continue to increase, businesses are aided through digital platforms that cater to the “right here, right now” mindset — a demand driven supply chain.

Procurement technology

Technology enables productivity and this means that technology enables us to do a lot more with less. If technology is at the heart of productivity, then procurement is the lungs of it.

Because of this, there has been a great deal of innovation in procurement technologies that drive value in both public and private sectors.

In particular, these digital innovations increase transparency and productivity while engaging healthy competition; they foster an environment where  innovation can propser.  Strategic procurement tools provide organisations with an opportunity to streamline processes and increase efficiency that add value to their businesses.

Automation is at the heart of the digital imperative. Digital innovation comes in all shapes and sizes, and those that are proven to impact the bottom-line such as those that increase the productivity of an entire supply chain have the greatest influence in positively contributing towards the growing economy. Forward thinking organisations that make strategic IT investments considerably strengthen their business outlook by opening up the opportunity for greater output at a lower cost.

This article was written by Dan Quinn, SVP Jaggaer MENA.

JAGGAER’s REV International 2018 takes place in Munich on 25th-26th June. You’ll have the chance to listen to a number of industry experts and procurement thought leaders as they share their best practices and the latest in procurement innovation. Register here. 

3 Ways To Take The Pain Out of Contract Management

Managing supplier contracts is one of the most fundamental and, arguably, simple tasks undertaken by procurement teams. But for many it’s also a major source of anxiety. So why does procurement find it so difficult to successfully manage supplier contracts?

 

Given the ever-improving technology landscape and growing popularity of cloud-based SaaS solutions, one would assume that effective contract management is now commonplace among procurement professionals. Almost a hygiene factor, surely? Not in our experience.

The key challenge is maintaining contract repositories with rigour and to the high standards required. But even where organisations have well-embedded enterprise resource planning systems, this alone does not guarantee that contracts are being successfully managed.

This is rarely about a lack of willingness to improve the process – in fact, most teams are hugely concerned about it, with the majority actively looking for better ways to manage contracts.

Why so hard?

Supplier contracts provide a detailed overview of the pipeline of current and upcoming projects within an organisation. Without this line of sight, the procurement function is likely to be on the backfoot when projects end and contracts terminate. This is of particular concern in areas such as telecoms and software, where significant penalties are charged when contracts automatically roll over.`

Much of the problem lies with how contracts are filed, stored and updated – often in multiple systems or, even worse, in individual desk drawers across many different departments depending on who ‘owns’ them. As a result, procurement can potentially have zero visibility over many contracts, creating significant risks if suppliers are not being managed effectively throughout the contract lifecycle.

Given that up to 70% of spend is repeated year on year, failing to have visibility over contract expirations and extensions in sufficient time to fully leverage all the strategic sourcing levers available means vital savings opportunities are likely to slide under the radar.

Easy as 1, 2, 3

A well-maintained and up-to-date contract repository can provide a complete overview of all contracts in operation – from those in a supplier cluster, e.g. a central supplier contract with several sub-contracts to those that function company-wide.

The key is integrating contract management into everyday processes so that it becomes part of what procurement teams do rather than an afterthought. Three quick steps to achieving this are to:

  1. Make your team accountable – Include contract KPIs in your procurement team’s objectives. All buyers and category managers should be responsible for ensuring that they hold signed supplier contracts for the categories they work on. It should be their responsibility to gather them from other departments, even though they are not the ‘owners’, and to upload them into a contract management solution.
  2. Capitalise on the results – Procurement leaders should routinely review their teams’ compliance with keeping contract management solutions up to date and actively use the output to drive better category planning and organise quarterly workloads.
  3. Choose the right technology solution – Using a standalone contract management solution is helpful, but on its own it can get neglected very quickly. Select an integrated procurement technology solution that links contract management with other modules such as spend analytics and supplier performance management. An integrated solution that connects different modules together provides more insightful output that can inform better decision-making, e.g. linking spend analytics with contract management allows procurement teams to track supplier contract compliance and ‘spend under management’ – key indicators to how well procurement is doing within the wider organisation.

The way forward

Embedding contract management best practices into the procurement function and then incentivising the team to keep the repository up to date is crucial. Centralising information storage and assigning responsibility for maintaining it takes the guesswork out of who manages which contract within a large business – vitally important when managing multiple contracts.

Once this is in place the procurement function can then use the combined data to define company-wide procurement initiatives spanning numerous projects, managing risks and spend in a way that would not have been possible before. Now that’s not so hard is it?

Download The Source for our latest insights in procurement and supply chain management.

Late, Late For An Important Date? Why Time Isn’t On Public Procurement’s Side

Time is fleeting and never more so when a contract deadline is looming large. How can public sector procurement professionals use their time more effectively?

In the second in a series of articles on the challenges facing public sector procurement, we examine the issue of time and why it must be managed better.

Before we begin, I have a riddle for you:

This thing all things devours;

Birds, beasts, trees, flowers;

Gnaws iron, bites steel;

Grinds hard stones to meal;

Slays kings, ruins town,

And beats high mountain down

Extract from ‘The Hobbit’ by J.R.R. Tolkien, 1937

Those of you familiar with the great J.R.R. Tolkien will recognise this as one of Gollum’s riddle to Bilbo Baggins in ‘The Hobbit’. The answer? Time, of course.

Time is the one thing none of us can avoid and all wish we had more of. How many times have you wished you had an extra hour before a work deadline? And that’s before we even consider more time at the weekend, or an extra hour in bed!

For public sector procurement professionals, it frequently feels like time is not on our side. An increasing volume of ‘Business as Usual’ work, combined with new ‘one-off’ projects, means it can feel like a juggling act to meet all the relevant deadlines.

In the public sector, these deadlines can sometimes mean the difference between the delivery or not of critical goods or services across a city.

It often feels like we’re like the White Rabbit from Alice in Wonderland, constantly running late for an important date. And the more time pressure builds, the more likely it is that mistakes will be made, costing even more time in the long run.

Typos in letters, ambiguity in specifications and issues with evaluation or award criteria – they all have the power to send us back to the drawing board. Getting it right first time is critical as the more time spent doing tendering, the less time there is to actually manage contracts.

When it comes to creating the value and savings required in the public sector, contract management is key. After all, you can agree savings in a pre-contract phase, but without effective contract management, organisations will typically lose 50 per cent of this value in the first year of the contract.

And that is why we need to manage our time more effectively.

More Haste, Less Speed

Before looking at how time might be managed more effectively, it’s worth examining why procurement in the public sector can be so time consuming.

Public sector procurement is a very bureaucratic, very legalistic, very risky – for both buyers and suppliers – and, ultimately, very slow process.

For procurement exercises above the EU Procurement thresholds, and requiring advertising through OJEU (Official Journal of the European Union), it’s not unusual for the process to take up to nine months (and frequently even longer) from identification of need to the award of a contract.

And while that may seem like a complete anachronism to those of you in the private sector (and believe me, it did when I first started in the public sector), there are good reasons for this. The process is aimed at promoting competition and procedural conformity, not necessarily value for money, though this is what most public procurement professionals are aiming for.

Greater competition allows for more open and transparent tendering and contracts, where SMEs, local suppliers and parties that may not ordinarily have access to these markets can get involved. A wider supply base may lead to new ideas, innovations and process improvements while at the same time potentially being a boon to the local economy.

The bulk of this time is taken creating a set of fully auditable documents for any procurement exercise above these thresholds. This includes a sourcing strategy, outlining key decisions and the reasons for them, detailed tender documents, including specifications, selection and award criteria, and a fully tracked evaluation process.

The type of route to market will, of course, be determined by the product, service or public works being procured. The detail of all of these routes is too much to go into here, but you can find a lot of useful information on ‘The Procurement Journey’, if you want to understand the end-to-end process.

There is limited scope for reducing the time taken to complete these processes, so where can time be saved to allow for more contract management? This is where good planning comes in.

Proactive Procurement

Procurement could be accused of operating in a reactive manner and it’s no different in the public sector. However, this can often be attributed to the nature of procurement’s place in the organisation and the changing nature of how organisations operate and procure goods and services.

The increasing number of ‘one-off’ projects, on top of the ‘Business as Usual’ work, can make even the best procurement functions feel like there is a never-ending volume of tenders to complete (referred to as the “tender sausage machine” where I work).

Moving from a reactive to proactive approach can help in this and crucially buy more time for that all important contract management. There are three suggestions below to help make this work, but it’s important to understand the caveats on these at the same time.

Making this a reality takes not only input from procurement, but from all its stakeholders and end users across the organisation. Procurement needs to be seen as a key strategic function and help mould the strategic direction that underpins procurement requirements.

That said, there’s still plenty scope for procurement to make changes and help things run that bit smoother.

  1. Proper Planning Prevents Poor Performance

This is very simple to say, but very hard to do. Get all your contract details in one place, including the dates of when they need to be retendered or procured and plan accordingly. Have quality project plans available to help understand when the procurement process needs to start and the key dates involved. Most importantly, share these dates with your stakeholders and then stick to them.

  1. Don’t “Boil the Ocean”

Once you know the procurement requirements, assess the market to see if other organisations or Local Authorities are doing the same or have been there before. Ask for documentation – my experience is that people are only too willing to share if they know it will be reciprocated in the future.

Also check out organisations like Scotland Excel, Yorkshire Purchasing Organisation (YPO) and Crown Commercial Services (CCS) for frameworks. If the framework is applicable, that’s half the work done for you and a major time saver.

  1. Kick-off Means Buy In

A kick-off meeting is a good way to get all the appropriate people in the room to discuss the requirements of the contracts and make sure that all the vital details are captured. Getting this done up front not only means you are better prepared, but you also get buy in from stakeholders who feel involved and will be better placed to help push the project along.

These suggestions by no means cover everything that can and probably should be done to make the procurement process more efficient. However, from the point of view of marginal gains, making these adjustments should help increase procurement efficiency and free up time to manage the contracts you’ve put so much effort into creating in the first place.

Unleashing the Real Power of your Supply Chain

The human element will make or break your supply chain career. Procurious Founder Tania Seary reveals the human strengths that AI will never replace and how to leverage that competitive advantage.

There comes a time when you forget why you ever started.

I’ll never forget my first meeting as a procurement executive with a supplier. For me, it was one of those moments of illumination. I can still remember the desk, the room, (funnily enough, not the particular supplier) and how I felt. I must say, the one word that continually comes to mind to describe what I felt was … power.

Not in a newly-minted supervillain kind of way, but “power” in the sense that for the first time I really felt the tangible ability to make an impact. To tell the truth, I’d had a lot of fancy jobs up to that point – marketing for Walt Disney in London, PR for the Mexican beer company Corona, hosting trade missions for LAX, launching listed companies. But moving from one side of the table from the role of seller to being the buyer … that was a buzz. 

There’s procurement gold in them there hills!

You see, procurement 20 years ago, was – for the first time – sexy. It was on a new trajectory – its very own moonshot. It was a time for firsts.

B2B was all the rage. CEOs and Boards were ponying up millions of dollars to build fancy eProcurement solutions and invest in procurement exchanges. Procurement was coming in from the wild west and being tamed and urbanised through leveraged buying, reverse auctions and blanket contracts. Everything was a first.

MBA graduates were like blurry-eyed prospectors, rushing for the gold fields to claim their stake on their ambitious careers by making their employers a fortune. I distinctly remember asking one of my fellow Penn State classmates, “Why are you going into procurement?” He answered, “Because you can save your company millions and be a corporate superstar overnight. It’s the fastest way to the top.” In other words, “There’s gold in them there hills!”

This is where my passion for procurement started and has continued. Like the chief cheerleader, I have been singing procurement’s praises ever since.

A lot has happened in the last 20 years, but we need to ask ourselves if we’re getting today’s graduates and future leaders excited enough to join our ranks in the search for exponential value? Do they see a bright future in our profession? Because now is certainly the time!

Procurement’s new moonshot opportunity

For the first time in more than two decades, a new moonshot opportunity has emerged for our profession. Cognitive procurement is upon us.

AI and cognitive give us the opportunity to provide a quantum leap in delivered savings. The opportunity to move away from all those back-office administrative tasks that have been holding us back.

Cognitive is going to take away everything we’ve been whining about, launching us out of the transactional malaise and into the strategic stratosphere. Our role in Industry 4.0 will be to orchestrate, collaborate, and negotiate within a complex, technology-enabled global supply network.

Our future will be e-enabled, but humanity most definitely still has a place in procurement. At the odd times when Watson, other robots, and the data seems to be at cross-purposes and pointing us in different directions, we are going to have to step in and use our uniquely human skills to untangle the gridlock of competing interests to find a resolution to the supply challenge.

You see, the secret to our success in Industry 4.0 lies in something that no AI being can match – relationships, along with our ability to leave people with the feeling that they are special, important, and of real value.

As you can see, I’m so excited about the “moonshot” opportunities currently available for procurement. I’m personally energised by my work with IBM on Watson, partnering with SAP Ariba to promote Procure with Purpose and with Procurious itself growing at 25% per year with nearly 30,000 members today and on track to have 50,000 members by 2020.

But of course, in life, nothing is ever perfect.

The human element

My mother is only 71 and has advanced dementia. Many of you will relate to this story. There are lots of things my Mum can’t remember, including most people’s names, what year it is, and how old she is.

But, surprisingly, she can still remember her feelings at different points in her life. She may not remember someone’s name, but she can definitively (and accurately) describe the emotions she associates with that person.

It reminds me of that important leadership lesson: “People may not remember what you said, but they will remember how you made them feel”.

Playing to our human strengths

For me, the human element is what makes business:

  • interesting
  • challenging
  • innovative
  • rule-breaking
  • risk-taking, and
  • friend-making.

For me, the joy of procurement is the personal. It’s the unique relationships I create with people: the deals, the secrets, the preferential options. My relationships are my competitive advantage.

Up, down, and across the supply chain, it will be interactions between people that will be the real determinants of success and failure. To prosper in this next Industrial Revolution, we need to play to our human strengths – collaboration, connection, innovation, influence – the things only we humans can do.

We need to embrace our human-ness, our humane-ness, and really get connected with our stakeholders, our suppliers, our teams and our communities.

We have developed Procurious for current and future generations of “Procurers”. We want to empower our future procurement and supply chain leaders to change the face of the profession from the inside out. We’re on a mission to enthuse a new generation, putting new moonshot opportunities through the power of conversation, collaboration, and connections.

Let’s stop worrying about the future and start creating the future we want to live in.

Let’s embrace cognitive and all that Industry 4.0 has to offer. Let’s equip ourselves and our teams to really make a difference with the advanced skills AI cannot – namely the power we have as human beings – or the power to connect.

Procurious Founder Tania Seary delivered this message to inspire audiences at the Procurious Big Ideas Summit in London, SAP Ariba Live in Amsterdam, The Faculty CPO Forum 2018 in Melbourne and ISM2018 Nashville.

4 Ways Procurement Could Better Manage Risk

Procurement pros need to get better at managing risk. Because supply chain disruption can come from any angle, whether it’s caused by a supplier site failure, environmental or geopolitical factors, or even adverse weather… 

If it’s not already, risk management should be a top priority for businesses. The consequences from not actively identifying, managing and mitigating supply chain risk can significantly impact an organisation’s profitability, not to mention brand reputation and potentially, its sheer existence.

riskmethods set out to determine the current “state of risk management and mitigation” in today’s global business ecosystem by surveying more than 250 senior procurement executives from across the globe. The study unveiled important findings around how prepared procurement leaders are to tackle rapidly evolving business environments brought on by new, more complex threats, and the current methodologies employed to manage risk in the supply chain. Here are four areas the survey explored, which indicate where procurement teams are failing in terms of risk management.

  1. Preventing disruption

All senior procurement professionals identify ‘avoiding significant disruption to the supply chain’ as a top priority, but when survey respondents were asked whether their organisation had a significant disruption in the past 12 months, more than 47 per cent indicated that they had experienced between one and five.

Additionally, a surprisingly high 13 percent indicated that they had 20 or more significant disruptions in the past year. Arguably the most alarming statistic – 12 per cent of respondents did not even know whether there were any serious disruptions to their supply chain during this time.

This is a testament to the 12 per cent’s minimal visibility into their operations. According to this data, nearly all organisations faced a disruption in the past year, speaking to the prevalence and nature of supply chain threats at they continue to increase. 

  1. Improve ability to uncover risks

The current landscape has made it critical for procurement professionals to have real-time, thorough views into potential risk and their impacts to make well-informed purchasing decisions. Many organisations have implemented some form of tracking mechanism for risks, but how often the data is updated is another issue.

When we asked respondents about the frequency in which data is refreshed, less than one third of respondents answered continuously. This is an alarming percentage.

Risk monitoring in today’s digital business environment needs to be a 24/7/365 task. Organisations that aren’t receiving continuous updates are falling behind and can’t possibly be making the best decisions for their business.

The underlying cause of this lack of complete information is usually associated with traditionally highly manual processes. Not only is the manual approach an extremely tedious and time-consuming task, it also takes away resources from other critical objectives. Most importantly, it severely limits big-picture insights and increases the chances of a serious supply chain disruption. When survey respondents were asked what level of automation their organisation employed to refresh critical information, less than one per cent of respondents indicated that it is completely automated.

An additional 39 per cent indicated that they were in the low to moderate rage of automation, relying heavily on manual tools such as Excel in conjunction with some outside sources. A full quarter of respondents indicated that they have no automation capabilities at all and are completely reliant upon manual search.

  1. Supplier risk impact assessments are key

Understanding a supplier’s potential impact on the business is key for procurement teams when it comes making purchasing decisions. For example, if a major supplier gets hit by a severe weather event which causes a delay in shipping, that could cause a ripple effect that halts production and eventually leads to a loss in revenue.

When survey participants were asked if their organisation had a mechanism in place for measuring the impact a supplier has on the business, almost half said that their organisation had no structured assessment of supplier criticality or impact.

Having no such assessment means organisations are at times putting their fate in the control of someone’s best guess. Organisations must have clear visibility into their supply chain, including which suppliers have the greatest potential impact, so they can refocus resources on reducing risk and preparing for a crisis.

  1. Organisations must be better equipped to mitigate emerging threats

While being able to identify potential risk is a crucial procurement workflow, having the ability to act on that information and mitigate evolving threats is equally, if not more, important.

Only slightly more than 20 per cent of study respondents indicated they have plans in place. An additional 27 per cent indicated that no such plans exist and 53 per cent indicated that there were only partial plans in place. These numbers demonstrate how difficult it is to evolve into a mature organisation when it comes to prioritising risk because businesses lack the necessary level of stakeholder collaboration.

Supply chains will never be free of risks, but an organisation’s ability to prepare for, identify and mitigate emerging threats will set them apart from the competition. Procurement teams can’t possibly make well-informed business decisions without a risk management strategy in place. As the number of risks continues to increase in this environment, the need for accurate, actionable insights will only become more critical.

When it comes to risk management, companies need to consistently be moving forward as the current threats will only continue to evolve.

Download the report: Procuring Risk: The State of Risk Management and Mitigation in Today’s Global Supply Chain to read riskmethods’ full findings.

Agile Procurement Through the Ages…

Agile principles are all about the decision-making process. What changes should you implement to drive greater value at higher speed?

At IBM, we understand agile as a set of principles and values that when thoughtfully considered across the business, enable quality decision making, empower teams, and delight customers.

In procurement, the Category Manager’s role is to enable their internal customers by eliminating any disruption or friction within the business while also managing cost using their category knowledge and procurement skillset. The key here is the category managers’ ability to have deep category knowledge paired with a breadth of understanding for all internal customer profiles and needs.

As a category manager, team members must build a consultative skill set that allows them to identify pain points, use time wisely, and seek feedback. The result is a category manager who works towards customer needs rather than contract expiration dates and the latest price benchmarks. As a guide, we should seek to digitise and automate as much as possible regarding benchmarking, negotiations, RFx process’, contracting, etc., allowing us to give the appropriate attention to discovering internal customer needs including service levels, pain points, and demand.

What we did before vs. what we do now!

Previously, IBM, like most large companies, hosted a heavily layered procurement organisation requiring multiple sign offs and complex processes in order for decisions to be made. Agile principles are all about the decision-making process. Our leadership knew we needed to make some major changes resulting in fewer layers of management, accountable teams with decision making authority, and greater collaboration across the business, allowing them to drive value for our customers at the speeds they expect.

In a traditional procurement organisation, the category manager’s role is to identify where the savings opportunity is and act accordingly. They do this while following age old processes and having little to no interaction with internal customers. Many organisations seek to use poorly participated customer surveys to get a sense of how well category managers are serving their customers.

Yet, the best way is to open the channels of communication and collaborate with the business, whether it be face-to-face or virtually, allowing category managers to make the right decisions.

While cost reductions are still a priority for nearly all organisations, we found that when we work closely and listen to customers, we can eliminate the costs associated with under and over delivering across the business, which in turn, results in lasting cost savings.

The journey

To achieve this transformation, it takes strong displays from leadership of all the principles and values agile organisations are known for, establishing a belief system across the business encouraging category managers to ask ‘why’ when performing a task their internal customers do not care for or need to be successful. Implementing an agile belief system into a large organisation requires a major cultural change that takes time and patience from all parties.

In this new space, the role of a category manager has quickly evolved from contract and cost management to a crucial role that links business needs to the external marketplace for a specific category of goods. To achieve success in this role, category managers must interact daily with internal customers and evaluate each moment of their time spent not serving their customer’s needs.

Even so, many procurement organisations are too deep into spreadsheets and other manual processes to be ready for such an agile way of working. These manual processes make it impossible for category managers to have the time capacity to be a true advocate and trusted advisor for the business. To lift category managers’ heads from the clutter, organisations must invest in digitising their procurement processes where possible and identify the areas where they are not ready and get ready!

This article was written by Shawn Busby, Global Category Lead- IBM and Norman Braddock, Sourcing Consultant – IBM. 

US Intel Chiefs Urge Business Cooperation On Cybersecurity

But what are the trade-offs in terms of privacy and civil liberties? Highlights from General Keith Alexander and John Brennan keynote at #ISM2018.

During the American Revolutionary war, military commanders of the 13 Colonies realised that the conflict could not be won with soldiers alone. Civilians left their towns and farms to swell the ranks to a level where the British could be pushed back and eventually overcome.

Retired four-star general Keith Alexander (former Director of the National Security Agency) tells delegates at #ISM2018 that just as civilians fought alongside soldiers 240 years ago, there’s currently an urgent need for a public and private partnership to defend against cybersecurity breaches. In other words, business and government need to cooperate if the US is to have any chance of defending against offshore cyberattacks and resultant IP theft.

Calling for a partnership

“I think our approach to cybersecurity has to be changed,” says Alexander. “We need a new strategy.” Companies that suffer data breaches tend to fall into two camps – those that have been attacked and know it, and companies that have been attacked and don’t know it. Alexander says that in an environment where “everybody’s getting hacked,” industry has a responsibility up to a certain level.

The issue is that intelligence agencies (such as the NSA) can’t see what’s in the packets of information that pass through cyberspace at light-speed until after the fact, which means they are relegated to reactive incident response. The solution is for companies to help build a common picture by sharing information so the government can then defend effectively. Alexander gives the example of the energy sector, where 18 companies are working together to share information at network speed.

Alexander also raises the issue of companies that have been attacked being treated as a guilty party, with some organisations getting sued after a cyberattack. “If you want industry to work with government and share what’s hitting them, you’ll have to give them liability protection. We also need to incentivise it so it’s cost-neutral to build up your cyber defence.”

Former Director of the CIA, John Brennan, comments that as difficult as counter-terrorism was, dealing with cybersecurity was even more challenging. “The digital domain is 85% operated by the private sector, and there’s currently no consensus on the government’s role in that environment,” he says. The nature of globalisation means it’s not always easy for a security agency to figure out what’s an American company. “The ecosystem is so interconnected,” says Brennan. “You’re not going to stop globalisation, but you need to [respond to it] in a way that protects government and business interests.”

Privacy trade-offs?

Panel facilitator and ISM CEO Tom Derry raised the question of how you can protect privacy and civil liberties while acting to defend against cyberattacks. According to Alexander, you can do both. “If we’re completely transparent in what we share and ensure everybody agrees to it, we can build a picture that defends our nation.” The consolidation that is taking place as businesses increasingly move into the cloud (usually via a managed service) will help in a cybersecurity sense. “It’s going to come down to consolidation,” says Alexander. “The cloud is going to be the future, collective security in the cloud will be so much better, and you’ll be assured that both your data and your privacy are protected.”

Brennan was less reassuring when it comes to privacy trade-offs. “Lots of privacy and civil liberties have been given up already. People would be shocked about how much of their information is being shared online. We need greater transparency and obligations, and need to be aware of the risks and opportunities. You can’t secure your data the same way you can secure a building.”

What can be done?

Most companies, says Alexander, have a firewall and other measures in place to defend against cyberattacks, but he gives the example of a company with 2,500 people and 5,000 systems that was discovered to have 400,000 unpatched vulnerabilities. “Most companies only try to patch the critical ones.”

Alexander and Brennan list the following solutions:

  • An unprecedented level of partnership and information-sharing between government and business.
  • Behavioural analytics, where a system-user’s behaviour raises red flags if it changes dramatically.
  • Freezing or isolating systems when malware signatures are detected.
  • Better hiring practices, training, procedure and policies to protect against the human element (e.g. Edward Snowden’s data theft).
  • Machine learning and AI systems to cope with the sheer size of the challenge.
  • Be clear on policy: what constitutes an act of war in cyberspace?

In other news from #ISM2018:

ISM Appoints First Chief Product Officer

Susan Marty to Lead Member Engagement, Market Development and Growth Initiatives for ISM.

In its mission to reflect the voices of everyone in the supply management community, ISM has appointed Susan Marty as it first Chief Product Officer. Ms. Marty will focus on member engagement, market development and growth for ISM, the leading not-for-profit, independent, unbiased resource for everyone in supply management.

“As Chief Product Officer, I am strongly committed to meeting the current and future needs of all ISM members and constituents in a timely and meaningful way. We will continue ensuring that all our offerings–from education and events, to discussions and publications–enable members to advance professionally while making their organizations stronger and better,” said Ms. Marty.

“Susan Marty is an exceptional leader with a talent for building strong customer, partner and industry relationships, and innovating in response to market shifts. At a time of rapid transformation for supply management, she will help ISM remain vital to our entire industry,” said Tom Derry, CEO of ISM.

In addition to her focus on ISM’s educational offerings, Ms. Marty will concentrate on making ISM a source for compelling, customer-driven content, including research, thought-provoking conversations with subject-matter experts, and issue-oriented articles.

She will also lead efforts to bring supply management leaders and practitioners together with technology providers, analysts, and other members of the broader professional community. Whether online or via social media, she will focus on maximizing opportunities for the profession to access all ISM has to offer.

“We are thrilled to have Susan Marty join the ISM team. She is a high-caliber talent with a wealth of experience to help us deliver superior products that are valued by our customers,” said Debbie Fogel-Monnissen, Chief Financial Officer, ISM.

“Susan Marty is exactly the kind of product leader that ISM needs to fulfill the strategy of increasing engagement with the supply management professional. Her background in creating value offerings and communicating them clearly and through multiple channels will help today’s supply management professional leverage ISM’s vast resources,” said Jim Barnes, Managing Director for ISM.

Ms. Marty comes to ISM after serving as Vice President Marketing, Product Management and Sales at WorldatWork. She previously held senior roles at Inter-Tel (now Mitel), Voice Access Technologies, OmniSky and AT&T Wireless (now AT&T Mobility).

Arianna Huffington: No More Brilliant Jerks In the Workplace

#ISM2018 keynote Arianna Huffington is on a mission to end the collective delusion that burnout is the price we pay for success.

In 2007, Arianna Huffington collapsed in her office. “I hit my head on my desk, broke my cheekbone, and came to in a pool of blood. I asked myself the question: is this what success looks like?”

By any of the usual metrics, Huffington is an undeniably successful businesswoman and a role model for many. The Greek-American author and syndicated columnist has written 15 books and is the co-founder and editor-in-chief of The Huffington Post, later acquired by AOL for US$315 million. She is a regular inclusion in lists such as Forbes’ Most Influential Women in Media, The Guardian’s Top 100 in Media, and Forbes’ Most Powerful Women in the World.

But, as Huffington tells the audience at #ISM2018, having money and power as your only metrics of success is like trying to sit on a two-legged stool. A third leg is required if you’re going to attain balance – and that’s where the concept of “Thrive” comes in.

The size of the prize

We’re currently operating in the midst of a global epidemic of burnout and stress. “What’s sad is that it’s completely unnecessary,” says Huffington. “When we take care of ourselves, we’re more effective in what we’re doing.”

Issues which used to be the province of health magazines are now entering the mainstream. Businesses are increasingly recognising that performance improves when employees take care of themselves. The three pillars of self-care are nutrition, movement and – Huffington’s favourite topic – sleep.

Sleep is the best performance-enhancing drug

Ever heard the phrase “we can sleep when we’re dead”? That kind of attitude, according to Huffington, only brings forward the time when we’ll actually be dead. Sleep affects your well-being, your cognitive performance, and subsequently your company’s bottom line. Not long ago it was common to see business leaders competing in terms of who can operate on the least amount of sleep. U.S. President Donald Trump, PepsiCo CEO Indra Nooyi and television personality Martha Stewart all reportedly operate on 4 hours of sleep or less.

Huffington knows that when she’s exhausted, she is “the least good version of herself”. Lack of sleep translates into lower creativity, a lack of empathy, more reactive behaviour, a greater likelihood that she’ll take things personally and miss red flags. Similarly, former President Bill Clinton famously said that every one of his major mistakes was made when he was tired.

Here’s the good news. High-profile CEOs are “coming out” as champions of a good nights’ sleep, including Amazon’s Jeff Bezos. Bezos wrote a piece about why getting eight hours of sleep is a top priority not only for him personally, but for Amazon’s shareholders, as a well-rested CEO is much more likely to make good-quality decisions.

Fix your culture to reduce attrition

“Taking care of your employees is no longer just a ‘nice’ benefit,” says Huffington. “It directly affects the business metrics.” Burnt out employees are highly likely to change jobs, with their companies bearing the brunt of attrition costs. Lower engagement, reduced productivity and higher healthcare costs are the other risks faced by companies that run on burnout.

When we prioritise a healthy culture, says Huffington, we’re much more able to deal with problems as they emerge, and respond to crises quickly. “A thriving culture means that everybody knows you cannot sacrifice empathy and caring on the altar of hyper-growth”, she says.

Huffington uses Uber as an example, where from her position on the Board she has seen first-hand the negative effects of a hyper-growth culture that is fuelled by burnout. “The idea that everything will be forgiven if you’re a top performer is no longer sustainable. I promised Uber that going forward, no more ‘brilliant jerks’ will be allowed in the organisation. The truth is that no matter how brilliant you are, if you’re not there to support colleagues, be empathetic, and be humane, in the long term you’ll have a deleterious impact on the business.”

Why do people become jerks? “When employees are burnt out,” says Huffington, “they act out.”

Thrive

In the age of machine-learning, artificial intelligence and continuous disruption, it’s more important than ever to protect and project our uniquely human qualities – namely, empathy and creativity. Huffington singles out these two qualities as they cannot be replaced by AI. She notes that although we regularly celebrate advances in the field of augmented reality, we need to prioritise and cultivate “augmented humanity”.

Alibaba Founder Jack Ma spoke in Davos recently where he introduced the concept of LQ (Loving Quotient), or how people treat one another. In business this will become increasingly important as maturity develops beyond IQ, through EQ, and finally to LQ.

Put the smartphone down

“The next stage of technological disruption will involve technology that will help you disconnect from technology,” says Huffington. She speaks persuasively about the negative effect devices have on people’s wellbeing, and the importance of taking the phone out of the bedroom to ensure a proper night’s sleep. “Your phone is the repository of every problem that you’re dealing with,” she says. It certainly shouldn’t be the last thing you see before sleeping, or the first thing you see when you wake in the morning.

“Learning to manage relationships with our phones is key, but putting boundaries on technology doesn’t mean we don’t love technology. At present our culture values people who are always on, always texting back,” she says. “Where we put our attention determines our lives.”

Huffington leaves the audience at ISM2018 with the image of the three-legged stool. The third leg – the Thrive leg, is built from a sense of well-being, connectivity with your own wisdom, giving back, and feeling a sense of wonder about life, she says. “So often, we don’t even look up.”


Are you at ISM2018? Visit Procurious in the Exhibitor Hall – Booth #207!

Don’t miss out on Procurious Founder Tania Seary’s inspirational & informative ISM2018 Session titled “From The Amazon to The Moon: The Possibilities for Procurement” on Tuesday 8th May, 3.45-4.45.

5 Nashville Chartbusters For Procurement Professionals

How are the smash-hit singles of Johnny Cash, Willie Nelson and Dolly Parton relevant to procurement? Let’s find out.

Photo by Michael Marks/Michael Ochs Archives/Getty Images

Procurious has landed in Nashville! This iconic town is everything we hoped for – the neon lights, the honky-tonk venues, the gift shops brimming with cowboy boots and sequin-studded denim jackets. But Nashville is also known as Music City, so as ISM2018 gets underway, let’s explore some of the smash-hit tunes that this city has gifted to the world – and find out how they relate to our profession.

1. Johnny Cash: Folsom Prison Blues

I’m stuck in Folsom Prison / And time keeps draggin’ on…

Unfortunately, procurement is one of the top business functions where fraud takes place, mainly because the nature of the profession means the opportunity – and temptation – often exists. Organisations fight fraud by removing this opportunity through policies, processes, strict ethical standards, audits and (increasingly) tech solutions.

Corruption, procurement fraud and other ethical breaches aren’t just bad for the companies involved – they also tarnish the reputation of the profession as a whole and undo a lot of the work we’ve all done to build the profile of procurement as a trusted business advisor. So, take Johnny Cash’s advice: Walk The Line in supply management if you want to stay out of Folsom!

2. Dolly Parton and Kenny Rogers: Islands in the Stream

Frequently nominated as the best country duet of all time, this song describes how two lovers’ affection for one another is strong enough can withstand anything life can throw at it (the stream).

From a procurement angle, let’s flip this concept upside-down. Imagine that the ‘stream’ is your supply chain – whether it’s a small creek or a raging torrent, ideally it will keep flowing without interruption, day and night.

Now – imagine that the ‘islands’ are the disruptive forces that threaten to choke and block your supply stream. From natural disasters, to disruptive technologies, to bankrupt suppliers, disruptions really can feel like a huge boulder has been dropped out of nowhere, causing chaos and delays. Let’s hope you’ve got a plan in place in case an island threatens to block your stream.

3. Willie Nelson: On the Road Again

No road-trip is complete without this classic from the great Willie Nelson. It resonates strongly with procurement and supply managers simply because we’re one of the most well-travelled professions out there. Aside from attending must-see events such as ISM2018, we’re always on the road visiting suppliers, dropping into our organisation’s different sites, and even traveling overseas to review critical parts of complex global supply chains for ourselves.

I know a few CPOs who don’t want to see certain team members in the head office for more than one day a week – in fact, they’re of the opinion that if a supply management professional spends most of their time at their desk, they’re not doing their job properly.

So – pack your travel case, put Willie Nelson on Spotify, and get on the road again to see your supply chain for yourself.

4. Dolly Parton – Working 9 To 5

Still working 9 to 5? It’s 2018! Most workplaces have introduced a little something called flexibility. A long time ago I worked in an office full of clock-watchers. You could work until 6.30pm in the evening and no-one would even blink, but God help you if you walked in five minutes after 9.00am the next morning. Luckily, most managers now recognise that it’s outputs that count, not the time spent sitting at one’s desk.

Flexible working hours are especially important if you interact with global supply chains. Chances are you’ll need to be on the phone at least once a week with overseas suppliers late into the evening or at the crack of dawn. That’s time on the clock – so if you want to front up at the office a little bit later the next morning, you’ve earned that flexibility.

Flexibility is also crucial for driving gender equality in the workforce, bringing talented new parents back on board after parental leave, and a source of competitive advantage when it comes to attracting the best young talent to work with your team.

5. Billy Ray Cyrus – Achy Breaky Heart

Gotta love that mullet, Billy Ray.

Have you ever had to ‘break up’ with a supplier? Just like splitting up with a significant other romantically, things can get messy. No matter how gently you break the news, the meeting can become emotional – particularly when both sides have invested heavily into the relationship.

Avoid giving your suppliers an achy-breaky heart by establishing and maintaining a strong feedback-loop throughout the relationship, and give them as much warning as possible that you won’t be renewing their contract.

This topic is worthy of its very-own blog article, as there’s no shortage of break-up songs from Nashville! Runners-up include Roy Orbinson’s It’s Over and Brenda Lee’s Break It To Me Gently.


Are you at ISM2018? Visit Procurious in the Exhibitor Hall – Booth #207!

Don’t miss out on Procurious Founder Tania Seary’s inspirational & informative ISM2018 Session on Tuesday 8th May, 3.45-4.45:

From the Amazon to the Moon: The Possibilities for Procurement