All posts by Gabe Perez

Don’t Just Have Great Ideas – Incubate Them to Succeed

Your career doesn’t hinge on just having big ideas. If you take a good idea and incubate it right, you could have the recipe for real success.

gabe-perez incubate

How can you incubate your big idea on the job? Forget about the size of the idea and focus on execution. An idea is nothing without execution. There are a lot of big ideas that sound great on paper but never go anywhere. And, a lot of “small” ideas, when executed successfully, can turn into something much bigger.

Before you incubate your idea, you need to figure out whether the factors for successful execution are in place.

And, you also need to figure out whether your idea is worth incubating in the first place. What kind of measurable value will your company realise if this idea is executed successfully?

For procurement specifically, that may mean taking a step back and making sure your idea aligns with the company’s strategic priorities. Is your company trying to cut costs? Are they looking for top line growth through mergers and acquisitions? Are they trying to innovate with suppliers?

Conceive, Incubate, Execute

The big idea in procurement right now is to elevate the organisation based on value delivered. That’s not going to happen overnight. It’s going to be the result of building a track record of executing initiatives that support the company’s larger goals.

That doesn’t necessarily mean bringing a big idea, or even a new idea. Frankly, it might be finally executing on ideas that we’ve been talking about in the profession for many years, in order to build the credibility needed to take new ideas forward.

To build credibility, I’m a big fan of testing ideas quickly on a smaller scale. A great way to incubate an idea is to find a department or stakeholder that could benefit from the value that your idea could deliver, and see if they’ll work with you on a trial.

If it works, now you have a proof point, someone willing to champion your idea, and you’ve learned more about what it will take to execute on a larger scale. Results and value delivered are the best way to overcome resistance when you are looking to execute a change to the status quo.

Sharing the Knowledge

I met a procurement professional whose idea was to help his company speed up the sales cycle, something that’s strategically important at most companies.

His insight was that since procurement is always involved in negotiations, his team could help the sales team understand the thinking of the procurement teams on the opposite side of the table in sales negotiations.

He brought that idea to sales leadership, and they agreed to a trial where his team worked with sales executives on strategy for a few deals. Sales saw immediate value in the form of less resistance and faster time to close.

They were able to build on that success to create a company wide initiative where procurement was assigned to sales people to help on strategic deals.

That’s a great example of incubating and executing a new idea. But there’s also value in revisiting old ideas that have never been executed properly.

Accountability on Value

For example, at Coupa, we started with the idea that customers should continually measure and quantify the results that technology has delivered to their organisation. We call this ‘Value as a Service’.

Too often, in enterprise software, business cases were created to fund the purchase of software, but then organisations and software vendors were never held accountable to delivering the promised results.

The cloud delivery model gave organisations and vendors shared visibility into results. However, the mind shift toward a culture of accountability around value hadn’t happened yet.

If we wanted to go after the big audacious idea that value from every implementation should be measured, it would have been a huge leap from where the market was at that time.

Instead, we started with a smaller aspect of value that we called Savings as a Service. We partnered with our customers to quantify the savings they achieved by deploying our service. By helping them define savings goals, and having quarterly business reviews for accountability, we were able to document over $8 billion in savings.

From there, we moved into our bigger vision of Value as a Service by expanding our measurements into other value metrics.

Focus on the Outcome, Find the Idea

The problem with chasing big ideas is that they’re often too big to execute. Maybe you lack the credibility to get the needed resources and buy in. Or it’s something that wasn’t on the radar, so it doesn’t have budget and you’d have to pull resources from somewhere else.

People also fear change and they fear failure. The bigger and more complex the idea, the more reluctant they are to jump on board.

But don’t let that stop you. Focus on the outcome you’re trying to achieve to figure out which ideas are worth incubating. Then, land and expand. Right-size your idea to something you can execute successfully. Deliver value on a small scale. Win over your champions.

Careers are made not by having big ideas, but by being able to identify and execute on good ideas, big and small.

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The Next Big Idea: Eliminating Supplier Enablement

What’s the next big idea in procurement? Getting rid of the need for supplier enablement and moving to real time supplier activation instead.

Supplier Enablement

It may sound tactical, but really it’s the key to success with all the other big strategic ideas we’ve been talking about for a long time: Increasing supplier innovation, optimising total spend, and getting a seat at the table with top leadership.

Back when EDI , cXML, and other proprietary technologies were the only way for suppliers to electronically transmit data directly into buyers’ back-end systems, supplier enablement was a necessity. These are not the easiest integrations, so buyers had to run enablement campaigns to get suppliers on board.

We all know how that has played out. The only suppliers who participate are those with the resources and the sales volume to justify the effort. As a result, most buyers can only transact electronically with 10-20 per cent of their suppliers.

There was a time when getting the top 20 per cent of your suppliers electronically enabled was a big step forward. Today, twenty percent enablement is a dismal result that’s holding the profession back.

Proprietary supplier networks were supposed to alleviate this problem by providing buyers access to ‘pre-enabled’ suppliers. This too was a step forward at one time. But even the largest proprietary networks today only boast between one and two million suppliers. When you consider that there are close to 200 million suppliers in the world, this too is a dismal result.

Supplier Exclusion

The need for supplier enablement is excluding the vast majority of the world’s suppliers from participating electronically. For buyers, that not only means inefficient processing, it means lost data. And in today’s data driven world, that increasingly means lost opportunity to analyse, optimise and innovate.

We can do better than that now. We have the technology. In our daily lives, we no longer enable anything. We activate and go. We are already pre-enabled to connect and share data through the Internet using our computers and phones. There are 7.4 billion people on the planet. There are 8.6 billion phones. We have never been more connected, and in real time.

Over 100 billion apps have been downloaded from the Apple store since 2008. Uber fulfils a million rides daily. Over two million people have set up shop on Amazon’s marketplace. There are two million Airbnb listings.

These are all networks powered by the meta network—the Internet. The Internet is the enabling thing. If you have a valid driver’s licence, arts and crafts to sell, or property to share, all you need is a data connection, an email address, and a pulse to join and start tapping into the value of any of these networks. Their reach is already enormous, and growth is not limited by enablement hurdles.

A Phone and a Blackberry

In contrast, your typical supplier enablement exercise requires unnatural acts to get to the value. It reminds me of these people I see in the subway in New York City, who have an iPhone and a Blackberry, or two different phones—one for work and one for business.

What if you had to use a separate phone to download an app from the Apple store, hail an Uber or shop on Amazon? These networks would certainly not have achieved such widespread adoption under those circumstances. Yet that is essentially what supplier enablement as we know it asks suppliers to do—step outside of their normal systems and business processes, and do something different and unique in order to transact with the buyer.

These closed networks have been created through years of collective enablement campaigns but the whole world is moving toward open networks that require no enablement and instead leverage the ways in which we are already connected.

B2B commerce is a one trillion dollar market by some estimates. Open networks are its future. They are the key to connecting electronically to the 80 to 90 per cent of your suppliers that make up the long tail.

When you unlock the tail, the odds of finding the innovation and value that procurement is looking for go up exponentially. Those are the hungry suppliers, the scrappy suppliers, the startups, the ones that aren’t getting the same opportunity that big companies are, but who might be moving faster and doing more inventive things. This is where the next big ideas are.

The tail is not a tactical part of spend. It’s actually the strategic part, and no company can afford to write it off. The 80/20 rule of supplier enablement is no longer good enough. We have to get as close to 100 percent participation as we can, by democratising the network using technology. We’ve got to be able to say, “If you can connect to the Internet, we can collaborate.”

Coupa are one of the sponsors of the Big Ideas Summit, to be held in London on April 21st. 

If you’re interested in finding out more, visit www.bigideassummit.com, join our Procurious group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

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

Unifying Procure to Pay: A Leadership Challenge for the CPO

It might seem obvious, but removing silos in the procure to pay process can ensure spend optimisation. But it’s people, not technology, that hold the key.

Silos Procure to Pay

Imagine you were just elected mayor of your city, with a mandate from the voters based on an ambitious agenda that includes cutting costs. You’ve promised to streamline programs, increase transparency and work to a set of measurable success criteria which you laid out in your campaign.

You know there will be challenges. But, when you roll up your sleeves and get to work, you start to have some rude awakenings.

You realise there’s a section in the city that has its own budget and runs its own services, because it’s in a special tax jurisdiction. And there’s a powerful labour union that dictates wages, job duties and hiring across the city.

You also find you can’t get accurate reports because data resides in separate systems that don’t talk to each other – and neither do the people who run them. You realise that, more than anything, the bureaucracy and the politics that have grown up around it are what shape how business is done.

The success of your initiatives, and the city as a whole, are your responsibility, and you’ll be held accountable. But you don’t have full visibility into, or control over, what happens. Accomplishing your goals under these circumstances is going to be a real leadership challenge.

Mayor of Spend Management

That’s what it’s like being the head of a procurement organisation today. You lead the official buying organisation, but the employees in your organisation will buy based on the easiest process available to them. If there’s a contract in place and you make it easy, they’ll buy against the contracts you’ve negotiated. If not, they’ll buy what they need on their p-card or credit card, and expense it. Or they’ll go out and make deals on their own and an invoice will just show up.

But spending is spending, no matter how it happens. It all ends up in accounts payable (AP) and the bills get paid. When it comes in through the front door, you have the opportunity to manage and optimise for cost and compliance. But there are also side doors – multiple independent buying processes – for things to get bought and paid for without you knowing it in advance.

This is also a leadership challenge, and one that most procurement leaders face. There’s no one who is accountable for all of the company’s spending. Everything goes through AP, but by the time it gets to them, the money’s already been spent, so they’re just focused on effectively managing the payment process.

The whole spend management process – invoicing, expenses and procurement – should be united under one leader responsible for optimising all of the company’s spending. This head of procure to pay, or chief spend officer, would manage the spend management organisation to a shared set of KPIs.

The Missing P: People

This is not a new idea and it makes sense to most of us. We now have the tools – modern, easy to use spend management suites – to streamline the process from end to end and enable data sharing to make each part more efficient. For example, everybody’s expensing the new iPad? Procurement gets an alert: Hey, maybe you should source that.

What has made this such a tall mountain to climb isn’t the lack of technology to support a unified process. It’s that most organisations don’t have alignment of their people. Even the best technology won’t fix everything if procurement and AP aren’t working together and aligned to the same goals.

Bringing the people together is a perfect leadership challenge for procurement to take on.

Think about it. Over the past few decades, the profile of the procurement profession has been rising. The average level of education and certification has been rising. The amount of spending that they’re managing is increasing. Procurement departments took centre stage during the great recession—not just cutting costs, but leading new strategic initiatives for their companies.

There’s a feeling in procurement that the profession hasn’t yet achieved the status it deserves. There’s still a lot of talk about striving to be seen as strategic, and to have a seat at the table with top leadership. Striving to ascend, as Tim Cook did at Apple, from procurement to CEO.

Executive Level Challenge

Here is your chance. We know there’s huge business value that companies can achieve from uniting procurement and AP in the procure to pay process – value far greater than the sum of automating each separately.

The world is changing faster than ever, and becoming more connected. In the consumer world, we have visibility and data everywhere; in the business world, not so much. You can see your Uber approaching on your smartphone but you can’t see where your invoice is in the payment cycle.

Your watch or wristband can tell you how many steps you’ve taken today, but you can’t tell how many orders have been placed against a contract. Your dishwasher can order its own soap from Amazon, but employees in many companies can’t even figure out the best way to buy a stapler.

Businesses need to achieve the same levels of visibility, efficiency and control in every area of their business in order to meet rising expectations and to stay competitive. A unified, automated spend management operation does that for spending.

If procurement wants to ascend to the heights it aspires, it can show leadership by spearheading the effort to tear down the silos between buying and paying so that someone, a chief spend officer, a head of procure to pay, a head of business services – it really doesn’t matter what you call them – can finally be responsible and accountable for making sure all of spend is optimised. Someone can finally be mayor of spend city.

Coupa are one of the sponsors of the Big Ideas Summit, to be held in London on April 21st. If you’re interested in finding out more, visit www.bigideassummit.com, join our Procurious group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

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