All posts by Kelly (McCarthy) Barner

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.

3 Ways To Keep Up with the Social Media ‘Joneses’

What do you mean you had time to read The Economist cover to cover – don’t you have a job to do??! Kelly Barner advises how you can keep up with the Social Media ‘Joneses’.

We all know one… that person in your network that not only mysteriously has the time to think, read, discuss and be oh-so-intellectual about the day’s leading topics, they also broadcast that fact everywhere. Here are some sample ‘shares’ to give you an idea:

“Really enjoyed this article the third time I read it in this week’s issue of the Economist”

“Back from our week-long innovation retreat / chakra cleansing with a revised vision for procurement”

“Pleased to share volume 4 of my treatise: ‘Reflections on the Meaning of Corporate Procurement’”

Honestly. Don’t these people have real jobs? After reading status updates like these, it’s hard not to feel horribly overwhelmed. Let’s face it – the rest of us are scrambling from top priority to top priority. We’re trying to cover the fundamentals while also finding the time to look for opportunities to create additional value.

Here’s the thing: just as people gild their personal experiences on social media to make it look like they have the ‘perfect’ life, they are tempted to do the same at work. Although you may feel a combination of stress and envy in response to their abundant discretionary time, you can convert that energy into something that is not only productive, but realistic to achieve.

Procurement has long been hesitant to engage on social media (eek! a supplier might be looking!!), but the tide is beginning to turn. Here are some suggestions for how to keep up with the ‘Joneses’ without actually becoming them.

Read One New Thing Every Day (Max investment: 15 minutes)

There is so much content published on a daily basis that it may seem just as easy to let it all float by as to pick something to read. And yet… not reading anything is a huge mistake. Don’t think too hard about your selection – it is wasted time. You’re better off reading something mediocre and moving on than making it an hour long task. There is something to be gained from every piece of content – even if it is so complex or boring that your mind wanders to other topics. Let it go! Stepping away from project-related tasks and phone calls may be just the distance you need to foster a great idea.

Post a Comment (Max investment: 30 minutes)

Not everyone is a writer – and not everyone who writes should. That said, there is just as much value to be realised in commenting on or challenging other people’s work as there is in publishing your own thoughts. If you’ve already invested the time to read something, why not make a comment? We are all made better when we are challenged, and sometimes all it takes to get the conversation going is the first comment. You’ll find that articulating your point of view helps you formalise your thoughts in a way that just reacting in your mind doesn’t.

Host a Lunch & Learn

One of the things we have to give procurement credit for is the abundance of high quality – free access – webinars and podcasts. If you come across one that is relevant to your team, reserve a conference room and invite others to join you. If it is during lunch, encourage people to bring something to eat. If not, grab coffee or see if the company will spring for bagels (people love bagels…) The resulting conversation will move everyone forward and add to the shared knowledge base of the team.

The key thing to keep in mind is that you can learn and grow without shoving it in other people’s faces. If you’re focused on using that investment of time to put yourself above other people, you’re missing the whole point of building virtual community and advancing professional development. Plus, we all know the unspoken reality… the more showy people are about their own accomplishments, the more likely they are to be updating their status from their parents’ basement. 

Removing Obstacles to Competitiveness with CLM

Do you view CLM as an automated filing cabinet? You’re completely missing the point!

When you think about why a company would invest in a contract lifecycle management (CLM) solution, the first things that come to mind might include improved governance and agreement administration. But is that it? If the ROI of CLM is limited to better dotted I’s and more neatly crossed T’s, the effort to select and implement a solution hardly seems worth it.

Companies that view CLM as an automated filing cabinet are completely missing the point. They may even be at risk of having a constrained strategic vision for the future and for the place they want to hold in the market.

In order to create and defend a competitive advantage, a company must lean forward with every process, through every employee, and via every system they implement. There is no reason to do anything if it does not breakdown silos, overcome barriers and make them more competitive in some way, and contract management is no exception. CLM must eliminate obstacles to competitiveness and be as strategic as the company’s approaches to market segmentation and lead generation.

Competitiveness Requires Constant, Active Refinement

Even though the world is moving faster than ever before, contracts are still put in place for multiple years at a time. The chances of conditions being the same in the second or third year of a multi-year contract as they were during the bidding process are slim to none. As a result, companies – led by their procurement function – should expect to modify the contracts that govern supplier relationships. This is especially true for an actively engaged team that wants to drive maximum value through their contracts. CLM not only makes it easier to amend an agreement, it tracks the changes – even if there are hundreds of them – and makes clear which set of terms and conditions is the most current.

Are You Getting What You Contracted For?

There are two ways of looking at supplier obligation management. The first involves whether or not the company receives the goods, services, delivery, and outcomes outlined in the contract each time they make a purchase against the contract. The other is a bit more complex, and it forces procurement to look at demand management in a nonconventional way. Just like a world class athlete, a competitive organization has to be supplied with the appropriate fuel. If procurement estimated a certain level of demand by a predetermined point in the contract and actual purchases are falling short, there is a very good chance that other performance benchmarks will be missed as well. CLM can ensure that consumption is proceeding as planned, and if it isn’t, the system can alert procurement. Procurement’s insight becomes a leading indicator of potential performance – one that the executive team won’t want to be without.

Sleep with One Eye Open

In order to secure or defend a competitive advantage, procurement may be supporting decisions to take risks rather than just monitoring external risk from afar. If a company is going to engage in strategic risk taking, they must be able to constantly audit and review reports to ensure that performance benchmarks are achieved and compliance is maintained. This becomes even more important if procurement is taking advantage of appropriate opportunities to refine and amend the contract.

It is unrealistic to expect anyone working in a fast-paced environment to remember the latest terms and conditions; instead, CLM should bear the weight (and proactively report on) key contract data.  

Results matter above all else in a competitive enterprise. Leading companies are harnessing the capabilities of CLM to navigate (and eliminate) uncertainty and enable maximum performance at all times. If your company is looking to become more competitive, you’ll need to be prepared to do the same – an increase in performance that is not possible without leveraging the full capabilities of your supply base through contract management.

This article was originally written for Determine By Kelly Barner.

The ‘Why’ Behind the Drive for Retail Process Efficiency

Process efficiency is good. In fact, it’s one of the most frequently cited objectives for the procurement profession. But it can’t have a real impact unless we understand the bigger picture…

As we expand the impact of procurement beyond savings, one of the most frequently cited objectives is process efficiency. In theory, if procurement can help the company execute internal processes more swiftly they can… something, something, something (?). Process efficiency is good, and savings are good. But neither will have any real impact if we don’t understand why we are driving them.

The retail industry is a perfect case example for the need to understand the big picture impact of process efficiency. When you work for a B2C company, customer satisfaction is the answer to every question. In retail, the benefit of every project must be traceable all the way to the store.

The wholesale goal of retail: customer experience and satisfaction

Sourcing project teams usually sit down and articulate their goals and objectives at the outset of the process. Too often they are focused on the impact of the product or service on the company and its employees when they should trace that efficiency forward to the value it creates for customers. This perspective provides the context for many of the decisions made during the sourcing process:

Why should office supplies need to be easier to order? 

So marketing doesn’t have to interrupt their work on the new ad that will drive shoppers’ grocery lists this week.

Why are we going through a lengthy equipment testing process?

To prevent customers from being inconvenienced at the deli while we repair the slicers (again).

Which supplier should we award the fixtures and millwork contract to?

The one whose product best evokes a farmer’s market, ultimately increasing produce sales.

In a retail environment, one of the most dangerous lines procurement can draw is between direct and indirect spend. This division is practical enough, especially for categorisation purposes, but it creates the impression that indirect spend matters less than direct spend does. Even indirect spend must create value for the end customer. Every dollar the organization spends – whether it is an investment in inventory or to buy copy paper for headquarters – should efficiently advance the interests of the customer. That is what defines valuable process efficiency in retail.

Placing a value on retail intangibles

Case in point: Kemper Freeman is the owner of Bellevue Square, a multilevel mall in Seattle, Washington. He is a bricks and mortar king in an increasingly digital commerce world. Despite the lacklustre performance of retail chains like Macys, J. Crew, Sears, Charming Charlie, and J.C. Penney, his business is booming. He characterizes his approach to customer attraction as “emotional fulfilment”, and it is something eCommerce businesses can’t compete with.

As was recently explained in a Wall Street Journal article about Freeman, emotional fulfilment is “the joy customers take in seeing, touching, sniffing and testing the product before they pull out the credit card.” For a retail business to be driven by the creation of emotional fulfilment, every employee – from store clerks to corporate procurement to janitorial staff – has to buy in and place the customer at the centre of every effort they make.

Given this context, what does process efficiency mean in retail?

Procurement-enabled retail process efficiency removes barriers between demand and supply so that value can be created for customers. Process efficiency is not getting to the end of a sourcing project faster and it is not about making corporate roles easier. Efficiency ensures that the flow of products and services are not interrupted, and they certainly don’t take customer-facing roles away from their primary focus. Even in procurement, the customer should remain the central focus, and the goals for every project should be tied to a barrier removed or a benefit advanced. These are the only efficiency gains that matter.

This blog was orginally written for Determine by Kelly Barner .

Improve Contract Compliance by Thinking Like Sales…Not Procurement

Call us crazy but we reckon Procurement would be better off looking at the Contract Management process the same way sales does…

If you’re anything like me as a procurement practitioner, you think of our end-to-end process in a linear fashion. It usually starts with spend analysis or some other source of information (budget, ERP, BI system output, etc.) and ends with Contract Management and/or Supplier Performance Management. For us, this is completely logical because the sub-processes that we view as the most “active” portions of procurement – strategic sourcing and negotiation – have been dealt with at this point.

In Contract Management and Supplier Performance there is something of a phased handoff back to the budget owners. After all, the spend we bring under management is rarely associated with a procurement need; we are often just temporary custodians of someone else’s spend.

Unfortunately, the procurement phase that covers implementation and ongoing Contract Management includes the following two milestones:

  • The majority of the supplier’s value is created for the business.
  • Weaknesses and disturbances come to light, threatening to diminish total value and reduce contract compliance.

Procurement may see the contract phase as the end of the project, but our internal stakeholders (and in many cases, our suppliers) see this as the beginning of the effort. Everything up to this point has been theoretical, now it is real.

Contract compliance: think like sales

As crazy as it sounds, procurement would be better off looking at the Contract Management process the same way sales does. The day after you sign a contract is the first day of a new sales cycle. Your contract win is a prospect once again, maybe not for the same product or service they just bought, but for expanded coverage, increased volume, a longer commitment, or an alternate type of offering. This is the worst possible time to go hands-off, especially if you think there is the potential for more business.

Procurement may be guaranteed “more business” from their captive clients (a.k.a., internal stakeholders), but if those clients aren’t satisfied with the services and support they receive, they have no incentive to be loyal; to procurement or to the contract. In the alternate scenario, procurement stays involved to ensure a smooth transition to the new contract and serves as an advocate for the business as well as the supplier during the agreement lifespan. In this case, spend is far more likely to stay on contract where it lowers risk, increases savings, and delivers the desired value.

Here are a few examples of how procurement’s proactive investment in contract compliance can build loyalty for the future:

If the shirt fits…

In a sourcing project for driver uniforms at a freight company, several business divisions were combining their demand for the very first time. Each division brought their supplier and their current service levels to the table. Although being an incumbent was an advantage, the mandate was to select one provider for the whole company. This would inevitably lead to someone losing their incumbent so another division could keep theirs. After the selection was made, procurement redirected the team members who had been responsible for the sourcing effort to manage the rollout at the division transitioning to the new supplier. This not only minimized disruption to the business, it prevented the rise of resentment – something that could easily have lowered compliance and become a barrier for future sourcing efforts.

Have your supplier’s back

Sometimes you can tell that compliance is going to be an issue before the ink on the contract is dry. During a reverse auction for “35% water-added ham” at a wholesale grocer, procurement discovered that the category owner was secretly telling their incumbent supplier what they needed to do in order to win. After much drama, the supplier was excluded from the business because of their willingness to undermine the negotiation process. That left us with a guarantee of a new supplier and an ANGRY category owner. No supplier selected at that point was going to have an easy time with implementation. Knowing that contract compliance would be an issue, procurement took extra time to include metrics and SLAs in the agreement and worked with the new supplier to ensure that they would be able to report their performance back in detail. This effectively created a framework where they could quantitatively prove their performance. The wholesaler got the product they needed and the supplier was protected from unfair, costly complaints about their performance. Orders for “35% water-added ham” were placed and fulfilled with no disruption to local grocery chains. Yum.

Compliance credit where it’s due.

If procurement goes hands-off during Contract Management, we get no credit for value creation, but full credit for having created the circumstances leading to buyer inconvenience and frustration. The amazing thing is, that effective Contract Management is borne out when projected savings become realized savings – or not. And actual purchases become managed spend – or not. Without active Contract Management, there is a good chance that procurement’s efforts will be undermined and we’ll inadvertently create a tense relationship with internal stakeholders who we will, no doubt, need to work with again in the future.

In a Determine webinar featuring Spend Matters’ Jason Busch, Contract Compliance: Why It Matters to Procurement, he stated that contract compliance is more important than procurement performance. Strong words, but there are many components to that truth — and it’s a must-watch on-demand video.

Contract compliance and procurement’s role in ensuring it are a big and growing topic. You’ll find information on the subject in Determine’s extensive library of resources, or contact them to schedule a personalized demonstration of the Determine Cloud Platform.

This blog was orginally written for Determine by Kelly Barner .

Have You Aligned Your SIM & CLM Systems?

Procurement teams with mature SIM and CLM systems can extract greater value from supplier relationships. How can the two be brought into better alignment?

This article was written by Kelly Barner for Determine

Procurement is so accustomed to aligning our technology and processes with the objectives of the business at large that we sometimes miss opportunities to align our own technologies and processes with each other.

Supplier Information Management (SIM) and Contract Lifecycle Management (CLM) provide a perfect case example. Both bring together suppliers and internal touch points, extend beyond procurement’s peak involvement in managing spend categories, and play an important role in addressing (and mitigating) supply chain risk.

Procurement teams that have mature SIM and CLM programs in place reduce their risk, but they also create opportunities to extract greater value from each supplier relationship and reduce confusion within the enterprise.

When we stop and think about how SIM and CLM can be brought into better alignment, three critical shared issues come into focus: information integrity, ownership and actionability.

  1. Information Integrity Through Integration

Information is such an important component of SIM it is included in the name, whereas with CLM the devil is always in the details. An incorrect piece of information in a contract can easily become a legal liability. Both start with essential supplier contact information and metadata and extend to the details associated with supplier onboarding and contract terms. Although the following information is collected for separate reasons, it is critical that it be consistent across SIM and CLM:

Supplier Onboarding

 When a new supplier is on-boarded post award, a standard set of information is usually collected. This includes their contact information, location details, proof of certification, and details regarding the users who will represent the supplier in company systems during the term of the agreement. Making sure as quickly as possible that this information is complete and accurate lays the groundwork for an equally smooth implementation and on-going relationship. Beyond simple collection and centralisation, procurement must also validate supplier information at the time of onboarding – paying particular attention to documentation associated with certifications that were included in the award decision.

Contract Initiation

When creating a new contract, it is natural for procurement to focus on product/service specifications, prices, terms and SLAs, but capturing other more straightforward information is just as important. For instance, specifying a production location might seem like a minor detail — until the supplier makes the decision to outsource their production to another facility, or even another country. Having specified the location in the contract may not prevent the change from being made, but it does create an opening for discussion of the associated quality and oversight expectations. As contracts become an increasingly dynamic part of supplier management, more details need to be incorporated.

  1. Ownership

Since managing risk and increasing performance are at the heart of both SIM and CLM, establishing ownership early on is critical. Who will manage the relationship and who will be the documented owner of the contract? Should it be the same person? Why or why not? Alignment of goals can not be achieved if the individuals associated with each responsibility are not also aligned.

Supplier Relationship Management

Any supplier may have multiple relationships in an enterprise. Procurement is certainly a point of contact, but so are the budget owner and any functions that have a high volume of demand associated with that supplier. Many people may have contact with a supplier in the course of daily business, but information about performance reviews and contract updates should be managed in an organised fashion so that the supplier is kept informed and no one speaks out of turn.

Contract Ownership

 In addition to including a complete set of terms and signatures, each contract needs an owner from the outset. While captured as a simple name field in many CLM systems, a lot of consideration must be given when deciding who will own each contract. The primary value proposition of CLM is that it allows contracts (and the business deliverables they govern) to “leave the filing cabinet” in order to have a measurable impact on the business. Empowered by automated CLM notifications, someone in the enterprise needs to take action based on the information provided; and having an appropriate designated owner from the start provides accountability and ensures a prompt response.

  1. Alignment Actionability

Putting SIM and CLM in place is not about static documentation or information centralisation, but rather the actions each motivates. Unlike information integrity, where consistency is key to alignment, actionability requires each of these systems to “feed” information to each other. There are supplier performance considerations in both systems, and while they are different, it is in their combination that the best result is achieved.

Supplier Performance

SIM systems often include supplier performance details submitted by procurement, as well as the other individuals in the enterprise who come into contact with the supplier’s products or services. In some cases, determinations of performance will be based on buyer perceptions and expectations. This information should be recorded and communicated to suppliers on a regular basis.

Contract Compliance

When viewed through the lens of a contract, supplier performance is about following the “letter of the law.” Just as suppliers can have performance issues that do not rise to the level of legal non-compliance, a supplier can be in perfect standing based on the requirements of the contract and still not meet the expectations of the company. If performance measurement and contract terms are not both aligned and visible, it will be hard for procurement to know the difference and lead the appropriate response.

The full benefits of SIM and CLM alignment are realised over the term of the agreement, as long as 3-5 years in some cases. The sooner the enterprise can achieve alignment in terms of information integrity, ownership and actionability, the shorter the timeframe to evaluate and lower the overall risk.

This article was orginally pubished on Determine. 

Don’t let your career break become a career breakdown

We know the story; a promising career comes screeching to a halt! But how do you ensure your career break is the start of something brilliant and not the car-crash it, at first, appears to be!

The first part of my professional story sounds exactly like scores of other professional women’s: college, work, apartment, graduate school (nights), wedding, better job, travel, better job, and… family!

Suddenly, the career I had been working so hard to build came to a screeching halt. I went from being the Associate Director of Consulting at Emptoris to… well I didn’t know what. My newborn daughter was completely unimpressed with my title, my two graduate degrees, or my extensive knowledge of spend management principles. I honestly didn’t know if and when I would return to the workplace, in procurement or otherwise.

Then I received a completely unexpected, unsolicited invitation to join Buyers Meeting Point. Anna was 18 months old and her little brother Timmy was expected in a few months’ time. Could I juggle two small children and a fledgling business? I labored over the decision, but ultimately came to the realisation that I might never get such as opportunity again.

I am not a natural entrepreneur!

Here’s the funny thing about that: I am not a natural entrepreneur. I know a lot of entrepreneurs. They are a very unique and amazing group of people. They have vision. They have passion. They act with confidence even when they don’t particularly feel it. They have a tolerance for risk that I can hardly comprehend. In fact, I’m such a NON-trepreneur that when I was getting my MBA at Babson College (home of U.S. News and World Report’s #1 graduate program for entrepreneurship in the nation for over 2 decades) I did not take one class in entrepreneurship. Why? I was never going to own a business… doh!

I found myself at home with 2 children under the age of 2 and no schooling in entrepreneurship building a business. As I look back 8 years later, part of me is still shocked that I made it work. I think the key was my goal: to never, ever, ever, (ever!) return to a cube again.

My kids are now 9 (Anna), 7 (Timmy), and 4 (Joseph). They are healthy, active children, and since the kitchen table is also my executive conference room, my business life and personal life often collide. If your career break becomes a brand new beginning, here is my advice for balancing family and work from the joyful chaos of a home office.

Partner with your calendar and task list

When you have a lot of disconnected moving pieces in your head, your best bet is to communicate with yourself in writing. I am disciplined about keeping my calendar(s) up to date so that podcast interviews and new prospect calls do not collide with horseback riding lessons or meeting the school bus.

The same goes for managing tasks. I am not kidding about this piece of advice: if you do not write it down, it will not happen. Period. There are daily tasks, weekly and monthly recurring writing schedules, and one-off writing contracts. They all have to be kept in priority order so that deadlines are not missed. I find it helpful to work with a hard copy to do list each day, putting work tasks alongside family ones. That way, if the vet calls while I am finishing an article, or I see a request come in from a colleague to share something on social media while I am making lunches for the next day, I can jot it down without breaking off to find my phone.

Build a network

Something I know I share with procurement colleagues working in traditional positions is that feeling of dread that arises when someone at a party asks what I do for a living. “Procurement? What on earth is that?” Sigh.

It is even more important that non-traditional professionals have a strong network of peers to lean on. The major downside of working from home is that you can feel isolated without ever being alone (not even for a second). Using Skype and social media sites to build connections and invest in peer relationships is a must. Figure out who is really a ‘friend’ and who just wants another number in their connection statistics. Make sure you reach out to people and engage with their topics on a regular basis – not just when you need something.

And… most importantly, laugh!

For years, I have scheduled calls around nap schedules, archery lessons, half day preschool, and parent teacher conferences. In the summer (when book manuscripts are inevitably due for some reason…) I keep Italian ice in the freezer because it takes my kids so long to eat it. One of my final book manuscripts received a little additional editing from Anna – she drew a shark on page 137. I have presented webinars with Joseph driving Matchbox cars at my feet and once I tripped over a Minion toy during a podcast interview. Luckily, the sound was not picked up on my microphone!

When work and home life share the same headquarters, your best case scenario is two-way immersion. I like to think that I show my children that the only thing that can hold you back in life is the limitation of your own imagination. They have been at my side (cheering!) as I brought each of my final book manuscripts to FedEx to overnight to the publisher. My husband (a hardware engineer) has been called upon more than once to work ‘IT magic’ for some accessibility or conversion effort. I get to continue working in an industry I love without being tied to a desk.

With today’s connectivity and open-mindedness about contract labor, there are very few things that you can’t turn into a career from home. If you have the determination and discipline, there is no reason that you, too, can’t say good-bye to a ‘cube dwelling’ life forever.

Three Economic Indices You Can’t Ignore In Procurement

Procurement professionals need the ability to understand – and react to – changes in inflation, employment and optimism.

Register as an online delegate for the London Big Ideas Summit 2017 here.

The interesting thing about procurement’s typical line of sight is that it very closely aligns with the terms of the sourcing projects we run and the contracts – and therefore supplier relationships – we manage. This might be 6 months, 12 months, 3 years, or 5 years long, but regardless of the exact length of time, you can be assured it is far longer than the changes being seen in global and local economies.

Since the summer of 2016, I have been the Business Survey Chair for the ISM-New York Report on Business. It has been an amazing learning opportunity, and I am fortunate to be working with a career economist to learn to decipher and draw meaning from the data. There are two pieces to the report: 1. the indices (some seasonally adjusted and some not) which provide a monthly trend up or down as the economy contracts or expands, and 2. the narrative, which highlights some of the key figures and milestones and adds some context to the numbers.

You don’t have to be a professor to see the connections between procurement and economics, but it is easy for us to become overly focused on information that is internally available or provided by suppliers. Based on what I’ve learned, the following categories of information tie directly to procurement’s efforts and objectives. And although they may not often come up in internal conversations, they need to be present in procurement’s thinking and strategy development.

Inflation

Investopedia defines inflation as “the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling.” Most of what procurement buys tends to be based on pre-negotiated contracts, so we’re unlikely to see annual changes in prices based on inflation. What we might see, however, is a difference in the prices we are able to negotiate every three years. This will be especially true of anything we buy internationally or that has significant foreign-sourced materials in it because the relative purchasing power of the U.S. Dollar in global markets will be affected by inflation. But it’s not just an international issue – for any procurement team that reports into finance, keeping an eye on inflation will give you a benchmark for the minimum project-level ROI, as the alternative might be to just hold onto the cash if the project is expected to return less than 3% (the average rate of inflation) per year.

Employment

Higher levels of employment are usually considered a good indicator or economic growth and stability. From a procurement perspective, however, employment also tells us what to expect about trends in services-category spend. With an increasing portion of organizational demand being met ‘as-a-Service’, employment rates (and therefore costs) are critical to our cost to operate. For some industries, services are so important that even the factors driving alternate economic measures like ‘Prices Paid’ are services too – the New York Metro area is a perfect example of this, as are many other major cities. It’s why you must know the product/service mix in your spend before trying to figure out what approach to take. The other consideration relative to employment is talent availability. Higher employment means lower UNemployment (see how I did that?) and therefore less candidates available to compete for open positions. Luckily for procurement, we have a wide array of talent options at our disposal through contingent workforce programs. Striking an optimal mix of employment models presents an opportunity to maximize both costs and capabilities.

Optimism

The final economic index I’ve learned to appreciate is optimism – in the ISM-New York Report on Business we call this the Six-Month Outlook. In other words, as of today, how much better or worse do you expect things to be going six months from now. It would be unrealistic to expect the outlook to be more specific than a trend up or down, but even this insight provides important information for others watching the economy. The fact that this question is even asked is an indication of how special procurement’s perspective on the economy and business activity is. This perspective is due in part to our understanding of the organization’s anticipated demand levels and the prices we are paying, but also the conversations we have with suppliers about the conditions they are doing business in. Competition drives prices down, differentiation drives margins up, increases in demand drive prices up, and large increases in price may push buyers and suppliers to innovate together to come up with alternatives, and procurement has a front row seat for it all.

Many people in the business world watch the monthly reports on business, whether the ISM national reports or regional reports, like ISM-New York. If they value procurement’s perspective on the economy enough to wait for the numbers to be released each month and report on the findings, then we should have a greater appreciate for our own insight and do everything we can to deepen it.

 2017 could be a pivotal year for the procurement profession. The Big Ideas Summit in London will help lay the ground work for all of  the changes ahead. Our London event takes place on 23rd February and you can now register as a digital delegate now! 

Is Generation X The Forgotten Generation?

Is Generation X the equivalent of the middle child? Is it the forgotten generation? Unsurprisingly there’s more to the generation than that.

generation x

“In general, middle children tend to possess the following characteristics: people-pleasers, somewhat rebellious, thrives on friendships, has large social circle, peacemaker.” (Parent Magazine)

Generation X includes adults in their mid thirties up through age 50. They – or I should say WE – are younger than baby boomers and older than Millennials. There you go! I’ve now summed up everything most people know about Generation X!

But there is so much more to our generation – especially when you look our potential for career development. Baby boomers are retiring and Millennials are just getting started, while Gen X is transitioning into the vast majority of leadership positions.

Even though Gen X’ers are an up and coming group, we don’t get much attention. We are the forgotten middle children in a crowded professional landscape. And yet, we are also the answer to many of the professional challenges being faced by our older and younger peers.

An Inter-Generational Bridge

A 2014 article from The Pew Research Center stated, “…in most of the ways we take stock of generations – racial and ethnic makeup; political, social and religious values; economic and educational circumstances; technology usage – Gen X’ers are a low-slung, straight-line bridge between two noisy behemoths.”

If you look at most of the writing about the generations in the workplace today, commentary that isn’t about Boomers or Millennials, is about how they struggle to work together. Clearly a bridge is exactly what they need.

By combining the traits of people in Generation X with the characteristics of middle children, we are given a unique opportunity to help ourselves, our peers, and our companies by being independent peacemakers who are ready to blaze new trails and leverage the power of our networks to make change happen.

Dear Baby Boomers, Share your wisdom and we will make your legacy soar

While not all you baby boomers are on your way out, the vast majority of you have gone as far as you are going to go professionally. Making sure that your career experience is not lost to retirement requires it to be passed down to someone who can understand it.

You lament that you have little in common with Millennials, making it hard to connect and communicate with them. Gen X, on the other hand, shares quite a bit with the Boomers, and we are in line to fill your positions next.

By passing along your wealth of knowledge to Gen X, you ensure that your legacy lives on and that the organisation achieves a kind of continuity. This also takes advantage of a whole new range of opportunities, and helps translate the lessons of the past to the conditions of the future.

Dear Millennials, We can help you make your revolutionary ideas a reality

Despite the fact that we seem just slightly less old than everyone else you report up through, we aren’t as established as you might think. We have seen a lot of change come to the workplace – we’ve driven some of it.

We’re (almost) as tech savvy as you are, and we have a lot of experience with change management. We also know a thing or two about how to work the room, and have the connections that will help us sell your ideas in a way that respects their spirit while making them seem achievable.

By working together with Gen X, you can take some of those wild new ideas you’re so famous for and make them possible – without having to wait until you are in their thirties.

Take it from an X’er that was in her 20’s about 15 minutes ago – you are going to be 35 in a flash.

From One Gen X’er to Another

Baby Boomers and Millennials have an edge in that they are getting a lot more coverage than we are, but we must accept some level of responsibility for that as well. The advantage of being – well – ignored, is that we have lots of extra time to prepare ourselves for the professional roles still to come.

Get an MBA, earn a certification, take a class, build a diverse network of colleagues, and do it in a way that is uniquely ‘X’.

We want to be connected to our colleagues, which is made easier by the fact that (unlike the Millennials) a lot of us will pick a general area of professional focus and stick to it over the course of our career.

Many Gen X’ers have families, which means we have an incentive to commit to a company for a few years at a time – simultaneously increasing our impact at that organisation and boosting our earning potential.

On the other hand, we aren’t bound by geography, which might otherwise see us spending our precious networking time in Flinstone-esque ‘Lodge’ meetings with local procurement professionals.

We are fortunate to have at our disposal sites for virtual networking that allow us to form new relationships quickly and easily, not to mention all over the world. With this power, we can leverage ideas across industries and continents in a way that our predecessors could only dream of.

The biggest challenge for Generation X is defining our own identity. The best way to do that is by leaning on each other. Not to the exclusion of the other generations, but in a way that allows us to leverage and amplify the power of our own generation.

The Procurious Career Boot Camp will increase your stamina, get you in the best career shape of your life and help you to punch above your weight.
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