All posts by Madeleine Tewes

What if Savings Didn’t Matter in Procurement

There are countless articles and blogs on the value procurement brings to an organisation.

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This article was originally published on LinkedIn.

Most say that savings are just one component of this value proposition and that we need to look outside of savings into other areas of value like stimulating innovation, supporting the organisation’s corporate social responsibility goals and reducing risk throughout the supply chain. Everyone agrees with these articles and, as we map out KPIs for our procurement department or individual team members, we ensure savings is just one, albeit important, metric that their value will be evaluated on.

What happens though when you remove the value of savings altogether from a procurement department and it’s individual team members? Even from the offerings of procurement consultancies which often focus on savings as a way of convincing CPOs to purchase their services?

Other Value Opportunities

This is a question I first grappled with in Singapore where I came across organisations so cash-rich that they did not seem to value savings, were not actively looking for savings within procurement or from external suppliers, and they actively pursed other types of value like corporate social responsibility as mentioned earlier.

Interestingly, the procurement team members in these organisations also seemed to be grappling with this issue as when savings are off the table the value procurement, and individual procurement professionals, brings becomes harder to demonstrate.

I came across a great quote recently in an old article on the SpendMatters website which is from a technical stakeholders view and sums up their view on savings well: “Procurement is like a UFO — here one day, gone the next. Zapping savings here and then going off to the next project.”

It is interesting that this technical stakeholder wanted his procurement representatives to focus on areas of value outside of savings as well. It seems then that in some of these organisations in Singapore that do not value savings, other areas of procurement value get their time in the spotlight.

Here are some brief observations on three of the many areas of value these organisations focused on rather than savings. I think these are valuable as they are complementary components of value and can be applied in organisations with and without a focus on savings:

1. Compliance

For a number of the organisations I met with in Singapore a key area of focus for the procurement team was on how they supported compliance within the wider organisation. A large part of their value proposition therefore was based around maintaining the quality of the goods and services being purchased, managing supply chain risk especially around continuity of supply and ensuring that supply chain practices around labour and bribery complied with applicable legal requirements like the UK Bribery Act.

Compliance is an area that all procurement teams focus on, however outside of Singapore I have not come across many compliance related KPI’s from a procurement team or individual view other than basic ones like non-acceptance rate for raw materials or supplier certification rates. By raising awareness of the way procurement supports compliance and measuring teams against it, procurement can grow its brand away from the traditional savings agent.

2. Innovation

Singapore has a focus on pioneering advances in innovation and driving competitive advantage for growth according to Teo Lay Lim, MD, Accenture Singapore and ASEAN. I found this to be true with most of organisations in Singapore I have met with recently bringing innovation into our conversation and wanting to discuss methods for using procurement to stimulate and support innovation.

Outside of Singapore, innovation is increasingly being recognised as the key to sustainable growth by companies around the world and as Capgemini research points out, innovation has evolved from a purely internal capability to a collaborative process with the external network of supply partners. Therefore the ability of procurement to work with suppliers to identify and execute innovation within existing contracts and to stimulate innovation outside of existing arrangements is a key part of the procurement value proposition.

Some simple observations from Singapore include having incentive schemes in place relating to innovation in supplier contracts, having innovation as an agenda item on regular meetings with key suppliers as well as internal stakeholders and having KPI’s in place which reward procurement team members for focusing on innovation rather than relying purely on traditional savings or throughput metrics.

3. Corporate Social Responsibility

Research conducted by the Harvard Business School found that organisations who focus on corporate social responsibility (CSR) significantly outperform their competition in terms of stock market and financial performance. One Singapore-based organisation, Fuji Xerox, describes their view of CSR very clearly, “…forging a link between long-term competitiveness and the sustainable development of society and the company…” which seems to be a view echoed by many of the organisations I have met with in Singapore.

Each of these organisations had different ways of using their procurement team to support their organisation’s focus on CSR. Some common examples included the standard inclusion of evaluation criteria on environmental, social and ethical standards, educating suppliers on CSR principles and supporting suppliers to implement improvements in their manufacturing processes to reduce environmental impacts.

An IBM IBV CPO study found that 97 per cent of successful and influential procurement teams are significantly involved in their organisation’s CSR initiatives compared to 61 per cent of average procurement teams.

Regardless of the current maturity of a procurement team though, or if it is the organisation driving these initiatives or procurement lobbying for them, clear KPIs (results driven rather than process orientated ideally) will allow procurement to demonstrate the value it is providing to the organisation.

In summary, regardless of whether your organisation is cash-rich and based in Singapore, a not-for-profit based in South Africa or is financially and geographically somewhere in between, your procurement team needs to deliver value beyond savings.

Whether the area of value is compliance, innovation, CSR or any other area, having good stakeholder communication and clear KPIs will help ensure the value your procurement team brings is clear and you avoid the sobriquet UFO unlike the unfortunate procurement team in the SpendMatters article. 

Travelling for Business – A Rookie’s Guide

Travelling for business is one of the things I most looked forward to when I embarked on my professional career (excuse the pun).

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This article was originally published on LinkedIn.

Growing up with a father who was forever jetting off around the world, I saw business trips as a great opportunity to see new places, do some shopping (since there were always presents for the kids when he came home) and I assumed some work must be involved but it was never clear what that entailed and how easy or difficult it was.

As a young professional I was fortunate to begin domestic travel in the first year of my career, progressing to international travel the following year and more recently in 2014 travelling to an average of two cities per week and in 2015 travelling to an average of two countries per month. These trips, I came to realize, were definitely a great opportunity to see new places, however shopping for loved ones was rarely on the agenda aside from at airport shops and in fact the amount of work involved before, during and after each trip was significant.

Aside from this realisation, I have learnt a number of basic lessons from the last few years of business travel so thought I would share some of my general tips with you in this post and then some more country specific ones in my future posts. China will be the focus on my next post and then the Middle East after that so keep an eye out! I hope these tips are entertaining as well as useful for you as you either prepare for your first business trip, or read this from your hotel on your 51st trip.

General Tips for Business Travel

As you will have noticed from my first post on networking, I like to think about the work that needs to be done before, during and after any activity. Therefore for business travel I have broken up the information into pre-trip, trip and post-trip:

Pre-Trip

When the requirement for business travel is first identified by yourself or your boss there are a number of questions to be covered before you can begin your pre-trip preparation.

One model I have found useful is the Six W’s which has been adapted from Kipling’s Six Honest Serving Men (What, Why, When, How, Where, Who). By running through these questions you can understand what the travel is, the purpose and goal of the trip, when you need to go and for how long, how you will do it, where you will go, who you will go with and who you will meet with/work with on the trip.

An example is you are going on a sales trip, the goal is building relationships with prospective clients, the trip will be in June and last for one week, you will fly from Hong Kong to Beijing for two days and then fly from Beijing to Shanghai for three days and then fly from Shanghai back to Hong Kong, you will liaise with your local Sales Agent on travel bookings and meeting bookings and your local Sales Agent will accompany you to all meetings which will be with executives from 20 large companies.

Based on this information you can get the practical arrangements made, for example:

  • Book travel and meetings
  • Nominate a colleague to cover your normal duties
  • Purchase travel insurance
  • Pack appropriate business and casual attire
  • Get your passport and papers in order.

Once that is complete you can begin the preparation needed to help you achieve the goal of your trip. I fully believe in the Seven P’s (Proper Prior Planning Promotes Peak Performance) so would strongly recommend you take the time to prepare for your trip whichever way you need to.

Personally, my preparation normally includes some or all of these activities:

  • Research the country I am going to so I can be prepared for any cultural differences and safety considerations
  • Research the people I am meeting with including reviewing their company website and activity in the media and looking over their personal LinkedIn profile
  • Preparing meeting packs including relevant notes, presentations or papers which I will need to refer to in the meeting
  • Writing a clear itinerary showing the time, location, contact, goal and background for each meeting
  • Finally I think it is always a nice touch to send the people you will be meeting with or working with on your trip a brief email to confirm the meeting details, provide a short agenda and tell them you are looking forward to meeting them/ seeing them again.

By understanding the Five W’s and following the Seven P’s you are laying the groundwork for a successful trip and will reduce the level of difficulty and complexity of the work that you will need to do on the trip so maybe you will be able to find time for that quick shopping expedition for the kids or even visit a local attraction or two. Although of course the execution of the trip itself will also need to be spot on if you want to enjoy these perks. Here are my top tips for during the trip.

Trip

Depending on where you are travelling there are lots of ways to make or break your trip. Generally though my tips are:

  • Arrive to each meeting early and be professional and friendly
  • Note all follow-up actions and complete as many as you can straight after each meeting or well within the agreed time-frames
  • Pack muesli bars or snacks to eat between meetings as you often have to skip meals
  • Try to get enough sleep as the days are long and you have to be on top of your game for each meeting
  • If you have lots of meetings booked each day (5 for example) then arrange a driver or negotiate with your first taxi driver to drive you for the whole day as not being able to find a taxi is not an acceptable excuse for being late to your next meeting
  • Have your phone on you at all times as people often have to move meetings forwards or backwards at short notice so you need to be contactable

Speaking of moving meetings – always be flexible and as much as possible work around the people you are meeting with; Try to avoid excessive drinking at night (this could be easy or hard depending on the people you are travelling with and where you are going – I will address this in my country specific posts); Keep up the communication with any colleagues you are travelling with so you can support each other; and finally always thank and show your appreciation for anyone who has assisted you during your trip before you leave whether it is your driver, Sales Agent, local colleague, professional translator etc.

Post-Trip

To make sure you achieve the goals of the trip, it is important that you allocate time to your post-trip work, for example:

  • Prepare and then complete the action list from the trip which would normally involve things like sending promised information to people and saying thank-you for their time
  • Update any reports you need to with meeting notes and agreed actions
  • Put away your passport somewhere safe
  • Prepare your travel expenses for reimbursement
  • And of course give your loved ones any small presents you brought home.

Business travel is loved by some for the experience of visiting new places and hated by others for the long lines at the airport and the stress of rushing around a new city, but overall as long as you allocate sufficient time to the pre and post trip work and keep your head in the game during the trip then you should be able to meet all the goals that you set and perhaps even have a good time.

If you have any tips of your own on business travel please feel free to post them in the comments section!

Madeleine Tewes is the Head of Business Development and Marketing at Apsiz Services.