All posts by Peter Smith

Will You Be Your Organisation’s First Chief Sustainability Officer?

For most organisations, there are far more risks and opportunities related to CSR and sustainability in their supply chain than there are within the “internal” business…

By Joshua Resnick/ Shutterstock

What’s the biggest change in terms of the focus and priorities for procurement teams and leaders over the last decade or so? There are a few potential answers to that question, but my feeling is that the whole area of corporate social responsibility and sustainability is a strong candidate for that award.

It’s just over a decade since I last held a full-time CPO (Chief Procurement Officer) role, but I don’t remember issues such as modern slavery, carbon reduction, global warming, plastics or human rights featuring too much in my thinking as a CPO through the nineties and noughties.

But now, it is right up there on the agenda for most organisations, in terms of both procurement priorities and indeed overall business focus.  That’s been driven by consumer demand and a more aware population, with younger people taking the lead on issues such as climate change, as we’ve seen in the UK with major protests and the visit of Greta Thunberg in recent weeks. Firms have become aware of the risks if they mess up on these issues, and that has spread through to shareholder action and sensitivity – a sign that firms really do need to get to grips with this agenda.  

We’ve even seen some CPOs morphing into “Chief Sustainability Officers” in their organisations, or combining the two roles. That’s not surprising when you think about it. The fact is, for most organisations, there are far more risks and opportunities related to CSR and sustainability in their supply chain than there are within the “internal” business.

Certainly, an organisation can look at its own energy and water use, how plastics fit into its packaging strategy, and make sure it is behaving properly with regard to the human rights of its own staff. But if we consider the wider issues once we look at our suppliers, the scope is far greater. For larger organisations in particular, the impact they can have on hundreds or thousands of suppliers, all around the world, almost certainly outweighs anything they could do purely internally.

We can see another sign of how these issues have risen up the agenda with the announcement of SAP Ariba’s “Sustainability Summit” in June. It takes place on Tuesday June 4th, from 9 am to 12 noon, just before the opening of the SAP Ariba Live event in Barcelona that afternoon. There will no doubt be a certain amount of discussion around how SAP Ariba products can help in this area, but the morning is primarily designed to be a very interactive session, with expert panel discussions and small group sessions as well, so participants can pick up ideas from each other as well as from the experts involved.

And this isn’t just about “saving the world”, although there is nothing wrong with believing that we should all do our bit to make the world a better place. There are selfish reasons too for procurement organisations and leaders to position themselves in the foreground for their organisations’ sustainability efforts. From a functional standpoint, the vast majority of us look for purpose in our work, but as we said earlier, younger people are particularly concerned about these issues. So, if you want to attract the brightest and best to your team, it makes sense to show that you are concerned about sustainability and similar issues and that procurement in your organisation is deeply involved in worthwhile initiatives.

It is also clear that because sustainability is high on the corporate agenda, procurement can gain in terms of internal profile and reputation if we are seen to be taking a lead and driving the agenda through our supply chain. I’ve heard a number of procurement executives talking about how topics such as carbon reduction or supporting social enterprises have got them onto the Board agenda, in a manner that day-to-day procurement frankly just didn’t.

Back to the Summit: SAP Ariba Live is the largest procurement event in Europe, we suspect, and numbers for the Summit are limited. So if you are interested, don’t delay and do register now – please contact Miriam Kuritzkes to express interest and for further details.

Procure with Purpose

Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.

Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery; to Minority Owned Business; and from Social Enterprises; to Environmental Sustainability.

Click here to enroll and gain access to  all future Procure with Purpose events including exclusive content, online events and regular webinars.  

Want to get your wheels turning towards a supply chain career one could only dream of? Then don’t miss our upcoming Career Boot Camp with IBM – a free 5-part podcast series with some of the very best of the best. Check it out here: https://www.procurious.com/career-boot-camp-2019

Big Ideas Summit – A Review

“The overall standard of the speakers and content was very strong, and here are four points that stood out for me as positives.”

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Yes, I was looking forward to the Procurious Big Ideas Summit last Thursday. But when I got up to see pouring rain and realised that the opening session was all about Brexit, my heart sank more than a little. Perhaps South Western Railways would come through with a handy 45-minute points failure? But no, all went well, and I was at the rather lovely Soho Hotel in good time for Professor Anand Menon, Kings College London and Director of think tank “UK in a Changing Europe”.  I sank back into the very comfy seat and prepared to be bored. 

And he was great. Probably the clearest description of where we are with Brexit that I’ve heard, and convincing ideas of where we go next. Why isn’t this man on the BBC more often, I wondered?  And guess what? When I got home that night, there he was, reviewing the papers at 10.30pm on the BBC News Channel!

So, what else was good about the Summit? The overall standard of the speakers and content was very strong, and here are four points that stood out for me as positives. 

1. Whether it was planned or not, almost all the speakers left plenty of time for questions and discussion. With the size of the group – around 50 – that meant we got into some genuinely interesting and engaging debates. For instance, Julie Brignac (from WNS Denali) gave an interesting viewpoint on why CPOs don’t make it to CEO very often. But because she only used half of her 35-minute slot for her formal presentation, we then had a really good interactive session with loads of comments and ideas flying around. A good lesson here for speakers and event organisers generally, I think. 

2. Although there were “sponsor speakers” from Ivalua, SAP Ariba, Barclaycard, and Icertis (plus WNS Denali), none of them simply promoted their product. Indeed, in the case of Justin Sadler-Smith of Ariba, someone asked him why he hadn’t focused more strongly on technology as an enabler for procurement transformation during his session! That showed admirable restraint from him in my book.  Vishal Patel from Ivalua was similar, talking about the hype and reality of AI, including the vital need for robust and accurate underpinning data, without pushing his own solutions too strongly. 

3. That size of audience – around 50 people – does help with networking.   You generally see and interact with people several times during the day, so particularly if you go along to the post-event drinks, you can make real personal connections through the event. That’s harder to do when there are 200 people at an event. 

4. The non-procurement “inspirational” speakers were very well chosen. Darren Swift lost both his legs when serving in the Army in Belfast, and has since become a champion sky-diver, a snowboarder, actor and motivational speaker. Just amazing and testament to the power of positive thinking. And David Gillespie is an actor and writer who told us about the power of stories, and how we can project our “status” and image in a way that will make us more respected and effective when working with others. It’s the sort of thing that initially sounds a bit fluffy and new age, but he was actually very down to earth and totally convincing in his messages. And perhaps he gave us some clues in terms of answering those questions I mentioned above about CPOs getting to CEO!


So, I assume the sessions will be available online at some point, and they are pretty much all worth checking out (there was only one during which I may have dozed off…!)  

If you’d like to attend Big Ideas Summit London 2020 on 12th March please contact Holly Nicholson [email protected]

New Goals for Procurement – Driving Revenue Growth Through Supplier Collaboration

Procurement professionals need to think in more innovative ways about how we can drive competitive advantage and shareholder value for our organisations.

By Greg Epperson / Shutterstock

In my recent article, I talked about “the Art of Procurement”, and suggested that the time is right for procurement to move beyond our traditional focus on transactional improvement and basic cost reduction. Whilst remembering those are still important aspects of the role, we need to think in more innovative ways about how we can drive competitive advantage and shareholder value for our organisations.

Revenue growth is one key factor that determines shareholder value and organisational health generally. While profit is of course important, and the procurement goal of cost reduction plays a key role here, “you cannot cut your way to growth” (or ultimate success), as the saying goes. Growth is vital, and stock markets arguably value growth more than absolute profit levels or even margins.

So, firms can grow revenue through a variety of activities, for instance;

  • Finding new customers for existing products
  • Improving existing products (so the firm sells more)
  • Introducing new products – either totally “new”, or line / range extensions and additions
  • Improving the efficiency and effectiveness of sales and marketing activity

In every case here, it’s clear that procurement has a potential role to play. Even in terms of the “improved sales / marketing” route, there are possibilities – maybe procurement can work with the marketing team to find innovative suppliers in areas such as digital marketing? 

For one European bank, the capability of their internal procurement team has become a customer benefit that is winning new revenue.  Potential business customers – particularly small and medium sized firms who may not have much internal capability – are offered access to a set of procurement tools, templates and good practice guidance developed by the bank’s procurement team, who are also available for telephone consultation if the clients want that too. In a market where the core banking service on offer from every competitor is very similar, this has proved to be a differentiator that has won new business for the firm.

When it comes to improving existing products (or services), suppliers are often better placed than the business itself to identify opportunities. Procurement can really come into its own by supporting that supplier-driven innovation and improvement. But in many cases, it is not simply about identifying the innovation or improvement – it may well be that the firm gains revenue and advantage through the speed to market compared to the competition.  

That was highlighted in a recent webinar I enjoyed, which featured my old friend and ex-colleague Jason Busch of Spend Matters as well as KPMG and Ivalua. But the highlight was hearing from Mark Gursky, Director of the Procurement Center of Excellence at Meritor (a $4 billion global manufacturer of automotive components). He explained how procurement in that business was contributing towards ambitious targets for growth via new product launches.

The key was (and is) enabling more effective working between Meritor and key suppliers, who are supporting the drive for growth. That change in the whole working relationship between buyer and suppliers, needed to support Meritor’s goals, has itself been supported by technology (that’s where procurement technology firm Ivalua comes into the picture).

It struck me that the technology achieves two goals. First of all, to really make the most of what your suppliers can offer, you need to manage the basics of supplier management well. That means supplier master data management; spend and contract analytics; risk management and so on. Putting it simply, if you don’t have a grip on who your suppliers are, what they’re doing with you, where in your organisation they are already working, and how they are performing, then impressive sounding “supplier innovation programmes” will be built on sand.

Then, having got the foundations in place, technology can support the actual collaborative development work. Gursky talked about using the Ivalua platform to manage all the work between the firm and key suppliers. Information is captured in one place rather than emails flying around between lots of different people. Complex requirements can be quickly translated into bills of material, then suppliers can respond rapidly to requests and questions. Projects can be tracked, data and information exchanged securely between the parties, and outputs tracked and monitored via the platform. Information is easily shared, but proper controls are managed too, important when we’re talking about potentially innovative new products.

You can still access the webinar here to find out more about the Meritor story; it’s a great example of procurement looking beyond the norm, and really contributing to those wider goals such as revenue growth.  And at the Ivalua Now “Art of Procurement” conference next month, I’m expecting to hear more examples like that of procurement moving beyond our traditional heartland of cost control and transactional management.

You can book for that here, and join the firm, key clients such as Total, Suez and Deutsche Telekom (and me) in Paris for what should be a stimulating couple of days – maybe see you there!   

Ivalua are sponsoring today’s Big Ideas Summit in London. Sign up now as a digital delegate to follow all the action wherever you are in the world.  

The Science And The Art Of Procurement

As we move towards a new decade is the emphasis in the procurement world changing – are we going to see a new age, where the Art of Procurement comes to the fore?

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Much of our focus in the last twenty years or so within the procurement profession and within our specific procurement functions has been on what we might call the “Science of Procurement”.

The huge growth in the use of technology has been the most visible part of that developing picture. Over the years, we have moved from the first spend analysis initiatives, laboriously building Excel-based “spend cubes”, through to today’s automated, cloud-based, AI-driven, integrated, holistic (add your own buzz-word here…)  procurement platform. Technology has radically changed procurement activities and procurement roles across virtually all our spheres of activity.

Outside the technology field, we have also seen “science” come to the fore in terms of codifying processes such as Category Management. There may be different models in use, but there is a pretty well-accepted logical methodology behind how organisations approach their management of major spend areas. Professionalisation of the function, logic and analysis has also extended into other areas, with a growth in relevant qualifications, all the way through to procurement and supply chain MBAs and even Doctorates.

But, as we move towards a new decade, perhaps the wind is shifting, and we may see a different focus in the next ten years.  Is the emphasis in the procurement world changing – and are we going to see a new age, where the Art of Procurement comes to the fore, alongside the scientific approaches?  I first saw this term used a few years ago by Philip Ideson, as a title for his website and excellent series of podcasts, and it feels like this may be an idea whose time has come.  

However, we would stress that doesn’t mean forgetting the science and (of course) the technology. After all, we’re only just beginning to see what AI and machine learning might do to revolutionise procurement and supply chain management; the possibilities are endless and hard to predict.

But we are also seeing increasing focus on issues such as;

  • how procurement can successfully influence, engage and collaborate with internal stakeholders to drive value;
  • procurement being asked to support development of unconventional business models that move beyond traditional buyer / seller (partnerships, JVs, large firms running start-up incubators, etc); and  
  • capturing and exploiting innovation from supply markets and individual suppliers becoming a top priority for organisations and therefore procurement functions.

When we look at that sort of activity, we can see that it is very different to the standard procurement processes – spend analysis, competitive sourcing, purchase to pay management. Now those core tasks and issues are not going to go away, and we would not want to suggest procurement leaders take their eyes off those particular balls or stop trying to execute this work as effectively as possible! But adoption of technology, automation, and best practice process is not the ultimate objective; it is a means to an end. 

The emerging strategic priorities for our organisations require different approaches from procurement, different skills sets amongst staff, and critical success factors such as creativity, flexibility, adaptability and even imagination really start to come into play. In addition, our expectations and requirements of technology must evolve as well, to support not just rapid deployment of standard best practices, but the ability to bring our best ideas to life and promote agility.

So, this talk of creativity, agility and innovation all starts sounding and feeling much more like “Art” rather than pure “Science”, and it is interesting to see that technology firm Ivalua has titled the Ivalua Now 2019 conferences this spring (in Chicago and Paris) the “Art of Procurement”.  To support that, the firm hopes to challenge the speakers to go beyond the usual “journey to best in class” descriptions and include their reflections on how procurement is embracing change in their organisations. How will procurement leaders contribute to generating real competitive advantage, to growing business revenues through innovation – supporting the top-line as well as the bottom line, as it were.

I’ve argued elsewhere that actually, if procurement doesn’t change and widen its scope, we in the profession may face existential issues of survival, as technology advances further. So, in our next two articles in this series, we’ll look at case studies that demonstrate the sort of innovative approaches procurement organisations are taking and how considering the Art of Procurement might secure our future. And finally, you can register for the Ivalua Paris event here if you want to participate in what should be a stimulating couple of days, from April 10th-12th.

Ivalua are sponsoring Big Ideas Summit London on March 14th. Sign up now as a digital delegate to follow the day’s action wherever you are in the world.