All posts by Procurious HQ

Mark Perera’s Big Ideas on startups, technology & disruptive procurement

Mark Perera of Old St Labs

Mark Perera fronts Old St Labs – builders of technology that enables enterprises to forge deeper and more valuable relationships with their buyers and suppliers. He will be appearing at our inaugural Big Ideas Summit on 30 April, the world’s first digitally led event for procurement. Mark – no stranger to innovation himself, talked to us about his world and shared some of his own Big Ideas.

Procurious asks: Mark, you’re heavily involved in the London start-up scene. How are we seeing this disruptive start-up mentality breaking into the procurement world?

Mark Perera: The London startup scene is really booming at the moment, and it’s great to be a part of it. There have been some real success stories coming out of London, and we’re now thought of in the top tier of startup cities, behind Silicon Valley and New York City.

In terms of how the startup community is disrupting the procurement scene, I think the best is yet to come. We’ve seen some great companies like C2FO changing the game in the B2B and the finance sector, but I don’t think we’ve seen truly disruptive technology hit procurement yet.

Procurious: How about Coupa and Procurify? Aren’t they the flag bearers for the new disruptive model of procurement?

Mark: What Coupa and Procurious have achieved is impressive, but I’m not sure I’d call it disruptive innovation. Coupa is probably disruptive for Ariba because they are doing what Ariba does but they are offering a better user experience; however, I’m not certain they are disrupting the way that procurement operates.

Procurify is similar story. By offering a more competitive price point, they have opened up the market for small and medium organisations to start leveraging procurement technologies. However, the services they are offering are not unique in the market.

If you look at what C2FO has achieved, you’ll see that they have changed the way companies are managing working capital. At Old Street Labs we’re looking to fundamentally change the way businesses collaborate, we don’t see why procurement software should miss out on the brilliant user interfaces and technology platforms that companies like Google and Facebook have implemented.

Coupa and Procurify may have slicker interfaces and more affordable price points, but they are essentially solving the same problem that Ariba solves.

Procurious: You are one of the founders of the Procurement Leaders Network, a business that was established more than a decade ago, how have you seen procurement technology come along in that time?

Mark: If I was to sum procurement technology over the last decade in a word, it would be “consolidation.” Ariba bought Procuri, then SAP bought Ariba. This is a trend that has been replicated across the industry. Prior to being bought out by IBM, Emptoris had acquired some smaller firms. Very few new tech companies make it through without this happening.

If someone comes up with a great idea, it is quickly bought out by a larger firm. Ariba bought Procuri for its cloud capability, which is the same reason that SAP went on to buy Ariba.

I think the most interesting developments in tech in the past few years have been around the collaborative models of companies like AirBnB and Uber. It will be exciting to see how this approach and the sharing economy will be leveraged into the procurement world.

I think there will be some drastic changes over the coming years as new, slicker, more nimble firms begin to fill gaps left by the large ERP providers. The real changes will occur when we stop looking for 10 per cent improvements and starting using the Google’s 10X mentality (changing the way businesses run to enable improvement by a factor of ten).

Procurious: Tell us a little about your latest venture, Old Street Labs.

Mark: Old St Labs, is a software company that enables enterprises to forge deeper and more valuable relationships with their buyers and suppliers. Our first product is called Vizibl (http://vizibl.co/) it’s a cloud-based platform for individuals and teams to deliver a real return on their commercial relationships.

We’ve created an environment in which buyers and suppliers can work together in productive collaboration. We want both buyers and suppliers to understand each other in as much detail as possible and to be able to match the right individuals, teams and skills to the right tasks.

Vizibl enables you to carry out effective Performance, Innovation and Risk management through intuitive dashboards and reporting.

Procurious: So if unlocking innovation is the key to procurement success, can you point out any organisation that you feel has done this well?

Mark: I’m not sure that unlocking is the key to procurement success, but it certainly is a driving factor. The businesses that have done well to date are generally from the FMCG and Automotive sectors. It’s hard to argue with Apple’s track record of developing innovative approaches through close relationships with its suppliers. Apple continues to produce great products that sell, and they can do this because they are close to their supplier base. I’d say that makes them the benchmark from an innovation POV.

There are a lot of businesses that achieve innovation in isolation but struggle to sustain and integrate it into their business culture. A big part of this is that firms have not found the right technology to support the process. Often, people are forgotten in the process, so the challenge remains to build a simple, beautiful, powerful business tool that can support organisations in their efforts to be more innovative. We believe we’ve achieved this with Old Street Labs.

Procurious: Big data, wearable devices; what’s next in procurement technology?

Mark: This is an interesting question. I don’t think we’ve really seen big data in procurement yet. There have been attempts, but we’ve yet to see a truly great solution. Part of this is that procurement struggles so much to manage their own internal spending data. The complexities of big data solutions seem a step too far. At Old Street Labs, we’re currently looking into a big data solution for procurement, so watch this space.

Big data is a huge opportunity for procurement, but I think first we need to focus on building technology that people love to use. After years of clunky experiences on SAP and ORACLE, our expectations of procurement technology are pretty low. But across the tech industry, we are starting to see applications that are a mixture of behavioural science and technology—this is where the future of procurement technology lies: in building something that truly resonates with users.

In terms of wearables, I think we need a little time to see how these technologies work before we understand their commercial potentials. There is still so much that we can do with mobile devices that we aren’t doing yet, and these devices have been around for a decade. The Apple watch looks like a huge opportunity, but, from a procurement point of view, we really haven’t utilised the mobile phone to its full extent so it could be best not to get too far ahead of ourselves here.

Want to hear more from Mark and our other Big Ideas influencers? Join in with the discussion by registering on our Big Ideas Summit Group

Samantha Coombs on the challenges facing Millennials going into procurement

Samantha Coombs will be joining us at the Big Ideas Summit on 30 April. A gathering of 40 of the most influential thought-leaders from across the procurement profession and beyond. Here she discusses the challenges facing today’s young professionals, and the skills they bring to the table.

Procurious asks: Can you speak to us about the challenges facing the Millennial workforce. Competition, the contract vs. perm debate etc.

Samantha: Competition is high now that there are more procurement professionals than there used to be 10 years ago when purchasing was more a transactional-operational function. Nowadays many businesses are seeing the value add that procurement teams bring in terms of benefits, quality and cost savings.

The contract market tends to be highly counter-cyclical, so in a boom, you may find that the market is actually tougher than in a bust.

For me, I became a contractor after being made redundant from a perm job when the company outsourced the function over-seas. It was bad timing and the economy was in a state of recession. I found it difficult to seek perm employment due to permanent recruitment freezes.

This left me with the contract option of working on projects which gave me an advantage to gain a wider range of experience in different industries.

Job variation leads to skills. Contractors normally take contracts ranging between 3 and 9 months in duration. By working on shorter contracts you will gain experience faster, work on more varied projects and hopefully get some big-name companies on your CV. Changing projects on a regular basis gives you an opportunity to update and further skills and to learn from the best. In general, contractors have more advanced skills than their permanent counterparts, which will give your career a boost.

In my experience contractors are seen as if we’re all about big money, having no commitment and companies often use contractors because they want us to transfer their skills to their permanent staff, since we often have a higher level of technological competence.

Every contractor has a different story and motivation.

Contractors who undertake projects allows them to build business contacts and if a client likes your work they will be happy to hire you again or recommend you.

Procurious: What have you found to be the disadvantages of living life as a contractor?

Samantha: Job security. Entering a weaker market, termination of your project, or having skills that are out of demand are all threats to your job security.

Administration. As a contractor you will always have more administration work in your spare time than you would if you were a permanent employee. You must read up on how umbrella companies work, and may also need to hire an accountant to ensure you are legally compliant and tax-efficient.

Applying for contracts. Imagine job-hunting every six months; this would drive most people crazy, and it’s worth keeping this side of contracting in mind.

Short-notice holidays. Essentially, these don’t exist. You need to plan your holidays for when you have gaps between jobs. Sick days are a thing of the past, so we must ensure we make provisions for any eventualities.

It is not a myth that you can earn vastly more as a contractor than you could as a permanent employee, but it’s not a given either. A senior permanent employee can earn nearly as much as an equivalent contractor, but will, in addition to his or her salary, have a range of benefits that aren’t offered to the contractor. These can include pension schemes, private health care, car allowances, professional development funds, to name a few; however, such roles do tend to be very senior, and are few and far between.

In many ways, the greater earning potential that a contractor enjoys is compensation for the lack in job security

In my experience recruiters see contractors as having little commitment and are afraid of taking on a contractor in a perm role because they fear the contractor will leave after a short period of time and find something with more money.

This is very frustrating as is NOT the case. Contractors move from the temp to perm side because motivations change, and we want and deserve all the benefits that permanent employees receive.

What happened to equal opportunities?

Procurious: What [skillset] do today’s professionals bring to the table, that perhaps the CPOs of yesterday lack?

Samantha: Candidates from a contracting background bring a fresh pair of eyes, are used to meeting new people thus dynamic in personality and thrive on networking, gumption to push boundaries and challenge the status quo, and aware of modern technologies, and can hit the ground running.

Procurious: What needs to be done to transform the profession, and bring it up-to-date?

Samantha: A ‘Try before you buy’ Experience Ramp solution. It would provide both sides an opportunity to trial working with each-other.

This could be offered on a reduced yet affordable pay rate over a period of 11 months giving the candidate adequate time to understand how the business works operationally, align their work to the strategic objective and deliver in terms of what is required.

Procurious: Let’s talk ‘Brand You’. How important is it to have a clearly defined brand today?

Samantha: It’s vital to have a strong brand for recognition of quality, knowledge and performance you can deliver.

Weakening the brand makes you disappear down the bath plug.

Procurious: Let’s talk innovation – who/what is innovating in the procurement technology space right now?

Samantha: Procurious is innovating the way procurement professional network and widen their network by bringing us under one roof, so to speak

Apple launched new Apple watch which will affect how businesses use digital tools/software

Procurious: Is more innovation needed in the building and maintaining of supplier relationships?

Samantha: I believe there people are either born personable or not. It’s a natural flair developed in childhood and adulthood, then put to the test in the work place and developed overtime.

The old ways of supplier building used to be structures and models but it’s too prescriptive and not real. The best method I feel when building and strengthening relationships, is to find common ground, understand the values and opinions of others and be supportive in feeding back between the supplier and stakeholder for example. Establishing ‘partnership’ type relationships will help you leverage more in terms of innovation, technology and trustworthy relationships.

Procurious: Looking forwards how do you see the future of e-purchasing changing/evolving?

Samantha: With shopping sites like Amazon, travelsupermarket.com and other ‘compare costs websites I see procurement coming alive in consumer world without many of them actually realising.

e-Purchasing is replacing the old ways of paper purchase orders and excel spreadsheets generating quotes to a more sophisticated yet easy to use platforms which can house of operational purchasing and strategic projects under one umbrella. Many platforms have bolt on modules such as contract management and catalogue search functions where anyone user can access contracted supplier products that can be delivered directly.

The future will be seeing a reduction in resources required to purchase as the system can do this and a lot more.

Are you a Millennial thinking of joining the profession? Maybe you can relate to Samantha’s experiences? Join us (digitally) at the Big Ideas Summit by registering here and stand-by for a day packed-full of challenging discussion. Learn more about Big Ideas on www.bigideassummit.com

How can access control technology strengthen security across the supply chain?

Simon Birchall, managing director of leading workforce management solutions developer timeware (UK), discusses how sophisticated access control technology can be used to increase the security of supply chains at the most crucial point. 

A recent study conducted by Allianz found that disruptions to the supply chain, such as major security breaches, are considered to be the top concern for UK companies.

To help combat this, effective security measures must be put in place at every point. One effective security measure is to deploy access control systems at the manufacturing sites that carefully monitor employee movements helping to increase visibility across the whole chain.

According to Allianz, the number of multinational companies has increased from 7,000 50 years ago to 104,000 today. In this globalised era transparency is becoming increasingly difficult as operations expand across continents. This is not just a challenge but a need for globalised control and management of each process throughout the supply chain. One way to monitor operations more closely is to ramp up the security at each individual stage. By limiting authorisation to key personnel and monitoring worker behaviour it is possible to regulate the whole process. As well as the problems that arise through increased globalisation, cyber-crime is becoming more and more commonplace and also poses significant threats to supply chain stability.

These increased risks to supply chains have meant that businesses must put stricter security measures in place at each link. As failure to do so can not only affect revenue but can also have a significant effect on business reputation. Increasing the level of control across the whole supply chain can also improve visibility and control over the overall process.

Even with supply chains that span country borders and even continents, increasing the overall control and visibility of the whole process starts locally. Supply chain protection has to begin with ensuring the necessary security measures are in place at the actual manufacturing site, for example, carefully screening any contents of cargo being shipped.

A recent survey from security firm Pinkerton cited one of the most common security problems associated with supply chains as being poor security at the manufacturing site. This included poor security practices within the shipping and receiving departments and poor access controls. The study also found that the security weaknesses are well known by staff internally 90 per cent of the time.

The need to deploy robust access control measures

To overcome this and to strengthen those security weak spots, businesses must deploy robust access control measures to monitor movements and improve visibility. Because when it comes to supply chains, total control over the manufacturing site has a powerful reinforcing effect across the whole process.

Access control can be described as the selective restriction of access to a place or resource and is crucial when it comes to supply chain security as it can identify any individuals entering the site. Access control can also decide who has the clearance to access both buildings and files and as a result gives organisations greater control over the whole supply chain as individual movements can be traced and monitored. For manufacturing sites, for example, access control can prohibit unauthorised access to shipping, loading docks and cargo areas.

Access control technology becoming more sophisticated

In recent years, access control technology has become more and more sophisticated and modern systems are now using biometrics to optimise security, privacy and convenience across the supply chain.

So why are biometrics so effective? With an ability to prevent issues such as undocumented access, loss of ID cards and ID swapping, biometrics are a formidable alternative to previous access control systems that relied on passwords and physical keys. Nowadays access control and biometric technology has the capabilities to control access points and identify, record and track all employees, contractors, visitors and vendors that may have access to the building. It can also be used to deny access and trigger an alarm when anyone attempts to enter an area without jurisdiction. New technology can even control the times individuals have access to facilities.

The level of sophistication available with biometric access control technology means that authentication can be taken one step further. Biometrics actually have the ability to monitor behaviour and can take into account the way in which the person interacts with the device, for example, the force that they hit a key. This has massive implications for the supply chain as everyone involved in the process, from the manufacturers to the distributors, can be carefully monitored and screened.

Using access control to protect people and property

An example of the latest access management technology available to businesses is timeware’s access control package which focuses on protecting the two most valuable assets; people and property.

The timeware software is designed to ensure than when a distributor completes a job or when an individual leaves employment, they will no longer have access to the building. The access control technology can be fitted to any door and biometric readers will ensure only authorised personnel have access through it. Once the system is installed, it is possible to produce reports on staff movement and to track individuals around a site. It’s also possible to give visitors and contractors temporary access to ‘public’ areas with badges that will cease to function after a pre-determined time.

Sophisticated access control technology has the ability to strengthen security at the crucial point in supply chains, such as the manufacturing sites. Reinforcing the security at this critical point can help to increase visibility across the whole supply chain. More and more businesses are installing a variety of access control technologies to increase control at the point where it is needed the most.

Access control technology is but one example of innovation in the supply chain. We’ll be exploring more at our inaugural Big Ideas Summit on 30 April when 40 of the most influential thought-leaders gather to discuss the future of the procurement profession. Learn more about the event here.

Professor Olinga Ta’eed on Turning Procurement Professionals into Agents of Change

Professor Olinga Ta’eed on the ‘God Metric’, social innovation, the work of the Big Society, and his ideas for 2030.

Professor Olinga Ta'eed interview on social value

Professor Olinga Ta’eed  is just one of our 40 influential thought leaders appearing at Procurious’ inaugural Big Ideas Summit on 30 April. To hear Olinga expand on some of the ideas presented in this interview, why not become a ‘Digital Delegate’ and register for the online event? You can do so here.

If you missed part one of our interview with the Professor, you can read it here:
Professor Olinga Ta’eed’s Big Ideas For Helping Your CEO Understand Social Value

Procurious: You’ve spoken at The Vatican, and have been called ‘The Angel of Social Value’ – does religion have a big role to play, and do we need it to instil a sense of greater good?

Olinga: I must say it was ironic for S/E to be called the “God Metric” by the Vatican Press. Embarrassing and flattering. Financial value is older than organised religion. Religion has long conveyed sentiment long before Facebook ‘likes’ and LinkedIn ‘connections’ appeared. Religion can help set the mood music, and give us attributes to aim at. But it has turned out that religion is a very poor vehicle to articulate in the language of each stakeholder why they should change. It tends to be pious and judgemental – we are good versus they are bad – and so I think the influence is limited but the aspiration is immense.

Procurious: Social innovation: can you tell us what it is, and why it matters?

Olinga: No one, especially me, gives a fig about metrics. It’s the outcomes and what we can do with it that matters. Social Innovation is about delivering positive change in society. It is unfair on procurement professionals that everyone is turning to them to be the agent of change in society merely because they deal with the largest budgets. So we need to arm procurement with instruments that make it easy for them to do their job.

We are now the go-to metric for the Social Value Act 2012 and Modern Slavery Act 2015. Let’s drill down how it works. For the public sector we have UK£ 12 billion of procurement under management in the UK, launching in Spain and other countries, and we only started this in September 2014 after publishing a 250 ‘bible’ on Social Value in Public Procurement! Our proposition was a unique win-win-win-win for all sectors involved. Basically we charge 1 per cent of a contract value to deliver 20 per cent social value.

Our first contract for UK£ 385m in February 2013 for social housing –  we delivered 14 per cent of that value as social value according to independent government reports. The public sector pays nothing so they are delighted. The winning bidder pays 1 per cent which is nothing given variation of contract after award is typically 19-20 per cent. The third sector NGO’s are the multipliers that multiply any resource they receive and thus deliver say 10x the social value that a private company could do for the same UK£ 1. And finally the community are the recipients of all this goodwill.  What has enabled this social innovation – the S/E metric without which procurement would have surveys and narratives to compare oranges and apples.

What we offer for our 1 per cent is measurement, reporting, compliance against your legislation, ideation of social innovation, monitoring of the contract on a monthly basis displayed on a SaaS dashboard, but above all delivery of up to 20 per cent social value. It’s hard to argue against it and for this reason we have a very open door internationally.

Similarly, other social innovation ideas need instruments to make them work. Social Investment Bonds (SIB) are basically a financial bet on a social outcome. But without measuring outcomes and what good looks like, then it’s not possible to accelerate and embed social innovation around us. 

Procurious: Will the outcome of the UK General Election impact on the work of the Big Society?

Olinga: Social innovation industry has trends like all industries. A hundred years ago it was good old philanthropy – you makes pots of money and mercifully feed the poor. About 20 years ago it became Corporate Social Responsibility (CSR) which is transactional – then 10 years ago moved to Sustainability  – now it’s Social Impact because it’s the suffering we have now that matters, and already there is a shift towards Citizenship. Barclays, Nationwide, Imperial Tobacco, John Lewis etc abandoned CSR departments and now call them Citizenship. Whilst in the UK we call blended solutions ‘Big Society’ you will find the term will not be heard again after the elections. It has helped develop our understanding of what works and what doesn’t work, but we have to build on our experience and articulate using more precise language and numbers.

To capture this burgeoning Zeitgeist we have embarked on capacity development initiatives such as the journal of Social Value & Intangibles Review, The World Intangibles Conference 2015 X – Series: a disruptive set of conferences navigating the noise in the social impact market, a free MOOC (massive open online learning) system, heading up EU SEiSMiC Social Value and EU PROCUREMENT Social Value & Transparency in Supply Chains, etc. We are fortunate that no one would dare voice concerns supporting Modern Slavery, or against added Social Value. This is why we have enjoyed cross-parliamentary support in all our work and elections will affect the future. 

Procurious: Finally – in-keeping with the theme of the Big Ideas Summit, looking forward to 2030… What’s your BIG IDEA? 

Olinga: To establish a currency to articulate intangible values. We  consider that Total Value to be the sum total of Financial Value and Social Value. As the $ is the currency of financial value, social impact is the currency of social value. The globally accepted single number index to financial value is called the Price Earnings Ratio (p/e); I have developed the corollary to this – the Social Earnings Ratio (s/e). It is open source (Creative Commons 4.0), free for non-commercial applications and is provided for us all to share in understanding, articulating and making a better future for us all.

If you missed part one of our interview with the Professor, you can read it here:
Professor Olinga Ta’eed’s Big Ideas For Helping Your CEO Understand Social Value

McDonald’s commits to remove deforestation from its supply chain

Fast food giant McDonald’s announced on Tuesday that the firm would take action to end deforestation across its supply chain operations.

The company detailed the following eight points as the cornerstone of its commitment to halting deforestation:

  • No deforestation of primary forests or areas of High Conservation Value,
  • No development of High Carbon Stock forest areas,
  • No development on peatlands, regardless of depth, and the utilization of best management practices for existing commodity production on peatlands,
  • Respect human rights,
  • Respect the right of all affected communities to give or withhold their free, prior and informed consent for plantation developments on land they own legally, communally or by custom,
  • Resolve land rights disputes through a balanced and transparent dispute resolution process,
  • Verify origin of raw material production and
  • Support smallholders, farmers, plantation owners and suppliers to comply with this commitment.

The commitment is expected to mean big changes within the company’s supply network, with more than 3,100 of the firms suppliers expected to be impacted by the new code.

Michele Banik-Rake, a sustainable agriculture expert at McDonalds, said that the initiative for the new code was actually driven largely by the firms supply base. “The question that was coming back to us was, ‘As suppliers, we have stronger commitments than you do as a company, so why don’t you make the same commitment?’ I couldn’t argue with that logic, right?” she said.

Questions have been raised as to where the responsibility for McDonald’s commitment to deforestation starts and ends. It’s one thing for McDonald’s to have a policy that impacts the firm’s direct suppliers, but perhaps the biggest challenge will come from ensuring that the third party plantations and farms that McDonald’s do not hold a direct relationship with will abide by these practices.

McDonald’s commitment to deforestation mirrors moves made by others in the fast food space recently including Krispy Kreme, Dunkin’ Donuts and Yum Brands. David McLaughlin, the vice president of agriculture at the World Wildlife Fund (who advised McDonald’s on its new commitment) was quoted as saying: “McDonald’s brings size and scale to the debate of sustainable sourcing. Their reach is large, they are global, they work closely with the suppliers and so this outreach can only help.”

Professor Olinga Ta’eed: Big Ideas For Helping Your CEO Understand Social Value

Professor Olinga Ta'eed on procurement and social good

Professor Olinga Ta’eed has led a life spanning private, public and third sectors which perhaps is most accurately described as “entrepreneur, investor and social activist” (Professor Conlon, Dean of University of Notre Dame,  April 2011). And despite embarking on plans to retire from a successful business career at 48, Olinga remains active and is instrumental in championing social good throughout business and industry.

Olinga is just one of our 40 influential thought leaders appearing at Procurious’ inaugural Big Ideas Summit on 30 April. To hear the Professor expand on some of the ideas presented in this interview, why not become a ‘Digital Delegate’ and register for the online event? You can do so here.

Procurious asks: You’ve spearheaded the Social Earnings Ratio initiative that will see the annual reporting of social value of 1 billion organisations by 2020. First of all can you explain to the uninitiated what this is, and why its important. 

Olinga: Currently there are very sound robust metrics around financial value based around UK, USA and international GAP (general accounting principles). Financial value is measured because it matters. Increasingly all the ‘other soft stuff’ is starting to also matter– social value, personal value, consumer index, provenance in products, modern slavery in our supply chains, animal cruelty, impact investment, arts, etc. So in 2011 we set about developing metrics as robust as financial value to articulate these intangible values. As we know, in business if you can’t measure it – you can’t bill it and so it is with other values in our society.

Modern society is built on sentiment, about how we feel, about our values. It drives consumer purchasing right through to contracts being awarded based not only on price, speed and quality but also on delivering created social value. For example in public sector procurement, as government funds recede they are increasingly looking towards the private sector to deliver the same services into the community through third sector agencies; this is at the centre of UK The Social Value Act 2012, 2 per cent CSR Law in India, Indonesia 2 per cent CSR Law, 2.5 per cent Zakat in the Islamic countries, the Italian 0.5 per cent Cinque Mille, … the so called Big Society concept. To articulate between these blended solutions requires a common currency. We developed that common currency to translate sentiment into financial value. As governments utilise legislation and procurement to transform society, we found ourselves right in the centre of that need to articulate non-financial values.

Our mission is to translate complex inputs into simple, singular measurements of true intangible outcomes, the Social Earnings Ratio or S/E Ratio. 

Procurious: Regarding the 2020 deadline: Is this realistic/what needs to happen to make this achievable?

Olinga: We currently conduct yearly UK or US GAP (general accounting principles) audits of 35 million companies in USA, 165 million in USA, 40 million in China … c. 1 billion organisations in the world.

Unfortunately using traditional social impact metrics (there are 1153) means surveys, translation proxy tables, etc which cost UK£ 5,000 to UK£ 200,000 to conduct and 3-18 months. This has proven to be a  very significant barrier to resourcing the measurement of social value. Imagine the supply chain of a city like Birmingham with 34,000 suppliers, or a housing association with 18,000 suppliers, or of a food retailer with 35,000 suppliers. Who is going to pay for to evaluate these organisations, projects and processes? In any case no one has the time. The typical turnaround from a formal PQQ/ITT to contract award is a matter of days so this is simply not possible.

We set about building the first Model-T Ford of Social Value – fast, cheap, high consistent quality, fit for purpose, accessible to all, and in a lot of cases does not even require the intervention with the target company. Big Data, Social Media and Sentiment Analysis have changed the world of social value measurement. Shockingly, our disruptive metric takes 10  seconds and costs UK£ 5, and can be undertaken on a SaaS platform, Seratio.com, allowing 1 billion organisations to be measured by 2020. This is why we have been labelled as “the fastest adopted social impact metric in the world” (Vatican press, January 2015).

Procurious: How can procurement help CEOs understand social value?

Olinga: Changing CEO sentiment is a 100 year task but changing behaviour is a lot simpler. For example, if s/he wants to get that UK£ 1.5 billion contract, EU directive now says that impact funds must deliver 20 per cent social value. No ifs, no buts. So the driver here is easy. CEO’s are becoming bewildered by the range of KPI’s they have to perform to. It used to be simple – shareholder value and everything else was a slave to that. But now they find if they cough wrong in one part of the world, customers can walk away in other parts of the world due to social media, governments can pick on them for avoiding tax for example, suppliers don’t want to be associate with their toxic brand, etc.

But it’s not only about self-preservation, it’s about good business. To do that you have to articulate ‘good’ in terms that CEO’s understand. So we give them 3 distinct metrics – social value as a percentage of their capitalization ie what it means to their bottom line; and S/E Ratio which is an efficiency score just like the P/E Ratio – they could spend less but get more impact. Finally, and most importantly, we benchmark them against sectors, competitors, globally – no one wants to be at the bottom. 

Procurious: Modern-day slavery and supply chains are intrinsically linked. Do we need greater transparency? 

Olinga: Let’s not mix up transparency with ethics; they are not the same. When a company demands say 3 per cent cut in supplier remittance, they are making a conscience decision to transfer value. In a capitalist framework, financial value is an artefact between the board and shareholders; everyone else is a ‘slave’ to that. Customers, suppliers, community, statutory bodies, environment, staff … detract from dividends. Pay them more (eg tax, CSR spend, suppliers) and you have less to share with your shareholders and your own bonus. But we now recognize that we operate in a multi-stakeholder Citizenship framework, where all this ‘other stuff’ is social value – and they can contribute towards the total value.

So when a company takes out 3 per cent from their suppliers they have made a deliberate and conscience decision to take out value from their supply chain and give it – usually – to their shareholders. What they are saying that their success is contingent on someone else being deprived of their value ie. underpay, poor conditions, etc in their supply chain in a developing country. We however are not here to admonish companies but merely to measure them. Being university backed we are neutral, non-partisan, no agenda of our own. We merely point out that we can measure that you have taken value from the supply chain and perhaps increased your shareholder value by the same. It may be however, that they give the value to their community initiatives – that’s why  we don’t judge. We simply allow them to measure value so they can track transference.

To hear from Olinga (and many others), watch exclusive videos, read more interviews, and contribute to discussions please register as a ‘Digital Delegate’ on our Big Ideas Summit page.

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Earth Day 2015: A Time For Change Not PR

45 years ago April 22 was just a normal average day… If it had been a colour, it would be grey. Unremarkable. Now it is forever marked in history as Earth Day – the original Earth Day occurred in 1970 and saw scores of people gather across the globe to show their support for greener policies. 

Fast-forward to 2015 and more than 1 billion people from 192 countries have come together to build environmental democracy and to broaden, diversify and mobilise the environmental movement. Improvements in industrial development can be observed in corporate sustainability targets and the expansive range of sustainable products filling our shops and lining our cupboards. Yes, more companies are engaging with the issues firsthand – with the proposal of realistic goals, tangible progress is happily being achieved. The bottom line is now the Holy Trinity of people, profits AND planet.

If you happened to be in Washington last Friday you’ll have enjoyed Usher, Mary J. Blige, and Gwen Stefani (among others), performing at the free Global Citizen 2015 Earth Day rally hosted by rapper/entrepreneur will.i.am and journalist Soledad O’Brien. The event tied neatly in to the IMF/World Bank Spring Meetings – an early opportunity for world leaders to gather before they set the world’s sustainability agenda at the UN General Assembly in September.

The assembled throng counted world leaders and corporate innovators among its numbers  top of the agenda were rallying calls to end to extreme poverty and eliminate the threats posed by global climate change. 

“Whether it’s the big migrations we expect to see or soil depletion or emptying the oceans, loss of species, loss of timberland — all these things are creating poverty at the same time that they are also creating climate change issues. Eliminating poverty will require solving climate change”  – Kathleen Rogers, Earth Day Network president

The day saw a total of 33 commitments announced: education, water and sanitation, food security, health, political action, marine protection, and environmental awareness were all among them.

World Bank Group, President Jim Kim said: “Each person must do their part. We need engineers and entrepreneurs, we need doctors, we need lawyers, artists, teachers, we need students and activists – we need YOU. We are the first generation in human history with the opportunity to end extreme poverty.”

Also in attendance was the organiser of the very first Earth Day – Denis Hayes: “Climate justice is THE issue facing this generation. Ruthless, powerful carbon companies are buying votes and lying like the cigarette industry did for so long.  So far, they are winning. The main power on the other side is you—you and billions of other people who actually care about tomorrow.”

A group of leading scientists and economists have added weight by issuing a chilling warning today – stating that three-quarters of known fossil fuel reserves must be kept in the ground if humanity is to avoid the worst effects of climate change.

Johan Rockström says: “It’s so frustrating, because it’s the choice of moving down a business-as-usual route with devastating outcomes for humanity and, at the same time, we have this almost unprecedented opportunity, we can transform the world economy to a fossil fuel-free one and moreover do it in a way that is security and health-wise more attractive.”

Turning Back The Clock

Steven Cohen, Executive Director of Columbia University’s Earth Institute– writing for The Huffington Post neatly summarises the challenges such an initiative needs to tackle head-on:

Sustainability is at or near the top of the modern global political agenda. At the core of that agenda is the need to:

  • Protect ecosystems and biodiversity;
  • Mitigate and adapt to climate change;
  • Protect and enhance water supply and quality;
  • Ensure adequate and healthy food;
  • Develop sustainable cities built with renewable energy and efficient transportation systems.
  • Reduce the impact of human-created waste on natural systems.
  • Develop businesses that minimize environmental impacts and maximize the use of renewable resources.

Steven notes: “We still have a lot to learn. We continue to extract and burn fossil fuels at a ferocious and destructive rate. The transition to a renewable resource based economy will be the theme of Earth Days for the next several decades. The institutional inertia and sunk costs of elements of the economy that depend on finite resources will not be easily addressed.”

Bob Langert, former Vice President of Sustainability, McDonald’s suggests that today’s society is in need of a reality check: The consumer is less engaged today than in times past. We need a real surge to engage the consumer, or “sustainability” will be a niche that serves only a small segment of the marketplace.”

The 1990’s bought recycling to the fore but the enthusiasm (and novelty) soon wore off – and although recycling initiatives have become a part of modern society, the fervent desire once exhibited has now waned.

Bob continues: “While the consumer movement is quiet, the corporate environmental movement — including corporate collaborations with NGOs — is on fire. In 2005, Walmart worked with the EDF, Conservation International and others to put in place bold environmental goals, including zero waste. Similar actions and partnerships came from Unilever, Nestle, Nike, Coke, General Mills and General Electric, among others. For example, Coca-Cola has a “water neutral” goal. These aspirations, goals and progress are amazing.”

A Time For Change, Not For PR

Forbes notes that dozens of iconic US food, consumer and manufacturing giants (many of them Fortune 500 companies) such as Kellogg Co., Unilever, PepsiCo, Starbucks, Nestle, Mars, Gap Inc., L’Oreal, and Ben & Jerry’s will all be gathering on Capitol Hill to deliver a single, focused message to Congress.

Speaking to Forbes, Tim Brown, President and Chief Executive Officer – Nestlé Waters North America, said: “Nestle’s is directly impacted by the effects of climate change. Of particular concern are changes to weather patterns, water availability and agricultural productivity that will affect our global supply chain”.

And while many others will no doubt use the day to highlight their own sustainability plans and issue press releases – climate change is a challenge and not a business opportunity, and as such the developed world should not profit from disaster, according to India’s Environment Minister Prakash Javadekar.

Biggest Report Ever

Impeccable timing finds a newly-released report that details how sustainable production of bioenergy can be an important tool for addressing climate change.

Industry experts are calling the SCOPE Bioenergy & Sustainability Report the most comprehensive report on bioenergy ever released. It pulls together work from 137 researchers at 82 institutions in 24 countries that documents and analyzes impacts, benefits and constraints related to the global expansion of bioenergy. 

View and download the report 

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We need you! We hope you’ve been enjoying all the great content on Procurious and the benefit of connecting with other people like you. If you’ve got a minute, we need your help to attract even more procurement professionals to become members.

By growing our community we elevate the profession:  in-turn we all benefit from richer discussions, more knowledge sharing and better career prospects for Procurement.

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To be in with a chance of winning, all you need to do is invite 10 people to join Procurious before 11.59pm (GMT) on 29 April 2015.

We’ll be announcing the lucky winners live in London (and via Procurious) at our Big Ideas Summit the following day. The list of winners will also be available on this Group page and via Twitter.

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How much are you worth? Average UK procurement salary on the rise

According to The CIPS/Hays Salary Guide and Procurement Insights Report 2015 published last week, the average salary for all UK procurement and supply chain professionals has increased again, and by more than the national average. But what impact will this have in the ‘War for Talent’?

The annual survey, involving more than 3000 procurement and supply chain professionals, looks at salaries and rewards across the profession. In 2015, it found that the average pay award in procurement was 2.5 per cent, considerably higher than the national average of 1.7 per cent.

Top Salaries, No Equality

In real terms, what this means is an average salary for procurement and supply chain professionals of £41,661. When looking at the individual job roles, the average salaries are now:

  • Procurement Director – just over £89,000
  • Head of Procurement – £64,000
  • Category Manager – £42,000
  • Senior Buyer – £35,000
  • Buyer – £27,000

Although salaries are on the increase, there is still a lack of equality between men and women in the profession. At all levels apart from tactical roles, salaries for men were higher than those for women, with the greatest inequality at the advanced professional level, where the difference was as much as £10,300.

The salary also found that professionals who held MCIPS accreditation earned on average 23 per cent more than their peers without the qualification.

Junior Roles on the Rise

What might be surprising to many people is that the biggest annual increase was seen in junior procurement roles. Assistant Buyers gained on average a 4.2 per cent increase in their salaries, while Procurement Directors reported only a 3.3 per cent increase.

The rise in the wages of junior roles highlights an important issue for procurement, even in light of it being one of the fastest increasing professions in the world. A lack of professionals starting in the junior roles means that organisations now have to work harder to attract and retain their employees.

The War for Talent

The ‘War for Talent’, as coined by McKinsey in the 1990s, is still firmly in place in the procurement profession. The number of procurement jobs available has increased significantly, with Hays Recruitment seeing a 40 per cent increase this year alone.

This increase has left many employers struggling to find the right, skilled employees to fill these roles. Of the number of avenues open to organisations when looking to attract new talent to their organisations, social media is one of the most powerful.

Platforms like Twitter, LinkedIn and Procurious can help employers check out potential employees, get to know them in more detail and also be noticed as an ‘employer of choice’ in the industry. But social media is by no means the silver bullet for procurement recruitment. Without new ideas, the work that procurement has done to get to the executive table may be undermined.

‘People’ is one of the key topics at the Procurious Big Ideas Summit on April 30th. Procurious has gathered 40+ of the biggest influencers in procurement and will be getting their ideas on the future for ‘people’ in procurement (among a host of other topics). Join in, ask questions, watch exclusive video content and contribute to all the discussions by here

In the meantime, here are some of the top stories making the headlines in procurement this week.

Exploitative fashion retailers named and shamed

  • Australian fashion companies lack transparency around their supply chain or do not have full knowledge of where their raw materials are being sourced from, leaving workers including children at risk of exploitation, an audit has found.
  • The Australian Fashion Report 2015, launched by  international development organisations Baptist World Aid and Not For Sale, which aims to empower consumers with the knowledge needed to purchase fashion ethically – this year assessed the ethical practices of 219 clothing brands — and found that popular retailers including Rockmans and Lowes are some of the worst offenders.
  • Many brands now produce in Bangladesh, which in recent years has become wildly popular for ready-made garment suppliers and where the wage is approximately $39 a month, 75 per cent cheaper than China.
  • Corporate governance researcher with the University of Technology in Sydney and a researcher with the thinktank Catalyst Australia, Martijn Boersma, said: “For Australia, the bulk of our imports come from the Asia-Pacific region where it is estimated 78 million children are involved in child labour. The deeper supply chains are, the more difficult it is for them to be monitored.”

Read more at Mamamia and The Guardian

Hilton hotels to improve animal welfare in supply chain

  • Hilton Worldwide is to implement new measures to improve the welfare of animals in its global food supply chain. The hospitality company said it would begin to eliminate the use of cages for egg-laying chickens and gestation crates for breeding pigs.
  • All hotels in the Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton and DoubleTree by Hilton brands, will ensure that chickens are not confined in cages by 31 December 2017. By the end of the year after that, all pork products will have to be come from suppliers that house breeding pigs in groups, rather than gestation crates.
  • The changes, announced in conjunction with the Humane Society of the United States, will initially apply in 19 countries and will be adopted in other markets as supply becomes available. Jennifer Silberman, vice president, corporate responsibility for Hilton Worldwide,  said the company was committed to addressing key issues throughout its business and supply chain.

Read more at Supply Management

Internet of Things will deliver US$1.9 trillion boost

  • DHL and Cisco have jointly released a new Trend Report focused on the Internet of Things (IoT) at the DHL Global Technology Conference in Dubai. DHL and Cisco Consulting Services are also collaborating on a joint IoT innovation project that will improve decision-making in warehouse operations with near real-time data analytics based on Wi-Fi connected devices.
  • Ken Allen, CEO DHL Express and board sponsor technology, said: “At Deutsche Post DHL Group we have a deeply held belief in the positive powers of global trade. There is huge potential for countries to further increase their connectedness and prosper through trade, integration and technology. We believe the Internet of Things will be a primary enabler of this transformation.”
  • The Trend Report, which estimates that there will be 50 billion devices connected to the Internet by 2020 compared to 15 billion, looks at the potential impact this technological revolution will have on business.
  • The value at stake, combination of increased revenues and lower costs that is created or will migrate among companies and industries when new connections are made, reveals the huge potential when the Internet and networks expand their connections to warehousing, freight transportation and other elements of the supply chain.

Read more at m2mnow

‘SWL Australia’ opens for business

  • Science Warehouse is a leading provider of on-demand procurement and managed catalogue solutions that deliver purchasing efficiencies and control, spend visibility and drive savings. The Software-as-a-Service (SaaS) solution boasts dozens of clients across the UK public sector including higher education and the NHS, as well as corporate clients in the construction sector.
  • During the past 2 years it’s been developing a presence in Australia, working in partnership with the leading Australian spend analytics provider, Purchasing Index ANZ.  The Charles Perkins Centre (CPC) at the University of Sydney has been live with the Science Warehouse solution since 2014 and has already seen CPC users buying from over 2 million live products.
  • In response to very positive feedback from other potential Australian customers, a new subsidiary (SWL Australia) has been formed with offices in Melbourne.
  • Richard Shine, Science Warehouse Sales Director said – “This is a fantastic opportunity for Science Warehouse to really showcase a market-leading solution.”

Cabinet Office procurement plans almost “perverse” and “draconian”

  • Reaction has been swift to a reported move by the Cabinet Office to include two subtle but radical provisions in the government’s Small Business, Enterprise and Employment Act which could shake-up local government procurement.
  • The Act, which became law last month, is said to contain two clauses which appear to give the Cabinet Office authority to investigate and challenge local authority procurements. The majority of the Act does not affect procurement, but two clauses appear to have relevance.
  • Responding to the bill’s provisions, the ICT leader at one London local authority said, “At a time when we’re looking to devolve spending decisions and empower local communities the Cabinet Office have introduced provisions which could, somewhat perversely, do exactly the opposite. Not sure why these powers were introduced.”
  • The National Outsourcing Association (NOA) has described the proposals as “almost draconian.” Kerry Hallard, chief executive of the NOA said, “Now that the government has the ability to implement measures relating to public procurement as it sees fit, it is imperative that this new power is not used callously.

Read more at Government Computing

How to Achieve Award Winning Procurement – Learn from the Experts

Henderson Global is a leading independent global asset management firm. The company provides clients access to skilled investment professionals representing a broad range of asset classes.

Henderson Global

In 2011, Henderson Global’s third party spend was valued at over £100m. However, there was no formal procurement function, with individual business areas conducting informal sourcing activities. The decision was made to create a centralised procurement function, with the aim of delivering value, increasing control and reducing risk.

The department was formed in early 2012 and handed some stiff objectives to prove its worth. It took just three months for the team to deliver significant value and savings and, in 2014, it won the CIPS ‘Most Improved Purchasing Organisation – Start-up’ award.

Nykolas Bromley, Head of Procurement at Henderson, talks to Procurious about his and the team’s journey to this award and plans for the future.

How did you get started in procurement?

After university, I applied to be a trainee buyer on the Tesco Graduate Programme. I assumed that I would end up working in one of the grocery categories, but was offered a place in their procurement function instead. I’ve worked mainly in indirect procurement ever since.

Tell us about getting the department up and running and what your successes have been?

Rather than spend months analysing and strategizing, we initially targeted quick wins in order to demonstrate that procurement can generate an immediate return on investment. By delivering benefits so soon after the function was established, we gained credibility and opened the door to involvement in much larger and more complex projects. In the three years that have followed, we have built out our systems, policies and processes, and focused heavily on developing capability within the team.

What prompted you to submit a nomination for the award?

We were genuinely proud of what we had achieved and felt we had a good story to tell.

What will the award do for you and your team?

Winning a Supply Management Award has raised the profile of the department both within the organisation and the wider procurement industry. The award is proudly displayed in the office, and should the need arise, I expect it will be easier to recruit new talent into an award-winning team.

What has been the most challenging aspect of being in a start-up/greenfield department?

Henderson celebrated its 80th anniversary in 2014, and for most of that time had existed without any form of central procurement. This created something of a communication challenge, whereby stakeholders were often unfamiliar with typical procurement terminology and processes. The steep learning curve worked both ways, as having moved from the retail industry, the language and acronyms of investment management were entirely new to me too.

Do you have any advice for someone in a similar situation?

There will always be a degree of resistance from some quarters in an organisation with no tradition of formal procurement. However, there are also likely to be areas of the business that are crying out for assistance. My advice is to concentrate on the stakeholders that want your help first. Even though they may not be the most strategic or highest value projects, it’s a great opportunity to build up allies, advocates and success stories.

What are your key aims for 2015?

This year we will complete the implementation of a new Purchase-to-Pay tool, which will transform the way that we manage our purchasing and payables processes within Henderson. This is a substantial change-management initiative, and a successful roll out of the tool is a key priority for the function.

What do you see in procurement’s future and how can social media play a role?

We are a small team with low staff turnover, so we try to utilise our external network to keep in touch with developments and best practices in the wider procurement industry. Tools that provide access to potentially thousands of procurement experts and facilitate knowledge sharing are invaluable in our situation, and in advancing the profession.