All posts by Procurious HQ

Blockchain: Are You Bothered?

There are so many misconceptions around blockchain and its potential impact. Will the fundamental concept of blockchain really have a significant impact on procurement, finance and supply chain?

Last month’s Procurious London Roundtable was sponsored by Basware

Blockchain is the coolest technology of the moment and the hype surrounding it only appears to be growing year upon year. Whilst the concept was first used for Bitcoin, the digital currency, its potential is far wider, and many industries are actively investigating the possibilities of using blockchain-based solutions.

But despite organisations around the world jumping on the Blockchain bandwagon and advocating for its enormous potential, do the majority of professionals understand precisely what it is, what it can do and the extent to which it will impact our businesses?

At last month’s Procurious roundtable, Paul Clayton, Head of New Service Development, Basware put us through our paces with an overview of blockchain technology and his insights as to why procurement pros need to be cautious not to overestimate it’s bearing on the function.

What is blockchain?

A blockchain is simply a digitised, decentralised and cryptographically secured ledger of transactions.

“The biggest misconception” Paul begins, “is that there is only one blockchain. There are actually many blockchains in use today throughout many different industries.”

“Blockchain is actually only a concept, whose origins go back to academic work in the early 90s, rather than a thing. The concept was first publicly used to allow the crypto-currency Bitcoin to be traded virtually, anonymously, and without the need for a centralised bank.”

“Blockchain technology says where something has been transferred to and retains a trace of the transfer. Conceptually a blockchain acts like is a single ledger, a source of the truth if you like. In reality, it is physically distributed where there are actually multiple ledgers, known as nodes, that all work together to come to consensus on where something has been transferred to, which is then shared between them.”

An obvious advantage of this technology, is that it’s very difficult for you to break the integrity of the ledger. “There are multiple copies of the same ledger and so if someone hacks one it becomes immediately obvious that it is different.”

The flaws at the heart of blockchains

Whilst a blockchain itself is safe, an application using it remains hackable – Security researchers and hackers have proved it’s possible to hack someone’s Bitcoin wallet and empty it of crypto-cash. Mt. Gox infamously lost 7 per cent of all Bitcoins in circulation in 2014, which were worth, at the time, approximately $473 million. It also appears to be an uphill battle trying to prosecute someone for taking a Bitcoin

It’s can be too transparent – With public blockchains, once a transaction and its associated data have been placed onto a blockchain, anyone and everyone who has access to it can view everything, whether you like it or not

It’s not the most elegant solution – The very nature of the deliberately distributed ledger with multiple copies (nodes), means that you have multiple nodes undertaking exactly the same piece of work ie working out where something has been transferred to. From a pure computing power point of view, for certain applications, this is a highly inefficient way of doing things.

The blockchain for Bitcoin for example, has already had to be re-designed to increase its scalability as the number of Bitcoins in circulation and the growth in the associated transactions meant that the ledger became too unwieldy and it was taking too long for it to update.

You can still lose things!

Even if you know where something went, you can still then lose it. Who could forget the unfortunate James Howells, who mistakenly threw out a hard drive containing 7,500 Bitcoins, now estimated to be worth $7.5 million

 

Blockchain for business

There are some who would argue that these problems have been addressed and eliminated for blockchain for business. Paul is not one of them!

“The distributed nature of ledgers means blockchain is good at maintaining the integrity of who owns something but what it cannot do is determine whether the person who put something into a system owned it in the first place.”

This means, when making a transaction via a blockchain, the recipient needs to be able to trust the supposed owner of the thing that is being exchanged. “You are, essentially, reliant on the veracity of the source of what goes in to the blockchain.”

For example:

Does the “owner” actually own the rights to the house they are trying to sell you?

If you’re exchanging metals, does the “owner” have documents to prove they have the rights to the gold?

It might be good at preventing a fraudulent transfer of an asset but blockchain is “next to useless at establishing if a person owned something in the first place”

“As a ledger system it is extremely inefficient, almost clumsy in the way it works. In certain circumstances, where there are a high volume of transactions it uses so much computing power it’s almost not worth it.”

“And it’s for these reasons that, whilst it will have applications in many areas from supply chain through to electronic voting, blockchain won’t change the world!”

Where is the value for procurement?

“Is there value in blockchain tech? Yes. Does the value match the hype right now? Not even close!”

“From a procurement point of view the biggest area of impact right now is most likely to be in supply chain applications. There are obvious applications for the transfer of title and bill of lading. Of particular interest in this space right now are supply chains that can be subject to fraud such as pharmaceuticals and food

Going beyond that the application of so called “smart contracts” to a blockchain can help automate certain business processes. Smart contracts, are pieces of computer code attached to a blockchain that automatically execute an action once a set of agreed criteria have been met. For, example, a smart contract could be used to automatically pay a supplier once the buyer has received their goods without the need for invoice processing and payment.

” In 2017, blockchain is word of the year, it’s absolutely everywhere. But it’s not earth shattering, it’s not the third generation of the Internet its just an interesting concept with some obvious benefits and flaws.”

Last month’s Procurious London Roundtable was sponsored by Basware

How Do You Get Your Biggest Idea Through a Big Company?

Think you know what it takes to drive a big idea through an even bigger company? Watson Supply Chain was built on one big idea…

On 24th January 2018 3.30pm EST Procurious founder, Tania Seary, will be speaking with Joanne Wright in IBM’s webinar: How IBM Built the Cognitive Supply Chain of the Future. Register here.

Five years ago, Joanne Wright had a sizeable problem…a $30 USD billion supply chain problem to be precise!

Joanne was fortunate enough to be working with a company that could actually do something about it. Working with IBM’s engineers to design and implement a tailor-made solution to her supply chain challenges, she has now benefitted the entire global supply chain profession as a result of her intrapreneurship and ingenuity.

This is her story.

That “AHA” moment

Joanne had hers in 2011 following a series of unfortunate events.

The devastating earthquake, and subsequent Tsunami, off the Pacific coast of Tōhoku Japan in the early months of this year resulted in $360 billion USD of damage and wiped out componenets globally. It was frustrating and time consuming to even attempt an analysis with incomplete information.

Then, there were the volcanic eruptions in Iceland, which meant that freight couldn’t be moved in the same way it had been before.

Finally, the extreme floods in Thailand, triggered by the landfall of Tropical Storm Nock-ten, wiped out disc drive head production and heavily impacted the storage side of the business.

In each of these instances, Joanne considered how she might leverage the right data to make better decisions.

The need for faster, better intelligence

Given the speed at which circumstances can change in our world, the only way for procurement organisations to be successful is to achieve faster, better intelligence.

When Joanne reflected on how her team had managed the crises of 2011, it was clear that the situations could each have been tackled faster, more intelligently, and with a higher level of accuracy- if they could only utilize the right cognitive solution.

Getting the idea through a BIG company

Introducing and executing a new idea is no small feat in a company the size of IBM. How did Joanne get senior management support for her venture?

It was a long process of trial and error, during which her team learned a lot about how to best manage their data. It took nine months to get started, and furthermore, eighteen months to get to implementation. They needed coders; they ran design workshops where they spent time identifying data sources and emphasizing the importance of data to their clients.

Once you’ve identified the data, it has to be cleaned; and then you have to train Watson. A task that, according to Joanne, can’t be underestimated.

Joanne’s team quickly discovered that they weren’t just the early adapters, but they were the creators of Watson Supply Chain, which added a level of drive and passion to the project; needless to say, it took on a much bigger purpose.

How does the IBM Transparent Supply Chain operate today?

  1. Resolution Room

Resolution Rooms with Ask Watson capability provides cognitive-enabled insights, recommends experts and provides actionable advice based on learned best practices. This helps drive automation and collaboration in responding to disruptions and events. Resolution Rooms leverage Watson’s capability to develop a body of knowledge by learning about how issues were best addressed in the past. This enables greater speed and accuracy in responding to future events.

“My team gets to collaborate in one place.” Joanne explains. ” A demand spike in our new Z14 mainframe, planning of the new product introduction, what the new demand is, what the client order patterns will be and which countries will we be shipping to. Logistics, materials, suppliers, engineering, transportation and providers can all be in one place, with total transparency working with the best data you have available. We’re truly able to use our best experts (wherever they are in the world!) and Watson as your trusted advisor.”

And what does Watson bring to this resolution room?

“Watson provides the opportunity to deliver business value and insights from all of these data insights – structured (SAP) and unstructured, data from weather patterns, news, D&B and supplier IQ. And it does this with speed and accuracy. No more are we saying ‘OK…let’s get the data and meet again tomorrow’ because Watson takes my team’s input and incorporates that into the next iteration as we go.

  1. Operations Center

Operations Center with Smart-Alerts proactively monitors and governs operations with speed and agility, predicts disruptions, and provides configurable, intuitive alerts cutting through data overload. Supply chain practitioners can prioritize actions based on instant analysis of the financial impact of impending risks and disruptions.

This capability helps reduce number of expedites, reduce inventory and be more predictive on what we need to do for clients.

Joanne’s final words of advice to her peers “You can’t afford not to be engaged with these technologies. It’s a game-changer. You need to the winning recipes!”

On 24th January 2018 3.30pm EST Procurious founder, Tania Seary, will be speaking with Joanne Wright in IBM’s webinar: How IBM Built the Cognitive Supply Chain of the Future. Register here.

A New Role Emerges: Supply Chain Scrutinisers

Any increase in transparency is good news for the supply management profession. That’s why the rise of the 3rd-party Supply Chain Analyst is a development that the profession should welcome, rather than fear.

How many articles have you read about Apple’s supply chain? Dozens, no doubt. Tesla’s is similarly scrutinised, along with McDonald’s, Walmart’s and a handful of other household names.

The reason for the growing popularity of this news is twofold.

Firstly, increased transparency in reporting means that researchers have a lot more to work with. For example, a recent Forbes article from Jonathan Webb reports that recent legal changes in Taiwanese corporate law means analysts can now take advantage of mandated monthly earning reports.

Secondly, corporate supply chains are finally being recognised as a key factor that contribute to commercial advantage – such as risk levels and speed-to-market – or commercial disadvantage. As such, top analyst firms such as Bloomberg now employ supply chain research experts whose insights can affect a companies’ share price just as dramatically as a surprising result in a quarterly earnings report.

What does the role look like?

Here’s an example of a supply chain analyst role currently being advertised with Bloomberg:

https://careers.bloomberg.com/job/detail/62154

The role calls for someone who is capable of “researching and analysing business relationships on over 23,000 companies globally, “providing a roadmap for clients to view supplier and customer relationship networks, helping them identify and manage supply chain risk and generate investment ideas”.

The researcher is expected to interact with analysts, fundamental and quantitative portfolio managers and news agencies. In other words, the data uncovered by a supply chain analyst is much-anticipated and eagerly consumed. Gartner’s annual Supply Chain Top 25 Rankings, for example, make a splash not just within the supply management profession but within investment circles too:

Cleaning up the supply chain

Valuation and investment insights aside, another major role of supply chain analysts is to uncover malpractice such as human rights abuses, corruption, and environmental breaches. The biography of the aforementioned Forbes contributor, Jonathan Webb, says it all:

“I’m focused here on the murky world of supply chain corruption, looking at commercial bribery, supplier compliance and other nefarious goings on in the supply chain.”

And this is where the really interesting part of the supply chain analyst’s role begins. Once the domain of investigative journalists, supply chain malpractice is now being uncovered by experts who travel to hotspots to reveal and report on issues ranging from conflict minerals in the Congo, sweatshops in Bangladesh, and toxic waste in China.

Again, the big-brand household names are those that come under the most scrutiny for supply chain sustainability and human rights abuses, with subsectors such as clothing manufacturers and chocolate makers receiving the highest level of focus. Reporters and political enemies of Ivanka Trump, for example, continue to probe her clothing brand’s supply chain as a likely area of weakness. In response, the company has apparently made public information harder to find than ever.

What does this mean for the next generation of procurement pros?

The emergence of the supply chain research analyst opens up a new career path for procurement and supply management professionals. If you’re currently working as a data analyst for a single organisation’s supply chain, in the future you may consider scaling up your role to pull trends and insights from the supply chains of tens of thousands of organisations.

In other procurement news this week…

Procurement Fraud Is Costing NHS

  • The NHS Counter Fraud Agency (NHSCFA), launched 1st November, has estimated all types of fraud cost the health service a total of £1.25bn, with procurement fraud the second largest contributor after patient fraud
  • One of its aims is to identify problem areas in preventing – and increasing reporting of – invoicing and procurement fraud
  • This is the first time the health service has released an official estimate of the cost of fraud to the NHS. The total figure is roughly 1 per cent of the NHS budget

Read more at Supply Management

Stephen Hawking’s warning on AI

  • Stephen Hawking is concerned that artificial intelligence could replace humans. The world-renowned physicist fears that somebody will create AI that will keep improving itself until it’s eventually superior to people
  • “If people design computer viruses, someone will design AI that improves and replicates itself. This will be a new form of life that outperforms humans”

Read more on The Independent 

Weetabix sets out new supply chain vision

  • Milan Pankhania, who was appointed head of supply chain for operations at Weetabix, has just completed three months in the role and he has been identifying areas where the company could make efficiencies or cut waste
  • “My role is to help drive efficiencies across the supply chain process, while striving for excellent customer service,” he said.
  • “The focus for my strategy will absolutely include cost control and proactive risk management. It isn’t about cutting costs though, it’s about doing the right things to manage risk”

Read more at Supply Management

The CPO’s Guide To Persuasion

What’s the number one skill required by the CPO of the future? According to award-winning Australian CPO Kevin McCafferty, you won’t get far without mastering the art of persuasion.

Broadspectrum Executive General Manager and 2017 Asia-Pacific CPO of the Year Kevin McCafferty will deliver a keynote session at the upcoming GovProcure2017 conference, running from 5th-7th December in Sydney, Australia. Procurious caught up with Kevin to ask him about top skills required by the CPO of the future. 

Kevin, you’ll be talking about procurement in 2018 and beyond at GovProcure2017. How can CPOs equip themselves to meet the coming challenges?  

“In my opinion, the number one skill for the CPO of the future is what I’d call the ‘art of persuasion’. Procurement is a profession that a lot of organisations see as a tactical solution to some of the issues that they have. Most organisations spend about 50 per cent of their revenue on 3rd-party suppliers and service providers. If your business spends that much money externally, they need to become more strategic in doing so – and that’s where the need for persuasion arises.”

Which parts of the business generally require the most persuasion from CPOs?

“A CPO’s job is firstly to persuade the organisation when to be strategic in the way they spend it, and secondly, to invest in the profession so they get the best value-for-money outcomes every time they spend money. It doesn’t matter whether they’re buying pens and pencils, or if there’s a $10 million project your organisation wants to invest in; there’s an art involved in being able to persuade your board, your executive team, and your chief executive that investing in procurement to get those outcomes is absolutely critical to the profession.”

In your view, how important is networking for procurement professionals?

“The power of your network is absolutely critical to your career. In this profession, being able to talk to your peers and understand what’s happening in their organisations will help you work through your own strategies and goals.”

Kevin McCafferty will deliver the opening keynote at GovProcure2017 in Sydney on 5th December, where he’ll focus on:

  • an overview of procurement trends for 2018 and beyond
  • the age of commercialisation and digitisation, and how it’s impacting the profession, and
  • common challenges facing procurement and how to tackle the solutions.

Click here to learn more and download an event brochure.

You will be Assimilated: The Collective Intelligence of Procurement

For those who remember “The Borg” from Star Trek, you’ll remember the notion of a dispassionate alien mind-being that would suck up your individual mind to subsume into the collective intelligence.  Resistance is futile. 

bluecrayola/Shutterstock.com

Crazy stuff, right?  Or maybe not.

Flash forward to today.  For most people, your every move is being tracked by your smartphone, social media apps, web browsing, and credit card transactions.  Ever wonder why Google and Amazon are basically giving away their helpful devices and AI assistants?  You are being watched.  You are the product (not the customer).  You are the raw materials of a collective intelligence being built upon your individual experiences and desires.  In other words, the proverbial machine is watching and learning from you (in order to sell to you, er, rather, to “better meet your needs”).

But, this is all consumer stuff, right?  B2B is different, right?

Sort of – but it’s not THAT different.  And with all the regulatory pressures coming on consumer data privacy, as compared to much of the privacy that you sign away your rights to when you enter an employment contract, the tables may actually turn here. If you’re using a popular cloud-based Procurement system, you are also being watched (many providers analyse your system behaviour to figure out how you navigate the system and how to help you… yes, the chatbots are coming). If you use a procurement “business network” or eMarketplace (e.g., Amazon Business), your suppliers are signing away some of their intellectual property – whether they know it or not.  And smart companies are trying to gain a market intelligence advantage through digital business strategies in the supply chain. There’s a reason why GE created Predix; why Flex funded Elementum; why DHL sells supply chain risk technology; and so on.  Adoption creates insight and intelligence… and advantage.

All this isn’t necessarily bad for you though.  It serves up price benchmarking, risk intelligence and improved system usability.  It also signals how the world is moving away from “empty apps” that push documents around in workflows and move towards systems that are building intelligence to make your apps “smarter”.  This intelligence is typically built using machine learning fed by large data sets that help improve repetitive tasks like spend classification. Of course, AI is a bigger topic, and there are 23 distinct areas in AI for procurement and supply chain that we’re following that I can’t cover in a single blog post!  For example, contract management is a great example where AI is already having an impact and this will be very disruptive in the Legal services (e.g., Legal BPO) area.

Still, building your collective intelligence for your firm doesn’t necessarily require AI.  You can avail yourself to some good old-fashioned knowledge management built up from the various collectives that are all around you:

  • The internal corporate collective. Learn from consulting companies and build presentation storyboards of your procurement projects that created change and value – and use them to win over skeptical stakeholders.
  • Your supplier collective. Your current supply suppliers, previous suppliers, “almost suppliers” (who bid on your business), and potential suppliers via crowdsourcing are a wealth of knowledge – if you know how to tap them through supplier innovation programs and proper supplier management processes.
  • Your customer collective. This includes not just internal stakeholders, but external customers as well.  For example, Lenovo uses its social customer mining tools to identify key customer/demand information that can be passed upstream to suppliers.  On the flip side, many similar intelligence tools are being deployed on the supply side with varying results (that’s a whole topic for another day).
  • The installed base collective. Your procurement app providers, consulting providers, and managed service providers are likely working hard to extract and productize your individual intelligence into a re-saleable collective intelligence. Choose a provider that is working on building collective intelligence into its overall platform strategy.
  • Your peer/community collective. There are lots of communities out there right now where you can learn from your peers – and many of them are free. You’re learning right now by reading this on Procurious, so you’re already well on your way!

We even practice what we preach at Spend Matters when we tap into this collective intelligence of procurement technology users by capturing end user satisfaction (think Net Promoter Score on steroids) and using it as an entire axis of our “SolutionMap” vendor scoring model/methodology.  And, yes, there’s a freemium version (it has eight procurement technology areas mapped out based on five different buyer personas from which you can select)!

The bottom line is that although we all start with a certain amount of individual intelligence, it’s the collective supply market of intelligence that is all around us if we can learn how to tap it, build it, and wisely bring the right intelligence back to our individual selves (and we’ll even be able to augment that individual intelligence into our own personal bots and ‘digital twins’).  And since procurement should be enabling stakeholders to also tap that collective intelligence of supply, it couldn’t be a more important competency to build right now.

So, go bravely into that supply market and assimilate yourself into the collective intelligence of procurement and be smarter and better from that experience.  It’s really what life is all about, isn’t it?

This article was contributed by guest author Pierre Mitchell, Chief Research Officer and Managing Director at Azul Partners.

You Don’t Have To Be In Melbourne To Strike Gold Today

The Big Ideas Summit has landed in Melbourne! And there’s a plethora of inspiring and insightful content for you to sift through…

Everett Historical/Shutterstock.com

Some would say that Melbourne is famous for the Victorian gold rush of 1851. For a short time the gold output from Victoria, Australia  was greater than in any other country in the world.

Today as Procurious launch The Big Ideas Summit in Melbourne for the first time, we’re having our very own gold rush!  We’re pretty confident we’ll be exporting some of the best procurement content and thought provoking discussion  for you to dig in to!

And don’t worry if you’re not able to  join us in person for the event, you can still strike gold!  Simply sign up to Procurious and join the digital delegates group for The Big Ideas Summit Melbourne 2017 to access live content throughout the day.

Here’s what procurement’s top influencers (and speakers at Big Ideas Melbourne) have to say on the big ticket trends affecting procurement today!

Procurement and the Conversational Century

When he was born in July 2013, Prince George of Cambridge became the first royal baby to have his own hashtag…

Former U.S President, Barack Obama is the author of six of the top-ten most liked tweets of all time…

And pope Francis became the first pope to engage with a wider audience through Twitter…

The social media revolution has allowed for traditional institutions to create personal digital conversations with their audience. Welcome to the era of ‘The Conversational Century’.

Read more here

Line ’em Up: Five Ways To Take A Swing At The Biggest Challenges Facing Procurement

It’s  important that procurement teams address the biggest trends and challenges facing our organisation today. Telstra’s Alexandru Butiri shares five challenges – and five solutions – to trends that will resonate with procurement professionals everywhere from connecting the dots between disruptive technologies and earning a seat at the table!

Read more here

How To Train Your CEO To Get What The Business Needs

Procurement leaders in large corporations face a tough business environment. However, more than 50 percent of procurement functions are still seen as a service rather than business functions with only a small proportion of CPOs reporting into CEOs – the majority still report three levels down. How can procurement train their CEO to get what the business needs?

Read more here 

Eye On The Prize: 5 Ways Soft Skills Can Help You Focus On The Big Ticket Projects

Roll up! Roll up! See the procurement pro dazzle as they juggle 80 balls in the air!!

Sure, it might look impressive, but underneath that whirl of frenetic activity, are you actually adding any value?

When you prioritise keeping multiple balls in the air, you wind up ineffective and shortsighted. But the solution doesn’t lie in downloading the latest time-management app….

Read more here

Cogntive Process Automation Is So Much More Than Robots

With 45 per cent of business processes having the potential to be automated, it’s of little surprise that organisations are embracing the opportunity presented by technology. For many robotics and robotics processes, automation is the starting point.

Re-imagining the way the organisation operates at its core and using technology to enable new ways of working is what cognitive process automation is really about and that;s when the magic really starts to happen…

Read more here

Sprinting Outside Your Comfort Zone

Who could be a better pick to advise on endurance than an ultra-marathon runner?

As a former lawyer turned athlete, Samantha Gash has experienced challenges that require an enormous amount of persistence both within a corporate environment and on the running trail.

Samantha has seen first-hand how projects and big ideas will fail without the right mindset and the extraordinary achievements we’re capable of when we tap into our hidden reserves of persistence.

Read more here

Workplace Inclusion: Cut The Fluff

Business leaders are tired of hearing the “D” word – Diversity. Because the reality is that by and large  businesses already have diverse workforces.

Walk into most workplaces, and you will see some form of workforce diversity: age, gender, physical ability, sexuality, culture, thought. But the problem remains because we are simply not including these diversities where and when it really counts in business.

Read more here 

Renegotiating Mindsets From Competitive To Collaborative

Procurement leaders are facing more pressure than ever in the current business environment. In the wake of prevailing disruption and increased competition from nimble technology-focused companies, the c-suite have become eager to see procurement leaders make their function deliver more and add greater value to the organisation.

When you change from seeing your top suppliers as competitors to enablers, how you negotiate with them will change dramatically…

Read more here 

Why you should encourage dissent in your procurement team

From Brexit to the election of President Trump;  from numerous terrorist attacks to Spain’s crisis in Catalonia, unthinkables have been occurring at an alarming frequency throughout the past few years.

Unthinkables such as these disrupt everything that we presume to be stable and constant, they create an unthinkable environment and, unfortunately, they’re not letting up as we approach the end of 2017.

We know it’s important to change the way we do business to prepare for an uncertain future but how should we be managing our teams and who should we be recruiting to help the function, and wider organisation, face the uncertainties of the world today?

Read more here

Follow all of the action LIVE from The Big Ideas Summit Melbourne via our digital delegates group.

Why You Should Encourage Dissent In Your Procurement Team

Think you’d prefer an easy life when it comes to managing your procurement team? Think again! If you truly want your organisation to flourish and cope with the unthinkable events coming your way, you need an organisation that’s rife with dissent!

From Brexit to the election of President Trump;  from numerous terrorist attacks to Spain’s crisis in Catalonia, unthinkables have been occurring at an alarming frequency throughout the past few years.

Unthinkables such as these disrupt everything that we presume to be stable and constant, they create an unthinkable environment and, unfortunately, they’re not letting up as we approach the end of 2017.

We’ve heard from  Nik Gowing, BBC Broadcaster and Visiting Professor at King’s College before on the importance of managing what he decribes as “the new normal” and preparing for an uncertain future.

If procurement needs to change the way we do business, how should we be managing our teams and who should we be recruiting to help the function, and wider organisation, face the uncertainties of the world today?

Say no to the conformists

“Leaders need to be liberated from that conformity which guaranteed their career progression. The challenge is how to achieve that” says Nik.

As much of the research conducted for Nik Gowing’s and Chris Langdon’s 2015 report Thinking The Unthinkable reveals – leaders are still extremely reluctant to embrace dissenting voices within their organisation.

“We tend to dismiss dissenting voices as cranks or extremists or whatever they are, which I think is dangerous. It’s very difficult within the system to fix this”, said one former top official.

But the alternative is blind conformity and fear of speaking out about key issues and unthinkables. What our organisations don’t need in the age of uncertainty,  is an army of “yes men” who, no matter what their ability or potential are restricted and confined by an ingrained workplace culture of conformity.

“You can take the best analysts in the world, and if you don’t demand outstanding advice from them, you won’t get it.You’ll just get dross”, said Ngaire Woods, Dean of the Blavatnik School of Government in Oxford.

Say yes to the mavericks!

A welcome alternative is to embrace mavericks and dissent in the workplace. As the Unthinkable report suggests, “rigorous conformity must be seen as at best a neutral qualification, but in reality it is more a negative.”

“If your policy options are all risk averse, then you tend to end up with indecision. If your policy options encompass and embrace the concept of managing risks, then you’ll take a managed risk in the context of the policy frameworks”, said a leading academic specialist in risk-management.

Our procurement teams should  encourage and reward maverick thinkers in their teams because they are the unique thinkers, the innovaters and the ones best placed to predict and cope with unthinkables.

But is this shift in workplace attitude achievable?

How to encourage dissent within your procurement organisation

  1. Stop hiring people like you

One surefire to fail in your attempts at nurturing a team of mavericks, is to employ a non-diverse team.

Diversifying the C-suite whether it’s by skill-set, age, gender, sexuality, outlook or race opens up enormous potential for innovation and different points of view.

A cyber-security specialist [said] “We are guilty of introducing people that are like us into the C-suite as opposed to somebody who is nothing like me but who may well have a different lens, a very different lens …We are recruiting people into our C-suites because they’re like us.

Creating new roles is another way to improve diversity within an organisation. The unthinkable report notes how organisations have employed, for example, a Chief Digital Officer, to manage and prioritise the massive amounts of company data, and Political Scientists who are hired, sometimes for the long term, to advisory boards and management teams of US companies including some in the US Fortune 500.

The ultimate aim is ensuring that all voices are heard to guarantee a range of opinions and input.

Most of us who are chairman or chief executives actually very consciously hire at least one person onto the board, who, by their very nature, is not conformist, is the awkward squad.

2. Build systems that ensure dissenting view find their way to the very top

Rigid organisational structures have a part to play in restricting innovative thinking.

One way to address this is to blur the workplace hierarchys  and encourage open discussion at all levels of the business, giving junior employees a platform, and the confidence to share their opinions and ideas with those at the very top.

They are leaders who encourage open, non-hierarchical debate with unambiguous signals for change that confirm an overarching intention to secure change of behaviour, culture and attitudes. One example is a principle adopted at one major investment bank. In staff meetings there is no longer a visible hierarchy with a chairperson sat at a top table. Attendees stand with a clear expectation that, “Everyone can speak about what they think might happen”.

This approach removes any fear of a “career penalty” for speaking out of turn or sharing a particularly obscure idea.

Part of this process demands that leaders encourage their team to be intellectually and morally courageous.

“They encourage their team to take some risks. They don’t punish you if you don’t succeed every time. I think that is the hallmark of real leaders.”

BBC Broadcaster and Visiting Professor at King’s College Nik Gowing will update delegates at the Melbourne Big Ideas Summit on why business and political leaders are struggling to prepare for unthinkables, and what needs to change.Grab a ticket here to secure your seat!

Renegotiating Mindsets From Competitive To Collaborative

When you change from seeing your top suppliers as competitors to enablers, and take a collaborative approach, how you negotiate with them will change dramatically.

This article was written by Sarovar Agarwal, Partner, Communications Media and Technology Practice at A.T. Kearney. 

Procurement leaders are facing more pressure than ever in the current business environment. In the wake of prevailing disruption and increased competition from nimble technology-focused companies, the c-suite have become eager to see procurement leaders make their function deliver more and add value to the organisation.

However, the 2016 Return on Supply Management Assets (ROSMA) Performance Check Study, “What Good Looks Like,” released by A.T. Kearney at the end of last year found that only 15 to 20 percent of procurement functions deliver high value to their organisations.

The study revealed that there is a top-tier of standout performers, a middle-tier delivering value, but performing well below the top tier, and a large group of bottom-quartile performers that add limited value. For procurement leaders focused on becoming top-tier performers and adding significant value to their organisations, we suggest the following approach.

Work smart, not hard

There has been an organisation-wide push toward productivity improvement by businesses, especially by harnessing the power of technological advancements. Procurement functions should be looking at this as a great opportunity.

Historically, procurement has focused on the smaller 2000 suppliers since this is the area of least resistance. In productivity terms, this is like the tail wagging the dog, rather than the other way around. With resources squeezed, procurement leaders are now irrevocably turning to the top 20 suppliers, rather than the complete 2000, because these are the mega vendor agreements that can affect the organisation the most, and where the most value can be added if managed effectively.

Meanwhile, technological advancements (like RPA) are now enabling automation of the large volumes of transactional activity that goes on in procurement, especially for the smaller group of suppliers, to ensure the function remains effective and productive.

If we apply the 80/20 Pareto Principle to procurement, a shift in focus to the top twenty suppliers, nurturing those relationships and making them more effective, will result in better deployment of resources and so more peas – or greater results. One key thing to note is that simply switching focus to the top 20 suppliers isn’t enough, you need to nurture those relationships too, which requires a change in mindset.

Competitive to collaborative

When you change from seeing your top suppliers as competitors to enablers, how you negotiate with them will change dramatically.

When you move into the top 20 suppliers, you are dealing with strategic categories which if led and managed well can make a significant impact on the business. The challenge for procurement leaders is that the relationship status with these suppliers is often complicated.

For example, in the telco world, Cisco is a supplier to every telco’s network, they are also a sell-through partner, and a competitor for the sell-through business.

Which is why it’s very surprising that all too often procurement brings a toolbox – for example RFP, vendor management, basic category management etc – to the negotiating table. This industrialisation of the procurement process is useful for the tail end – those 2000 suppliers with low resistance – but it cannot be used for the top 20 suppliers who have the potential to impact your business and your role in such a way.

The tools to handle these special relationships put better collaboration and engagement of vendor partners at the forefront of the strategy:

Top-to-top engagement: The biggest critical differentiator for the collaborative sourcing approach is top-to-top engagement between the company and the partners – that enables proactive involvement of the c-suite. This can help establish the right leverage and also enable internal visibility.

Business led: A high degree of involvement from the business owners will further align procurement’s interests with the business challenges and opportunities. This requires great communication and trust between functions and top-line management.

Strategic alignment: Procurement functions should start with an open mindset, rather than spell out all the asks at the start. All too often, the cookie cutter approach takes over, which doesn’t deliver the right long-term solutions. This will help deliver tailor-made solutions based on vendor insights.

Collaborative solutioning: Procurement departments should adopt transparent and collaborative solutions. They should conduct design and immersion workshops with partners, to take them along on the journey. 

Involved facilitation by procurement: Finally, they should drive proactive governance and risk management.

Procurement leaders are best placed to play the Lead Orchestrator role to this new way of thinking about the top 20 vendors. For those procurement leaders who are aiming to become a sustainable source of value for the business, the top 20 approach is smarter, more productive and gets better results for your function and for your position in the business.

The first step is changing your culture and mindset towards the top 20 from competitive, to collaborative; from contracting, to partnering – and this is often the hardest!

A.T. Kearney’s Enrico Rizzon will be speaking  at The Big Ideas Summit Melbourne. Join us LIVE to discuss the big-ticket trends affecting procurement – grab a ticket here to secure your seat!

Why Procurement Should Give Cognitive Tech A Warm Embrace

When you pushback on the advances of cognitive technology, you’re buying yourself, and procurement, minimial time. Working side by side in a warm embrace is the way to do it! 

Our webinar, Beat The Bots: How Being Human Will Win The Day, takes place TODAY at 1pm BST on 24th October 2017. Register your attendence for FREE here.  

There’s no question that procurement teams needs to prepare for their own cognitive journeys, to consider what their company’s digital transformation will look like, and then think about how to prepare, or even influence it.

But in doing so, are they also mapping out a talent journey?

The 2017 Deloitte CPO survey interestingly revealed that whilst the vast majority of procurement leaders see the need to train and develop their people, only 31 per cent were planning to focus on training in digital skills in the coming year.

John Viner Smith, Principal, Mercer and speaker on today’s webinar has some thoughts on why this is the case, “I think part of the reason is that there’s no consensus at present as to what the skills people need to acquire are to be ready for this [cogntive] world.  It’s just not clear for the leaders concerned yet.”

Last week we outlined the key soft skills procurement professionals should be developing to prepare for the cognitive age.  But what about the attitude on the ground? Procurement professionals are still wary of the impact cognitive technology will have on the function, which results in a level of pushback and reluctance to accept the changes that are coming.

The warm embrace of cognitive technology

“It may be reasonable to look at the state of technologies today and think ‘No worries, I can’t see anything out there that could do my job’, but that’s not the risk.” John explains. ” The risk is that these technologies, coupled with other disruptors, could make your job obsolete and truly redundant. Imagine being a farrier at the very beginning of the 20th century; if you were thinking ‘Thank goodness they haven’t invented a machine that can shoe horses better than me’, you were kind of missing the point.”

So what is Justin McBryan, Learning & Development, Strategy, Communications Manager- IBM ,seeing in terms of pushback within his organisation?

“I don’t know if I would characterise it as a pushback so to speak.

“We see it as a warm embrace across the organisation but a wary embrace as well. As we digitise the organisation and continue to march forward into the cognitive era, certainly the technologies on the horizon are noticed and seen [by our employees.]

“But I say a warm embrace because a lot of the technologies we are building, have built and continue to build need the procurement skills and institutional knowledge that we’ve built over the years including all of our great people. In terms of where we are today and as we’ve been rolling out Watson Supply Chain etc. we see it as more of an embrace.”

Cognitive tech is “not necessarily a replacement of the person, it’s someone sitting next to you and helping you.”

The environment that Justin describes is one of collobaration, with seasoned procurement pros looking to help machines learn and work alongside them. But that doesn’t mean they aren’t doing so with the wary eye of “what’s next?”

But as Justin points out, as procurement teams embrace and integrate these cognitive technologies, they can also be asking themselves “What can I do to begin to point my skill development in the right direction?”

Exploiting the advantages of cognitive technology

There’s a lot of scare mongering out in the field that says that if you’re not a data scientist, you don’t have a future in Procurement.

But we’re reassured by the fact that IBM is working hard on developing its employees’ soft skills and is a strong advocate for how cognitive tech will allow professionals to better perform their roles not seek to replace them.

When it comes down to data scientists versus soft skills experts, Justin believes they’re sequential from each other and likens it to climbing up two different kinds of hills, “We want the majority of our organisation to build up on their soft skills. We’re happy if everyone builds up their analytics skills. We certainly need a solid group up at the top who can drive the innovation and integration of the cognitive tools.

“We need our best and brightest from a data scientist perspective but not all of us need to be there.”

“If we continue down the cognitive path we’re going to have a lot of tools to add to the procurement portfolio. The digitisation of our organisations  free up time for our employees to focus on two big things that are important for procurement:

  1. Getting closer to clients
  2. Creating time and space to innovate on our processes and innovate on the solutions that we’re delivering to our client

“The more we add to the digital cognitive portfolio of tools that procurement pros can use, the more time that is freed up on the innovation and client engagement space, [which is an opportunity for procurement] to exploit the advatages of the cognitive era.”

Our webinar, Beat The Bots: How Being Human Will Win The Day, takes place TODAY at 1pm BST on 24th October 2017. Register your attendence for FREE here. 

Big Ideas Summit Lands In Marvellous Melbourne!

Toot tooooot! After wowing audiences in London and Chicago, Procurious is steaming into Melbourne to bring the first ever Big Ideas Summit to Australia! With only one week to go, now is your chance to buy a ticket or join the Digital Delegate Group to follow the action online. 

If you’re interested in getting involved but still not entirely sure what’s going on, look no further – we’ve compiled a list of our most frequently asked questions to get you fully up to speed!

What is it?

The Big Ideas Summit is a unique online event uniting procurement and supply chain professionals from around the globe to drive innovation and inspire change. At the Big Ideas Summit in Melbourne we’ll be driving the conversation on the following topics:

  • Procurement in the digital age
  • Trend-spotting and pattern-hunting in procurement
  • Human skills in a machine world
  • The Conversational Century

Our international line up of speakers includes BBC Broadcaster and Visiting Professor at Kings College, Nik Gowing (UK); IBM’s Global Client Centricity Leader and cognitive expert Anita Karlsson Dion (USA); A.T. Kearney Partner, Board Member and data lake guru Patrick Van Den Bossche (USA); and Founder and CEO of the Conversational Century & Facebook’s advisor to the Royal Family, Elizabeth Linder (UK).

When and where is it?

The Melbourne Big Ideas Summit kicks off on Monday 30th October at the stunning Telstra Theatrette at 242 Exhibition Street, Melbourne. If you’re in Australia, there’s still time to reserve your seat! Visit the event website to learn more and secure your ticket today.

If you’re not in Australia or can’t make it to Melbourne, simply join the Digital Delegate Group here on Procurious to follow the action live and access valuable content after the event. Expect to see most of the action in the Group between 08.30 – 18.00 (AEDT) as we share video insights, quotes, photos and summary articles direct from Melbourne.

If you can’t join the action live, not to worry. The thought-provoking discussions and debate will continue long after, and we’ll be sharing video footage of all our Influencers’ Big Ideas throughout November on Procurious.

How can I join in online?

To become a Digital Delegate, you’ll need to be a registered member of Procurious – register here for free if you haven’t already. Then simply join the group to access Big ideas, participate in insightful discussion, connect with our Influencers, access exclusive podcasts and interviews and share your own Big Ideas with the Procurious community.

We’ll also be live tweeting throughout the day, so make sure you’re following @procurious_ to share and respond to our tweets using the hashtag #bigideas2017.

Do I have to be a member of Procurious?

Yes. Participation as a Digital Delegate is free and open to all members of Procurious. By joining Procurious, you will not only have access to all the exclusive Big Ideas Summit content, but you will join a community of 23,000 like-minded procurement peers and gain access to all Procurious’ free resources, including being able to:

  • Upskill on the move with dozens of eLearning modules
  • Get your procurement questions answered by experts
  • Find out about relevant professional events around the globe
  • Become a digital delegate in the global think-tank, Big Ideas Summit 2017

Will Big Ideas be live-streamed?

Procurious boasts a global audience of 23,000+ procurement professionals, from more than 140 countries. If we were to cater to all of these time zones, it would be a tough job – so rather than live-streaming (and keeping you awake at awkward hours), we’ll share exclusive video and podcast interviews with Digital Delegates.

 I’m on the fence – why should I take part?

Here are some compelling reasons to join your fellow Procurians and stake your claim to the wealth of knowledge on offer:

  • Get your questions answered by world-class experts
  • Make powerful new contacts around the globe
  • Share your own Big Idea and make your voice heard
  • Access exclusive content & learnings.

Who are the sponsors?

The Melbourne Big Ideas Summit is made possible by our partners Telstra, IBM, A.T. Kearney and The Source.

 I’ve got a Big Idea of my own…

Great to hear! You can Tweet us your Big Ideas @procurious_ remembering to use the hashtag #BigIdeas2017.

Leave your Big Idea on Facebook – you can find us at www.facebook.com/procurious .

And of course you can tell the Procurious community all about it by joining the Big Ideas Group page and posting it to the community feed.

Who is behind Procurious?

You can read all about us in Our Story.

Join the conversation and register as a digital delegate for Big Ideas 2017 in Melbourne.