All posts by Procurious HQ

2017 Rewind- The Impact Of Blockchain On Procurement

As part of our 2017 Procurious rewind, we’re taking a look at the top blogs of the year. Blockchain was one of the hottest topics on the site this year. It’s time to brush up on your knowledge and understanding right here, right now! 

Blockchain technology will not only impact procurement and procurement professionals but is expected to be more pervasive in our business and personal lives than the internet itself. To put the enormity of impact on procurement and procurement professionals in perspective picture yourself twenty years ago trying to explain how the Internet is going to change things. Where would you even begin?

Like the Internet the Blockchain is a network. In the case of Blockchain comprised of decentralized “ ledgers”, many are referring to it as Internet 2 or more commonly the Internet of Value or Internet of Trust.

The benefits

The most important thing to understand is that Blockchain addresses many of the most critical problems we’ve encountered doing business on the internet.

1)  Security: Practically speaking the Blockchain is unhackable.

2)  Transactions are verified by network participants (consensus), eliminating the need for third-party intermediaries’ (banks) costly, time-consuming and predominantly manual settlement processes. In addition to slowing down our supply chains banks alone have estimated these processes are costing them more than $20 billion annually.

3)  Eliminating high transaction processing costs for high volume/low margin retailers who accept credit cards could significantly add to their bottom line.

4)  Once transactions are verified they are secure and immutable. (unchangeable)

5)  The immutability of the Blockchain means that supply chain provenance can be assured. This is particularly important for conflict minerals, pharmaceuticals, food and many other supply categories where provable chain of custody is critical.

6)  Payments can be made directly from buying entity to selling entity “ledgers” by-passing intermediaries (banks, brokerage, clearing houses, title companies, etc.)

7)  Payments can be automatically triggered based on the codified terms of “ Smart Contracts” stored in transaction blocks.

8)  Blockchain capabilities will change, if not eliminate the role of accounts payable and accounts receivable departments.

9)  Blockchain enables the concept of micro-units and micro-payments. It is estimated that approximately one -third of the world’s economic opportunity exists for products and services such as energy or digital rights where backend settlement costs currently constrain those markets.

10) It is also estimated that 25 per cent of the global population does not participate in the global economy because they have no bank accounts and/or credit cards. Without these tools they cannot participate in the Internet economy. The primary reason they do not have these economic tools is because they cannot prove their identities. Immutability of the Blockchain can enable these people.

What do I need to understand?

The capabilities I’ve outlined just scratch the surface on how Blockchain impact all of us. Aside from the aforementioned, as a procurement professional are several important things to understand.

1)  Blockchain is a much wider and more pervasive concept than Advanced Cognitive Systems, Big Data, Predictive Analytics, Robotics, 3-D Printing or even the Internet of Things. In fact these technologies will become infinitely more practical and secure because of Blockchain.

2)  Do not think of Blockchain and BitCoin, FinTech or Crypto Currencies as synonymous. They are not.

3)  Do not think that it will take 20 years to mature and be mainstream. The estimate is 5-7 years for full maturity.

4)  Do not assess progress by the US/Euro FinTech Community. While they were the first to recognise Blockchain’s inherent value and arguably have the most to gain by adopting it, they also have the biggest hurdles to overcome and could very well be last to cross the finish line.

5)  Don’t make the mistake of waiting to become knowledgeable about Blockchain; it is the most highly disruptive technology we’ve seen since the Internet and it won’t wait until you are ready for it.

Michael Shaw is CPO and Executive Board Member of Sourcing and Procurement Executives (ACSPE) and Chief Information Officer at Blockchain Executive.  This article was originally published on LinkedIn

2017 Rewind – IBM CPO: You’re Finished If You Think You’ve Finished

As part of our 2017 Procurious rewind, we’re taking a look at the top blogs of the year. This article features our interview with IBM’s CPO Bob Murphy, who believes there is nothing so important as professional development and human relationships.

The numbers are eye-watering. IBM CPO Bob Murphy looks after a $70 billion spend – $25 billion internally and $45 billion 3rd-party. The company has around 150,000 contracts across 17,000 suppliers, with its flagship cognitive technology, Watson, reading 900 million pages in multiple languages per second.

As we prepared for our interview with Murphy, it’s understandable, then, that we expected to find him entirely focused on data analytics, automation, AI and the other tech that’s rapidly impacting so many professions. We were wrong – what comes across loud and clear is that this is a charismatic, engaging leader where people and relationships matter.

Think 40 and other professional development

Talking to Bob, it becomes immediately clear that his personal commitment to professional development is enormous. “If you want to be a leader, you have to stay current and replenish your IQ through learning and new knowledge. Ultimately, talent development is about making sure you have excellent people to replace outgoing leadership – it’s also vital for driving innovation.”

IBM’s Think 40 program mandates a minimum of 40 hours per year of self-initiated professional development. For the procurement team, this means having the option to select from a range of internal and external courses (often online), including offerings from Six Sigma, Procurement Leaders and ISM. For Bob, it comes down to inquisitiveness and a love of continual learning.

“We look for logical, friendly, humble, smart and inquisitive people. Anyone with a rudimentary knowledge of supply management can be trained to become outstanding procurement leaders. Making people aware of what is possible is absolutely critical – most successful people around the world put aside time to regularly read and educate themselves. They’re inquisitive; they enquire after things.”

Two critical skills for future leaders in procurement

  1. Digital literacy

“Data”, says Murphy, “is omnipresent and omnipotent.” He stresses that leaders who want to thrive in the procurement profession need to develop an understanding of:

  • Data analytics – we can gather data but how do you use that data to gain insights?
  • Robotic processes – how can you automate tactical processes so human capital is used to the greatest effect?
  • Cognitive computing – understanding how to digitise a process end-to-end so it is interconnected and insightful.
  1. Relationship building

Murphy tells Procurious that while leaders need to be able to use technology to get the insights and knowledge they need, their main focus should be on developing their emotional intelligence (EQ) rather than their IQ. “You need to have the ability to talk to clients in a consultative manner. We have one mouth and two ears, and that’s how we ought to apportion our time in any discussion. When we’re talking, we’re not learning.”

How can you train someone to be adept at building relationships? “It’s about attitude, not aptitude”, says Murphy. Whether leadership is innate or taught, the results are the same. You need to be able to work collaboratively with your suppliers, show them what’s important to you and understand what’s important to them. “Your relationship-building skills will ultimately enable your suppliers to drive innovation. For example, we have 17,000 suppliers at IBM. I want each one to wake up every morning and think: ‘How can I make IBM better’?”

Have you got a cognitive journey map?

Where is your organisation headed with cognitive procurement technology? Where do you want to be? How will you use people, processes and technology to get there? What can we automate?

Murphy recommends that every procurement team should have a roadmap that lays out the strategy for its data, analytics and cognitive journey. “All CEOs need a vision for their cognitive journey, and every function needs one too.”

According to The Hackett Group’s 2017 Procurement Key Issues research, only 32 percent of procurement organisations currently have a formal digital strategy in place, and only 25 percent have the needed resources and competencies in place today.

In reality, we can’t all be first-movers. But even if your company isn’t yet ready to act on cognitive technology, CPOs will be rewarded for raising the question, thinking through the issues and putting the challenge on the Board’s agenda. Most importantly, there needs to be milestones and deliverables, as Murphy warns: “Strategy without execution is a daydream”.

To end on a gem of a quote from Murphy, he spoke about how the constantly evolving nature of technology means a never-ending journey. “’Journey’ is a good description, because it is never finished. Anyone who thinks it is finished, is finished.”

2017 Rewind – Help! A Potential Employer Asked For My Facebook Password

As part of our 2017 Procurious rewind, we’re taking a look at the top blogs of the year. Today’s article advises what to do when a recruiter asks for your Facebook password! 

Have you ever been asked to hand over your social media details in a job interview? Don’t panic – it’s probably just a stress test.

Stress tests are designed to put you under pressure and see how you handle it. They range from grilling you about your weaknesses, to subjecting you to a barrage of quick-fire questions to try to fluster or catch you off-guard.

Heineken took this to the extreme in their viral recruitment video where interviewees are subjected to a range of stressful situations, including a creepy hand-holding interviewer who later feigns a heart attack. While it’s fun to watch, there’s a lesson here – in an age where candidates often give text-book answers to text-book interview questions, recruiters are looking for ways to separate the wheat from the chaff.

“We need your Facebook login details”

Your three potential reactions:

A) Meekly handing over your password: Wrong answer. This shows that firstly, you’re desperate for this job and secondly, you’re a pushover. Is this how you would behave when representing the company in a tough negotiation?

B) Anger: You’ve fallen into the trap. Even though it’s an outrageous demand, getting angry only demonstrates that you won’t be able to remain calm in the face of on-the-job pressure.

C) Politely but firmly refuse: Correct! You were on the lookout for a stress test, and you’ve identified this one as such. This takes the pressure off, allowing you to present a calm and logical response.

Unfortunately, that’s easy to say and hard to do!

How to say “no” politely 

  1. Call them out

If you’ve read the situation correctly, then you could simply respond by saying, “This is one of those stress-tests, right?”, and then launch into a detailed explanation of how you’re able to stay calm under pressure, with examples.

If they still insist, and genuinely appear to be demanding your Facebook login (and you still want this job), then you’ll need an excuse beyond the bare fact that you don’t want them seeing your drunken photos from the big party last weekend.

  1. Privacy

“I have an obligation to protect my friends’ privacy. They have their own privacy policies set on their accounts to safeguard themselves and their loved ones and that’s their right. If I start sharing their information with potential employers then I’ll have broken my trust with them.”

  1. Work/life

“For me, work and home are two separate things. I’m careful to keep work-related posts off my Facebook page, so it’s in no way relevant to any potential employers.”

  1. Direct to LinkedIn

“I think you mean LinkedIn? While I wouldn’t hand over my login details, I’d be happy to connect with you on LinkedIn so you can see how I present myself professionally on social media.”

  1. Show me yours and I’ll show you mine

This one’s a bit more provocative! “Absolutely fine – I think this is a great idea. I’d also like to see the type of team I’m joining, so if you can share your log-in details, along with your director’s and all the team members’ Facebook passwords, then I’d be happy to share mine.”

  1. Throw the question back at them

Whatever you decide to say, it’s vital you do so in a professional, calm and reasonable way. In a stress test, how you say it is more important than what you say. The interviewer will be judging your response, attitude and manner, but you can turn the tables by asking them to put themselves in your shoes.

For example:

  • “I’m sure you would agree …”
  • “I’m sure that if you were in my position…”
  • “From a privacy perspective, my friends wouldn’t be comfortable with me showing their information to people. I’m sure your friends and family would agree.”

Asking someone to put themselves in your position makes it almost impossible to be offended by a calm and rational argument.

In the end, keep in mind that there is no right answer to a stress-test question. It’s designed to judge how you react, so be confident in whichever answer you choose.

Procurious Picks: What Were You Reading In 2017?

As the year draws to a close, we’re taking a look at some of our most-read blogs of 2017…

The procurement people have spoken* and we can now confirm the official top five Procurious blogs of 2017.

From assessing the impact of blockchain to exclusive interviews with global CPOs; from recruitment advice to top career tips, we think it’s a brilliant sample and representation of all the great content Procurious has to offer.

*read

5. 5 Global CPOs Answer Your Top Five Procurement Questions

Wouldn’t you like to know how the best in the business feel about the value in professional certifications? Or maybe you’re keen to hear their take on the biggest mistakes made by procurement pros?

We put  five global CPOs to the test with a round of quick-fire questions. Hear what they each had to say on the value of formal procurement certifications, the biggest mistakes procurement pros make and how to stand out from the crowd!

Read the full article and listen to our CPOs answers here. 

4. Help! A Potential Employer Asked For My Facebook Password

You’re in the middle of a job interview when the recruiter shocks you by asking for your Facebook password, citing “company policy”. Do you…

A) Meekly handing over your password: Wrong answer. This shows that firstly, you’re desperate for this job and secondly, you’re a pushover. Is this how you would behave when representing the company in a tough negotiation?

B) Anger: You’ve fallen into the trap. Even though it’s an outrageous demand, getting angry only demonstrates that you won’t be able to remain calm in the face of on-the-job pressure.

C) Politely but firmly refuse: Correct! You were on the lookout for a stress test, and you’ve identified this one as such. This takes the pressure off, allowing you to present a calm and logical response.

Read the full article here.

3. Why Being Reliable Spells Doom To Your Career

Do people in your workplace ever refer to you as reliable, trusty, dependable? That’s got to stop!

Being known for getting the job done is not enough to build value and does not get you the pay scale, nor the flexibility you crave.

Defining your value and pouring your heart and soul into developing that is what’s priceless. It’s a linchpin in your ability to create the career you really want.

Read the full article here.

2. IBM CPO: You’re Finished If You Think You’ve Finished

The numbers are eye-watering. IBM CPO Bob Murphy looks after a $70 billion spend – $25 billion internally and $45 billion 3rd-party. The company has around 150,000 contracts across 17,000 suppliers, with its flagship cognitive technology, Watson, reading 900 million pages in multiple languages per second.

As we prepared for our interview with Murphy, it’s understandable, then, that we expected to find him entirely focused on data analytics, automation, AI and the other tech that’s rapidly impacting so many professions. We were wrong – what comes across loud and clear is that this is a charismatic, engaging leader where people and relationships matter.

Read the full interview here.

1.The Impact Of Blockchain On Procurement

Blockchain technology will not only impact procurement and procurement professionals but is expected to be more pervasive in our business and personal lives than the internet itself. To put the enormity of impact on procurement and procurement professionals in perspective picture yourself twenty years ago trying to explain how the Internet is going to change things. Where would you even begin?

Read the full article here.

‘Tis The Season To Waste Lots Of Food….

An estimated 1/3 of the world’s food is wasted along the supply and consumption chain from farm to kitchen. What can you do to help this Christmas?

This morning you may have discovered your milk was spoiled and tossed it in the garbage before trying to find something else to eat. Maybe you didn’t finish your whole breakfast and that went in the trash, too.

You’re not alone. An estimated 1/3 of the world’s food is wasted along the supply and consumption chain from farm to kitchen. How much does that add up to? A lot!

And with Christmas just around the corner and an estimated  £64 million’s worth of food set to be wasted in the UK alone, it’s the perfect time to start reducing some of that waste!

There are a lot of programs helping to combat food waste this Christmas. Some supermarkets have started to offer items past its best before date at a reduced rate and are providing food for those most in need. There are also a number of  steps you can take to help in your home as well.

How Much Food Do Humans Waste?

Via: InvestmentZen.com

Read more on food waste and sustainability in our articles on Earth Day and supply chain regulations.

Guess The Impact: Can You Handle The Pressure?

How can you prepare when you know the worst is coming, but you can’t be sure when, where or how it will come? The Guess The Impact quiz will help!

What would be the impact on your global supply chain if a volcano exploded in the Pacific? How would your supply chain be affected? Would your business continue running as usual or would the devastation prevent access to suppliers, parts, staff?

What about a diesel shortage in France? Do you have contingency strategies in place just in case? Can you source materials or labour you need elsewhere?

Maybe you think you understand the financial implications of a tsunami wiping out a global manufacturer or what happens when a major distributor goes bankrupt.

In an increasingly volatile world, pre-empting catastrophes and assessing the bearing they might have on your business is vital. Major events and even seemingly unrelated business decisions can have a serious impact on your bottom line.

But whilst 87 per cent of supply chain leaders consider proactive risk management important, a mere 36 per cent feel equipped to manage it!

Disruptors: A Case Study

 IBM Watson Supply Chain created the “Guess The Impact” quiz to test just how well you would manage a major supply chain disruption.

Meghan Jones, Content Marketing Manager, IBM Watson Supply Chain, created the quiz to demonstrate the magnitude of disruption that these events can have in a ripple effect on people and businesses everywhere. “I wanted people who took the quiz to rethink their preparedness for disruption scenarios as they were reading about how far reaching disruptions can spread.

“As an example, most people are aware of the devastating havoc that a tsunami will wreak on a country where it happens; though people don’t generally stop to think about the worldwide implications of a disruption-taking place beyond just the physical location of where it happened.”

One of the case studies in the quiz highlights the 2011 earthquake off the Pacific coast of Tohoku, which triggered a powerful Tsunami travelling 6 miles inland. 130,000 buildings collapsed, 1 million buildings were damaged, and heavy damage was inflicted on roads, railways and dams. The Bank of Japan offered 15 trillion Yen, or $183 billion USD to the banking system in March in effort to normalise market conditions.

The World Bank later estimated the full economic cost at $235 billion USD making it the costliest natural disaster in history.

Is your supply chain equipped with the visibility you need to mobilise quickly and source from another supplier to avoid the ripple effects of a natural disaster like this?

Almost anything from a weather incident to an unexpected spike in demand can disrupt a company’s supply chain, impacting cost, productivity and the customer experience. IBM Supply Chain Insights can elevate your existing systems to provide greater visibility, transparency and insight into supply chain data and processes—so you can better predict and mitigate the disruptions and risks that threaten your competitive advantage.

To survive and thrive, supply chains must become thinking supply chains.

IBM Supply Chain Insights

Joanne Wright, Chief Supply Chain Officer, IBM, created IBM Supply Chain Insights to help procurement professionals quickly mitigate these disruptions; enabling them to build a transparent, intelligent and predictive supply chain.

IBM Supply Chain Insights leverages Watson cognitive technology trained in supply chain to provide comprehensive visibility and insights across the entire supply chain. It enables organisations to predict, assess and mitigate disruptions and risks allowing you to improve supply chain operations to deliver greater value to the business.

Take the “Guess The Impact” quiz, developed by the gurus at Watson Supply Chain, to test your ability to handle a major disruption in your supply chain.

Christmas Supply Chains and Fist Fights in the Toy Aisles

Do you remember the Tickle-Me-Elmo War of 1996? What about the Cabbage Patch Kid Riots of 1983? No amount of long-term forecasting can prepare manufacturers and retailers for the moment a product becomes the “must-have” toy of the season.

Robert Waller, a clerk at a Canadian Wal-Mart, told a harrowing tale about toy-mania in an interview with People after the Christmas rush of 1996. He was unpacking the latest shipment of Tickle Me Elmo (a vibrating, giggling plush toy based on a character from Sesame Street), when he became uncomfortably aware of a crowd of about 300 people watching him carefully. He opened a box, pulled out an Elmo – and the crowd stampeded.

““I was pulled under, trampled—the crotch was yanked out of my brand-new jeans,” Waller told People. “I remember being kicked with a white Adidas before I became unconscious.” Waller also suffered a pulled hamstring, injuries to his back, jaw and knee, a broken rib and concussion.

Tyco, the toy company behind the craze, saw its sales surge to an astonishing $350 million that year as every one of the million Elmo toys was snapped up.  Meanwhile, scalpers were buying the US$29.99 toy by the dozen and asking up to $10,000 on eBay by the end of the year.

The “hot-toy” phenomenon tends to happen  every year, with fist-fights breaking out in toy aisles over prizes such as Mighty Morphing Power Rangers, Teletubbies, Cabbage Patch Kids, Elsa from Frozen (who had been stripped from shelves by November of 2014) and – most recently – Hatchimals. Retailers respond by refusing to accept pre-orders and limiting purchases to one per customer.

Avoiding a Christmas disaster

Unless you’re a parent who missed out on getting the must-have toy of the season, none of the examples above are really “disasters” for the manufacturers and retailers involved. If a toy sells out in November, there’s certainly a missed opportunity if you are unable to get another shipment onto shelves before Christmas, but it’s still a success story.

The real disasters, these days, are taking place in online ordering and fulfilment. Customers are extremely unforgiving when it comes to a Christmas order not being delivered, as was demonstrated when Toys “R” Us first tried to take advantage of the online shopping craze in 1999. The company promised customers that any orders made on or before December 10 would arrive by Christmas, but as an unexpected number of orders rolled in, warehouses managers realised it would be impossible to keep this promise. Toys “R” Us sent an email to customers two days before Christmas, which led to the media making the toy retailer the focus for stories about shipping delays and tarnishing the brand for years. After this disaster, Toys “R” Us (which recently filed for bankruptcy protection in the U.S.) handed over its logistics management to Amazon.

A similar story played out in Australia in 2015 where some customers who pre-ordered their Christmas hams online with Australia’s two largest supermarkets were told at the last minute their orders were not going to be fulfilled. While a missed delivery at any other time in the year may be forgiven, emotive customer backlash at Christmas time is particularly fierce.

In other news this week:

J. Shipman Gold Medal – ISM Calls For Nominations (U.S.)

  • The J. Shipman Gold Medal Award recognises leaders in the profession who have worked diligently to promote the advancement of procurement and supply management. Now in its 87th year, the award is the highest honour conferred by ISM.
  • Nominees are considered role models, mentors and community leaders who have helped others excel in their careers. They have had innovative ideas, and their persistent efforts have helped improve the profession.
  • View a list of previous J. Shipman Gold Medal Award winners here.

Download a nomination form . Nominations must be submitted by February 1st 2018.

Why Don’t You Trust Social Media To Help Crowd-Source Solutions?

Whoever said you’ve got to harness the power of the crowd, clearly didn’t get around to telling the procurement professionals! The vast majority of you have never used social media to crowd-source a solution….When Procurious put out a call for procurement survey participants, we were delighted that 500+ professionals across more than 50 countries shared their insights and wisdom.

The results have revealed some fascinating information about the current climate in procurement and the attitudes of professionals working within the function.

We’ve investigated the finding that 54 per cent of procurement professionals don’t trust their boss and interviewed a number of global CPOs to find out why this figure is so alarmingly high.

We also asked them why it is that procurement staff are moving on from their current roles so quickly and how leaders can cope with this erratic workplace dynamic.

This week, we’re putting the same group of CPOs to the test to find out why 77 per cent of global procurement professionals have never crowd-sourced a solution to a business challenge on social media. What’s so scary about the world of online networking and why don’t professionals see its value?

The Results Explained By Global CPOs

At The Big Ideas Summits in Chicago and Melbourne earlier this year we revealed the results of the survey to our CPO delegates.

In the video below we ask them how can procurement better tap into the wisdom of the crowd?

Why is procurement reluctant to crowd source?

There are a number of explanations for procurement’s reluctance to embrace crowd-sourcing.

Tony C. Astorga, Supply Chain Management Consultant, puts it down to “Organisations [getting] protective of their information.”

Michelle  Varble, Procurement Director, United Airlines  is also skeptical of its value given the stats we revealed. “The value depends upon the number of individuals participating in these exchanges as well as their level of experience. I question with 76 per cent of respondents not participating, how effective are they at this point and will they reach a tipping point where they can be more effective?”

“When you look specifically inside a supply chain you look and see specific problems to the business which aren’t necessarily something that from a crowd sourcing perspective, merit that type of approach.” says John Foody, General Manager, Procurement U.S Steel  “The challenge is finding the common ground that exists.”

David Henchliffe, Group Manager Procurement OZ Minerals suggests that scepticism about crowd sourcing might stem from  concerns over who to trust for information, “the Key thing for me is the veracity of the information you obtain. The first step is to establish that network and know who you can call on and who’s advice you would trust.”

Anne Berens, Principal AMB ProCures LLC concedes stating how “important to use this as a tool in appropriate situations, properly defining what your question is and inviting people to provide certain types of expertise. There’s always a discounting of input if you don’t know who the source is.”

What are the benefits of crowdsourcing?

Jane Falconer believes “procurement can be a bit insular in understanding how we add value or how we don’t and I think crowd sourcing is a really good way for us to be able to point to a broad base of ideas.”

Adam Cockrell, Global Procurement Lead HSBC agreed stating “The more active we are on social media in terms of seeing what innovation and strategies are out there, the better we’re going to be in terms of moving the needle from a procurement perspective.”

Jim Wetekamp, CEO Bravo Solution reasoned that “If you come to Chicago and you want to go to a nice restaurant you might go to an app and that will tell you where the best place to get a steak is.

“In essence that is  crowd-sourcing. You’re getting peoples’ input that you don’t even know and you’re going on those recommendations. You can use that same concept with procurement and sourcing. There’s so much knowledge out there that is untapped.”

Eric Lynch, Vice President, Basware admits “I’m a big fan. You may know the absolute best about procurement but there may be somebody out there in the field who has experience from a prior organisation where they know they’re getting better pricing on a certain commodity. You need to be able to tap into that knowledge.”

Request your copy of the Gen NEXT Report

The Gen NEXT report, exclusively available to Procurious members, is packed with data, insights, recommendations, and links to over 20+ Procurious articles that further explore many of the findings that are raised in the report. Email us to request your copy.