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Innovating the Last Mile of the Supply Chain

From Amazon delivering your groceries, to a host of companies delivering your dinner, the competition for the last mile of the supply chain is heating up.

Last Mile Supply Chain

At the Big Ideas Summit 2016 last week, there were a whole host of discussions around the future of the supply chain. Paul Markillie discussed the future trends in manufacturing (and you can watch Paul’s Big Idea video too), while Lucy Siegle discussed the increasing need for transparency and ethics in the supply chain.

Ahead of the Summit, we also asked the Procurious community about their Big Ideas for the future of the supply chain, and logistics, industries.

David Weaver, Online Marketing Manager, INFORM GmbH

Big Ideas Supply Chain - David WeaverIt truly is an exciting time to be involved in the supply chain industry. Over the course of 2016, technological advancements in the field of robotics will continue to reshape manufacturing and warehouse facilities.

Based on what I saw at some of the events I attended in 2015, I believe picking bots in large warehouses will become a reality, sooner rather than later. Additionally, the migration of supply chain planning into the Cloud will continue to expand and the implementation of advanced analytics to successfully plan across all supply chain functions will experience an upward trend.

Furthermore, companies will have to get creative with their methods for increasing transparency across their value network. However, in order for companies to be successful, the 4 important T’s of transparency must be fulfilled:

  • The topic must have traction within the organisation,
  • Internal and external trust must be established,
  • Appropriate supplier training programs should be in place, and
  • Today’s available technology needs to be implemented.

Next to all of these leading topics, I expect some of the biggest ideas to be aimed at solving the “last mile” logistics problem. Over the last few years we have seen several last mile logistics providers introduce their innovative approaches to solving the problem (Doorman, Roadie, Deliveroo, etc.).

I expect the fight for control of this market to continue, and as a result of the high level of competition, we will continue to see new, innovative problem-solving methods. 

Even although the event itself is over, there’s still time for you to get involved with the Big Ideas Summit 2016. Visit theBig Ideas Summit website, join our Procurious Group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

In the coming weeks, we’ll be sharing exclusive and unique thought leadership, Big Ideas, and discussion that will shape the future of procurement. Don’t miss out – get involved, register today.

Procurement Recruitment – Find the Needle in the Haystack

According to the experts, procurement recruitment can sometimes be like finding a needle in a haystack. But what are the trends in this area in the coming years?

Procurement Recruitment

One of the key topics at the Big Ideas Summit 2016 was people, and more specifically, how to attract and retain the best talent in procurement. Our experts and influencers discussed a number of ideas and concepts procurement could consider. You can read all about them here.

However, we also wanted to hear what the Procurious community thought were the Big Ideas in procurement recruitment, now and in the coming years. Here is what they had to say.

Tony Megally, General Manager, The Source Recruitment

Big Ideas - Tony MegallySpecialist roles – Procurement needs to consider promoting the profession as an exciting career path to non-procurement professionals already in relevant commercially focussed roles. For example, finance and legal (great for contract management), and possibly agency recruiters specialising in procurement.  

Commercially focussed accountants are highly numerate, analytical and offer great business partnering skills, and, in some cases, they are supporting sales teams with commercial analysis of bids and tenders. In house legal advisors are often partnering with Procurement overseeing contract terms, and could transition well to contract management roles.

Procurement recruitment consultants are generally great at negotiating, building relationships, are equipped with sound knowledge of the profession, and maintain strong soft skills all round. (I’ve know of a couple of recruiters who have made a career change to Procurement!).

The challenge will be getting CPOs and Procurement Heads to think outside the norm of recruiting just from our profession. Non-procurement pros are not typically thinking about procurement as a career change. But if we promote it on both sides this could change!

Senior and Exec Leadership Roles – Procurement should be recruiting for senior and executive leadership capability, rather than technical expertise. We have a great recent example in Australia, where Qantas has appointed a new CPO, Lisa Brock.

Lisa previously occupied executive roles with Jetstar as Chief Commercial Officer, and previously with Qantas in Strategy and Corporate Development, and she has a background in Corporate Finance at Ernst and Young.

She knows the business, is highly people focussed, is a great change agent, is financially literate and has built strong relationships across the organisation at a senior level. Perhaps this is easier to achieve with internal leaders with a proven track record of leading cross functional teams.  

Succession Planning – Succession planning is crucial for future leadership capability. There is a lot of material out there on this topic but it is relevant. The point to be made is around the changing demographics of the workforce, and the fact that Millennials now make up a significant number of the workforce. They generally want faster career progression  and development opportunities.

If we want to retain outstanding talent then it’s necessary for CPOs to actively identify a strong bench of potential leaders, and to actively provide opportunities that will enable a future leadership development path to those who are capable of attaining it.

Anna del Mar, Head of Learning & Development, Future Purchasing

Big Ideas - Anna del MarWith enormous pressure on businesses to streamline their operations and find ways of driving performance in increasingly competitive environments, the need to improve capability and maximise returns from L&D investment is critical.

A leading private equity firm confirmed to us that more than 75 per cent of value creation in their portfolio of companies comes from operational performance improvement.

Procurement has a large contribution to make to any performance improvement programme and increasing capability is often a critical step achieving this.

The procurement recruitment market remains increasingly challenging, and finding people with both the technical and change management skills to create performance improvement is often likened to ‘finding a needle in a haystack’. Future Purchasing is not a recruitment agency and as such we cannot comment on the state of the recruitment market. We can however, observe the methods our clients are deploying to get the best talent.

We have seen three interesting trends:

1. We are seeing some organisations recruit from other functions, and train individuals in Procurement approaches. The behavioural skills required to drive change and implement real category management are so important and less easy to learn than procurement process skills. Whilst that can work in some cases, in practice the value of real experience in commercial scenarios cannot be underestimated.

2. Finding people who will drive real change can be made much easier by using Network Analysis. This approach lets recruiters assess the level of connectivity and impact people have across the networks in which they work. Those people who are well networked, are often well suited to change management roles, as it is their natural tendency to drive change.

3. Thirdly we see procurement organisations recruiting excellent skills from other markets, in particular central Europe. One leading CPO who has outsourced transactional activities to Poland sees this location as a real talent pool for the rest of the global team.

Food for thought!

Tell us what you think about the future of procurement recruitment on Procurious. Even although the event itself is over, there’s still time for you to get involved with the Big Ideas Summit 2016. Visit theBig Ideas Summit website, join our Procurious Group, and Tweet your thoughts and Big Ideas to us using #BigIdeas2016.

In the coming weeks, we’ll be sharing exclusive and unique thought leadership, Big Ideas, and discussion that will shape the future of procurement. Don’t miss out – get involved, register today.

Procurement Gives a Tweet – #BigIdeas2016 on Twitter

Likes, retweets and the #BigIdeas2016 hashtag being spread far and wide – taking a look at how the Twitter-verse reacted to Big Ideas 2016.

Twitter on #BigIdeas2016

Whether you chose to follow the Big Ideas Summit 2016 on Procurious, or via one of our other social media channels, we hope you got just as much out of the day as we did in London.

The Big Ideas Summit was positioned as a digitally-led event, enabling us to include the global procurement and supply chain community in the day, even although we couldn’t have everyone in London (as much as we wish we could!).

Following the huge success of the event on Twitter last year, we were eager to find out just how far our conversations, learnings, interactions and Ideas reached. And we couldn’t have predicted just how widespread the Big Ideas conversation went.

Once again, we’ve been overwhelmed by the response from our followers. So, thank you, and here are some figures showing just how much you helped us spread the word:

Hashtag: Our #BigIdeas2016 hashtag was picked-up and mentioned 1,500 times throughout the day.

In total, tweets relating to the event were served to a potential combined audience of over 5 million people worldwide!

This map shows where the #BigIdeas2016 hashtag was being used worldwide:

This map shows the global activity on April 21 of #BigIdeas2016
This map shows the global activity on April 21 of #BigIdeas2016

If you’re not following us already, come and find us using @procurious_ and help to continue the conversation! We’ll be continuing to share your Big Ideas, and all the key thoughts and ideas from the Summit in the coming weeks.

We’ve also put together a sample of the tweets from April 21st which mentioned the Big Ideas Summit, and used the #BigIdeas2016 hashtag. See what influencers, thought-leaders, commentators, and fellow procurement professionals made of the day’s events.

Disruptors & Cul-de-Sacs: Recapping Big Ideas 2016

Did you fall asleep or oversleep? Get caught in a meeting? Or did you just forget it was on (we hope not!)? To help you catch up, we’re recapping Big Ideas 2016 – and what a day it was!

Many Meetings - Recapping Big Ideas 2016

The team at Procurious HQ would just like to say a quick thanks to everyone who took part in the Big Ideas Summit 2016, both in London, and around the world. We were blown away by the conversation, discussion and interaction last week’s Summit, and are looking forward to sharing even more with you in the coming weeks.

Where were you last Thursday? Did you join in with the discussions and conversation online? While we prepare all our influencers’ videos and content to share soon, we’ve pulled out some of the key moments and are recapping Big Ideas 2016 just for you.

We got started early, setting the scene and introducing our early arrivals to our digital delegates and social media audience.

To provide the context for all our conversations over the course of the day, Barry Ward, Senior Procurement Brand Manager at IBM, spoke about external change, market disruptions and the three key calls to action that CPOs must take notice of.

Barry W - BIS Keynote

Nik Gowing then scared the life out of us talking about the cataclysmic potential of Unthinkable Events.

Having talked about the findings of his excellent ‘Thinking the Unthinkable‘ study, our delegates were invited to think about their unthinkables, and share them with the rest of the room.

Nik G - BIS Keynote

As everyone settled back down again after our morning interlude, Paul Markillie opened our eyes to the potential of the disruptive mega-trends that will change the way supply chains are designed and operated.

Paul talked about new materials being used in the manufacturing process, how BMW are leading the way in this field with their manufacturing process for the i3 model, and how 3D Printing is finally coming of age.

The audience were then treated to an insight of a revolution currently taking social media by storm. Elizabeth Linder used her wealth of experience to build on the concept of the Conversational Century.

Needless to say, it got people thinking, and more than a couple of senior procurement leaders in the room considering how their teams could be leveraging social media more effectively.

Elizabeth L - BIS Keynote

Probably the keynote with the most profound human and empathetic impact of the day came from Lucy Siegle. Lucy pricked our social consciences while discussing the impact that supply chains, particularly those in the fashion industry, were having on a global population.

From consumer behaviour, to the forgotten people in supply chains, Lucy got us all considering what we individually and collectively could do to make a real difference in the world.

Sustainability Panel

Lucy was joined on stage by Peter Holbrook, CEO at Social Enterprise UK, and Timo Worrall, of J&J, to discuss social and sustainable procurement.

It was a fascinating discussion and generated some great takeaways for our procurement leaders. Take a look here at some of the topics our experts discussed.

Gabe P - BIS Keynote

Fancy yourself as a Chief Spend Officer? If Gabe Perez and Coupa have their way, then procurement’s remit could expand to include all organisational spend. Here are a few top insights from his session.

Online collaboration is something all the members of our next panel know about in great detail. Martin Chilcott, founder of 2degrees, Chris Hancock, founder of Source2Fund, and our very own Procurious GM, Lisa Malone, discussed the power of online collaboration in procurement.

Read our thoughts on it here.

Next up, procurement heavyweight and ISM CEO, Tom Derry. Tom talked about how ISM are helping procurement professionals equip themselves for the future by ensuring that they have the right skills. The ISM Mastery Model has already helped train over 60,000 procurement professionals, and it certainly felt like there were a few more converts in the audience!

Tom Derry - BIS Keynote

Tom was then joined by two heavy hitters in the UK CPO recruitment space in Lucy Harding and Lee Gudgeon to discuss what skills procurement leaders need to succeed in the future.

Lucy urged the delegates to help “challenge the notion that procurement is a career cul-de-sac“, and showcasing all the best aspects of working in procurement.

Big Data, predictive analytics and forecasting will enable procurement to be more agile in a volatile environment. This was the view of Chris Sawchuk, the Hackett Group, during the final keynote of the day.

Finally, we asked some senior procurement leaders to tell us what they thought procurement’s blind spots were, and how they should be dealing with them.

There were some great, tough questions from the audience, and from our social media audience, producing some great insights for our delegates to take away.

Continuing Online

The day itself may now be over, but the debate and discussions are still being amplified online. You can see all our content from the day on the Big Ideas Summit website, plus check out all the conversation from the day on Twitter too.

You can find all our Periscope recordings of the keynotes and panels in the Big Ideas 2016 Group, as well as accessing our Digital Goodie Bag, which all our sponsors have contributed to.

Plus we’ve just started to release our first few videos from the event, in which our thought leaders shared their own Big Ideas. You can find them in the Learning hub on Procurious.

And if that’s not enough reading material for you, here’s a handy list of related stories you might have missed on Big Ideas 2016:

Procurement Sets Courageous Agenda – Big Ideas Summit 2016

The Big Ideas Summit 2016 global brainstorm lit up social media, bringing together a global community to advance discussions on ‘uber-ization’, cognitive procurement and more, as well as setting a courageous agenda for the future.

Big Ideas 2016 - Courageous Agenda

Expected to handle cataclysmic events and act with extreme agility, today’s procurement executives must be brave and bold. Indeed, Being courageous is now the defining characteristic of successful procurement leaders, according to the influencers who spoke during Procurious’ second annual Big Ideas Summit on April 21, 2016.

The unprecedented digital think-tank event connected these presenters with Procurious’ 14,000+ members, crowdsourcing everyone’s big ideas for the future of the profession.

Sponsored by Coupa, The Hackett Group, IBM, and the Institute for Supply Management® (ISM®), the event sparked vigorous discussion on Procurious.com, the leading online community for procurement/supply management professionals.

Delegates watched live footage, and posted and tweeted under the #Bigideas2016 hashtag, reaching a potential audience of over one million individuals. Among the big ideas that influencers shared:

Preparing for “Black Swans”

In a year racked by political and economic volatility, Former BBC anchor Nik Gowing challenged delegates to prepare for the next “black swans” (unknown cataclysmic events) that threaten their supply chains.

Barry Ward, Senior Brand Manager, IBM, urged them to use Cognitive Procurement technologies to predict these crises, which could throw their market caps into a downward spiral.

Uber-ization Sparks Innovation

Gabe Perez, Vice President of Strategy and Development, Coupa Software, encouraged procurement leaders to drive more innovation and value by replacing RFP processes with an Uber-like open network model.

How else can procurement leaders accelerate innovation? Christopher Sawchuk, Principal and Global Advisory Practice Leader, The Hackett Group, laid out an agility model enabled by the right culture, talent and leadership, risk forecasting and planning, automation, outsourcing, and more.

Driving Social Outcomes

Procurement leaders’ opportunity to do social good was another hot topic. Journalist Lucy Siegle, co-founder of The Green Carpet Challenge, called attention to abuses in the fashion industry supply chain, and the iconic brands who are tackling it.

Peter Holbrook, CEO of Social Enterprise UK, discussed the transformational ‘Buy Social Corporate Challenge‘, through which ten major global organisations will spend £1 billion with social enterprises by 2020.

Open and Connected

With the pervasive use of the Internet and social media, especially among the Millennial generation, leaders such as Tom Derry, CEO of ISM®, advocated a more open communications approach. Walking the talk, his organisation recently made its comprehensive Mastery Model – a blueprint for lifetime success in supply management – freely accessible over the Internet.

“The procurement profession must share, share, and share online to build our collective muscle, amplify attention to our impact, and tackle our thorniest issues together,” said Tania Seary, founder of Procurious.

Everyone’s Turn

The global brainstorm continues on Procurious, where members can view more Big Ideas Videos and articles from the speakers, submit their own videos, tweet using #BigIdeas2016 @procurious_, ask follow-up questions on the Procurious Discussions Board, claim their Digital Goodie Bags, and invite friends to participate.

Be courageous and make your voice heard today by visiting the Big Ideas Summit website.

We’ve been keeping an eye on the top headlines in procurement and supply chain this week…

More supply chain leaders are making the move to CEO

  • Supply chain leaders who have stepped up to CEO include Tim Cook of Apple, Mary Barra of General Motors and Brian Krzanich of Intel.
  • Kevin O’Marah comments that supply chain leaders have CEO-level skills including balancing risk and opportunity, fighting the near-term battle with an eye on long term strategy, and focusing on profitable growth.
  • CPOs think like engineers, but also like salespeople. Like CEOs, they’re able to communicate and influence to get the job done.

Read more at Forbes

CIPS UK: Procurement salaries are on the rise

  • Demand for procurement professionals has risen over the past 12 months driving salaries up 5 per cent, compared to the UK national average rise of 2.9 per cent.
  • 68 per cent of those surveyed had received a pay increase in the past year, compared to 61 per cent in 2015,
  • This has driven the average salary for procurement professionals up from £41,661 last year, to £44,226 in the past 12 months.

Read more at CIPS

India: Punjabi procurement agencies in wheat corruption scandal

  • Punjab’s foodgrain procurement agency officials accused of siphoning off over Rs 12,000 crore and diverting procured wheat to the black market.
  • Officials accused of covering up theft by adding water to stored wheat to increase its weight.
  • Farmers caught in the cross-fire as banks freeze payments.
  • Over 500 mandis (procurement centres) to be monitored by committee.

Read more at Indian Express

US Defence: Proposal to cut war budget to fund procurement

  • Chairman of the House Armed Services Committee, Rep. Mac Thornberry, wants to allocate an additional $18 billion to buy newequipment and maintain aging gear and facilities.
  • The draft bill would preserve the overall budget top-line of $610 billion, but bulk up base budget spending to $574 billion.
  • $18 billion would be pulled from overseas contingency operations funds.
  • Thornberry said he believed “procurement was the real way out of the readiness pit”.

Read more at Military.com

How to Introduce a Sustainable Procurement Strategy

Although the theory is well regarded, the practical aspects of introducing a sustainable procurement strategy are often overlooked.

Sustainable Procurement Strategy

This article is by Gerard Chick, Chief Knowledge Officer, Optimum Procurement Group.

About 10 years ago the UK government started taking the pursuit of sustainable procurement seriously. They established a task force of industry experts to try to define ‘sustainable procurement’, and develop appropriate standards for general deployment.

The Government’s goal was position the UK at the forefront of sustainable procurement in Europe by 2009. Their framework and recommendations have been instrumental in guiding sustainable procurement strategy, theory and practice across the globe.

What is Sustainable Procurement?

So what is this thing we call sustainable procurement? Sir Neville Simms, chair of the UK Procurement Task Force, described it as the use of procurement “…to support wider social, economic and environmental objectives, in ways that offer real long-term benefits” to organisations and the communities in which they exist.

These long-term benefits include:

  • The achievement of significant savings by focusing on a “whole life costing” methodology for procurement.
  • The incorporation of the “three Rs” (Reduce, Reuse, Recycle), to cut waste and improve the efficiency of resources.
  • The enhancement of businesses public image, by demonstrating a sustainable approach to business, and championing related environmental and social benefits.
  • The development of new markets for innovative products and services through technological advancements.
  • The improvement of management information, a focus on business and supply chain risk, and better supplier relationships.
  • Competitive advantage as a consequence of the early adoption of practices, focusing on increasingly environmentally-focussed legislation.

Developing Sustainable Procurement Practice

The UK Task Force devised a National Action Plan to inform interested organisations to adopt a sustainable procurement strategy. In 2006, Procuring the Future was published to support public and sector organisations in taking their first steps in this burgeoning area of interest.

To help you, here are the central planks of the report established as recommendations for those who wanted to develop sound, achievable, sustainable procurement practice:

  • Be a beacon: Provide clear direction for both procurement and your supply base providing consistent leadership and policy-making on sustainable procurement issues.
  • Set the standard: Fully implement existing procurement policy and standards. and ensure these are extended across all procurement activity. This will improve performance and underline expectations, including the establishment of well understood minimum standards for your suppliers.
  • Prioritise: Rationalise existing procurement standards into a single integrated procurement framework, which covers both policy relevance and appropriateness.
  • Test: Filter and select new procurement policies to ensure they are enforceable, before considering implementation.
  • Develop capability: Ensure you and your team have the requisite professional skills to support the efficient deployment of sustainable procurement.
  • Tool up: Provide the appropriate tools, training and information resources to execute these standards.
  • Be ready: Ensure you already have the appropriate budgetary mechanisms in place, and that your spending and budgeting policies facilitate your sustainable procurement strategy.
  • Be proactive: Encourage openness to innovation and look proactively for opportunities to drive social benefits through your engagement with suppliers and the wider marketplace.

There is no doubt that the UK’s lead is now being adopted elsewhere, and that the global procurement community seeks to embrace a sustainable approach with an eye on good practice coupled with other significant business rewards.

Why Procurement Agility is Key to Avoiding Obsolescence

Organisations that don’t increase their procurement agility and harness the power of new technologies face obsolescence in the next few years.

Chris Sawchuk - Agility

Chris Sawchuk, fresh from Hackett’s own Best Practice Conference, took a look at what agility means, and why procurement needs to be more agile.

The Hackett Group believes agility is the defining trait of the procurement team of today and the future. More agile functions will be better positioned to respond to complex business problems, and adapt to the fast-changing business environment in which procurement exists.

As easy as it might be to talk about being more agile, putting it into practice requires leveraging of new tools and technologies, as well as ensuring that the procurement teams have the skills they require to carry out these strategies.

Growing Business Uncertainty

In 2016, companies are expecting to see business uncertainly and risk increase, along with greater struggles to grow revenue. So the pressure to reduce costs is increasing. At the same time, procurement leaders need to balance this with other, more strategic, priorities, like becoming a better strategic business partner.

Chris discussed how a confluence of high volatility, technology-led innovation, and hyper-competitive market conditions, has accelerated the rate of change in business to unprecedented levels. Agility is the key to success in this environment.

However, for many companies, agility just hasn’t been a priority in the past. Chris made the point that because agility isn’t an area that many CPOs focus on, procurement’s maturity in the area is only low to medium, leaving the procurement teams a step behind the rest of the organisation.

It’s not about a lack of understanding. Organisations are certainly talking about agility, but procurement either isn’t aligned with this strategy, or there’s a delay in alignment. People need to have the right mindset, and up until now, procurement hasn’t had this. And as we’ve said, a more uncertain environment means that procurement needs to be more agile. It’s time for procurement to catch up.

Role of Technology

Chris went on to talk about the concepts surrounding procurement agility. These functions have strategies in place to take advantage of technologies like the Cloud, and the Internet of Things, and are using other technology, like bots, to push their organisation on.

Procurement leaders are realising that higher-quality information can help them drive greater business value. Big data has been a game changer when it comes to customer analytics, offering an unprecedented ability to quickly model massive volumes of structured and unstructured data from multiple sources. But procurement’s lack of maturity in market intelligence is a significant obstacle that must be overcome.

Becoming information-driven should be a primary focus area for procurement. The function must develop the tools and skills that will allow staff to apply market data and intelligence to decisions on spending and sourcing strategies. Creating deep, consultative working relationships with business leaders, demands that procurement bring this valuable expertise to the table.

Chris ended by outlining a path for procurement leaders to take in order to understand their department’s level of agility, and how to increase this agility in the future:

  1. Apply the agility test to your own service delivery model – determine where the gaps are and how it needs to change to support procurement’s evolving role.
  2. Take an honest inventory of procurement’s identity and culture – Is it an optimiser or an innovator? Is it operating seamlessly across cultural and geographical boundaries? Refresh recruiting, hiring and training with the idea that chaos is the new normal.
  3. Even for non-regulated businesses, risk forecasting and planning is a hallmark of agility – Evaluate your current risk management program not only for depth but speed and agility. Benchmark cycle times to strike the right balance.
  4. Invest in predictive capabilities, pilot emerging technology – Work towards expanding single function supplier networks into interconnected business communities.
  5. Consider outsourcing providers to help manage tail spend – Model the ROI on efficiency gains and compliance versus savings.

The message was clear – it’s critical for procurement to become more agile to avoid potential obsolescence in organisations. As Chris concluded, it’s not the strongest that survive, it’s not the fittest, but the most agile and adaptable.

Collectively Addressing Procurement’s Blind Spots

Education, brand and taking calculated risks – our executive-led panel rounded the Big Ideas Summit off by discussing procurement’s blind spots.

Procurement's Blind Spots

What a way to finish the day. The aim behind the Big Ideas Summit was to challenge our delegates, and create tangible outcomes for them to take back to their organisations. Our senior panel did just that with their discussion on procurement’s blind spots.

Ambition, Strategy and Delivering Value

Mark Roberts, Global Procurement Capabilities Director at AB InBev, started by stating that unless procurement has the vision and ambition, the boundaries that are imposed on it will be out of its hands. Procurement needs to be more than it is today – at AB InBev procurement is starting to consider socially responsible actions of their $25 billion spend.

Dapo Ajayi, CPO at AstraZeneca, argued that procurement truly does have the ability to influence across the enterprise. In the pharmaceutical industry for example, procurement can assist with the speed of clinical studies. The profession’s remit is much broader than just about saving money, it has got to get into conversations about procurement’s strategic role in the organisation.

Chris Browne, CPO at The World Bank, talked about his organisation’s work with world’s poorest countries. The goal of the World Bank is to end extreme poverty, but working in some of the most fragile countries in the world. Currently, the biggest procurement spend is on a $8 billion project to build a solar plant in Morocco.

Chris also talked about his experience working on the government procurement reform in New Zealand, and then subsequently at the NZ Earthquake Commission following 2 devastating earthquakes in Christchurch. The EQC sprang into action following the earthquakes, stopped procurement regulations so people could do what they needed to do, and worked solely on the basis of delivering value and a service to the people on the ground. A very different way to procure, but just highlighting what’s possible.

  • What was your ‘ah ha’ moment from the day?

Dapo – Dapo said that the conversation around transparency has got her thinking about what else AZ could be doing in this area.

Mark – Mark also highlighted transparency. In the era of Wikileaks, people are just as interested in who are the greenest CPOs/CEOs. The other positive for Mark was in the use of the word ‘skunkworks’. The idea that procurement doesn’t need to look for empowerment to chase innovation, but just going and doing it.

Chris – Chris said that corruption is the single biggest issue facing procurement around the world. Linking back to IBM’s opening keynote, Chris highlighted the use cognitive technologies to look at the issue of beneficial ownership – who ultimately is benefitting from contracts being placed around the world.

For Chris, there was also the realisation that we are facing a new norm, in both procurement and society as a whole. Some of the things procurement professionals have taken for granted for past 20 years are likely to be eroded in next few years due to the advancements in technology.

  • What are procurement’s blind spots?

Dapo – Dapo put this question out to her global procurement colleagues at AZ. She argued that maybe we are all playing it safe, that procurement professionals are stuck in our box, with too much focus on savings. The blind spot for procurement was in seeing that a change of mindset was needed in order to make procurement more comfortable about dealing with the wider business.

Mark – For Mark, the blind spot came back to the issue of talent. The profession has used the ‘traditional’ sources, but we need to go beyond that. The other blind spot for Mark was whether or not procurement had enough ambition. Professionals need to be looking at the wider ‘why’ picture, and why what they are doing will benefit the wider business.

Chris – For Chris, the blind spot was how procurement are dealing with organisational lawyers. At the World bank, the lawyers have been taken out of the decision making process, but there is still a blind spot on how procurement works with legal teams, particularly when taking a calculated risk.

  • What do you think we can do as a collective to address issues?

Mark – This is a matter of education, education, education.

  1. Education of the bodies and media around the procurement organisation to give institutions and people a clear indication of what procurement stands for;
  2. Education of the potential talent pipeline, the people we want to bring into the function;
  3. Education of the people procurement already has, how to build on the competency level and what will be required next. Mark suggested that these skills would include relationship management, but also entrepreneurial spirit.

Dapo – Building on Mark’s comments, Dapo said that it was about brand, brand, brand. Addressing this can be helped by using social media, which provides a window into the profession. On social media, the procurement profession needs to create a platform that encourages people to tell the stories about great outcomes, rather than just talking about savings. Procurement has been traditionally poor at doing this, so we need a platform to help.

Chris – Chris highlighted that often procurement people are perceived as, and can be, a bit boring. As Dapo said, the profession needs to be talking about how we are making a broader contribution to the organisation, rather than just about procurement itself.

Gabe Perez – Our final comment came from the audience, and Gabe suggested the profession should draw a line in the sand, and look forward to where we want to go as a profession. People are seeing the value that procurement can offer, why it’s a great profession to work in.

According to Gabe, we should stop looking at what we know, and now look forward to what we are going to do in the future.

The session helped to bring to a close what was a fantastic event, filled with great ideas and thought leadership. However, as was commented on Twitter, we cannot afford to rest on our laurels – we need to put these ideas into practice, address procurement’s blind spots, and collectively drive real change in our organisations.

Don’t Let Procurement Be a Career Cul-de-Sac

The message from our Big Ideas Summit people panel discussion? Please don’t let procurement be a career cul-de-sac!

Career cul-de-sac

People remain one of the hottest, and toughest, topics for Procurement. Covering millennials, attraction and retention, employee value proposition, and Brand Procurement – this panel discussion had it all!

Featuring Lee Gudgeon from Reed Global Tom Derry, CEO, ISM; Lucy Harding, Odgers Berndtson; and Procurious’ 10,000th member, Siddharth Sharma – direct from KPMG India.

Here’s how the discussion unfolded:

Is the “millennial” generation all that different?  If so, what do you think, heads of procurement should be doing differently to attract and retain millennials?

Tom: As the proud father of three millennials, Tom believes the next generation of Procurement talent demand authenticity from their leaders, and are more socially conscious and aware.

“Millennials are looking for opportunities to be employed where their values are engaged, rather than just making a living. As managers, we need to understand that they want to work for companies who’s values they believe in. Patagonia is a company that gets this and has prospered as a result,” suggested Tom.

Lucy: While Lucy agreed millennials have different motivators and different values, she’s suspects that this is more about their stage of life and that we weren’t so different at that age.

Lucy also made the point that sustainability, social responsibility are not just issues for millennials – but that Gen X’s and Boomers want to work for companies they believe in too. Judging by the numerous head-nods around the room, our audience agrees.

Lee: From REED’s vantage point, the main differentiator between ‘us’ and ‘them’ is in the way Millennials want to access information. Rather than a corporate brochure, Millennials want a photo on Instagram or better still, a video of ‘what its like to work in the business”.

“HR needs to get smart about how they communicate Procurement’s value proposition using new technologies,” suggests Lee.

Interestingly, Lee also believes its not just millennials who are demanding great technology at work, but Procurement practitioners at every age and level.

“If procurement practitioners are going to deliver on expectations, they need to be equipped with the best technology – great systems are a huge and often overlooked – employee value proposition.”

Siddharth: Agreed that the issue is less about different values, and more about the avenues that are open to us to express views.

“What was done 20 years ago on paper, is now done on mobile,” said Sid.

Always a topic that ignites some passion, we threw the People discussion over to the audience. Some of our favourite, most controversial take-outs are shared below:

A rising star and our only true millennial in the audience, Mike Murphy O’Reilly, asked: Are we using the wrong word? Rather than millennials, are we really talking about Digital Natives?

For Mike at least, the difference is not so much in terms of values, but in the way we want to receive information and expectations we have of technology.

Anna Del Mar: Suggested that the real problem in attracting and retaining young talent lies with the ‘Frozen Middle’ which despite the energising and inspirational CPOs out there, can be a very unattractive to graduates coming through.

Cutting straight to the core as always, Gabe Perez offered the view that millennials, more than anything, are looking for opportunity. Linking back to his earlier presentation, Gabe warned: “Just like our supplier enablement processes and systems, we need to make sure our HR processes don’t make it more difficult for innovative, exciting talent prospects to get through the door in the first place!”

Tom Derry: Agreeing that a ‘frozen middle’ can exist in any organisation, Tom noted that leaders need to be able to make hard calls and make the necessary change needed to deliver.

Ever one of the most passionate procurement pros we’ve come, Helen MacKenzie asked: Are there enough Good News Stories about Procurement? Procurious loved Helen’s suggestion that perhaps we need a book, a movie, a TV-series about a Procurement Super Hero!

Wanting to know if these procurement issues are unique to procurement, Lance Younger asked: Is every function facing the same challenges as Procurement with respect to talent?

In response, Lucy Harding believes talent remains an issue for every part of the business but a rod we have made for our own backs: “We’ve created silos, and judge people on depth of vertical knowledge – creating narrow but deep skills.”

Adding: “We must challenge the notion that Procurement is a career cul-de-sac,” – a point widely picked up by Twitter.

Speaking on behalf of the professional association, Tom Derry believes that over any other function, Procurement has one unique advantage: We understand the upstream demand, the supplier, the structure of our industry, our market place – so if we capitalise on that and prepare to become GM of the business, or remain functional managers only – to our detriment.

And always delightfully controversial, Peter Smith, SpendMattersUK asked: So why is it still headline news when a CPO becomes CEO?

A good point neatly dealt with by Tom Derry: “That’s true but I believe things are shifting. Today, businesses compete on basis of their supply chains, and so I think we will see more examples of CPOs making the shift to the top job.”

Leading with Value – The Uber-ization of Procurement

Disruption in industries, heading towards major disruption in procurement too. Gabe Perez talks about the uber-ization of procurement.

Uber-ization of Procurement

We’re off to a flying start after lunch here at the Big Ideas Summit 2016. Sometimes a graveyard slot at conferences, Gabe Perez, Vice President, Strategy & Market Development at Coupa Software, got the audience energised discussing the disruption heading our way in procurement.

Gabe challenged our audience to start with the outcome, changing the way we traditionally look at going to the market as procurement professionals. The Uber-ization of procurement starts here, with a focus on value, rather than features.

Just What us ‘Uber-ization’?

Put simply, ‘Uber-ization’ is about being able to access value in real-time. In our personal lives, everything we need, we can get in real time – products within the hour from Amazon, cars from Uber, even setting up a site to sell our product on Etsy.

According to Gabe, you don’t have to do the same legacy tasks now in order to sell things. From selling or buying products, to driving a car for Uber, you just need to have a pulse! There is a new type of workforce, making money in ways that have never been imagined before.

In the real world, there’s little enablement. It’s totally the opposite in the business world, where we’re really just at the beginning in terms of this real-time penetration.

Issues in Procurement Technology

The biggest issue in procurement technology is that it is was originally developed and evaluated in a legacy way. That means is was evaluated on the features and functions, built for the organisational ‘power users’ years ago, and not with the best practice and innovation that is available in today’s economy in mind.

Gabe told the delegates that an RFP isn’t the best way to start. A better approach might be an RFV – a Request for Value. Procurement needs to start with the value proposition, and then work backwards, starting with who the best partner to achieve this outcome will be.

The issue for organisations is they are trying to do the same things over and over, not making any changes, and not making any difference. Features and functions shouldn’t be the focus, but the tools that allow procurement to get to value.

Organisations need to frame evaluations of procurement technology on the value delivered based on the business outcomes your organisation is looking to achieve.

Power of Networks

Gabe went on to talk about business networks, and involving more suppliers. The more companies, or “suppliers” procurement are connecting with, the more opportunities they have to leverage knowledge and expertise for innovation.

A lot of this innovation is coming from the suppliers in the ‘tail’, ones who are traditionally consolidated or ignored.

These smaller organisations don’t always have the opportunity to work with larger companies, thanks to traditional processes, protocols and business portals. All of this adds up to a higher business cost for small companies, making doing this work unprofitable.

There are so many processes and boxes to tick in most companies processes and evaluation, that small companies are out of the work at the beginning either because they did not get an opportunity, or did not see the value because of the cost of doing business.

Failing Networks

Business networks have historically failed in the supply chain, as they have been designed by the software vendor, with the vendor’s priorities and strategies in mind. They are not designed to be open networks, and because of this, they don’t drive value on both sides of the equation.

The other problem is that they only cover a fraction of the total number of suppliers worldwide. There are close to 200 million suppliers in the world. Traditional procurement methods and business networks only enable access to approximately 1 to 2 million, which is a dismal result.

An open network turns this on its head completely. What suppliers need is the simplest way to connect with buyers, other suppliers and collaborate with them. This is the key to unlocking innovation and value creation in the supply chain.

In a perfect world, there would be no user interface at all, but we need to open up the networks before we can get to that stage. And then we will have found the path to the Uber-ization of procurement.