All posts by Procurious HQ

Supplier Diversity? I Don’t Have Time For That!

“No one wants to change suppliers…” but embracing Supplier Diversity is getting easier than ever before, and there’s a whole host of reasons it’s good for your business! 

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Supplier diversity programs are a hot topic.

We know we’re supposed to have them…

And we’re told that they’re a great thing both for our organisations and the broader communities in which we work and live.

But what are the actual facts when it comes to embracing a supplier diversity program? Do they really add innovation and value to your business? Is finding a minority owned supplier more trouble than it’s worth?

What is supplier diversity?

Supplier diversity is a business strategy that ensures procurement professionals source their goods and services from a diverse range of suppliers; whether they’re minority or women owned businesses, not-for-profits or social enterprises.

How suppliers gain classification as a diverse business differs across the globe but both a formal process of classification and legislation supporting these businesses is extremely valuable to both buyers and suppliers.

United States

The United States is often regarded as being at the forefront of advancing supplier diversity.

The National Minority Supplier Development Council (NMSDC), with a network of 1,750 corporate members, advances business opportunities for certified minority business enterprises and connects them to corporate members.

Businesses in the US that are least 51 per cent  owned by citizens who are Asian, Black, Hispanic and Native American can be  Minority Business Enterprise (MBE) certified.  According to the Minority Business Development Agency, there are 8 million minority businesses in the US that account for nearly $1.4 trillion in revenues.

South Africa

The Broad-Based Black Economic Empowerment (B-BBEE) Act passed in 2003 with the fundamental objective  to advance economic transformation and enhance the economic participation of black people in the South African economy.

UK

The UK has been slower to implement clear policy in this area but is an increasing number of organisations working in this space .

MSDUK, for example, is a non-profit membership organisation driving inclusive procurement. We promote the ethos of diversity and inclusion in public and private sector supply chains by identifying and introducing innovative and entrepreneurial ethnic minority owned businesses (EMBs).

CIPS supports the definition of a diverse supplier as one that is “51 per cent owned, controlled or operated by one or more individuals who are members of an ethnic minority group, are disabled, or are women and who are ‘economically disadvantaged’, in that their personal net worth is less than $750,000”

Australia

Supply Nation connects Australia business with Indigenous businesses and is endorsed by the Australian Government as the leading directory of Indigenous businesses for their procurement teams to fulfil their targets under the new Indigenous Procurement Policy.

We interviewed two people who know a thing or two about the benefits;  Rod Robinson, Founder & CEO, ConnXus, Inc. and Lamont Robinson,  Vice President, Supplier Diversity -Nielsen.

Why should our organisations support supplier diversity?

“Supplier diversity has evolved throughout the years since its original inception through Executive Order 11458 in 1969, establishing the Office of the Minority Business Enterprise,” begins Lamont.

“Since that inception, supplier diversity has grown into a business imperative.”

He explains that organisations are establishing these programs to meet needs in six areas:

1. Clients

“Clients are increasingly asking their suppliers to help them with their diversity efforts. It is important to understand the reality that consumers use their purchasing power to support businesses that support companies with owners that look like them.”

2. Competition

“Having a successful supplier diversity program is often a differentiator for retention/recruitment of clients.”

3. Compliance

“Since some clients have federal contracts, they turn to their suppliers to assist with their diversity goals”

4. Communities

“Since diverse businesses typically employ more individuals in underserved communities than their larger counterparts, increased sales for those businesses should lead to more jobs in the community and more paid insurance for those employees.”

“A successful supplier diversity program could positively impact the recruitment and retention of diverse talent.”

5. Customisation innovation

“Diverse suppliers are more innovative and flexible in providing [a] solution.”

“Smaller, more nimble companies typically have greater customer service than their larger counterparts. The customer service is also more personable than with what is provided by large companies.”

6. Costs

“A diverse supplier base creates more competition, which leads to aggressive pricing.”

Rod Robinson argues that “corporate supplier diversity programs yield proven, measurable results in improved innovation, quality and value.

“Overall, it makes good business sense for corporations to do business with diverse suppliers to build a more sustainable supply chain.

“The U.S. Census Bureau reports that minority-owned businesses continue to grow significantly faster than non-minority-owned businesses. From 2007-2012, the number of minority-owned firms increased 29 per cent.”

How can supplier diversity add value to your organisation?

“If a procurement policy requires at least two diverse bidders for every three bidders, those new suppliers will not only have a chance to offer competitive pricing, but they can expose the organisation to new avenues of revenue growth, including access to new markets,” says Rod.

“Furthermore, these suppliers often align with corporate sustainability efforts (energy conservation, reduced paper consumption).”

Lamont believes that “diverse suppliers are typically created by individuals or groups looking to disrupt the marketplace.”

“These individuals seek innovative ways to create a service or product that more effectively meets the needs of clients. Working with smaller, nimble, and more innovative diverse suppliers allows supplier diversity to introduce innovation to the supply chains of their respective organisations.”

Supplier diversity programs are too time consuming

“No one wants to change suppliers,” Lamont admits.

“We all would like to maintain status quo when partnering with the companies that supply us products and services we consistently use and consume.

“However, there are various organisations and tools created to speed up the time needed to source from diverse businesses.

“Best practices are identified when organisations join diversity advocates such as the National Minority Supplier Development Council, the Women’s Business Enterprise National Council, the National Gay & Lesbian Chamber of Commerce and other similar organisations. Networking with peers from organisations that are members of the aforementioned advocates provides a platform to source for diverse businesses to meet an organisation’s needs.”

Rod agrees with this point of view, arguing that “vetting diverse suppliers requires the same process and time as vetting non-diverse suppliers, but procuring with purpose and intention yields a more sustainable business model, supply chain and economy.”

“Partnering with a technology leader such as ConnXus offers procurement professionals increased visibility and ease-of-use for what might seem to be a difficult or time-consuming task. Choosing the right technology partner can enable procurement professionals to have a unified tool to manage diverse sourcing, supplier diversity, supplier risk, economic impact and more.”

Procure with Purpose – Join the movement

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

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

Enrol here to join the Procure with Purpose group and gain instant access to our exclusive online events.

3 Ways To Win The Internet (You Don’t Have To Be Justin Bieber…)

The social media world is a scary place and unfortunately it’s scaring away the professionals and organisations who need it the most. How do you embrace today’s internet culture and use it to your advantage? 

The Procurious London CPO Roundtable was sponsored by Basware

Elizabeth Linder, Founder and CEO of The Conversational Century joined YouTube in 2007 and often thinks back to that year, a significant time for YouTube, in order to understand the social media space.

It was an exciting and life-changing time for skilled amateurs.

A time that had millions of people singing in their bedrooms, connecting with huge audiences across the globe and finding fame.

Perhaps the most successful YouTuber in this space was Justin Bieber, who’s YouTube performances were discovered  by chance by record label manager, Scooter Braun.

Others, to this day, rack up millions of video views for a commentary on something they would never otherwise have been considered an expert in, or had the chance to be!

Take 7-year-old Ryan as an example of this in action. His YouTube channel “Ryan ToysReview” where he (you guessed it!) reviews the latest and greatest in children’s toys has seen him become one of the richest YouTubers ever and a multimillionaire.

Or there’s Lindsey Stirling, an American violinist, dancer, and composer…

Youtube ultimately offers us the opportunity to be heard, and some people have seized the opportunity with both hands.

Building trust on the internet

Elizabeth Linder is a strong believer that the internet is the best place to build trust.

Clearly  “The People” ( i.e. you and me) have already got this all figured out.

The problem is that so many of the worlds experts; that is the professionals, the politicians, the press, have really struggled to figure out exactly where they fit in. And that’s why so many people still believe the internet is destroying trust.

All too often, as Elizabeth points out, we focus on the sinister corners of the internet, only promoting the negative effects social media is having on our society.

When governments, the press and businesses perpetuate this idea they fail to acknowledge the value and importance that online conversations can bring, and the huge impact they can have.

The public’s use of social media is way more sophisticated than what we see in most professional bodies and businesses across the globe.

That means, as professionals, we’re on the back foot.

And it’s time to change!

At last month’s Procurious roundtable, sponsored by Basware, Elizabeth Linder provided three key pieces of advice to procurement pros who want to start, and win, conversations online.

1. Go at your own pace

Leaders fear that they have to move at an increased pace because of today’s internet culture.

You don’t.

Elizabeth stressed that it’s crucial to take things at your own pace as long as you let people into your thought processes.

A politician in the throws of a disaster situation can’t be expected to have all the answers or all the solutions. But what they can do is keep the public posted on the events as they unfold, maintain a constant dialogue and reassure people that they are doing everything they can.

As a business leader, it’s ok to communicate that “the discussions are still in progress” or “we don’t have information on this yet” so long as you’re communicating something!

You don’t have to speed up because the internet is speedy. It’s just a different kind of dialogue.

When United Airlines hit the headlines for forcibly dragging a passenger off one of their planes, it took them so long to figure out their communications strategy, that they made things a whole lot worse.

They didn’t need a strategy.

They just needed to say something!

2. Believe in the power of primary

We need to believe in the power of primary sources because the public certainly do.

Hearing directly from the source rather than a paper adds a lot of value to your communication.

If you’ve ever been quoted in an article, blog or feature you’ll know the producer of that piece never quite gets to the meat of what you were trying to say. And that’s because you don’t own the conversation or drive the discussion – they do!

The opportunity to speak directly to your audience is an amazing opportunity for leaders and professionals but it’s taken, particularly western, leaders a long time to grab this space and run with it. Perhaps this is because it demands a greater bravery and vulnerability compared with hiding behind a newspaper column or official statements from your organisation. But the pay off is worth it.

The 2011 London riots  were a big wake up moment for the London Police force, who had to figure out how to communicate directly, and effectively with the general public.

And in the UK county of Staffordshire, the police have invested in real authenticity and conversation on social media, building a strong community relationship.

3. Embrace the hacker culture

Embracing in the hacker culture, i.e. making it up as you go along, is key.

EU politicians, for example, only see social media as a tool for outbound communications and not for their inbound policy making.

Hacker culture dictates that they need to consider the latter, and create as they go.

In the early days of Facebook your profile photo was meant to be one photo of yourself.  The idea was that you uploaded it and you kept it.

But Facebook engineers watched a trend emerging of members rapidly changing their profile picture; every time they went to a party, every time they went on holiday. They realised that users wanted to ability to share their photo albums on Facebook and so built in the functionality to do that. Simply by following the patterns of behaviour.

travel business is struggling with this right now – they used to be able to invite critics to review a hotel/ stay somewhere and write up a review – now all it takes is one guest to write a terrible review about crappy plumbing and it can go around the world- feeling of being out of control is prevalent in leadership circles.

Top tips for getting started online

  • Involve people, whether it’s colleagues, clients, customers or the wider community  in the early building stages of your online presence.  What do they want to hear from you? What’s useful and what’s not?
  • Keep a consistency and truthful tone to anything you post online. Post things that represent you or you organisation because it’s so much better to be yourself rather than a contrived version of yourself. If you’re not funny don’t try to be. If you’re earnest be earnest!
  • Don’t let your voice become part of the PR machinery. The UK lost count of the number of times they heard  Theresa May’s Brexit was going to be Strong and Stable – it was a meaningless consultant’s phrase.
  • Be honest! If you don’t know, say you don’t know! It’s much easier to do this online than it is live on TV.

Pick the right people to communicate with your audience. Your business might have a clear hierarchy but it’s important to consider who should be the spokesperson vs who will be the best spokesperson. The Estonian parliament Facebook page asked their maintenance man to run the page, and he’s become a local celebrity, and great PR for the government.

Elizabeth’s take away advice on owning the social media space? “Be yourself online and talk to people in a way that lets them in but not in a way so casual that you’re treating them like family.”

Procurious are hosting CPO roundtables on 30th May, 19th September and 14th November. If you’re a CPO and would like to attend one of our roundtables in person please contact Olga Luscombe via [email protected] to request an invitation.

Procurement Pros: Make Like Lady Gaga

If your procurement job is making you feel like you’re stuck in a Bad Romance you need to make like Lady Gaga! Embracing collaboration will have you on The Edge of Glory in no time!

Matteo Chinellato/Shutterstock.com

When you think of great, inspiring role models for the procurement profession, pop-music superstar Lady Gaga might not be the first person who springs to mind. But just hear us out… (if you can get the tune to Poker Face out of your head!)

At last week’s Ivalua NOW conference in London, Peter Smith, Managing Director – Spend Matters UK/Europe argued that Lady Gaga is the perfect model for CPOs and procurement leaders across the globe, and not just because of her wildly catchy tunes!

Rolling Stones vs Lady Gaga

Flashback to the 1960s/70s and imagine you’re Mick Jagger going out on tour with the rest of the Rolling Stones, Peter proposes. You’re part of a pretty small team. You might be playing the biggest venues and drawing in the biggest crowds but you’re out there on stage with only your bandmates and perhaps a small supporting crew.

Fast forward to the noughties and Lady Gaga is ruling the music scene, and under very different circumstances. A global Lady Gaga tour might recruit hundreds of people. There’ll be choreographers, dancers, backing singers, caterers, tech team, musicians, management, merchandise sellers…the list is endless.

A one-woman show is actually a team effort, a collaboration, with the star herself at its helm. She’s the leader, the strategist who must pull everyone together, in true gig economy style, to deliver the spectacular that’s expected of her.

If we look at the American music charts today, over 50 per cent of the top ten entries are collaborations and, in the UK Top 10, 7 entries are collaborations.

Artists have realised that 2 + 2 can equal 5.

Procurement needs to start thinking this way. Think about how Lady Gaga puts on her show. Think about how collaboration can deliver real value for your team and the wider organisation. By bringing together the suppliers, the engineers, the solution providers and the data experts, procurement can deliver a whole lot more.

Every industry is being shaped by digitisation and the rapid change in today’s world. Given that new sources of risk and competition are emerging all the time procurement needs every hand on deck!

Improving the bottom line with collaboration

Hemant Gupta, CFO & Head Commercial, Legal & Secretarial Blackberrys knows a thing or two about the benefits of collaboration.

Blackberrys, now a leading menswear brand in India has endured its fair share of supply chain struggles in recent years.

Hemant admits, during his keynote at Ivalua Now, that sourcing has been “a very tricky subject for Blackberrys” and their efforts to drive margin improvement and competitive advantage has been a journey.

Only a few years ago, Blackberrys still employed very traditional methods of sourcing. They had no visibility, no transparency and no way of maintaining a centralised system for their data. “Searching the vendor database for sourcing to look at our historic pricing was not possible.”

“The consumer is not brand-loyal any more. They just want the best price, which is increasing demands on the retailer – our discounting has increased by 25 per cent. As CFO I need to improve the bottom line and improve our sourcing process.”

“cost cutting is no longer the solution to sustainable profitability, the key to success is finding creative ways to optimize it” he asserted.

With the help of Ivalua, Blackberrys were able to start their transformation journey, which did face some resistance from employees at first. “People are always skeptical about new processes so collaboration is key,” Hemant explained.

But within a couple of years Blackberrys data started to improve with the involvement of internal customers and they began to automate some processes. They had improved control and transparency and benefited from lower risk and increased efficiency.

4 tips to make your sourcing transformation a success

Hemant shared his key learnings from Blackberrys’ sourcing transformation journey.

1. Challenge status quo

It’s human nature to think whatever we are doing, we are doing it right. You have to train yourself to change that.

2. Collaboration is key

Resistance to change is normal but you need 100 per cent commitment from leadership and strong champion. You also need to ensure you’re pulling all of your procurement resources – teamwork is dream work!

3. Identified -> Realised savings!

It’s imperative to follow through post sourcing processes.

4. Make it a lifestyle

eSourcing is not just about saving cost but cost avoidance and transparency – compliance.

Ivalua Now, The Voice of Procurement is coming to Paris on 29th March and New York on 17th May. Find out more here. 

Are You A Data Hunter Or A Gatherer?

Are you trying to stay afloat  in a huge “data lake”?  Trust us, there are better ways to manage and manipulate your data to make an impact. Are you a data hunter or a gatherer?

ArtMari/Shutterstock.com

There’s a whole lot more to data than simply having it…

If you’re one of those procurement professionals who’s anxiously sitting on an ever-growing mountain of data, wondering how on earth to make sense of it all; it’s time to shift your mind-set and your approach from gatherer to hunter….

Data on its own means very little unless it’s actually actionable.

But procurement professionals are so used to a deluge of data that it often ends up discarded in someone’s top drawer, never to be seen again! Perhaps it’s not fit for purpose but one thing’s for sure – nothing useful is done with it!

Can procurement teams do a better job in ensuring they get a decent ROI on their data?

Our latest webinar with IBM, which takes place on 28th March, will teach you how to become an astute data hunter!

We’ll be discussing…

  • Why every procurement team needs a Chief Data Officer
  • Unstructured data – How do you make sense of it all?
  • How to make sure your data is fit for purpose and get an ROI on your data investments
  • The biggest mistakes Procurement teams make when it comes to data and analytics?

Webinar Speakers

 Edward D. O’Donnell, Chief Data Officer for Procurement – IBM

Edward is IBM’s Global Procurement Data Officer and charged with the mission to advance Business, Intelligence, Deep Analytics, and Cognitive functionality across the procurement portfolio.

Marco Romano, Procurement Chief Analytics Officer, Global Procurement, Transformation Technology – IBM

Marco applies more than 15 years of experience as a procurement practitioner and project manager to understand complex environments that separate the noise from real issues and determine near-term and strategic solutions in realising business value. He leads a team that has saved IBM Procurement a significant amount in third-party costs and efficiencies through analytics data solutions and innovative sourcing strategies over the past three years. His team is also developing commercial analytics and cognitive procurement offerings leveraging data and technology for IBM clients’ competitive advantage.

 Tania Seary, Founder – Procurious

A true procurement entrepreneur, Tania is the Founding Chairman of Procurious, The Faculty and The Source. Throughout her career, Tania has been wholly committed to raising the profile of the procurement profession and connecting its leaders.

After finishing her MBA at Pennsylvania State University, Tania became one of Alcoa’s first global commodity managers.

In 2016, Tania was recognised by IBM as a #NewWaytoEngage Futurist and named “Influencer of the Year” by Supply Chain Dive. She hosts regular procurement webinars, and presents at high-profile events around the world.

How do I register for the webinar?

Registering for our webinar couldn’t be easier (and, of course, it’s FREE!)

Click here to enter your details and confirm your attendance. We’ll send you a confirmation email with a link to the webinar platform and a handy reminder one hour before we go live!

I’m already a member of Procurious, do I still need to register?

Yes! If you are already a member of Procurious you must still register to access the webinar via this platform. We’ll send you a confirmation email with a link to the webinar platform and a handy reminder one hour before we go live!

When is it taking place?

The webinar will take place at 1pm BST on 28th March 2018

Help! I can’t make it to the live-stream

No problem! If you can’t make the live-stream you can catch up whenever it suits you. We’ll be making it available on Procurious soon after the event (and will be sure to send you a link) so you can listen at your leisure!

Can I ask a question?

If you’re listening live, our speakers would love to hear your questions and we’d love for you to pick their brains . Questions can be submitted throughout the live stream via the webinar platform.

If you think of a brilliant question after the event, feel free to submit your question via the Discussion Board on Procurious and we’ll do our very best to ensure it gets answered for you.

Our webinar,  Basic Instinct: Are You a Data Hunter or Gatherer takes place at 1pm BST on 28th March 2018. Register your attendance for FREE here. 

4 Things Supply Managers Need To Know About China’s Belt and Road Initiative

Get to grips with the jaw-dropping scale of China’s investment in ultra-modern supply chains stretching from South-East Asia to Scandinavia.

title picture for blog post China's Belt and Road Initiative

China’s Belt and Road initiative is big. VERY big. We’ll get to some of the awe-inspiring numbers in a minute, but first let’s look at why this project is particularly relevant to supply management professionals around the globe.

Helen Sawczak, National CEO of the Australia China Business Council thinks that there’s a common perception that the Belt and Road will be a way for other countries to see to China.

“It certainly will enable smoother movement of goods into China, but what people need to understand is that the strategic focus is on the movement of goods out of China.”

That’s why the Belt and Road needs to be firmly on the radar of every procurement professional who sources goods from China – and let’s face it, that’s just about all of us.

In this interview with Sawczak, who is a guest speaker at The Faculty’s upcoming CPO Forum in May, we explore the sheer scale of the project, the timelines involved, its embedded supply chain technology, and what it means for standardisation of trade practices.

1: What is the Belt and Road, and how big is it?

The Belt and Road is a $900 billion-dollar signature initiative announced by China’s President Xi Jinping in 2013 and hailed by China as “the project of the century”. The name refers to the land and sea trade routes.

The “Belt” is centred around the re-establishment of the ancient Silk Road, which stretched from Japan to Europe in the time of the Roman Empire.

The modern-day Belt is actually divided into six routes where China is building roads, high-speed railways, gas pipelines and more to bridge an infrastructure gap that exists throughout Asia and Central Asia, before joining with existing transport infrastructure in Europe:

  • The New Eurasian Land Bridge, running from Western China to Western Russia through Kazakhstan.
  • China–Mongolia–Russia Corridor, running from Northern China to Eastern Russia
  • China–Central Asia–West Asia Corridor, running from Western China to Turkey
  • China–Indochina Peninsula Corridor, running from Southern China to Singapore
  • China–Myanmar–Bangladesh–India Corridor, running from Southern China to Myanmar
  • China–Pakistan Corridor, running from South-Western China to Pakistan

The “Road” (confusingly) refers to a maritime route beginning in South-East Asia, moving through the Suez Canal and ending in the Mediterranean. Similarly, China is investing heavily in ports along the route.

“Together, the Belt and Road encompass three continents, 68 countries and more than 60% of the world’s population”, says Sawczak. “An estimated 25% of all the goods that are shifted around the world will go via the new Silk Road route.”

Beijing says it will ultimately lend as much as $8 trillion for infrastructure in 68 countries.

Image: CCTV news

2: Long-term vision

During his historic visit to China in 1972, Richard Nixon reportedly asked Zhou EnLai what he thought had been the impact of the French Revolution on western civilisation. The Chinese Prime Minister considered the question for a few moments before replying, “It’s too early to tell”.

China has always taken the long-term view.

Without being locked into the short-term political cycles faced by many Western governments, China is in the rare position of being able to launch far-sighted projects to improve critical infrastructure.

As such, the length of the Belt and Road Initiative will be measured in decades, rather than years. Today, says Sawczak, “every company in China is trying to get a Belt and Road label in order to secure funding.”

“Belt and Road isn’t just about infrastructure and the supply of goods. To build this stuff they’ll need people, food, education and more. There are going to be enormous opportunities for business and suppliers to support this initiative – it’s going to have a huge impact.”

3: It’s buzzing with 21st century technology

One of the benefits of building new road, rail and port infrastructure from scratch is that China is taking the opportunity to build a truly 21st-century supply chain.

Infrastructure along the land and sea routes will feature digital technology including inventory sensors (IoT) that will enable a level of data analytics that leapfrogs past current supply chain practices.

Trading will involve blockchain verification and e-commerce settlement transactions that will vastly improve the cost and speed of trade.

To learn more about what IOT is and basics of Blockchain, check out here and here.

4: The Belt and Road will drive standardisation

“Because there are 68 countries involved, there’ll be a push for the standardisation of trade processes all along the Belt and Road”, says Sawczak. “One would hope the highest standards will be used – such as blockchain verification. Overall, standardisation is a good thing that eases free trade and boosts globalisation.”

Sawczak warns that with so many parties involved, it will be imperative for other countries to integrate their e-commerce with Chinese systems and to consider availing themselves of the new flexibility of the Renminbi as an international currency.

Read more on how to source from China here.

“Communication is another area where you’ll need to align. For example, WhatsApp has been blocked in the past in China, so cybercommunities need to be prepared to adapt to Chinese platforms to communicate during multilateral deals.”


Helen Sawczak is the National CEO of the Australia China Business Council, a membership based organisation dedicated to promoting trade and investment between Australia and China. ACBC has a Branch in every Australian State and Territory, holding hundreds of information and networking events each year to assist Australian and Chinese companies to connect.

Now in its 11th consecutive year, The Asia-Pacific CPO Forum is the region’s premier procurement event dedicated to accelerating commercial leadership at the highest level. Held at Melbourne’s Crown Conference Centre over two days, it is a once-a-year opportunity for leading Chief Procurement Officers to engage with peers and like-minded business leaders in an intimate and interactive setting. Click here to learn more.

Revealed: 4 Things CFOs Really Want From Procurement

Ever get the feeling you’ve been barking up the wrong tree? Let’s cut out the second-guessing and focus on the four essentials that Chief Financial Officers want from procurement.

Krasimira Nevenova/Shutterstock.com

Andrew Porter values having a good night’s sleep. As CFO of the Australian Foundation Investment Company (AFIC) and President of the G100, the peak body for Australian CFOs, Porter knows that the presence of dark circles under the eyes of C-level executives are linked directly to how the business is tracking.

“The CFO’s job is to help the CEO – and the Board – to sleep well at night”, he says. This concept also applies to the relationship between CPO and CFO, and the people reporting to the CPO, and so on all the way down the organisation.

“I’ll pay a little bit more for security of supply knowing that our strategic suppliers are happy, reliable, and we’re not going to be exposed as a business with a supplier that feels cheated”, Porter says.  “I want to know where the supplies are coming from, and know that they’re quality, and know that it’s not going to come back and bite the business later on.”

So – what exactly do CFOs want from their CPOs in order to help the business grow?

  1. They want to trust that everything is under control

CFOs, says Porter, worry about keeping three succinct groups happy: investors or shareholders, customers, and employees. It’s a delicate balance, because an initiative that benefits one group can have a detrimental effect on the others unless it’s been carefully thought through. Procurement practitioners have the ability to help maintain this balance, not in the least by keeping customers happy through the timely sourcing of goods and services. “If the job is being done well, it’s one less thing for the CFO to worry about”, says Porter. “But if procurement tries too hard and is seen to be screwing down the supplier, then you’ve undone all that hard work, shifted the balance, and suddenly the investors are unhappy.”

As all CFOs know, you can’t improve margins and grow your business without first being sure that you can rely on your bottom line. “In order to grow, you’ve got to have trust in your subordinates – and that cascades all the way down.”

  1. They want to be kept informed

“What CFOs really want is a crystal ball that works 100% accurately all the time”, says Porter. CFOs need to understand all sectors of the business – what’s firing, what isn’t firing, and (importantly), they need to know about roadblocks and other issues in advance. If procurement becomes aware of an upcoming issue, the CFO, CEO and the Board need to be informed of it before it happens, and be presented with a list of solutions.

“The board doesn’t want to see problems – they want to see solutions”, says Porter. “A good CPO should be putting themselves in the place of the person they’re reporting to. What does he or she need to know? What are the questions they’re going to ask, and how am I going to get those answers to them before they have to ask?”

  1. They want their CPOs to think outside the box

What does disruption actually mean in terms of supply for your organisation? Where will this disruption be coming from? Are there different, innovative ways of sourcing goods and services? Porter comments that although innovation isn’t always an immediate priority, the C-suite will inevitably ask what procurement is doing to drive innovation.

Part of thinking outside the box means broadening your field of vision. “Look globally as well as domestically for best-practice, and ensure you’re part of a good forum where you can share information with your peers.”

  1. They want to see purpose-led strategy

Are the procurement team’s KPIs in accordance with your organisation’s purpose-led strategy?

“A nightmare scenario involves the CPO chasing the wrong KPIs”, says Porter. “Ill-chosen KPIs can sometimes be at odds with the purpose and strategy of the business, and fail to align with the KPIs of the wider organisation. They need to be parallel all the way down. Everyone needs to absolutely understand what their role is in the company.”

But, Porter warns, you need to have sensible targets. “If CFOs start forcing CPOs and their teams into impossible targets, that’s when people get disenfranchised – and suppliers get hurt.”


Andrew Porter is the CFO of Australia’s largest Listed Investment Company, Australian Foundation Investment Company, known as AFIC. He is also CFO for Djerriwarrh Investments Ltd, Mirrabooka Investments Ltd and AMCIL Ltd, all other Listed Investment Companies. He is the current President of the G100, the peak body for CFOs, and the current Chair of ASIC’s Standing Committee on Accounting and Auditing.  He was formerly a non-executive Director of the Royal Victorian Eye & Ear Hospital.

Porter will deliver a keynote presentation at The Asia-Pacific CPO Forum, the region’s premier procurement event dedicated to accelerating commercial leadership at the highest level. Held at Melbourne’s Crown Conference Centre over two days, it is a once-a-year opportunity for leading Chief Procurement Officers to engage with peers and like-minded business leaders in an intimate and interactive setting. Click here to learn more.

Step 1: Brush Your Teeth Step 2: Change the World

“Molly, the reason you got less than Thomas, is because you are a girl.” We take a look at some of the highlights of this year’s International Women’s Day…

The #MeToo and Time’s Up movements have triggered an intensely powerful outpouring of testimony and solidarity among people around the world.

But this is only the beginning of the story.

The broader issues of systemic workplace sexism and the fight for meaningful inclusion undeniably stretch far beyond the entertainment world.

We need look no further than our own procurement backyard where women account for just 20-35 per cent of procurement association memberships, represent just 30 per cent of attendees and 20 per cent of speakers, and earn up to 31 per cent less than their male counterparts.

Time is most definitely up for our own profession to tackle this issue and celebrate more fully the dynamite contributions made by talented women to their businesses and to the profession.

And judging from the overwhelming response to our A Wise Woman Once Told Me campaign, you think so too!

A Wise Woman Once Told Me…

For International Women’s Day (IWD), we decided to pay homage to the wisest women we know with a new campaign entitled “A Wise Woman Once Told Me…”

Last year, we launched Bravo, a Procurious group, to both celebrate and promote women in procurement and campaign against the profession’s current gender disparity.

For IWD we asked procurement professionals across the globe to join Bravo and share the best advice a woman has ever given them.

Here are some of our favourite responses and action shots from the day…

Our youngest supporter and proud feminist shares the best advice he has ever received from a woman in his life… And what great advice it is too!
Procurious’ Melbourne contingent ready for an International Women’s Day celebration
Procurious founder Tania Seary shares the best advice she’s received from a woman…
A Procurious member shares their advice
Delegates at SAP Ariba live in Las Vegas created an amazing “A Wise Woman Once Told Me…” wall

Literary heroines from across the globe were very well represented…

Poignant advice from diarist Anne Frank
Advice from Hogwarts’ wisest witch
Matilda also had some wise words to share with the procurement community…

International Women’s Day 2018  – By the Numbers

Events, campaigns, protests and celebrations across the globe marked 2018’s International Women’s Day.

This year’s theme was #PressForProgress, a call-to-action to press forward and progress gender parity.

With the World Economic Forum’s 2017 Global Gender Gap Report findings telling us that gender parity is over 200 years away – there has never been a more important time to keep motivated and #PressforProgress.  – International Women’s Day

Some key events from this year’s International Women’s Day…

Pay Disparity is Child’s Play

“Molly, the reason you got less than Thomas, is because you are a girl.”

Stark pay gaps between men and women prevail across the world, which is why one Norwegian financial trade union, Finansforbundet, launched one of our favourite campaigns for this year’s International Women’s Day.

In the video, a group of children are asked to fill two vases with blue and pink balls.

Once they’ve completed the task they are rewarded with jars of sweets.

But the boys get more.

As you might predict, the confused children are quick to condemn the explanation they are given that boys get more simply because they are boys.

Unequal pay is unacceptable in the eyes of children.

Why should we accept it as adults?

Bravo – Join the campaign

There’s still time to join Bravo on Procurious and take part in our Wise Woman campaign.

Sign up here to join. 

We promise to donate £1 to Action Aid – a charity committed to ending the inequality that keeps women and girls locked in poverty – for every person that joins Bravo before 12th March 2018 – that’s the end of the day today! 

In other procurement news this week…

KFC: Back to Bidvest

  • It hasn’t been a (finger-licking) good month for KFC WHO experienced widespread distribution problems after it decided to switch its logistics contract from Bidvest to DHL, resulting in the closure hundreds of outlets and disappointment of thousands of fried-chicken fans
  • Last week, it was reported that KFC would be returning, in part, to its ex-distributor Bidvest, who will supply up to 350 of its 900 restaurants
  • Bidvest has pledged “a seamless return” and a KFC spokesperson said “our focus remains on ensuring our customers can enjoy our chicken without further disruption.” Let’s hope they don’t cluck it up this time!

Read more on BBC News 

Lego goes green

  • Lego has started using polymer from plants in some of its toys as part of a move away from oil-based plastics.
  • The Danish firm’s first bioplastic offering is made from sugarcane and will be used in “botanical” elements including leaves, bushes and trees
  • The bioplastics are set to appear in stores later this year as Lego moves towards sustainable raw materials in all its products by 2030
  • Tim Brooks, vice president of environmental responsibility at Lego said: “We are proud that the first Lego elements made from sustainably sourced plastic are in production and will be in Lego boxes later this year. This is a great first step in our ambitious commitment of making all Lego bricks using sustainable materials.”

Read more on Supply Management 

7 Steps To Thinking Like A Freak

The best thing you can do to improve your productivity, your rationality and your creativity is learn how to Think Like a Freak. 

Sergey_T/Shutterstock.com

Steven D. Levitt and Stephen Dubner, The New York Times bestselling authors of Freakonomics plainly see the world like no one else.

In their book series, which includes Freakonomics, SuperFreakonomics, Think Like a Freak and When to Rob a Bank, the two mix smart thinking and great storytelling like no one else, whether investigating a solution to global warming or explaining why the price of oral sex has fallen so drastically. By examining how people respond to incentives, they show the world for what it really is—good, bad, ugly, and ultimately…super freaky.

Freak up your thinking

“The fact is that solving problems is hard. If a given problem still exists, you can bet that a lot of people have already come along and failed to solve it. Easy problems evaporate; it is the hard ones that linger. Furthermore, it takes a lot of time to track down, organize and analyze the data to answer even one small question well.

So rather than trying and probably failing to answer most of the questions sent our way, we wondered if it might be better to write a book that can teach anyone to think like a Freak. ” Steven D. Levitt and Stephen Dubner, Think Like a Freak 

Levitt and Dubner want to teach us all to think a bit more productively, more creatively, more rationally—to think, that is, like a Freak.

Thinking like a freak offers a blueprint for an entirely new way to solve problems, whether your interest lies in minor life-hacks or major global reforms. They cover topics ranging from business to philanthropy to sports to politics, from the wild to the wacky (the secrets of a Japanese hot-dog-eating champion, the reason an Australian doctor swallowed a batch of dangerous bacteria, and why Nigerian e-mail scammers make a point of saying they’re from Nigeri) all with the goal of retraining your brain.

How to think like a freak

  1. Put away your moral compass

It’s hard to see a problem clearly if you’ve already decided what to do about it.

2. Learn to say “I don’t know”

Until you can admit what you don’t yet know, it’s virtually impossible to learn what you need to.

3. Think like a child

You’ll come up with better ideas and ask better questions.

4. Find the root cause of a problem

Attacking the symptoms, as often happens, rarely fixes the underlying issue.

5. Take a master class in incentives

For better or worse, incentives rule our world.

6. Persuade people who don’t want to be persuaded

Being right is rarely enough to carry the day.

7. Learn to appreciate the upside of quitting

You can’t solve tomorrow’s problem if you aren’t willing to abandon today’s dud.

There is nothing magical about this way of thinking. It usually traffics in the obvious and places a huge premium on common sense.

But there’s good news too: thinking like a Freak is simple enough that anyone can do it. What’s perplexing is that so few do Steven D. Levitt and Stephen Dubner, Think Like a Freak

Go on…give it a go!

Stephen J. Dubner, journalist, radio and TV personality and co-author of the critically acclaimed “Freakonomics” books will keynote at JAGGAER’s REV2018. The event takes place in Las Vegas on 24th- 26th April and there’s still time to register!

Digital Transformation Skill Gap Shock

Only six per cent  of CPOs possess the strategic leadership trait of being able to lead digital and analytical transformation in their organisation. What’s going on with the skill gap?

pathdoc/Shutterstock.com

It seems that everyone’s talking about digital transformation. Every procurement team globally lies somewhere on the maturity curve that begins at one end with 1990s-style manual processes, to world-beating teams who are embracing tech enablers such as predictive analytics and cognitive technology. Procurement publications (including this one) are writing article after article about the wave of exciting new technology coming down the Industry 4.0 pipeline, while the profession’s biggest conferences always have digital transformation experts high on the agenda.

Key findings in Deloitte’s 2018 Global Chief Procurement Officer Survey, however, suggest that digital transformation isn’t as high as priority for CPOs as we might think. When just over 500 procurement leaders across 39 countries were asked to identify the most common leadership traits in procurement, they listed:

  • acting as a role model – 23 per cent
  • collaborating internally and externally to deliver value – 20 per cent
  • delivering results – 14 per cent

Yet, as the report points out, strategic leadership traits are not widely evident:

  • positive disruption – 5 per cent
  • leading digital and analytical transformation – 6 per cent
  • innovation – 8 per cent

Similarly, modern technology usage is low, with only one-third of those surveyed using technologies such as predictive analytics and collaboration networks. Only one-third of procurement leaders believe that their digital procurement strategy will enable them to deliver on their objectives and value, even though analytics was nominated as the single factor that will have the most impact on procurement in the next two years.

The authors call out these disappointing results twice in the report:

“Progress and adoption has been slow over the past year and the survey findings show that procurement leaders remain hesitant about investigating new digital tools and technologies such as artificial intelligence, robotics and blockchain.”

“Despite recognising digital technologies, their impact and imminent uses, few organisations appear to be progressing at the rate that their c-suite executives consider necessary for achieving overall goals. Indeed, in the majority of areas, the level of impact has declined and the forecast application of new technologies is low … The level and speed of digitalisation across procurement functions is lower than expected and needed.”

So, what’s going on? The answer might be found within the report itself, across the following three areas:

  1. CPOs don’t know where to begin

The main barriers to the effective application of digital technology identified in the report include a lack of data integration (46 per cent), quality of data (45 per cent) and a limited understand of data technology (27 per cent). This suggests that one of the reasons for the disappointing adoption of technology is that CPOs are still coming to terms with the overwhelming task of getting their house (their data) in order before they can effectively roll out a tech enabler such as cognitive procurement.

  1. CPOs are losing faith in their digital strategy

Deloitte found that only 4 per cent of procurement leaders believe that procurement has a big influence in delivering their organisation’s overall digital strategy. Only 6 per cent believe their digital strategy will help them to fully deliver on their objectives and improve enterprise value, while only 18 per cent have a digital procurement strategy supported by a complete business case. The trend in the report appears to be that procurement leaders are struggling to understand the impact of digital technology. One of the stand-out pieces of commentary in the report contains the following:

“Applying digital technologies to the procurement function will enable strategic sourcing to become more predictive, transactional procurement to become more automated, supplier management to become more proactive, and procurement operations to become more intelligent.”

 3. CPOs are not investing in digital capability

Remember last year’s report? The main callout in 2017 was that 60 per cent of CPOs didn’t believe their teams had sufficient capabilities to deliver on their procurement strategy. This figure has improved slightly and now sits at 51 per cent, yet digital skills still remain a red flag. The report found that nearly three-quarters of those surveyed said that their procurement teams possess little or no capability to maximise the use of current and future digital technologies, but only 16 per cent of procurement leaders are focusing on enhancing the digital skills of their teams. Overall, 72 per cent of CPOs are spending less than 2 per cent of their operating budgets on training and development programs for their teams.

Download the full report here: https://www2.deloitte.com/uk/en/pages/operations/articles/cpo-survey.html


In other news this week:

 

Procurious celebrates International Women’s Day – Get Involved!

  • Women account for just 20-35 per cent of procurement association memberships, represent just 30 per cent of procurement conference attendees and 20 per cent of speakers, and earn up to 31 per cent less than their male counterparts
  • To address this disparity, we founded Bravo, a Procurious group that celebrates and promotes the contributions of women in procurement last year
  • Ahead of International Women’s Day on 8th March 2018 Procurious are running a new campaign, “A Wise Woman Once Told Me…”.  We want procurement pros across the globe to take part and  finish that sentence.  Write the best advice you’ve been given by a woman, be it a colleague, mentor, friend or family member and share your advice on both Twitter (Tagging @Procurious_ and #Bravoprocurement) and in the Bravo group on Procurious 
  • We’ll be amplifying all of your great advice to the global procurement community and, to encourage more procurement pros to join Bravo Movement, we’ll donate £1 to Action Aid for every person that joins Bravo before 10th March 2018

Contact Laura Ross via [email protected] to request your  “A Wise Woman Once Told Me…” digital kit.

 

KFC Supply Chain Cock-Up Continues

  • KFC has yet to reopen all of its UK stores after nearly 700 of the the fast food chain’s 900 stores were shut down after the company ran out of chicken last week.
  • Speculation about what went wrong has focused on DHL, which had taken over the contract only one week previously. DHL has one centralised warehouse in contrast to the previous contractor, Bidvest, which operated from six.
  • The hashtag has been trending on Twitter, while KFC’s marketing team has been praised for its handling of the crisis.

Read more: http://www.wired.co.uk/article/kfc-chicken-crisis-shortage-supply-chain-logistics-experts

 

Trump announces steel and aluminium tariffs

  • President Trump has announced a 25 per cent tariff on imported steel and a 10 per cent tariff on imported aluminium.
  • The tariffs are designed to punish China for what the White House has described as unfair trade practices, while reducing blue-collar job losses and wage stagnation.
  • U.S. steel production has fallen from 100 million to 82 million metric tonnes over the past decade, with imports increasing in consequence.

Read more: Reuters

When the Data Strategies Align….

There is a growing need for consuming data almost at the same time as the data gets generated – but how do you get your procurement data strategy straight, and align it with the corporate strategy?

There are many factors that require careful consideration to bring about effective cognitive solutions.

It’s akin to conducting a group of musicians – it might be possible (easy even!) to attain a pleasant sound from a solo instrument…

But, if expertly managed,  you could accomplish a symphony from the entire orchestra!

This week, our podcast series will guide you through the five steps required to conduct a dazzling cognitive symphony.

On Day 5 of Conducting A Cognitive Symphony Peter discusses the importance of having a single data strategy across procurement, how to align this with the corporate strategy and the value in creating a Chief Data Officer role.

A single data strategy

“It’s very important in today’s world [to have a single data strategy]” begins Peter “because there is a growing need for consuming data almost at the same time as the data gets generated.”

“New potential data sources arise every day. This requires a strategy in place that can be applied quickly and efficiently which covers the entire life cycle of the data from acquiring the data, through curation to consumption.

“And without having the right data strategy or a comprehensive data strategy in place that covers the anterior life cycle of the data, businesses may face some issues very quickly.

“They will not have an understanding of what data they acquire, what that data is and what business that data provides to them.

What about the importance of having a single point-of-contact, a Chief Data Officer, for smaller organisations? Is it still important that, even the role isn’t an individual job in itself, that there’s  a single person who has accountability, and responsibility for data?

“Ideally, yes” says Peter.  “A dedicated person, not necessarily a full-time person.

“And the data officer can be supported by data stewards, data management, data engineers. It’s really up to the organisation – how they want to set about a process for those right now.”

Procurement data vs Corporate data

Does procurement’s data strategy typically feed into a corporate data strategy of which procurement just becomes a subset?

“Corporate data strategy, if it exists,  is likely addressing a good portion of what a procurement specific data strategy would address,” explains Peter.

“If that’s the case then the implementation and the execution of the data strategy in Procurement will require less efforts and also gives the opportunity to put more focus on the procurement specific elements of a data strategy like implementing the right business process for capturing data in better quality from suppliers.

“There are lots of things that are significant between procurement data strategy and corporate data strategy. Likely if a corporate data strategy exists then it covers a significant portion of what the procurement data strategy would need to cover because in the end it’s just data. But with some specifics for procurement.

“Procurement does not need to invent new things that’s likely covered by the corporate data strategy.”

“What procurement teams can do better, is start focussing on specific things- the most crucial things. For example, buyers don’t always consider the importance of off-loading data from suppliers.

“Procurement can do a lot. But it just has to get the right data.”

Striving to conduct a cognitive symphony but in need of some expert guidance? Our podcast series runs throughout this week and will have your orchestrating cognitive success in no time! Register here.