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Sigi Osagie`s Big Ideas On Bringing The Real You To Work

Sigi Osagie, author of Procurement Mojo

Sigi Osagie arrived in the UK as an African immigrant with holes in his shoes, penniless and no address book. Fourteen years later, he was a global director in a FTSE250 blue-chip multinational. Today he works as a writer, speaker, business adviser and coach, drawing on insights from his atypical life journey and career success to inform and inspire others.

Ahead of Procurious’ Big Ideas Summit on 30 April, we caught up with Sigi to get his opinions on the development of a procurement brand, to discuss his thoughts on bringing the ‘real you’ to work and find out more about his new book, Procurement Mojo – Strengthening the Function and Raising Its Profile. An excerpt of said book is available to read here.

Procurious asks: You’ve just released a new book titled Procurement Mojo. Tell us about the title of the book. What exactly is Procurement Mojo?

Sigi: “Mojo” is about our ability to be the best we can be and attain success. And we should all be aiming for that; because we only get one life to live, and life is not a dress rehearsal – we won’t get the opportunity to live life again.

Most of us will spend most of that lifetime at work. So bringing out our best selves in the work we do is part of our personal success.

For Procurement folks in particular, it’s vital; because purchasing is a people-centric activity – our ability to manage ourselves effectively and nurture productive relationships with others is a critical component of our work success.

The title “Procurement Mojo” brings those two things together – finding our mojo in the Procurement work we do. That’s exactly what the book does: it shows readers how to up their game and get the Procurement function firing on all cylinders.

Procurious: In your book, you discuss ‘procurement effectiveness’ as one of the key tenants to procurement success. Can you provide us with some background to this concept?

Sigi: In Procurement Mojo I explain that ‘Procurement effectiveness’ is the route-path to sustainable functional success. Effectiveness is central to success in any realm of life. It means doing the right things to achieve our desired outcomes.

In some senses, it’s quite a simple notion to grasp: if your desired outcome is to head off to your right, then you take a step in that direction; if you want a clean car, you wash it yourself or take it to the carwash; if you want some dangerous excitement in your marital life, you get a lover.

The outcomes most Procurement functions want are not as simplistic as having a clean car or marital excitement. But the same basic tenet applies – do the right things, or take the right actions, to achieve what you want.

Procurement wants more relevance and recognition in the enterprise. Many Procurement functions still focus their actions entirely, or principally, on “cost savings” and other rudimentary elements of purchasing. Or they invest significant resources on “transformations” centred on process or systems enhancements. But they pay scant attention to what matters most: people.

The challenges that hold most Procurement functions back tend to be people-related or ‘soft’ issues – organisational cultures that don’t adequately recognise Procurement’s value; egotistical or ineffective executives who make short-sighted decisions; talent gaps inside Procurement; territorial stakeholders outside the function; and so on.

If the actions we’re taking in our Procurement approach don’t address these root-cause issues robustly, then they are not the right actions to focus on!

This is one of the simplest indicators of the inherent level of Procurement effectiveness.

Procurious: One of the issues that really jumped out at us from your book was the discussion around developing a procurement brand. Can you provide some insight into the importance of developing a procurement brand both within a business and externally with suppliers? 

Sigi: A superb Procurement brand is the pinnacle of functional success. Nurturing a credible Procurement brand requires an integrated approach internally and externally, which is part and parcel of improving effectiveness.

Everything we do properly in the first 4 steps to enhance Procurement effectiveness – the organisation; the enablers; the supply base; and the performance framework – helps nourish the Procurement brand, within the enterprise and with suppliers. Additionally, it is necessary to be organisationally savvy and apply some marketing approaches, like incorporating customer-centricity to Procurement’s ethos and leveraging effective PR.

It is important for Procurement people to grasp this, because perceptions can often be more important than reality. And it is the perceptions people have of Procurement that shape Procurement’s brand image.

Procurious: Some of our member have suggested that the ‘pay to stay’ scandals at Premier Foods and the ongoing saga with Tesco’s supply chain has damaged the procurement brand across the board, do you feel this way?

Sigi: I understand those sentiments. And I agree with the requirement for ethical practices. However, I’m not sure how damaging it’s been for Procurement as a profession; because the average man on the street knows “Tesco” but doesn’t have a clue what “Procurement” is.

I think some people in the professional class might have raised an eyebrow, but I imagine many of them are mature enough to recognise that such ethical issues are likely to stem from, or be sanctioned by, the top team, not just the department functionally responsible. A fish rots from the head down; and I think most people know this.

It’s more likely that Premier Foods and Tesco have suffered much greater corporate reputational damage than any damage the Procurement brand might have sustained. 

procurement-mojo-by-sigi-osagie-og

Procurious: At the Big Ideas Summit you’ll be discussing “Authentic Leadership and the Importance of Bringing the Real you to Work”. Can you provide us some background on this concept and why you believe that encouraging people to be themselves at work will facilitate a more effective work place? 

Sigi: I’ll be talking about the importance of ‘people’ issues to Procurement success, under the summit theme you mention. I’ve somewhat indicated why this is important in my response to your first question.

I should add that when we manage organisations in ways that don’t release people’s enthusiasm, energy, excitement, emotion, effort and expertise – what Charles Handy called the ‘E’ factors – it’s a ‘lose-lose-lose’ situation.

It’s a loss for the individual who gives us more of their lifetime than they spend with their family, because we don’t help them expose their true potential and abilities to excel. It’s a loss for the organisation, because we miss out on the opportunity to leverage those abilities for enterprise success. And it’s a loss for society at large, because, in the end, societal development is dependent on our collective abilities and efforts.

We can certainly do more in this regard, and attain greater success for more organisations by helping more people find their mojo.

Sigi will join 40 influencers and thought-leaders at the Big Ideas Summit on 30 April. You can attend ‘digitally’ by registering on our Group page. Stay tuned for exclusive video interviews, articles, discussions and more.

6 Big Ideas To Join Procurious By Thursday

6 Reasons To Join Procurious Before Thursday

Have you registered for our digitally-led Big Ideas Summit on 30 April? No? Then read on…

If you’re still on the sidelines we’ve listed six compelling reasons to join your fellow Procurians and stake your claim to the wealth of knowledge on offer.

1. A Private Audience With 40 Influencers

If you’re scratching your head at the mere mention of ‘Big Ideas’, then the following primer should get you up to speed: Procurious to host world’s first digitally-led  event for procurement professionals.

Join our ‘Big Ideas Summit’ Group and become a “fly on the wall” – by doing this you’re being granted money-can’t-buy access to a diverse collection of some of the most influential thought-leaders in procurement, technology and people management. Want to know who’s coming? We’ve got CPOs from organisations including:  Burberry, NHS, AstraZeneca, Hovis Ltd, and Exchequer Services, media from Spend Matters and Redactive, technology experts  representing the bleeding-edge of tech, and authorities in social media. As well as CIPS, McKinsey & Co, The Hackett Group, Jules Goddard from London Business School, and Rio Tinto’s CFO, Chris Lynch.

2. Get Your Questions Answered By World-Class Experts

Take advantage of the unique opportunity to submit your questions via Procurious’ Big Ideas Summit Group to our influencers and see how they tackle your toughest challenges on the spot. Want to quiz CIPS Chairman David Noble on the challenges facing accreditation bodies in the future? Hear what Chris Lynch has to say about cost consciousness? Or Professor Olinga Ta’eed on social good? Click to view the full lineup of Big Ideas influencers.

3. Make Powerful New Contacts Around The Globe

This might sound obvious, but don’t overlook the value of networking with your global peers. Someone out there knows the answer to your most pressing procurement questions. They’ve walked in your shoes… So why not tap into their experience, for free?

The Big Ideas Summit is as much about championing the use of social media as it is the big issues. Maybe you’re new to the community and just joined Procurious, or you might be a long-time member and (until now) been content with standing at the back. It’s not too much of a leap to suggest that by being a ‘Digital Delegate’ you want to be on the top of your game. Whether that be by keeping up with the latest trends, issues, or innovations – chances are your fellow delegates will be hungry to devour and analyse the ideas presented through the day. Procurious will also be on the lookout for those ‘Digital Delegates’ with the biggest, best ideas – and by leveraging our network of thought-leaders we can work together to develop these ideas, introduce influential contacts to your network and help make them a reality.

4. Share Your Own Big Idea

In the future everyone will be world-famous for 15 minutes – Andy Warhol

As well as hearing our influencers’ Big Ideas, by registering you’ll be able to submit your own. We believe everyone has a unique vantage point in the industries, communities and businesses they work in. So here is an opportunity to get your Big Idea across, and boost your own personal brand. How? Join our Big Ideas Summit Group and make a post to the community feed. We’ll also be keeping a careful eye on Twitter for your Big Ideas, just Tweet us @procurious_ using the hashtag #BigIdeas2015.

5. Access Exclusive Content & Learnings

Expand your knowledge, stay informed, and be inspired through swathes of exclusive content only available to Procurious members. On the day we’ll be updating the Group page with photos from the event, highlights from our sessions,  and updates on the discussions. In the days following you’ll be able to watch full videos from our think-tanks, as well as hear all of our influencers’ Big Ideas, digest articles and interviews from those who were in attendance.

6. Win An iPad mini

We’ll be announcing the winners of our iPad mini competition. If you haven’t already, don’t panic as there’s still time to enter! Simply invite 10 of your peers to join Procurious before 11.59PM (GMT) on 29 April to be in with a chance of winning 1 of 5 iPad minis. Full terms and conditions can be viewed on this page.

CIPS David Noble: Big Ideas On How Procurement Will Seize The Day

CIPS David Noble will be speaking at the Procurious Big Ideas Summit

David Noble was appointed Group Chief Executive of The Chartered Institute of Procurement & Supply (CIPS for short) on 1 June 2009. He’ll be appearing as one of our 40 thought-leaders at Procurious’ inaugural Big Ideas Summit.

Click to get involved and submit your questions to David

Procurious asks: How is the new Chartered Procurement and Supply Professional status encouraging professional development?

David: CPD is critical to Chartered Status.  There is a need for some roles in procurement, particularly at a senior strategic level to raise their skill levels beyond MCIPS and keep abreast of new thinking in the profession.  A professional with Chartered Status will lead procurement teams and have influence at board level as well as across supply markets by delivering innovative sourcing solutions. A higher-level status than MCIPS, those with Chartered Status will be qualified up to postgraduate degree level and be able to understand institutional risk and contingency approaches in all parts of the organisation, how the supply chain affects innovation, and risk sharing strategies throughout the business. Professionals who hold this status will be the most sought-after talent and those who will take the profession beyond its current boundaries.

Procurious: Is corporate social responsibility still relevant in a world of stringent budgets?

David: Being commercial and sustainable go hand in hand. To have a long-term sustainable successful business, CSR, responsible procurement, and environmental issues have to be considered.  Most of all it just makes good business sense to keep our energy bills to a minimum, or reduce our landfill costs.

It’s a reality of modern life that we have to take into account sustainability and CSR. Not doing so is a risk in itself which could result in damaged reputation, loss of market etc. It is imperative in the public sector – there are targets to reach in local government action plans and at national level. In economic terms, it is far better for a country as a whole to adjust and adapt now to become more sustainable and take into account environmental and CSR issues than to deal with them further down the line. There are already increases in tax on landfill waste, fuel, and disposables. These taxes will become greater as time goes on, as will the fines imposed on companies for abusing the evolving laws relating to environmental and CSR issues.

And then there’s consumer pressure. You only have to look at what happened to Nike when it was revealed to consumers that further down the supply chain, workers in the Far East were working in horrendous conditions. It resulted in mass marches and demonstrations outside NIKE stores in the US, resulting in a damaged reputation and a considerable loss of market share.

It’s time to consider what it is your company cares about; what it’s objectives and key drivers are; and how can these be achieved and strengthened to achieve the most sustainable outcome. How can you prioritise and find an opportunity to do things differently?

It’s not commercial issues versus sustainability issues; it’s the same sort of argument as commercial versus quality. Implementing sustainability itself is not an end point. Nothing is sustainable indefinitely. What should be achieved is a more sustainable option. It needs to be continuously monitored, updated, and improved. There has to be a balance, and it’s about the best balance with regards to the priorities and situation of your organisation. Anything that reduces resources, reduces waste, and increases efficiency is a win/win in terms of optimising sustainable and commercial benefits.

Procurious: In this time of economic uncertainty what can organisations do in order to mitigate risk down the line? 

David: I firmly believe that having professionally qualified people in these roles will help to safeguard organisations against risk.  Procurement professionals are required to horizon scan, and do deep dive audits into their supply chains to get under the skin of what’s really going on.  More than ever, it’s important that we understand our political and economic environment and its impact on business.  Recovery from the 08/09 recession has been one of the biggest challenges of the past century for business.  As the Eurozone faces a potential triple-dip recession and China and Brazil’s growth is slowing, it’s clear that we are still nowhere near out of the woods.

We have worked on risk tools over the past few years to better equip procurement professionals to understand their environment and manage risk.  The CIPS Risk Index quarterly reports helps you to understand the risks to which your supply chains are exposed. You can use the CIPS Risk Index Quarterly Report as an early warning of changes in the macro environment that may affect suppliers and your supply chain. You can then drill down from a global, quarterly, headline figure to a regional and country level perspective, enabling you to develop robust risk management strategies and mitigate against risk.

Procurious: Can you discuss the impact of supply chains in modern-day slavery? (David was invited to the Vatican to witness the signing of a bill to eradicate slavery by 2020, and the recent stories in the media surrounding the Indonesian fishermen). And looking forwards to procurement in 2030, what struggles do you hope we’ll have overcome?

David: Like most professions, old parameters are changing and there is a need to adapt to survive.  Procurement and supply is especially so and in our belief it has reached a significant crossroad.

Two hundred years ago accountancy was strictly regulated because there was a burning platform: incorrect submissions of company accounts led to investor misery and fraud, so the government acted.  Our burning platform is the supply risk side getting further out of control and people being harmed. In that sense, this profession is no different to accountancy – in fact you could argue the public good is more directly affected.  Poor quality food, modern corporate slavery and procurement fraud affect many more people across the planet and the institute does not believe the issues we hear about on an almost daily basis will ever be solved until licensing is embedded.

With the hard work and dedication of thousands of procurement and supply chain professionals, our perspective has now changed beyond all recognition, as global companies experience seismic shocks to their earnings and share prices when a supply malfunction occurs.

We have witnessed some unprecedented events in recent years, from natural disasters such earthquakes and floods alongside numerous product recalls based on faulty component parts and therefore putting consumer safety at risk.  Fraud, corruption and the mis-management of supply chains have caused untold issues and reputational damage for organisations as well as endangering human lives.  Certain sectors have become synonymous with poor supply chain practice from the garment industry through to conflict minerals in our mobile phones and laptops.  According to the World Bank corruption undermines our prosperity by imposing a cost equivalent to 5 per cent of global GDP (or $2.6 trillion –World Economic Forum) every year. It adds up to 25 per cent of the cost of procurement contracts in developing countries and can add up to 10 per cent to business costs globally. They estimate that over US$ 1 trillion is paid in bribes each year. Corruption also facilitates organised crime and terrorist activity.

Accountability for inadequate or exposed supply chains now goes right to the top, with the company’s reputation on the line.  Good corporate supply chain governance demands accountability and to have accountability means the appropriate authority and capability to act.

What does all this mean in terms of removing some of the poor practices we are still witnessing across global supply chains – whether it’s child labour, inhumane working conditions, forced labour and slavery and not least the ever rising issue of procurement fraud?  There is no doubt that the procurement and supply profession has a unique opportunity to step up to this challenge and effect real change – stepping up as a professional community.

Procurious: And finally, is there anything you fear will hold us back?

David: We’re not always very good at shouting out about our successes.  Procurement has much more to offer beyond savings and a clear communication channel must be forged with the CEO.  But this kind of communication between CPO and CEO is still relatively rare in business. Booz and Co in a recent report highlighted that less than 5 per cent of Fortune 500 companies have a CPO in their C-suite. In a separate report, Ardent Partners Supply Management Experts highlighted that less than 20 per cent of CPOs globally report to their CEOs.

So, if you work in one of the 80 per cent of companies where procurement has no direct line of communication to the top, you need to find a way to make yourself heard.

Procurement professionals need to talk the language of the business, get out more and become story tellers to demonstrate the wide reaching value they offer. Understand how your organisation  defines value and growth. This goes way beyond the terminology and knowledge you need for your day-to-day job. It extends to learning what is important to customers and to the other people who work in your organisation – particularly in areas that generate the most revenue.  There is a real opportunity for procurement to seize the day.

For more information about CIPS head to their website.

Discover who else will make up our 40 influencers at the Big Ideas Summit on 30 April. Click to join the Group on Procurious and get involved.

Thinking the Unthinkable – Big Ideas on Supply Chain Risk

How does the bird flu crisis affect supply chains?

2030 may seem like a long way away right now, but if you are planning your procurement strategies, you need to be thinking that far ahead. But what are the unpredictable risks in the supply chain that represent your ‘blind spots’?

As the news broke over the weekend about another avian flu crisis in the United States, North American organisations and supply chains could be forgiven for thinking that they have already had their fill in 2015.

In what is seen as the most significant outbreak of avian flu in over 30 years in the US, 16 states have declared states of emergency and are now quarantining affected farms. At Sunrise Farm in Iowa, one of the biggest farms in America, over 4 million birds will be lost, accounting for over 1 per cent of all the egg-laying hens in America.

Poultry exports are worth over $5 billion to the US economy, but the overall cost, as well as the knock-on effect to businesses further down the supply chain, is difficult to estimate. In Iowa alone, farmers are already predicting losses of $850,000 each, assuming that the outbreak can be contained.

2015 – A Bad Year

And this is just the latest in a long line of supply chain issues that have had a major impact in North America in 2015.

  • Winter Storm Juno – hit the Eastern United States in January, causing record snow falls and transportation disruption
  • Port Strikes – West Coast ports shutdown due to strikes, costing the US economy $2 billion per day
  • Tornados – the Midwest was hit by tornados, causing widespread destruction and killing 2 people

However, it’s not just North America that is seeing supply chain disruption on a greater scale than normal. A ‘once in a decade storm’ hit New South Wales last week, closing roads, cancelling ferries and causing massive disruption.

Unpredictable Risk

While 2015 has been hard on a number of supply chains, these are by no means isolated incidents. Friday the 24th of April was the second anniversary of the disaster at Rana Plaza in Bangladesh. A building collapse killed 1,134 people, the vast majority of whom were involved with making clothing for western markets.

While conditions are improving and better measures are in place to stop something similar happening again, progress is slow, while the demands for so-called ‘fast fashion’ hampers ethical considerations and makes wholesale change difficult.

However, all of these issues, all the risks are outlined above are unpredictable, making it extremely difficult for organisations to protect themselves completely from the fall out.

Protecting the Supply Chain

One of the themes of the Big Ideas Summit will be what procurement’s ‘blind spots’ are. While risks occur in an unpredictable fashion, organisations cannot let them be ‘unthinkable’ and need to understand what could be done in order to mitigate emergent risks.

  • Map your supply chain – know where your suppliers are and where your products are coming from. Where are the potential issues of getting your product from its creation to your end customer?
  • Identify transportation weaknesses – consider the port strikes in America as an example. Where are your products routed through? Can you find good alternatives in the event of a crisis? Is it worth splitting that load now?
  • Calculate costs – if you can understand the potential cost to your business of a failure in the supply chain, then you can use these figures to build support in the business for your plans.
  • Prioritise your risks – is there a particular item that is critical in the supply chain? Know everything there is to know about these items so that you can prioritise correctly.
  • Plan and prepare – Fail to prepare, prepare to fail. This is exactly what will happen if you haven’t spent some time carrying out analysis and understanding where your risks might come from.

There is no such thing as ‘no time’ to do this. The time you spend now may save you time and money further down the line.

Have you got any other suggestions? Can you think of any other ‘blind spots’ that exist for procurement and supply chain? Visit the Procurious Group for Big Ideas and tell us what you think – we’d love to use some of these to quiz our experts later this week.

Meanwhile, here are the other stories making headlines this week.

US Defense sustainability embrace a goldmine for Aussie innovators

  • The US Department of Defense’s multi-billion-dollar Net Zero Fund offers a huge potential market for Australian energy efficiency and sustainability companies.

  • Net Zero is a significant undertaking by US Defense to, in effect, green the military and supply chains. It aims to bring civilian sustainability measures into the defence arena and as the Defense literature states this can be done “while also maximising operational capability, resource and availability and wellbeing”. The funds being made available for Net Zero are therefore to be allocated to improving not just the energy usage of the US military, but also to retrofitting a potential 200,000 installations globally in an environmentally sustainable manner. The value of the installations alone is put at a conservative US$141 billion.
  • This presents a massive potential market for Australian applied research and Australian companies to offer environmentally sustainable solutions and energy efficiency to the US defence industry and the workshops aim to facilitate such contracts…

Read more at The Fifth Estate

Apple Watch: supply chain strain is the new norm

  • This week sees the launch of the Apple Watch. However, with rumours of 1 million pre-orders in one day in the US alone and the firm now pushing estimated delivery times for its product into June, speculation is rife that its supply chain may not be able to keep up with demand.
  • This type of speculation ahead of a big launch is nothing new. Recently Samsung was forced to admit that it may be unable to fulfil the 20 million pre-orders received for the new Galaxy S6 and S6 Edge.
  • Reports indicate that shipping of the product started in the US a week ahead of the April 24 launch date. It is also likely that the company’s procurement leaders have taken the required steps to achieve supply chain agility and where possible, spread risk across multiple suppliers.
  • This ‘supply chain strain’ has become the new norm in the consumer- driven world of high-tech gadgetry, where all eyes are on the newest and most innovative devices. For some companies, the struggle to meet demand is regarded as an endorsement of a product’s popularity. In fact, from a reputational perspective, a stock surplus would probably be more damaging to the company’s brand, than a supply shortage.

Read more at The Telegraph

Could the Groceries Code Adjudicator increased powers change procurement?

  • Founded in 2013, the Groceries Code Adjudicator (GCA) is a supermarket watchdog set up to regulate the relationship between food retailers and their suppliers. Its intention is to ensure the fair treatment of suppliers to reduce their exploitation.
  • We were met with news earlier this year that Tesco is facing a formal investigation by the GCA, after suspicion arose that it breached regulations on supplier contracts. After Tesco overstated its profits, the GCA looked into the supermarket chain and found ‘reasonable suspicion’ that it had breached the code of practice for grocers. It’s not just retailers that have shown unethical treatment of suppliers: world-famous food brand Heinz has come under fire for reportedly doubling the length of time it takes to pay suppliers.
  • The GCA has been granted increased power through new legislation and now has the power to fine retailers up to 1 per cent of its annual UK turnover. That means that the GCA could sting Tesco with fines of up to £400 million. Suppliers may soon enjoy a more equal relationship with retailers and the tough terms that they have previously had to cope with could ease. Food retailers may need to modify how they operate to ensure compliance and the procurement process could well be among these changes.

Read more on Supply Chain Digital

Top-performing supply chains: Pharmaceutical companies

  • Supply Chain Insights studied balance sheet patterns for over 2,000 public companies and shared those results with over 150 executive teams.
  • Progress in driving supply chain excellence in this sector is stalled. The reason? With a growth agenda and intense investment in research and development (R&D), growing regulation, and the building of global capabilities, the last decade has been a time of change for the global pharmaceutical companies. Their progress has not been equal to that in the consumer goods or food and beverage industries. The many mergers and acquisitions among companies in this category have also slowed progress in achieving supply chain excellence.
  • With a focus on both performance and improvement, which company did best? In the pharmaceutical industry, it is tough to judge which company is the leader—that is, who has the best metrics. The company posting the best performance in the portfolio of metrics is AstraZeneca; however, the company is not improving (as measured by the Supply Chain Index for the two periods studied). The companies making the greatest improvement are Biogen Idec and Novo Nordisk. Moreover, most companies in this sector are making progress on individual metrics, but not on the entire portfolio.

Supply Chain Insights: Best pharma companies

Read more on Supply Chain Insights

What are our procurement ‘blind spots’? Register for the Big Ideas Summit and contribute to the discussion with 40 influential thought-leaders and our 5000+ strong Procurious community.

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

Mark Perera of Old St Labs

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Samantha Coombs on the challenges facing Millennials going into procurement

The challenges facing millennials going into procurement

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

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

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

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

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

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

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

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

Every contractor has a different story and motivation.

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

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

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

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

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

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

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

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

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

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

What happened to equal opportunities?

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

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

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

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

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

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

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

Weakening the brand makes you disappear down the bath plug.

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

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

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

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

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

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

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

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

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

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

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

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

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

Using biometrics to control supply chains

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

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

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

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

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

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

The need to deploy robust access control measures

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

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

Access control technology becoming more sophisticated

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

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

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

Using access control to protect people and property

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

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

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

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

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

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

Professor Olinga Ta'eed interview on social value

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

McDonald’s commits to remove deforestation from its supply chain

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

McDonald’s commits to remove deforestation from its supply chain

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

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

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

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

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

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

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

Professor Olinga Ta'eed on procurement and social good

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

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

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

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

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

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

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

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

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

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

Procurious: How can procurement help CEOs understand social value?

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

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

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

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

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

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

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