Category Archives: Big Ideas Summit

We are Living in Exponential Times

We are living in exponential times. While that fact makes it exceedingly exciting to be alive right now, it also comes with a lot of procurement related issues. Let’s examine a few facts, and see if you can realise where I am going with this:

  1. In 1984, there were 1,000 internet capable devices.
  2. By 1992, there were 1,000,000.
  3. In 2008, there were 1,000,000,000.
  4. Today it is estimated at 30,000,000,000.
  5. Last year, 4 exabytes (4.0 x 10^18) of unique information was generated, which is more than the previous 5,000 years in total!
  6. It is estimated that there will be 70 billion connected devices by 2025.
  7. NTT Japan has successfully tested a fiber optic cable that pushes 14 trillion bits per second down a single strand of fiber
  8. Technical obsolescence is accelerated with technologies becoming obsolesced in as little as 3 years!

The Exponential Risk in Your Tail Spend

Let’s talk about third-party risk management. In procurement we need to focus on getting the correct supplier/provider/adviser at the best total cost, delivering the right level of quality and service levels.

To most people, this means that we are living in exponential times. But to a procurement person it means “oh no, I need to look at all of my supplier relationships because of the possible threat of risk.” The issue with this logic is we don’t know what we don’t know. And that means we have probably done little to no research/cyber security/risk assessment on our tail spend, let alone on every supplier in our critical spend.

Most companies have entered into multi-year agreements with their critical spend suppliers. This is in an effort to secure the best total cost of ownership and allow ample time for their suppliers to retool, ramp up and to get to know them in order to meet their service and quality requirements.

Therefore, despite quarterly business reviews (QBRs), it can possibly be as long as one to 10 years since that contract and relationship has been assessed (if ever) for real third-party risks.

Getting to Grips with your Supply Chain

I speak with CPOs on a daily basis and every one of them admits that they do not have a perfect grasp of their third parties, let alone their fourth-, fifth- or sixth-level parties. When was the last time you asked a supplier (especially in the tail) if they ever subcontract? Or whether their third parties, or fourth, have been reviewed for cyber risk? Or any risk at all for that matter?

Do you know whether your fourth parties are using human slavery? If every device is updated for the latest virus check? Whether employees are charging their phones through their devices, or if they are permitted to insert USBs into their computers from an unknown source?

How do we know if our fourth-level parties have a proof of mining to avoid conflict minerals? When was the last time we even checked our own staff for complying with strong cybersecurity norms?

The Cyber Risks Within Your Organisation

Just recently at a convention for hackers, cables that looked like Lightning cables were modified with extra hardware that gave hackers remote access to devices. Here’s how they work:

“O.MG cables are indistinguishable from the real thing, and they even come with the iconic adhesive binding rings you’ll find wrapped around new Apple cables. The [modified] cables act normally, too, letting you charge your devices via USB or transfer files from your iOS devices.

Neither your PC nor your connected devices will ever notice that anything is amiss. Short of dissecting the cable to look for the extra hardware, the only way to detect that you’re using an O.MG cable is when you realize, after the fact, that your device was exploited.

And even if you happen to catch an attacker running a terminal window on your PC remotely, O.MG cables include a kill switch that disables the implanted hardware, thus destroying any possibility to track down the attack’s origins.”

‘These Dummy iOS Lightning Cables Let Hackers Remotely Access Your Devices’, Lifehacker, August 2019

Secure Apps?

Apple would have you believe that your iPhone is very secure, until you add your first app. For example, when traveling recently I downloaded an app to play Dominoes (the game, not the pizza). This is seemingly innocent, but since I was on a long flight, I actually read the privacy information.

Check out some of the following extracts from the Terms & Conditions and Privacy Information:

  • FM GAMES App is a gaming application that may utilise your personal data. You also consent to FM GAMES’s cookie policies, as described herein.
  • Types Of Data We Collect: We collect personal data and non-personal data about you.
  • Location and Distance Information: When you use the FM GAMES App, we will collect your location to determine your distance from other users (“Distance Information”) through the GPS, Wi-Fi, and/or cellular technology in your Device. Your last known location may be stored for the purpose of calculating Distance Information between you and other users.
  • Messages: When you send a message we may retain the message for archival purposes or as otherwise allowed by law.
  • Purchases: We collect information necessary to complete purchases. This may include, among other things, your name, credit card information, billing information, address, telephone number, and email address.
  • Third Party Tracking Companies: We may share your hashed Device ID, Profile Information, Distance Information, and demographic information with our advertising and analytics partners. These third parties may also collect information directly from you as described in this Privacy Policy.
  • Third Party Service Providers: We may share your Personal Data with third party service providers

When I tried to turn off location services, this was not allowed, so I discarded the app. If this is the case with a gaming app for my phone, can you imagine the angst my home screen caused our IT folks?

Would you know if you had been hacked?

If I charge my phone through my computer, imagine what I am opening up for hackers to get to? How many of you reading this are using public Wi-Fi? What about Starbucks, or at the airport? Many of us will pass through at least one on the way to the Procurious Big Ideas event.

Did you connect to the seemingly innocent Wi-Fi? Would you know if you were hacked? If you haven’t heard about the reporter whose email was hacked on an airplane while using the airline app while working on a story about the FBI and Apple, take the time to do so.

The hacker read nearly everyone’s email on the plane. They then pulled the reporter aside when they landed to discuss the security, or lack thereof, of his phone while using public Wi-Fi, even if was at 35,000 feet.

The Fallability of Passwords

If this isn’t enough, consider what anyone can do with your passwords. Take for example my login for Amazon. If you were able to see my screen while I was logging in, this is what you could do.

Then, if in Chrome, right click and click on Inspect.

By merely highlighting the password and writing the word “text,” you will see my password. It is that easy if someone is “looking at your email” as you are logged in.

So, there you go. This is my Amazon password and I have now changed it since I wrote this post (but don’t tell my kids). This is the most basic level of cyber protection you can get, but even at a personal level with my own “research,” we are so out of our league, especially when dealing with technology obsolescence.

In the era of BYOD (bring your own device) who knows what your staff is exposing your company to. If we take this one level further to our third parties, who out there is doing the exact same thing and exposing their company to the same risks I just showed you?

So, while we are going to discuss third-party risk management in my session at The Big Ideas Summit, this is just the icing on the cake. If I am just one of the hundreds of contractors, imagine what damage I could be doing to your risk profile.

The Art of Third-Party Risk Management

So, the long and short of it, we are living in exponential times and it is time we paid clear attention to all of our third-party relationships (and their third parties, etc.) along our supply chains or we are destined to be in for a large risk event. It isn’t a matter of if, but when it will happen. If technology obsolescence is happening faster all the time, then we need to stay educated and alert, not paranoid.

To overcome these obstacles, we need to have an effective third-party relationship management and framework. Successful third-party management programs should focus on the four cornerstones approach: contract and performance management, risk management, financial management and communication management. The risk aspect of the relationship framework needs to be addressed for both critical and non-vendor relationships, along with non-critical vendors.

I recently took SIG University’s Third Party Risk Management Certification Program and was amazed to learn how much risk we are exposed to within our contracts and the need for a strong third-party relationship framework with a focus on risk. For a framework to be successful, it must have strong governance and approved by senior management.

As a result of the 2008 financial crisis, there has been a renewed focus on the role of board of directors, the composition of the board, capabilities, accountabilities, and responsibilities for prudent acceptance and management of risk. This renewed focus has made it much easier to focus on third-party risk and to get strong governance in place to mitigate risks.

The most important lesson to leave you with is that third-party risk management is an art, not a perfect science. Having a framework in place to address and mitigate risk, escalate issues and seek resolution is the key to making strategic procurement decisions.

Learn more about procurement’s role in managing third-party risk by attending Dawn’s session at the Procurious Big Ideas Summit Chicago 2019 on Wednesday, September 18. If you can’t be in the room, there’s still time to register as a Digital Delegate. Find out more and sign up today!

About the Author

Dawn Tiura is the CEO and President of SIG, SIG University and Future of Sourcing and has over 26 years’ leadership experience, with the past 22 years focused on the sourcing and outsourcing industry.

In 2007, Dawn joined SIG as CEO, but has been active in SIG as a speaker and trusted advisor since 1999, bringing the latest developments in sourcing and outsourcing to SIG members. Prior to joining SIG, Dawn held leadership positions as CEO of Denali Group and before that as a partner in a CPA firm. Dawn is actively involved on a number of boards promoting civic, health and children’s issues in the Jacksonville, Florida area. 

She is a licensed CPA and has a BA from the University of Michigan and an MS in taxation from Golden Gate University. Dawn brings to SIG a culture of brainstorming and internal innovation.

One Small Step for People, 5 BIG Ideas for Procurement

Change all starts with one small step. But Big Ideas are great in helping us get our feet moving!

Photo by Joshua Earle on Unsplash

What happens when Australia’s biggest CPOs and procurement leaders gather in one room?

You get a flood of ground-breaking ideas that are bound to push our profession into an exciting new era.

The Big Ideas Summit Melbourne 2019 has wrapped after a day of thought-provoking speeches, lively discussions and the unforgettable sight of 120 procurement professionals hopping on one foot before their morning coffee. You probably had to be there to believe it, but it’s true.

A recurring theme throughout the day – both from our presenters and from the attendees themselves – was fun. Whether they were creating unusual networking opportunities, encouraging us to gamify our processes to make the mundane tasks more enjoyable, or reminding us that positivity was the secret to longevity, fun permeated this procurement event.

Our line-up of inspiring speakers spent the day continually challenging existing ideas and shifting the goalposts as we took a glimpse into the future. Here are five of the biggest ideas to come out of the Melbourne Big Ideas Summit this year:

1. Co-design is the essential skill needed to succeed in Industry X.0

Ben Tulloch, Managing Director at Accenture, lead us on a journey through the history of procurement. We’re standing on the cusp of Industry X.0. Soon we’ll be utilising the full force of advanced technology and challenging the ways we do business to become faster, smarter and better.

But what do procurement professionals need to focus on now to best utilise emerging technologies in the future? Co-design is the ability to actively involve all stakeholders in the problem-solving process, focusing on the user and pulling apart the problem to find the best answer.

2. Think with your head, but lead with your heart

We all know the three C’s of procurement: cost, control and compliance. But Henrik Smedberg from SAP Ariba believes we need to be aware of three new C’s: convenience, connectivity and conscience.

It’s time to move beyond just checking the boxes of legal compliance, and start using our hearts to think about the humans affected by problems like modern slavery.

But if administrative processes to monitor our supply chains are too difficult, they simply won’t happen. We need to utilise tech solutions to manage and automate our supplier risk administration. Only then can we have a more holistic view of our suppliers and be proactive about driving change.

3. Psychological safety is the number one factor in high performing teams

We’re at record high levels of anxiety in the workplace. When we’re under extreme stress our brains can only focus on getting the task in front of us done, making us lose our ability to think creatively, innovate and problem solve.

To counteract this and create high performing teams within our businesses, John Dare of Emotous believes we need to create a positive environment and foster a level of trust that will lead to psychological safety.

This is the common thread of high performance – the confidence to innovate, share ideas and take risks with the support of your team.

4. We need to give new starters support to agitate change

During their panel discussion, Billie Gorman of Accenture, CPO of the Year, Lisa Williams, and Future Leader in Procurement, Sapphire Loebler, tackled the issue of encouraging the next generation to drive change.

Ultimately, we need to give them room to operate, an opportunity to speak and the space to try new things. Whether they make mistakes or have success, there will be important learnings that will benefit the business going forward.

5. Agile procurement is a competitive advantage

Agility and flexibility are big news at the moment. It’s a trend that has crept in from software development into all facets of the business world and is increasingly becoming important in procurement.

Andrew Shaw, Enterprise Sales Manager at Felix, shared how agile frameworks can help to increase efficiency, simplify processes and shorten delivery times. Moving away from rigid plans make you more able to adapt to change – an increasingly important skill as the entire profession evolves exponentially.

The Big Ideas Fun isn’t Over Yet…

As an added bonus, our high-energy MC, Dean Gale from Phuel, reminded us of an important lesson for all procurement professionals: learning and growth comes from incremental changes and regular challenges. If we’re going to drive change within our company – and the wider world – it all starts with one small step.

Thank you to everyone who joined us in Melbourne and online – we can’t wait to see what ideas await us in Chicago on September 18th.

Did you miss out on Melbourne? Or can you just not get enough of the Big Ideas vibe? If you want to get more, more, more, there’s still time to register as a Digital Delegate for the Big Ideas Summit Chicago 2019. Even if you can’t be there in person, you can still be in the room. Find out more and sign up today here!

Progress or Perish: How to Push our Profession to the Next Level

Traditional procurement roles will perish if significant progress isn’t made. But how can the profession progress enough to deliver true value?

By @lindsayhenwood on Unsplash

By Ben Tulloch, Managing Director at Accenture

Ask any business executive in Australia how procurement has made their life easier, and they’re more likely to tell you that it’s been a roadblock.

Despite the profession’s brilliant minds, appetite for improvement, and advanced solutions from AI to blockchain and beyond, only 20 per cent of procurement tech projects down under prove successful. The issue, it seems, is something more deep-seated. The modern Australian enterprise is not geared for rapid evolution.

By the time Aussie companies have dedicated years of effort and distraction to available solutions, the market has advanced beyond recognition. What we really need is the ability to rapidly prototype and test ideas, implement them at scale and do it all again next month.

A lack of agile skills has left Australia lagging behind the EU and US. In fact, we’re probably at a 3/10 in terms of our capabilities and maturity, still using procurement tech and processes that harken to the 1970s. As we’re so late in implementing the basics, how can we even begin to place ourselves ahead of the curve?

Progress: The role of the traditional procurement manager will perish if it doesn’t change

There’s a fearmongered risk that jobs will be lost to advanced technologies. At some level, that’s correct: if a theatre nurse implemented AI to predict, trigger and record stock orders in the blockchain, they wipe out the P2P function of procurement. But this doesn’t spell disaster, it opens up new opportunities for growth.

If we can remove the administrative element of the job, procurement professionals can progress from a traditional role and take a more strategic view, rather than just buying stuff. They can leave a legacy and make a tangible difference – socially, environmentally and economically. For example, readily available blockchain solutions have the ability to eradicate modern slavery by providing ultimate transparency across supply chains.

But the skills needed to run a digital control tower or AI stock predictor are different. We’re going to need system integrators, program managers, design thinkers, full-stack engineers, mathematicians and AI experts. How do you rapidly shift engrained national mindsets – quickly and cheaply? A culture of co-design, ecosystem partners and using the success of tangible use cases to build trust are key.

‘Design Thinking’ is the Next Step

One of Accenture’s government clients had small armies of people trying (and failing) to keep up with updating pricing lists. Place an order, and it was most likely attached to the wrong stock number. As a result, buyers lost trust in suppliers and vice versa.

Now imagine if those master pricing lists were housed on the blockchain – transparent, secure and updated in real time? That technology exists, it’s cheap and takes only weeks to implement. But this isn’t a tech problem, it’s a change problem.

In the startup ecosystem, design thinking is in their DNA. Even three months is considered a long time, and products evolve continuously to keep up with market changes. These newer generations of Australian innovators would laugh our outdated tech and processes out the room, instead turning to a slick new app or platform that can be pushed to market within weeks.

But if procurement brought a startup solution to the CMO of a large Australian enterprise, it would likely be met with, “they’re not on our preferred supplier list.”

The Business Case for Innovation

The return on investment for agile solutions is not only profound, it’s immediate. We’ve been working with a major airline in Australia on using AI to predict, prioritise and elevate invoices for large suppliers, and manage changes in very complex supply chain relationships. In doing so, they’ve removed all paper processes, increased transparency, and seen a significant ROI in only three months.

Another major telco client has been tackling customer service with an omnichannel conversational platform that can replicate complex human conversation, comprehend voice, text and multiple trains of thoughts – not just spit out an answer to a direct question. Within months, the bot has compressed contract changes from 3.5 days to 8 minutes. This relatively inexpensive solution has potential solutions for the entire procurement profession.

The best part is that the platform was in live testing by week three. That’s on a live contract with live scaling and live data, three weeks after the idea was suggested. That’s design thinking in action.

The Art of the Impossible

Showcasing the impossible is powerful. If I utter the word ‘blockchain’ to an old-school Australian organisation, they’re likely to palm it off as a futuristic dream. But show them a functional, cheap and efficient blockchain contract in action and they’ll get it. Demystify advanced technology for your workforce, and take the objection off the table.

Collaborate with industry partners to forge a path forward that benefits everyone – not just your company. Start with the problem, and isolate solutions. Sure, there are technical and personal risks involved in evolution. But there are risks with everything in business. Not every idea has to be rolled out permanently across your entire enterprise. But not taking steps towards the future is the biggest risk of all.

At this month’s Big Ideas Summit, procurement professionals will be coming together to understand, challenge and solve the profession’s biggest problems. I’ll be speaking to the power of design thinking in facing the future of procurement, and how an “Industry X.0” mindset can pave the way forward.

The bottom line is that if you do nothing, people will find their way around you. The best way forward is to recognise that you’re not alone – Australia lags behind with you – and then get on the front foot and be ready to progress.

The Biggest Myth about Supply Chain Visibility

supply chain visibility
Photo by pascal allegre on Unsplash

Traditionally, when organisations have discussed supply chain visibility, the focus has very much been on the downstream. Why? Because common thinking is that the customer is king. And, as downstream visibility focuses on the customer, it is the first, and sometimes only, priority.

This has in turn given credence to the biggest myth about supply chain visibility, which is that downstream visibility is more important than upstream visibility. It’s high time this myth was busted, because this belief has a very narrow focus, and is not truly reflective of modern supply chain thinking. The truth is that upstream visibility is just as important as downstream visibility. Why? Because a lack of upstream visibility is just as likely to impact your customer.

Supply Chain Visibility – Upstream vs. Downstream

Before we get any further, let’s make sure to clarify some basic definitions.

Downstream visibility is a clear understanding of exactly how your products are moving down to your customer. Basically, it covers all the processes and actions that are involved in getting your finished product from your warehouse into the hands of the end user.

Upstream visibility, on the other hand, is a clear understanding of exactly how all the parts required to make your product are moving down through to your organisation. From a supply chain perspective, this covers all the processes and actions involved in getting what you need to create the finished product.

You might also occasionally hear the term “midstream visibility” to refer to what’s happening in production. From a supply chain perspective, these processes are often amalgamated into the category of downstream visibility.

Together, upstream visibility and downstream visibility combine to create end-to-end supply chain visibility.

Too Much Downstream Focus?

Let’s say, for example, that your company manufactures cameras. You need to make sure that you have full visibility of what’s happening when a camera is moving from your warehouse to your customer. Right from final testing right through to delivery to the store.

There are several processes that are available to organisations in order to track and improve downstream visibility. Depending on the complexity of the product in question, this can range from optimization of transportation and warehouse logistics and unifying ERP systems, to creating digital twins of their production, and more.

If your organisation is already looking at these kinds of projects, well done. But if downstream visibility is your only focus, you’re only doing half the job.

Without upstream visibility, you run the risk of not getting the parts you need to build your product. How are you going to get your cameras into the hands of your customers if you can’t build them in the first place? This is why upstream visibility is just as crucial as downstream visibility.

Upstream – Just around the Riverbend

So how do you get upstream visibility? A supply chain risk management programme is a crucial first step. If you’re not monitoring your suppliers (not to mention your supply paths, your own sites and your second and third tier suppliers too) for events that are going to impact them, then you have virtually no upstream visibility.

Here’s where you should start:

• In procurement: Your procurement department owns the relationship with suppliers. The department needs to have access to data allowing for all the necessary insight into any type of risk affecting your supply chain, both upstream and downstream.

• In your supplier sub-tiers: According to the Business Continuity Institute, most supply chain disruptions occur below tier one, where visibility can be even harder. You need visibility into not just your tier-one suppliers, but of all your sub-tiers. This is where good tier-one supplier relationships are key.

• With your major logistics hubs: What major logistics hubs are your supplies and your products going through? Do any of these areas represent bottlenecks? And are you aware of events there that might impact your supply paths? If not, you’re not going to be able to effectively mitigate threats.

• Your own warehouses and distribution centres: You need to monitor your own sites as much as you need to monitor your suppliers. Creating good communication lines and relationships with internal stakeholders is going to help here. The people on the ground will know best if issues are on the horizon, and then you can collectively work to implement actions and processes to prevent, or at least mitigate, them.

The supply chain visibility conversation is an important one to have in any organisation that has a supply chain. But if you’re focused on just downstream visibility, you’re missing half of the equation. And this could ultimately be the difference between success and failure.

Myth = Busted!

Find out more about upstream and downstream visibility, as well as Supply Chain Risk Management software, with Big Ideas Summit sponsor, riskmethods, here.

Want to get your wheels turning towards a supply chain career one could only dream of? Then don’t miss our upcoming Career Boot Camp with IBM – a free 5-part podcast series with some of the very best of the best. Check it out here: https://www.procurious.com/career-boot-camp-2019

Intelligent Spend Management – Your Next Smart Move

Photo by Val Vesa on Unsplash

Bringing it all together by bringing Intelligent Spend Management to the business.

If you’re just buying office supplies, you’ve probably got a good idea what you’re spending on paper and pens. But odds are your budget goes beyond a few reams of ultra-white printer stock. And while you are specifically tasked with procurement, you actually help hold the reins and hold influence on multiple categories of spend — from direct and indirect goods, to services, contingent labour — even T&E.

True, this spending is spread out across your organisation and, yes, in many of these categories, spending is more decentralised than ever with employees all over the company buying what they need when they need it. And, it’s true that all of this spending and all of these categories aren’t even in your charge.

However, the business needs you to help bring all that spend under control across all those categories, so you can not only reduce costs, but also help your company:

  • Manage supplier performance holistically
  • Diminish delivery and reputation risks across the board
  • Improve compliance and enforce purchasing policies equally in all categories
  • Increase productivity across procurement and throughout the entire company

Changing Expectations

Organisations are expecting this and more from procurement.

  • They want you to collaborate with finance and supply-chain leaders and address spend management across the business.
  • They’re expecting you to bring more spend categories under control, to unify how you manage suppliers across all categories, and to help bring direct and indirect spending together with services and T&E to increase visibility into all your spend.

They want more, and there’s an easy way to deliver and manage every source and every category of spend in delivering one, unified view.

Unfortunately, the systems most businesses use to manage all of these different spend processes can create barriers between spend categories and keep people from working together. Intelligent Spend Management, on the other hand, is a strategy designed to bring those barriers down, so you can get visibility into and control over each and every area of spend. In one place.

Why Intelligent Spend Management Matters

Intelligent Spend Management means comprehensive policy and supplier management. This gives you oversight over indirect and direct suppliers while bringing that same level of discipline to services/external workforce suppliers as well as key travel suppliers.

And, integrated with your ERP system, an Intelligent Spend Management solution creates a common set of spend data — a hub where you can unify and clarify the information. You’ll also be able to:

  • Capture and centralise once-invisible spend like p-card transactions, non-PO invoices and direct travel bookings that used to slip through the cracks in your systems
  • Apply sourcing best practices consistently to all of your suppliers across all categories
  • Centrally manage supplier risk as well as tax and other regulatory requirements

It brings you best-in-class control of each spend category. This means you can manage the entire procure-to-pay process for direct and indirect expenses from a single solution. Imagine being able to:

  • Deliver a guided user experience that makes it easy to follow policy
  • Give users a simple way to make procurement requests, plus tactical purchases directly from suppliers
  • Ensure the suppliers you source, the prices you negotiate and the terms you establish are pulled through right to the point of purchase, so policy compliance becomes everyday practice
  • Capture data from across the process and use AI and machine learning to automate mundane tasks and serve up insight-driven recommendations at critical decision points
  • Strengthen supplier relationships and, ultimately, get more innovation from suppliers to improve how you work and what you deliver

And you can bring that same level of precision, efficiency and user experience for services, your external workforce – and the same level of control.

Presenting a Unified View

You get a unified view of spend. The Intelligent Spend Management solution connects procurement spend data with data from across spend categories, giving you a single, near-real-time view — without having to piece together reports from disparate systems.

This means you, your friends in finance and your supply-chain peers can see where every bit of your budget is going, and help the organisation:

  • Ensure that all spending is in line with corporate policy and priorities
  • Get up-to-date views into your KPIs, so you can adapt accordingly
  • Manage discretionary employee spend before it gets away from you
  • Feed this spend data back into supplier management and fuel stronger negotiations

Intelligent Spend Management breaks down the silos, so companies can control spend across the board.

This is about procurement, but it isn’t simply for procurement. Intelligent Spend Management enables you to work across categories and bring all the data together — so you can bring confidence to your company by bringing certainty to your spending.

This article was written for Procurious by Drew Hofler, VP of Portfolio Marketing for SAP Ariba & SAP Fieldglass.

Big Ideas Summit – A Review

“The overall standard of the speakers and content was very strong, and here are four points that stood out for me as positives.”

By Rawpixel.com / Shutterstock

Yes, I was looking forward to the Procurious Big Ideas Summit last Thursday. But when I got up to see pouring rain and realised that the opening session was all about Brexit, my heart sank more than a little. Perhaps South Western Railways would come through with a handy 45-minute points failure? But no, all went well, and I was at the rather lovely Soho Hotel in good time for Professor Anand Menon, Kings College London and Director of think tank “UK in a Changing Europe”.  I sank back into the very comfy seat and prepared to be bored. 

And he was great. Probably the clearest description of where we are with Brexit that I’ve heard, and convincing ideas of where we go next. Why isn’t this man on the BBC more often, I wondered?  And guess what? When I got home that night, there he was, reviewing the papers at 10.30pm on the BBC News Channel!

So, what else was good about the Summit? The overall standard of the speakers and content was very strong, and here are four points that stood out for me as positives. 

1. Whether it was planned or not, almost all the speakers left plenty of time for questions and discussion. With the size of the group – around 50 – that meant we got into some genuinely interesting and engaging debates. For instance, Julie Brignac (from WNS Denali) gave an interesting viewpoint on why CPOs don’t make it to CEO very often. But because she only used half of her 35-minute slot for her formal presentation, we then had a really good interactive session with loads of comments and ideas flying around. A good lesson here for speakers and event organisers generally, I think. 

2. Although there were “sponsor speakers” from Ivalua, SAP Ariba, Barclaycard, and Icertis (plus WNS Denali), none of them simply promoted their product. Indeed, in the case of Justin Sadler-Smith of Ariba, someone asked him why he hadn’t focused more strongly on technology as an enabler for procurement transformation during his session! That showed admirable restraint from him in my book.  Vishal Patel from Ivalua was similar, talking about the hype and reality of AI, including the vital need for robust and accurate underpinning data, without pushing his own solutions too strongly. 

3. That size of audience – around 50 people – does help with networking.   You generally see and interact with people several times during the day, so particularly if you go along to the post-event drinks, you can make real personal connections through the event. That’s harder to do when there are 200 people at an event. 

4. The non-procurement “inspirational” speakers were very well chosen. Darren Swift lost both his legs when serving in the Army in Belfast, and has since become a champion sky-diver, a snowboarder, actor and motivational speaker. Just amazing and testament to the power of positive thinking. And David Gillespie is an actor and writer who told us about the power of stories, and how we can project our “status” and image in a way that will make us more respected and effective when working with others. It’s the sort of thing that initially sounds a bit fluffy and new age, but he was actually very down to earth and totally convincing in his messages. And perhaps he gave us some clues in terms of answering those questions I mentioned above about CPOs getting to CEO!


So, I assume the sessions will be available online at some point, and they are pretty much all worth checking out (there was only one during which I may have dozed off…!)  

If you’d like to attend Big Ideas Summit London 2020 on 12th March please contact Holly Nicholson [email protected]

New Goals for Procurement – Driving Revenue Growth Through Supplier Collaboration

Procurement professionals need to think in more innovative ways about how we can drive competitive advantage and shareholder value for our organisations.

By Greg Epperson / Shutterstock

In my recent article, I talked about “the Art of Procurement”, and suggested that the time is right for procurement to move beyond our traditional focus on transactional improvement and basic cost reduction. Whilst remembering those are still important aspects of the role, we need to think in more innovative ways about how we can drive competitive advantage and shareholder value for our organisations.

Revenue growth is one key factor that determines shareholder value and organisational health generally. While profit is of course important, and the procurement goal of cost reduction plays a key role here, “you cannot cut your way to growth” (or ultimate success), as the saying goes. Growth is vital, and stock markets arguably value growth more than absolute profit levels or even margins.

So, firms can grow revenue through a variety of activities, for instance;

  • Finding new customers for existing products
  • Improving existing products (so the firm sells more)
  • Introducing new products – either totally “new”, or line / range extensions and additions
  • Improving the efficiency and effectiveness of sales and marketing activity

In every case here, it’s clear that procurement has a potential role to play. Even in terms of the “improved sales / marketing” route, there are possibilities – maybe procurement can work with the marketing team to find innovative suppliers in areas such as digital marketing? 

For one European bank, the capability of their internal procurement team has become a customer benefit that is winning new revenue.  Potential business customers – particularly small and medium sized firms who may not have much internal capability – are offered access to a set of procurement tools, templates and good practice guidance developed by the bank’s procurement team, who are also available for telephone consultation if the clients want that too. In a market where the core banking service on offer from every competitor is very similar, this has proved to be a differentiator that has won new business for the firm.

When it comes to improving existing products (or services), suppliers are often better placed than the business itself to identify opportunities. Procurement can really come into its own by supporting that supplier-driven innovation and improvement. But in many cases, it is not simply about identifying the innovation or improvement – it may well be that the firm gains revenue and advantage through the speed to market compared to the competition.  

That was highlighted in a recent webinar I enjoyed, which featured my old friend and ex-colleague Jason Busch of Spend Matters as well as KPMG and Ivalua. But the highlight was hearing from Mark Gursky, Director of the Procurement Center of Excellence at Meritor (a $4 billion global manufacturer of automotive components). He explained how procurement in that business was contributing towards ambitious targets for growth via new product launches.

The key was (and is) enabling more effective working between Meritor and key suppliers, who are supporting the drive for growth. That change in the whole working relationship between buyer and suppliers, needed to support Meritor’s goals, has itself been supported by technology (that’s where procurement technology firm Ivalua comes into the picture).

It struck me that the technology achieves two goals. First of all, to really make the most of what your suppliers can offer, you need to manage the basics of supplier management well. That means supplier master data management; spend and contract analytics; risk management and so on. Putting it simply, if you don’t have a grip on who your suppliers are, what they’re doing with you, where in your organisation they are already working, and how they are performing, then impressive sounding “supplier innovation programmes” will be built on sand.

Then, having got the foundations in place, technology can support the actual collaborative development work. Gursky talked about using the Ivalua platform to manage all the work between the firm and key suppliers. Information is captured in one place rather than emails flying around between lots of different people. Complex requirements can be quickly translated into bills of material, then suppliers can respond rapidly to requests and questions. Projects can be tracked, data and information exchanged securely between the parties, and outputs tracked and monitored via the platform. Information is easily shared, but proper controls are managed too, important when we’re talking about potentially innovative new products.

You can still access the webinar here to find out more about the Meritor story; it’s a great example of procurement looking beyond the norm, and really contributing to those wider goals such as revenue growth.  And at the Ivalua Now “Art of Procurement” conference next month, I’m expecting to hear more examples like that of procurement moving beyond our traditional heartland of cost control and transactional management.

You can book for that here, and join the firm, key clients such as Total, Suez and Deutsche Telekom (and me) in Paris for what should be a stimulating couple of days – maybe see you there!   

Ivalua are sponsoring today’s Big Ideas Summit in London. Sign up now as a digital delegate to follow all the action wherever you are in the world.  

Procurement Pros: You’ve Got A Friend In ROI

How does an organisation know that the procurement initiatives, projects, efforts really result in a quantifiable benefit to the business?

By Mercury Green / Shutterstock

As both a former CPO and consultant, I’m often asked about the strategies I have employed to grow, reach and deliver results. Yes, I can tell you stories from past lives of wooing reluctant stakeholders and setting savings records year over year. Actually, the secret to my success in procurement is much less glamorous, and I’d like to share that with you: 

Effectively planning and prioritising initiatives and meticulously tracking ROI through a rigorous project benefit validation process and governance framework are the best ways to increase your organisation’s credibility, dependability, and recognition.

Procurement plays a critical role in the cost management of an organisation.  This is why many organisations are quick to tout the cost savings and bottom line benefits generated by procurement’s efforts. Procurement’s maturity journey, when done right, can last months to years, and often requires significant investments – consultants, technology infrastructure, headcount, and support services. How does an organisation know that the procurement initiatives, projects, efforts really result in a quantifiable benefit to the business? Furthermore, how can the organisation fully appreciate procurement’s value? When the results are not tracked, reported, and kept as the focal point, procurement’s full impact can be overlooked, or underappreciated at best.

ROI is your friend

Procurement intersects across the business’ most strategic functions: operations, finance, legal, while managing critical external supplier and partner relationships. This broad exposure is combined with well-honed skills in cost control, analytics, process, research, contracting, and negotiation, as well as a deep knowledge of the business and company culture. Yet, we are often not given the respect we deserve as a key trusted business partner. Why is that?  Procurement teams tend to sell themselves short by not forecasting ROI and tracking quantifiable benefits for all value-add initiatives.

Identifying project benefits and estimating an accurate return on investment (ROI) can be very challenging for organisations. There are several possible reasons why ROI often goes unmeasured:

Being satisfied too early

Some organisations are satisfied with the general improvement in their financial statements after formalising a procurement strategy, because now a methodology in which to quantify “savings” or “value” has been defined.  When this journey begins, controls are strengthened, initiatives are defined, “low hanging fruit” is addressed, resources are deployed, and as a result, the organisation performs better as a whole. 

Focusing on tactics

Some companies focus intensely on training resources and executing projects in the early stages of a procurement journey, and place secondary emphasis on measuring ROI, believing that the benefits will come.

Can’t find the right formula

Some companies attempt to measure ROI, yet they are unsure how to quantify project benefits generated from procurement, especially if there are multiple ways to measure a successful procurement effort. It is evident that, even considering how well-known or understood the procurement function is to the world, there is still a significant knowledge gap. How can procurement quantify project benefits and truly link them to a company’s financial performance?

The well-reported results of industry pioneers that are more mature in their procurement function, as well as the pressing need to reduce costs and improve productivity, have encouraged company leaders to push their teams to undertake even more procurement initiatives. Sometimes, after an initial burst of enthusiasm, these efforts languish over time, or procurement becomes less engaged than they once were. This can often be because benefits have not been accurately estimated or verified as impacting the bottom line. In some cases, benefits can be reconciled as tangible contributions to the income statement; but in others, benefits may not be so evident during a reconciliation process.  A critical key to success is to ensure that procurement does not miss an opportunity to bring true credibility to their efforts is to implement a process that directly reconciles project benefits to the company’s accounting and reporting systems.

The tools you need: project selection, benefit validation and governance

A strong project governance process is key to the successful project execution and results. A comprehensive project governance process encompasses how projects are identified, selected, executed and reported. However, in most project governance processes, a key element is often forgotten: benefit estimation and validation.

While most organisations recognise the value of properly vetting project ideas and opportunities prior to launching a project, many fail to follow the process religiously for every initiative. Some may launch projects before a proper prioritisation effort has taken place, or others may spend too much time in the idea generation phase. Often, organisations fail to estimate potential benefit prior to project chartering or prioritisation of projects.

Experience has shown that the pressure to get started, or to drive quick results, pushes teams to launch projects without taking the time to adequately plan or determine probable benefits. This ineffective approach to project selection and prioritisation means that projects are often executed without being fully linked to the organisation’s overall strategic goals, and as a result, too many projects are chartered, and few are completed to the company’s expectations.

Not only does a project benefit validation process help with initial benefit estimation during project selection, it adds rigor during project execution by defining project benefits with more accuracy and clarity. This facilitates credible benefit reporting, and establishes a foundation for post-project benefit reconciliation, where benefits can be reconciled to the organisation’s financial statements. Simply stated, the benefits driven by the procurement effort can now be fully understood as to their impact to the business.

A strong project benefit validation infrastructure can support the procurement function as it matures an evolves to take on more challenging value-add activities for the business. It provides not only the basis for identifying and approving projects, but also serves to maintain the momentum and retain ongoing management and stakeholder support to build the brand, extend your reach, and deliver better results year over year.

WNS is sponsoring Big Ideas Summit London on March 14th. Sign up now as a digital delegate to follow the day’s action wherever you are in the world.  

How To Seize The Opportunities and Manage The Risks

Where supply chains are already complex, increased visibility throughout the supply chain and closer monitoring of risk are becoming more common…


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In 1992, Yoshihiro Francis Fukuyama, the American political scientist and author, published the much-praised The End of History and the Last Man, which suggested that the spread of liberal democracy and free-market capitalism meant that the final and ideal form of human government was now clear and established. He foresaw “the end of history as such.”

It’s clear that 25 years on, life has not quite worked out like that.

The world continues to be as unpredictable as ever, with the rise of unexpected leaders such as President Trump, the emergence of China as a global superpower, Brexit, wars in the Middle East, and many other developments. All we can say about the future is there is still plenty of history left to be written, and anyone who tells you they know what is going to happen is a genius, crazy, or simply a liar.

Look for opportunities

But of course, times of change bring huge opportunities, too. The digital revolution has turned industries upside down, with disruptive market entrants seizing market share. Some incumbents adapt well and others don’t. Emerging markets hold great potential, too, which many western firms have been slow to pick up on. For instance, by 2050, Nigeria will be the third-most-populated country in the world, with more citizens than the United States.

It is also amazing how rapidly the politico-economic situation appears to change today; a few weeks ago, the press was reporting that the United States and Europe were about to enter a trade war. One meeting later, all seems well again, and the “U.S. and EU reach deal to calm trade war fears,” as The Guardian reported.

Where does this apparently ever-increasing pace of change leave the procurement professional and the organisations in which they work?

I’ve previously compared Brexit to the over-hyped “millennium bug” (Y2K) and related challenges stating that unlike Y2K, where there was a defined risk and problem to solve, Brexit poses significantly more uncertainty and therefore perhaps a wider range of risks to review.

That uncertainty is central to the challenge for organisations. We know there will be issues to be faced; tax, customs, and trade complexities, for example. But it is impossible to know yet exactly how Brexit will affect the business environment at the national, sector, or individual company level. So although it might seem tempting, this is not the time for procurement executives (or indeed anyone in business) to pull the blankets over our heads and ignore the situation – the “wake me up when it’s all over” approach, we might call it. The UK was, after all, an independent nation for many, many years before it joined the EU. 

We know life will go on after March 31, 2019!

 Be prepared

Indeed, fortune favors the prepared. Scenario planning, looking at the “what if” questions, is essential for organisations that can see their business being potentially impacted by Brexit. And whatever happens, procurement or supply chain leaders, with their focus on the external world, have a particularly important role to play.

Where supply chains are already complex, increased visibility throughout the supply chain and closer monitoring of risk are becoming more common with the help of leading edge technology including blockchain and “cobots”.  Increased deployment of blockchain solutions, for example, enhances frictionless, secure transactions and smart contracts, minimising paperwork and effort to manage compliance with increased regulations. While it’s early days for blockchain adoption outside of financial services, almost all major manufacturing organisations have ongoing work in this area.

But let’s finish with two key takeaways for procurement leaders based very much on currently available technology. Both relate to areas where digitalisation should continue or even be accelerated to position the organisation well for Brexit and a period of change.

First, make sure your procurement “fundamentals” are in good shape.Digital technology provides the means to do this more effectively than ever: robust vendor master data; visibility on spend and suppliers; and accurate, relevant, timely data about spend and spending plans, suppliers, and contracts. Understanding the supply situation in its widest sense is essential if the organisation wants to be well positioned to handle future change, shocks, and opportunities.

Second, consider the specific need for supply chain risk management to be robust, effective, and dynamic. That covers not just political risks, of course, but also financial risk, reputational risk, “man-made” risk (e.g., labor disputes at supplier plants), or natural disasters. It also needs to consider multi-tier supply chain risk, not just immediate suppliers. Technology is a key enabler here, as well, but organisations need to consider skills and mindset too when it comes to effective risk management.

To sum up, while no one would pretend that there won’t be issues, problems, and costs associated with Brexit, for the UK and indeed other countries, there will be opportunities, too.

SAP Ariba are sponsoring Big Ideas Summit London on March 14th. Sign up now as a digital delegate to follow the day’s action wherever you are in the world. 

Forget Procure-to-pay – The Future Is Procure-AND-pay

How can virtual card payments improve the procurement experience?

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Traditional card-based solutions link one card to one individual. Virtual card solutions, on the other hand, link one ‘virtual card’ to one transaction. It’s a technology that has the potential to add real value to corporate payments – especially as controls on credit limit and dates of use can be set per transaction – but it’s one that is yet to be implemented across the entire corporate environment.

Integrating for efficiencies

The key to unlocking the full potential of virtual card solutions is about partnerships with existing procurement systems, especially in meeting the needs of multinationals.

“In B2B payments, we’ve had good traction for [our solution] in mid to large corporates, but utilisation for the very largest multinationals has been limited, and that’s because of their significant investments in sophisticated procure-to-pay (P2P) software,” says David Price, Managing Director of Client Coverage at Barclaycard .

Those systems allow businesses to procure in a compliant and cost-effective way, and provide a good experience for the user, except when it comes to payments.

The impact on buyer experience

Previously, procurement teams had to step outside the P2P environment to complete payment through a separate portal. Now virtual card platforms are being integrated into procurement systems including Coupa, adding ease of use and another option for users within a technology that is already trusted and familiar.

“From procure-to-pay to procure-and-pay”

“As soon as transactions are authorised, virtual card payments are triggered automatically so there’s no need to leave the environment or to process payment manually,” says David. “The common terminology is procure-to-pay; through integrations, it’s a move towards procure-and-pay.”

Integrated solutions have the potential to improve the buyer experience further, bringing additional benefits to the business such as greater efficiencies, control, data insights and cash flow flexibility.

Onboarding efficiencies

End-to-end procurement costs are often high because of bureaucracy and paperwork, with efficiency gains made elsewhere in the process lost at the point of payment. That’s especially the case in the tail-end spend of large volumes of small-value transactions. When suppliers are paid using a virtual card platform, there’s no need for a business to run lengthy due diligence checks or set them up on internal finance systems – typically saving them 3-5 hours per transaction for a new supplier.

“Virtual card platforms can help to streamline a business’ payment system.” They can also be used to make payments directly into suppliers’ bank accounts meaning they can be paid using the platform even if they don’t accept card payments.

“That’s the through the card piece in procure-to-pay that we are addressing,” notes David. “Precisionpay, [Barclays virtual card platform] helps to streamline a business’ payment system and also allows payments to be automatically reconciled to invoices and purchase orders, creating further efficiencies.

Flexible controls

Authorisations and controls are fundamental to the procurement department, as it looks to avoid uncontrolled or rogue spend. The result can be over-engineered and over-complex control policies, with a bias towards the buyer rather than supplier benefit. Such an imbalance can make it challenging for procurement to negotiate the best deal.

“Objective advice to create sustainable long-term relationships.”

“Therefore, what we suggest is adjusting your policy so that your authorisation and control strategy is reflective not just of a desire to create control but is also proportionate to the supplier you’re working with. As procurement functions start to implement appropriate, supplier centric payment strategies, that’s when some of a virtual card platform’s capability becomes even more valuable.”

Moreover, by using a virtual card solution, companies can flex cash flow, much as a consumer equipped with a credit card could. Payments made today, for instance, can be repaid as per the billing cycle, plus an additional 28 days after the equivalent of a credit card statement has arrived.

Building a strategic partnership

It’s unlikely a virtual card platform would be the right payment vehicle for all suppliers. It’s important to figure out where best to deploy virtual card technology. By analysing a client’s account payable file and understanding their business strategy, it can provide recommendations for different categories of spend and which result in the greatest benefit for the buyers, such as where to quickly drive efficiencies through volume.

Barclaycard are sponsoring Big Ideas Summit London on March 14th. Sign up now as a digital delegate to follow the day’s action wherever you are in the world.