Category Archives: Big Ideas Summit

Just When You Thought Our Ideas Couldn’t Get Any Bigger…

Spend 15 Minutes with five procurement power-players in our podcast series, Even Bigger Ideas, presented by State of Flux.

Register as an online delegate for the London Big Ideas Summit 2017 here.

As a Big Ideas Summit 2017 digital delegate, you’ll gain access to insightful discussions, connect with our procurement influencers, access video content from the event and have the chance to share your own big ideas with the Procurious community.

And, if that wasn’t enough, your digital experience just got that little bit richer and more intimate as we announce Even Bigger Ideas!, a 5-Part Podcast Series, which will be available exclusively to our Digital Delegates on Procurious.

Over five, bite-sized podcasts you will hear from some of the most intriguing thought-leaders on the trends disrupting business and the Big Ideas to benefit from them.

Without further ado, we’d like to introduce you to the stars of the show who’ll be helping you to think the unthinkable, nurture your big ideas in the biggest companies and unleash your creative genius.

James Bannerman – 15 Minutes to Unleash Your Creative Genius – Tuesday 21st February

Tuesday 21st February

Our podcast series kicks of with James Bannerman, Creative Change Agent and author of Non-Fiction best-seller Genius: Deceptively Simple Ways to Become Instantly Smarter. James believes that in a world where innovation is the new currency, procurement teams that fail to execute their ideas with originality just won’t cut it. He’ll be offering some top tips on how to unlock creativity in order to help us all achieve additional moments of pure genius.

Linda Yueh – Should Procurement Pros Be Concerned About Global Trade?

Wednesday 22nd February

Linda is a renowned economist and Adjunct Professor of Economics for London Business School. She was the BBC’s Chief Business Correspondent and host of “Talking Business with Linda Yueh”, as well as Economics Editor at Bloomberg TV.  She’s the go-to expert on issues relating to global trade, Brexit and Trump’s presidency. Concerned that a rise in protectionism might have a negative impact on your global supply chains? Linda’s  on hand to quell your fears and put your mind at ease.

Chris Lynch – Nurturing Big Ideas through Big Companies

Thursday 23rd February  

Chris Lynch, Chief Financial Officer at Rio Tinto, has had nearly 30 years’ experience in the mining and metals industry. He joined the Rio Tinto boards as a non-executive director in September 2011, and was appointed chief financial officer-elect, an executive board director and a member of the Executive Committee in March 2013. Chris has spoken extensively about the importance in fostering a culture of “intrapreneurship” within large organisations. He’ll explain how individuals will face more resistance, the bigger their idea is but, with the right nurturing and persistence, their is a chance of success!

Nik Gowing -Thinking the Unthinkable – The Update

Thursday 23th February

2016 Big Ideas Summit speaker, Nik Gowing is back to give us his latest update on Thinking the Unthinkable. Nik is a visiting Professor at King’s College & former BBC-Broadcaster with over 35 years analytical expertise in diplomacy, defence, international security. Last year, Nik explained that executive leaders are experiencing the very human sensations of feeling overwhelmed,  under pressure and unable to think unthinkables. What, if anything, has changed in the last 12 months?

Anders Sorman-Nilsson Seamless – Digital Adaptation and Human Transformation

Friday 24th February 

Anders is a Futurist and the Founder and Creative Director of Thinque, a strategy think tank that helps executives and leaders convert disruptive questions into proactive, future strategies. He’s an active member of TEDGlobal, has keynoted at TEDx and guest lectured at Sydney University and University of Technology Sydney Business School. Anders will help you prepare for a digital future lead you to question if your procurement team suffers from change fatigue!

Even Bigger Ideas is presented by State of Flux.  

No budget, no problem! Join the conversation and register as a digital delegate for Big Ideas 2017 now!

The Procurement Love Triangle

Love the idea of software solving all your procurement problems? You’d better make sure it’s working in harmony with your people and your processes. 

Paul Blake,  Senior Manager, Technology Product Marketing at GEP Worldwide is a keynote speaker at Big Ideas Summit 2017.  He’ll be talking about digital procurement transformation and why it’s so important for procurement to  adopt  digital-first models. We chatted to Paul ahead of the event to get his take on procurement’s current position.

Describe a perfect client for GEP?

The perfect GEP client is a large company with a lot of complexity in its spend but with a desire to do things better and drive more value into the business.

Do you think cognitive tech signals the end for the procurement profession in the near future?

I don’t.  Procurement has always been driven through human innovation and creativity, but that has often been constrained by the necessities of labour intensive transactional processing and data analysis.  Emerging technologies have the capacity to free the procurement profession from the bounds of document processing to focus more on driving new sources of value.

You’ve been at GEP for five years. What’s changed for the procurement function in this time?

Three major things:

  1. The cloud has come of age for procurement.  The industry can now conduct its entire operations completely independent of any infrastructure considerations.

2.  The unification of procurement and order processing.  Procurement’s remit used to end at the contract, with value realisation outside of their purview.  A single overview of “source-to-pay” gives a much greater ROI

3. The trend toward global harmonization of the supply chain is under threat.  That means increased risk, volatility and uncertainty.  Today, procurement teams need greater reserves of agility and responsiveness to remain successful.

What should we expect from the most successful procurement leaders of the future?

A recognition that procurement has a much broader, collaborative role to play across the entire business.  Reflecting changes in technology, the isolation of business functions into silos is retrograde thinking and a changing world will need a broad-minded approach to procurement operations

What 3 attributes make a great leader?

Education, education, education!

When is software not the answer?

When the question involves people and/or processes!  The three are so deeply interdependent that software itself is never the whole answer.

Join the conversation and register as a digital delegate for Big Ideas 2017

Do You Belong to a Procurement Dream Team?

The age of workforce 4.0 is fast-approaching. Have you ensured you’ve got a dream team in place to help you navigate your way through the rapid changes ?

Register as an online delegate for the London Big Ideas Summit 2017 here.

So. Here’s the scenario. After years of effort, elevating the role of procurement and complaining that Procurement doesn’t have a seat at the table in sectors where procurement is yet to tread (yes, in 2017 there are still organisations and sectors that do not have procurement teams or resources), your phone rings. It’s a CEO. And you’re invited to their office.

Now, this is the age of Workforce 4.0, so as we know, the CEO is agile and their office is the coffee shop near the school where their young children are running the lunchtime class teaching the adults how to tweet on facetube and grow vines on instachat.

Procurement is Awesome

As you sit down and your coffees arrive, the CEO looks you in the eye and says “Enough already. I get it. Procurement is awesome. Right. I want you to set up a dream team. Hire any five people you want. I’ve followed you on Twitter, read all your @Procurious_ and LinkedIn blogs, I’ve listened to the @aopshow and I get that there are some serious issues to deal with. I need you to do it and I want you to pick your team. Facetime or Skype me when you’ve done it.” And off you go…

How many of us are ready for that call? Whether it’s for a greenfield procurement team, or for a transformation programme or business critical project, do you have a list of five people in your head that without hesitation, you would call and bring on board to work with you to get it done? We can ignore minor administrative issues like availability, notice periods, or people processes for the purposes of this, but are there five people that you would hire, brief and set loose on the task without a second thought, safe in the knowledge that “it’ll be fine, [insert names] are on it and success is safe in their hands”.

What does the procurement dream team of the future look like?

I can’t quite remember where I was first posed this question. It was more than likely in a pub in the dim and distant past, but I remember first applying it when I worked in recruitment. If I was sifting CVs for a client, I tried to put myself in their shoes and ask, “If I was them, would I hire this candidate and put my success in their hands”. If I couldn’t say “yes”, or at least “maybe”, then I wouldn’t waste the client, or the candidate’s time.  That was a long time ago and before I’d even heard of Procurement!

Are you ready for “The Call” is a question I’ve asked colleagues over the years too, usually on car journeys, and it keeps them awake and puts them on the spot.

Anyway, where am I going with this?  Here are three things to consider about the future of procurement teams.

Procurement-as-a-service could be a big deal

Not my concept and not new, yet is a concept which has been increasingly discussed and heralded as the future of the function. It may well be that the future of working in procurement begins to sound a little more like this. Organisations will access resources to deliver specific outcomes rather than hiring employees and then wondering what to do with them.

Seriously, who is in your dream team?

You never know when that call might come, or when that platform starts to burn and you have that project you need to deliver. Can you pick your ‘dream team’ from current or former colleagues, or from all the people you’ve met and developed relationships with through all the networking you do?

Where’s your name?

Is your name on the team sheet of others? You may not be the one that gets the call. Your colleague or your peers may be the one having to decide who to bring in. Are you doing the best job you can, delivering results and developing the soft skills needed for tomorrow as well as networking, sharing your stories and taking ownership of your personal professional brand?

The dream team

Now, I might be about to do some oversharing here, but I personally have a ‘Dream Team’ WhatsApp group. A bit of fun to start with, especially as the joke was that ‘Group Admin’ does not count as a demonstration of leadership qualities! But over time, it has kept me connected to those people. We use it most days to share news, keep up to date (it’s all 100% professional of course). However, if I received the call, these are the people that have earned my respect and trust. I wouldn’t hesitate to contact them.

I am fortunate that my team currently has more than 5 people in it. When I get the call tomorrow I’ll be ready. But what if we were asked for a team of 10, or 20? My mindset is that I’m still hiring, and still looking to be hired by others too. I wonder if this mindset might prove useful in future?

Join the conversation and register as a digital delegate for Big Ideas 2017 now!

Cognitive Technology – One Giant Leap for Procurement?

Technology has helped to define the human race, from the invention of the car to the moon landings. Cognitive technology is one small step on the journey into the future.

Register as an online delegate for the London Big Ideas Summit 2017 here.

In 1961, US President John F. Kennedy said, “We chose to go to the moon.” People marvelled at the ambition of pushing the boundaries of human capabilities. After all, the technology to do this didn’t exist at the time.

Kennedy never lived to see his prediction come true, and watch as humans took that giant leap forward. Now, in the 21st Century, we come to the next advancement – cognitive technology.

It’s easy to compare the cognitive technology journey to the space programme and moon landing journeys of last century. For IBM, developing and deploying Watson is like the moonshot in the 1960s where IBM technology helped NASA make the lunar landings possible..

Cognitive technology is merely in its infancy in terms of where it can go. This journey will mostly likely take 50 years or more to be fully realised. And at the moment, we’re just in Year 1.

Millennials Will Help Take This Step

Procurement is starting its own cognitive technology journey and Millennials have the chance to be there at the outset. They will see cognitive technology evolving and developing throughout their whole career.

But first they need to know how to get on board and enjoy the journey.

At the same time, procurement professionals, and the wider workforce, are wondering what cognitive technology means for them. What’s left for procurement when cognitive systems like IBM’s Watson is the smartest guy in the room?

Without adapting and preparing adequately, procurement could easily be marginalised. But if CPOs lead from the front, identify the activities that only procurement can do, then procurement’s road will be much less rocky.

Now is not the time to be overwhelmed by cognitive technology, but to be educated. And to do this, we need to understand the key skills procurement professionals need to focus on to start preparing for the cognitive technology revolution.

Barry Ward, Procurement Brand Manager, Global Business Services at IBM, talks about five key skills below.

1. Watson Awareness

First things first, procurement professionals need to be aware of cognitive technology, and Watson, and what it can do for them.

The reality is that technology can change a job in four ways – eliminate, automate, empower, create. Far from being fearful for their jobs, procurement needs to embrace the change, and use it to enable the profession.

Traditional procurement processes such as cost optimisation, spend management and contracts can be empowered by Watson. Things that used to take days will now be done in a matter of minutes.

Watson can enhance these processes by analysing vast quantities of data, helping to improve the decision-making process. Through this, financial benefits can also be realised in this outcome focused structure.

Ward advises that professionals start with the categories that they manage, and understand how AI can be introduced (IBM refer to AI as Augmented Intelligence, using technology to enhance human knowledge and capability). Then it’s a case of learning as you go, and sharing knowledge with others to work collaboratively and to fully exploit the capabilities that the technology can bring

2. Relationships 

Cognitive technology may make computers super-intelligent, but it doesn’t mean consciousness or awareness. There will always be a need for the human touch in management of stakeholders.

In fact, as technology helps free up time for procurement to focus on strategic tasks, building relationships will become more critical than ever. For example, good supplier relationships will help procurement be more agile, ensuring they stay ahead of stakeholder needs.

Data can only take procurement so far. The rest is down to procurement doing the relationship work we always have done. Only now we’ll have more time to do it, and more information to help enhance the relationship.

3. Negotiation

As with relationship management, traditional procurement skills such as negotiation will also still be key. Watson can give recommendations for how to proceed, but ultimately it can’t make decisions for you. And you’ll always have the ability to correct it too.

However, Watson can help with providing data to enhance the negotiation itself. The system can give details on the person you are negotiating with, and help cut down the preparation time.

For example, if you were negotiating with Barry Ward, and you had done so in the past, Watson would be able to tell you what these previous experiences were like. Like what Barry does in certain circumstances, for example.

There’s less dancing around, you can get straight to the point, all of which saves you time. Plus, you’ll probably get a better deal out of it too!

4. Understand your organisation’s cognitive technology journey 

Find out what your CIO or CTO is doing, and what their plans are for the organisation in terms of cognitive technology. You can ask what the digital transformation will look like, and then think about how to prepare, or even influence, it.

Professionals can assess their own category, and establish what cognitive solutions are available in the market place. The key is learning how cognitive technology might specifically benefit your area.

For example, if you are travelling and your plans change, cognitive technology can assist. All you do is put the details into your phone, and the technology will assess the change, look at your airline and hotel preferences, and then present a plan, complete with cost, for your approval. All without lifting a finger. In truth, these systems are probably a couple of years away yet, but they will fundamentally change the way some categories are managed.

5.  Be Data Savvy

Finally, professionals need to be savvy in terms of knowing what cognitive technology can do for them in terms of data. As we have said, Watson is capable of handling structured and unstructured data, photos, contracts, documents, and even audio files.

The system can make sense of the data, and provide solutions based on combinations of data you’ve never even thought of. The quality of decision-making is improved, and previously unattainable insights are freely available.

We are only just discovering the possibilities that technological advances will bring but it is clear that digital transformation will open up huge opportunities for us all. This will be an exciting time to be in Procurement !

Barry will be  explaining the big ideas behind Watson and the opportunities that cognitive tech presents to procurement at  Big Ideas 2017. Register as a digital delegate.  

Three Economic Indices You Can’t Ignore In Procurement

Procurement professionals need the ability to understand – and react to – changes in inflation, employment and optimism.

Register as an online delegate for the London Big Ideas Summit 2017 here.

The interesting thing about procurement’s typical line of sight is that it very closely aligns with the terms of the sourcing projects we run and the contracts – and therefore supplier relationships – we manage. This might be 6 months, 12 months, 3 years, or 5 years long, but regardless of the exact length of time, you can be assured it is far longer than the changes being seen in global and local economies.

Since the summer of 2016, I have been the Business Survey Chair for the ISM-New York Report on Business. It has been an amazing learning opportunity, and I am fortunate to be working with a career economist to learn to decipher and draw meaning from the data. There are two pieces to the report: 1. the indices (some seasonally adjusted and some not) which provide a monthly trend up or down as the economy contracts or expands, and 2. the narrative, which highlights some of the key figures and milestones and adds some context to the numbers.

You don’t have to be a professor to see the connections between procurement and economics, but it is easy for us to become overly focused on information that is internally available or provided by suppliers. Based on what I’ve learned, the following categories of information tie directly to procurement’s efforts and objectives. And although they may not often come up in internal conversations, they need to be present in procurement’s thinking and strategy development.

Inflation

Investopedia defines inflation as “the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling.” Most of what procurement buys tends to be based on pre-negotiated contracts, so we’re unlikely to see annual changes in prices based on inflation. What we might see, however, is a difference in the prices we are able to negotiate every three years. This will be especially true of anything we buy internationally or that has significant foreign-sourced materials in it because the relative purchasing power of the U.S. Dollar in global markets will be affected by inflation. But it’s not just an international issue – for any procurement team that reports into finance, keeping an eye on inflation will give you a benchmark for the minimum project-level ROI, as the alternative might be to just hold onto the cash if the project is expected to return less than 3% (the average rate of inflation) per year.

Employment

Higher levels of employment are usually considered a good indicator or economic growth and stability. From a procurement perspective, however, employment also tells us what to expect about trends in services-category spend. With an increasing portion of organizational demand being met ‘as-a-Service’, employment rates (and therefore costs) are critical to our cost to operate. For some industries, services are so important that even the factors driving alternate economic measures like ‘Prices Paid’ are services too – the New York Metro area is a perfect example of this, as are many other major cities. It’s why you must know the product/service mix in your spend before trying to figure out what approach to take. The other consideration relative to employment is talent availability. Higher employment means lower UNemployment (see how I did that?) and therefore less candidates available to compete for open positions. Luckily for procurement, we have a wide array of talent options at our disposal through contingent workforce programs. Striking an optimal mix of employment models presents an opportunity to maximize both costs and capabilities.

Optimism

The final economic index I’ve learned to appreciate is optimism – in the ISM-New York Report on Business we call this the Six-Month Outlook. In other words, as of today, how much better or worse do you expect things to be going six months from now. It would be unrealistic to expect the outlook to be more specific than a trend up or down, but even this insight provides important information for others watching the economy. The fact that this question is even asked is an indication of how special procurement’s perspective on the economy and business activity is. This perspective is due in part to our understanding of the organization’s anticipated demand levels and the prices we are paying, but also the conversations we have with suppliers about the conditions they are doing business in. Competition drives prices down, differentiation drives margins up, increases in demand drive prices up, and large increases in price may push buyers and suppliers to innovate together to come up with alternatives, and procurement has a front row seat for it all.

Many people in the business world watch the monthly reports on business, whether the ISM national reports or regional reports, like ISM-New York. If they value procurement’s perspective on the economy enough to wait for the numbers to be released each month and report on the findings, then we should have a greater appreciate for our own insight and do everything we can to deepen it.

 2017 could be a pivotal year for the procurement profession. The Big Ideas Summit in London will help lay the ground work for all of  the changes ahead. Our London event takes place on 23rd February and you can now register as a digital delegate now! 

Procurement Leaders: Don’t Be A Creativity Killer

Everyone is born with a lot of creative potential. So what’s been holding us back all this time from releasing our inner creative genius?

Register as an online delegate for the London Big Ideas Summit 2017 here.

Last week, we introduced James Bannerman as one of our Big Ideas speakers.  A creative change agent and author of Non-Fiction best-seller Genius: Deceptively Simple Ways to Become Instantly Smarter, James  firmly believes that everyone has the capacity to be creative and innovative.

To start unlocking creative genius within our procurement teams it’s important to first understand the reasons that creativity is often so lacking. What happens between childhood and adulthood that means the average person is so deterred from expressing their creative genius in the workplace? James has a good idea about what’s holding us all back and it often comes down to three things…

Labels

It’s all too easy to get categorized by managers, colleagues and even our own self-doubt. Perhaps someone has identified you as having a particular type of creative talent but written you off in other aspects. Maybe you’ve been discounted as a creative genius altogether! Everyone has different strengths, weaknesses and areas to which they are more suited but in pigeon holing people, we are also limiting them. James believes that by labeling ourselves we are stifling our imaginations and he points out that often the best ideas come when we least expect them and from the people we least expect them from!

Organisational Structures

We’ve all had that one boss who greets every new idea with a perplexed look, a raised eyebrow or complete disinterest. Sometimes, it’s the age-old story of senior management wanting to keep things simple, avoid too much risk and a reluctance to alter the status quo.

Even within organisations who are sincere about wanting to innovate, it’s easy to discourage employees without even realising it, leaving a team of budding intrapreneurs fearful of getting it wrong or what their colleagues might say and too embarrassed to express their best and wackiest ideas. Organisations must create an environment of psychological safety that allows employees to feel comfortable to be creative even in the highly regulated environment of a workplace.

Time

Bannerman is keen to affirm that miraculous and fully-formed ideas won’t simply land at your feet. Instead, he recommends a technique called deliberate creativity:

“ If people had all the time in the world they could patiently wait for genius ideas to fall from the sky. In the real world of business, however, most people are time-poor and don’t have that luxury. That is why Edward de Bono – the author of Lateral Thinking – championed ‘deliberate creativity’.

De Bono showed us how we can use provocative mindtools to jolt the patterns of the mind, as and when required. Look at the highly-innovative organisation Pixar, for example, who appear to make great use of the Oppositions tool. If the rules of superheroes are that they have to be ‘young, fit and athletic’, for example, what do they do? They create ‘The Incredibles’.

Or if the rules are that ‘children are afraid of monsters’, what do they do ? They create ‘Monsters Inc’ where it is the monsters who are afraid of the children. Or if the last thing a chef wants in their kitchen is a rat, what do they do ? They make the rat the chef and create ‘Ratatouille’.

So if you’re looking for innovative solutions for your Procurement team or your organisational Supply Chain Management, ask yourself what might happen if you creatively questioned the habitual ‘rules’ ? The rules of cereal, for example, used to be that they were always eaten in a bowl with milk and a spoon. Questioning these rules, however, helped to inspire the invention of the ‘cereal bar’. Similarly, as Kelley of IDEO points out, for years high-jumpers used to jump forwards, but then – at the 1968 Mexico Olympics – Fosbury wondered what might happen if he deliberately jolted this pattern and jumped backwards, and now the ‘Fosbury Flop’ has become adopted around the globe.”

Join the conversation and register as a digital delegate for Big Ideas 2017 now!

Should Procurement Pros Be Concerned About Global Trade?

Renowned economist and Big Ideas Speaker Dr Linda Yueh explains why CPOs needn’t panic about the President Trump administration but there are causes of concern. 

Register as an online delegate for the London Big Ideas Summit 2017 here.

Donald Trump made good on a campaign promise on the first day of his presidency by signing an executive order indicating the United States won’t ratify the Trans-Pacific Partnership (TPP) trade deal.

Though expected, the move caused a media storm and a flurry of responses from politicians and businesses all around the globe. But what does this mean for supply managers?

Many CPOs are understandably nervous about the Trump administration’s policies with regards to global trade. The resurgence of protectionism in the U.S., coupled with the continuing fallout and trade effects of Brexit, has left many procurement professionals wondering which region of the world they should plan to source from in the future.

The TPP was a massive free-trade agreement advocated by the Obama administration, aimed at deepening economic ties between the U.S. and 11 other Pacific Rim nations, cutting taxes, and fostering trade to boost economic growth in the process. Trump argued on the campaign trail that the agreement would be harmful to the U.S. manufacturing sector. As he signed the withdrawal order, he called it “a great thing for the American worker”.

Economist, broadcaster, author and Big Ideas Summit guest speaker Dr. Linda Yueh’s message to CPOs is one of caution but it’s not time to panic.

Don’t panic

According to Linda, there are three reasons not to panic about what Trump’s protectionist tendencies will mean for procurement, trade, and global supply chains.

  • We need to keep in mind that trade takes place under WTO rules. China is the U.S.’s biggest trading partner, despite no free trade agreement being in place. Of course, if Trump were to pull out of the WTO, then that would be a game changer. But, globalisation, especially e-commerce and the Internet linking markets and people, will mean that trade is likely to continue across borders as it’s hard to see a significant roll-back Costs of trade, of course, are another issue to be focused on.
  • Luckily, the Trump administration hasn’t honed in on e-commerce, which is good news for procurement and supply chains. Currently, one in ten transactions are already undertaken via e-commerce, and this figure will continue to grow.
  • Trump may have moved quickly to sign the TPP withdrawal order on his first day in office, but that wasn’t a formal agreement. Extricating the United States from NAFTA for instance will require renegotiation time and then a period of notice before that free trade agreement would end. Even then, most trade agreements include implementation periods, so a “cliff edge” is unlikely which gives businesses time to plan. Therefore, there’s no need to panic or overhaul your supply chain immediately. But, of course, forward planning and following economic policies would be wise. Also, take Brexit as an example – if Britain succeeds in triggering Article 50 in March 2017, then the UK is scheduled to leave the EU by the end of March 2019 – almost three full years after the people’s vote. And even there, the Prime Minister has indicated that there may be an implementation period to allow more time for businesses to adjust to leaving the Single Market.

Things to watch

So, Linda warns that supply managers should keep an eye on certain factors as global trade adjusts to these seismic political shifts.

1) U.S. border taxes – recently, Trump threatened BMW with a 35 per cent border tax on foreign-built cars imported to the U.S. market. This isn’t an isolated incident and American companies are under even more pressure to produce in the U.S.. Congress is also considering a similar tax, so that is worth bearing in mind as that would have the force of legislation.

2) U.K. Tariffs – one of the consequences of a “hard” Brexit where the UK leaves the EU without any preferential trade deal, which would include no agreement on the Single Market, Customs Union, is the re-emergence of customs for EU trade. Right now, significant customs procedures only apply to non-EU shipments. But, with around half of UK exports going to the EU, taking leave of Britain’s membership in the EU with no deal would means the end of free movement of goods. More customs declarations and duties would raise costs, slow down supply chains and certainly add time at border checks. A potential ‘hard border’ would be a particular issue for Ireland.

3) Resourcing Brexit – the UK Government also needs to think about the resourcing challenges involved in ramping up staff as well as IT systems to cope with the doubling of customs checks on the UK border.

4) NAFTA – As mentioned earlier, Trump has also flagged that the North American Free Trade Agreement (between Canada, Mexico and the U.S.) is up for renegotiation. If you’re a U.S. company, you need to start making plans now about how these changes will affect you. The same applies to any other of America’s free trade deals with 20 countries that Trump would have the authority to re-examine.

What about China?

Globalisation has helped China become a manufacturing powerhouse, but with numerous closed markets.

However, there are very good reasons to continue to do business with China. Wages may be rising but that helps businesses to think about China as a market as well as one production locale in a supply chain. Plus, with growing protectionism in America, China’s President has signalled that China may take more of a lead in globalisation. There’s a lot to watch for.

In short, Linda’s advice to CPOs around the world is keep calm, but keep an eye on the details as the globalisation landscape is shifting significantly. Global trade won’t end tomorrow but it will likely look rather different in the coming years.

Join the conversation and register as a digital delegate for Big Ideas 2017 in London.

In Business Relationships, It’s All About H2H (Human to Human)

Simona Pop shares her Big Idea on why procurement technology needs to promote – not obstruct – trust, transparency and common goals.

Register as an online delegate for the London Big Ideas Summit 2017 here.

We know that many organisations are still mired in decades-old procurement processes. Besides the inherent inefficiency of paper-based workflows, spreadsheets and other manual tools, the real concern lies in their opacity.

One of the things I’ve learned working with various businesses and multiple stakeholders within supply chain and finance is that there is no real B2C/B2B divide. It’s all H2H: human to human. The concept was coined by Bryan Kramer and is the real foundation for every single business relationship we cultivate, internal or external.

Now, human beings are complex creatures, but for all their complexity, they greatly appreciate simplicity. Finding, understanding and communicating the complex in its most simplistic form is the recipe for success when it comes to relationships.

And a more recent way of translating the very complex into simple formats is technology. For many however, the subject of technology is a double-edged sword to be approached with extreme caution. It is seen as both a huge challenge and an opportunity depending on the maturity of the business and its stakeholders. Zooming in on procurement departments in particular, distinct feelings of inertia and unease prevail when it comes to tech.

So many procurement professionals I have sat down with continue to apply traditional tools to the purchase-to-pay process even though better, more efficient alternatives are available to them. The reasons? That mighty focus on cost savings is undermining the VOI (value on investment) and the temptation to keep things as they are because “if it’s not broke, don’t fix it or risk it” is holding organisations in a “vintage” status quo that’s affecting their competitive edge on a daily basis.

The current climate is very much a head in the sand affair. Procurement processes that have been around for the past 10, 20, 30 years are characterised by a great degree of opacity. The reason for this is the historic dependence on paper, manual work and fragmented software systems. This opacity means the relationships between departments/stakeholders within a business are not exactly what you would call fully functional. There was a time when things had to be this way because that was the best there was. That is no longer the case and pretending nothing has changed is far more dangerous than “risking” change.

Always reacting to situations as opposed to being proactive towards challenges is a symptom of traditional process that needs upgrading. The ability to stimulate internal collaboration and valuable relationships is affected by the permanent race against time. There isn’t one finance professional I’ve met who isn’t completely incapacitated by “month end” as a result of delayed purchase approvals or lack of a PO system. Incomplete or delayed information passing between departments opens the door to fraud and perpetuates false data. These draining complexities can be simplified by shining a light on proceedings. That light? Technology.

Technology is an agent of empowerment, not a antagonistic nuisance that must be adopted just because everyone else is doing it, with no real merit of itself. The key advantages technology brings are speed and transparency. Moving the information processed from paper/desktop to cloud/mobile and delivering it in real time as opposed to post-fact is all about simplicity. Eliminating the need for 100 spreadsheets, lengthy manual approval chains and data entry clerks will empower people from the bottom up, the top down and across the board. Accessing objective information and using it in real time will ensure each task is performed to the best standard and in full compliance.

A move towards value-based relationships is already happening as businesses are acknowledging that well-functioning relations are worth as much as good prices or good bonuses. Trust, common values and clear, real-time communication are all hallmarks of good service. Something every business needs to achieve to stay competitive, right?

In conclusion, using technology to empower the talented people across the P2P process is the key to better relationships and ultimately, better business. Accessing data in real time and performing tasks on the go will not only make people better practitioners but better collaborators too. The human-to-human foundation of successful business is based on trust, transparency and common goals. Given the goal of procurement is to make a business successful, promoting trust, efficiency and transparency should be a natural move.

This article was first published on Spend Matters.

Stay tuned for more Big Ideas from Simona Pop as we lead up to the Big Ideas Summit 2017!

Join the conversation and register as a digital delegate for Big Ideas 2017 now!

Resistance Is Futile, Disruption Is Coming!

Massive changes are coming to procurement pros, whether they like it or not! Is it high time we started embracing, instead of resisting, them?

Mark Stevenson is one man who understands the key trends heading our way. An expert on global trends and innovation, he will be setting the scene with our opening keynote at the Big Ideas Summit 2017 in London.  We caught up with Mark ahead of the event to get to know him a little better!

Tell us a bit about yourself?

I’m an entrepreneur, an author, an occasional comedy writer, a musician, and, as some people like to define me, a futurologist, but I’m not at all keen on that particular term.

What don’t you like about the term Futurologist?

I think it’s a fairly dodgy profession overall if I’m honest. There are no qualifications required and it’s often associated with prediction and, of course, you can’t really predict the future, you can only make it. Also people who identify themselves as future-experts are as apt to be shaped by the culture in which they are embedded or dogged by their own prejudices and wish-lists as the rest of us, and tend to predict accordingly. For instance many futurologists are overly tech focused. My work is more about the questions the future asks us about the interplay of technology, economics, society and politics. My job is to help people and organisations to ask the right questions about the future and then convince them to answer those questions in a way that makes the world more sustainable, humane, compassionate and just.

 What are the key challenges procurement and supply chains face in the next decade?

Supply chain issues are hugely important at the moment and supply chain professionals are having a lot of questions asked of them.

The first challenge to overcome is achieving greater supply chain transparency. Plenty of procurement professionals, particularly in larger organisations, have no clue where they are actually buying from. When the Rana Plaza building in Bangladesh collapsed in 2013 killing over 1,000 factory workers, many high-street brands were called out and, it materialised, ignorant of their involvement. Tragedies like this have forced high street companies to better audit their supply chains but there’s still a long way to go.

Secondly, organisations need to make their supply chains more sustainable by adopting science-based targets – addressing agricultural sustainability and reducing carbon emissions to give a couple of examples.

You’ve often advocated science-based targets in the past. Could you explain the concept in more detail? How could procurement apply these targets?

Science-based targets are a really simple idea and a very good way to think about sustainability. When it comes to dealing with environmental sustainability companies tend to say ‘this is what we can do, this is what we’re aiming for’ but, in reality, it doesn’t mean a whole lot when a multinational organisation vows to reduce its carbon emissions by 10% by the year 2034! That’s a recipe for planetary disaster.

Instead, organisations must figure out what they have to do based on scientific facts. The Science Based Targets campaign (a partnership between

Carbon Disclosuse Project, UN Global Compact, World Resources Institute and WWF) helps companies determine how much they must cut emissions to prevent the worst impacts of climate change. Coca- Cola, Walmart and HP signed up to this and if they can do it, anyone can.

And, by saving the world you’re also saving your business. Companies who take this stuff seriously will out-perform because they’ll become more efficient and they’ll attract the most forward-thinking, young talent who want to work for companies of which they are unashamed.

In your experience, how open are organisations to new technology trends?

Not very! Organisations tend to be comfortable operating as they always have done.

Upton Sinclair put it well: ‘It is difficult to get a man to understand something when his salary depends on his not understanding it.’ Take Blockchain, it could take away the untrustworthy parts of banking: bankers, who will naturally resist this particular technology!

Another example is driverless tech- it doesn’t take an expert to predict that the 3.5 million US truck drivers would be wary of such an advancement – and rightly so. So we have to find a transition plan for them – which culture resists. But it’s a business responsibility to prepare for the changes and approaching transitions, you have a duty of care to your employees and not being future-literate is a dereliction of that duty. Remember, Blockbuster, the DVD rental company went bust the same week that Netflix released House of Cards.

If you had one key message for our delegates at Big Ideas, what would it be?

Wherever you work and wherever you end up in the next 15-20 years, remember that it’s going to be a very turbulent time. Massive disruption lies ahead and the bad news is that our current institutions and businesses are unfit for purpose. Ask yourself: what’s my best effort for myself, my family and for society (and remember they’re all related). If you don’t, you can prepare to be very irrelevant and very unhappy!

Join the conversation and register as a digital delegate for Big Ideas 2017

Why Procurement Needs Clearer Insight into Industry 4.0

The impact of Industry 4.0 is already being felt. But procurement needs greater understanding in order to thrive in the digital era.

Download your copy of ‘Procurement 4.0 – The Digitalisation of Procurement’ on the Fraunhofer IML website.

In our previous article we introduced the concept of Procurement 4.0 – the profession as it might look in Industry 4.0. The key findings of BME’s study into the impact of digitalisation highlighted that procurement faces some major changes in the coming years.

And alongside those changes, there will be an array of challenges, and also benefits, to be faced. In this article, we’ll examine the significance of Industry 4.0 in procurement, but also why the profession needs to find consensus.

Industry 4.0 – Scope and Impact

The BME and IML study showed that many procurement leaders believe that Industry 4.0 has a very high influence on their organisation. Equally, they expect this influence to increase in the next few years.

There is consensus from survey participants that digitalisation will have a huge impact on the organisation as a whole. However, there is less agreement of its overall impact on the procurement profession itself. For many, continuing to look at procurement as a separate entity is impossible in the digital era.

But could this lack of consensus stem from a lack of a common definition of Industry 4.0? When we have discussed the fourth industrial revolution in the past, concepts such as ‘automation’, ‘robotics’, ‘digital’ and ‘technology’ have all been used.

However, similar terms have been used in the past to describe Industry 3.0. BME have concluded from this that the line between 3.0 and 4.0 is not clear, which may be causing confusion. There are two interesting quotes in the report worth considering to highlight the differences of opinion:

“Industry 4.0 is not a thing of the future – it already exists in the present day!”

“The next revolution, which will completely transform our cooperation on every single level.”

Neither one on its own appears to be unusual. However, when seen side-by-side, they serve to highlight two distinct groups. One which sees the changes already taking place; the other which sees them as a future occurrence.

How Organisations Have Prepared

Has your procurement organisation started its digital journey? How confident would you be at pinpointing the changes so far?

If these two, polar-opposite, opinions exist, in a small sample, it highlights a level of unpreparedness in the profession. In the study, only 5 per cent said that no digitalisation activities had taken place. But, interesting, a quarter of respondents claimed the first steps were now being taken.

However, without a pre-defined starting point, then some activities that are already in-progress may be overlooked. Some organisations may be making progress in Industry 4.0 without realising it, or considering it relevant.

Something as simple as an e-procurement system, or digital P2P process, might not be considered as an Industry 4.0 change. Particularly if this change happened a few years ago.

Prof. Dr Michael Henke, believes “Companies often attribute these developments to the third industrial revolution and do not realize that this was nevertheless an important step towards industry 4.0.”

Impacting Procurement Strategy

Currently, it is unlikely that you will find either Industry 4.0 or Procurement 4.0 contained in strategy documents. However, there is likely to be mention of digital transformation, digitalisation, and innovation.

Contained within these objectives will be more common procurement strategies for realising these objectives. Within the BME study, over half of organisations were accounting for digitalisation in procurement strategy.

However, only 20 per cent claimed to have fully explored the impact of Industry 4.0 on their organisations. In spite of this, nearly half of the organisations have a department dedicated to ‘Industry 4.0’. This is a central team, usually comprising of senior management level employees.

“The companies that have already included Industry 4.0 in their company strategy are often already more advanced in the implementation of Industry 4.0 as a company without a corresponding strategy ” Prof. Dr Henke continues.

Taking Procurement Forward

As with most activities, the incorporation into strategy is not sufficient for action. Digitalisation needs to have a specific roadmap, complete with action plans, timelines, and responsibilities.

As well as this, the activities need to be seen from an organisation-wide perspective. Consideration of this topic without full functional input will only hinder coordination.

The perception of these strategies is also key. Though many of the participants considered digitalisation to only be playing a supporting role in order to move procurement forward.

The Association Supply Chain Management, Procurement and Logistics (BME), founded in 1954, is the leading professional association for supply chain managers, buyers and logisticians in Germany and Central Europe.

Fraunhofer IML, founded in 1981, is a global expert on all fields of internal and external logistics. The Institute also currently heads up the largest logistics research centre in Europe.

To download your copy of the report, visit the Fraunhofer IML website.

The procurement function must adapt and evolve to accommodate technology changes and be ready to embrace what we’re calling Procurement 4.0. The question is: Are We There Yet? Join the conversation and register as a digital delegate for The Big Ideas 2017 in London.