With world-class talent and unlimited potential, a career in procurement can be brilliant … but you’ll need a plan to make it happen. That’s why we’ve launched our “My (Brilliant) Procurement Career” survey to understand how YOU will manage your own career into the future.
Ten minutes is all it will take to put yourself in the running to win this quadcopter!
We need your input to discover:
In what ways are our peers across the globe seizing control of their own career management?
Do procurement professionals expect the profession to thrive, or to disappear by 2030?
Is crowdsourcing answers on social media an effective way to get the solution you need?
Do individuals in procurement feel isolated, or well-connected with the wider profession?
We’ve kept the survey to under 10 minutes – we know you’re busy!
Want to know more about the quadcopter? Check out this video review:
Cool, right? But you’ve got to be in it to win it! My Online Career is only open until Friday 8th September. You’ll also receive a copy of the report summarising the findings of the survey.
Prospective employees returning from career breaks have a pretty good idea of their priorities. Want your organisation to appeal to them? Follow these steps…
Our webinar, Out of Office: Your Career Break (Through), takes place at 1pm on 10th August 2017. Register your attendence for FREE here.
When I returned from maternity leave I realised just how important it is to have policies and benefits in place to support people returning to work after a career break. Although mat leave for female talent is not the only type of career break businesses should consider, women returning to the workforce offer a valuable resource to employers, plugging skills gaps and boosting diversity.
So what do they look for when re-entering the workplace, and how can your company catch their eye?
After surveying 1,000 female professionals, the Robert Walters Group discovered that a strong salary and company benefits (90 per cent), career progression (88 per cent) and well-being initiatives (82 per cent) are top of women’s priority lists when returning to the workplace.
Flexibility (79 per cent) is also a main preference, with over half of respondents keen to move into a more family-friendly sector once their career break comes to an end.
However, there seems to be a disparity between the attitudes of employees and employers towards flexible working. While 84 per cent of female professionals want the option to work from home, it’s offered by just 39 per cent of employers. And although two-thirds of women would welcome the chance to work part-time, only 35 per cent of businesses provide this opportunity.
With all this in mind, it seems employers will only attract the brightest talent if they’re open to the idea of flexible working.
Top 5 tips when recruiting those on a career break
Of course, flexible working isn’t the only thing your business needs to consider when recruiting people after a career break. The following points are also key:
1. Understand what women want from their jobs
Flexibility, competitive salaries and career progression all remain important issues. Since only 24% of female professionals go back to their previous employer after a career break, it’s worth delving deeper to understand what they’re after.
2. Don’t make your recruitment messages too restrictive
Many women returning to work are looking to move into a new area within their sector, or to embark on a career that’s connected with, but different from, what they did before. So ensure your job ads and interviewing make it clear that you’re open to good people with transferable skill-sets and experience.
Half of professionals consider financial support for childcare to be important. This gives employers the chance to stand out from the crowd by offering family-friendly policies.
5. Make it easy for women to come back
Avoid the loss of talented staff members by keeping in touch with them during career breaks. Office visits, newsletters and social channels can all help. Some 79% of women say they’d find a mentor helpful during their transition back to working life. Mentoring schemes could ultimately give women a better idea of their future career options.
Procurious’ Hugo Britt shares his experience of what happens when you truly disconnect – whether it’s on an extended career break, or just a short trip away.
Our webinar, Out of Office: Your Career Break (Through), takes place at 1pm on 10th August 2017. Register your attendence for FREE here.
It’s 2009. I’m sitting alone in a tent perched high in the Italian Apennines, listening to the roaring of wild boars on the other side of the canvas. I’ve been scribbling away at my journal by torchlight in an effort to capture my experience hiking the 400km, 23-day Apennine Trail, when something makes me pause mid-sentence. I flip to a clean page at the back of the notebook and, in full caps, write the words “LIFE PLAN” at the top of the page.
I’ve still got that journal, but I remember tearing that page out a few days later, a bit embarrassed at how self-indulgent it seemed. What was I up to when I wrote it? I’m not normally one to come up with grandiose life plans – in fact, I usually have trouble planning more than a week or so ahead.
Here’s my theory.
By that point in my hike, I’d been trudging along for nearly 20 days. This was to be the last hurrah after nearly a year of travel. My then-girlfriend and travel partner (now, happily, my wife) was working in the UK, and I’d taken the opportunity to do something I’d always wanted before heading back to Australia – one of Europe’s spectacular long-distance trails. I was going it alone, not only in the sense that I didn’t have a hiking partner but because the trail rarely passed through towns. It was off-season, so I barely met anybody over those three weeks in the mountains apart from the odd deer hunter. I had a phone, but rarely had reception – and (it being 2009), I was yet to upgrade to a smartphone.
In short, I’d disconnected. I hadn’t thought about the job I’d resigned from for months – nor was I worrying about finding another job when my shoe-string travel budget inevitably gave out and I had to head home. If I did think about my career, it tended to be through a wider lens (“What do I really want to do with my life”) rather than the practical details (“I need to update my CV, line up some interviews, buy a new suit…”). Thoughts like this didn’t even occur to me, probably because they’d have been so incongruous with what I was doing at that moment, whether it was trudging up a slope or cooking dinner on a fuel stove.
My point is that if you do manage to properly disconnect, you stop sweating the small stuff. From memory, the four or five points in my so-called life plan weren’t about getting practical little jobs done – it was more of an epic to-do list. It included asking my girlfriend to marry me, deciding what city we wanted to live in, whether I really wanted to finish my current course of study – in other words, the big-ticket items.
Switching off on a short break
2017 – eight years later, I’ve just returned from a very different sort of trip. Our family of four took in the frenetic sights and sounds of Hong Kong for two weeks, which gave me a short, but invaluable, chance to disconnect from the office. Unlike back in 2009, I was very much employed this time around and must admit sneaking a glance at my inbox a couple of times in those first couple of days. Eventually, I made the conscious decision to switch off and did so by disabling just about everything on my phone apart from the camera app.
Switching off helped me zoom out. It helped me put some common-sense context around the unanswered emails and unfinished projects sitting in my inbox. While I can’t claim to have completely stopped thinking about work during that two-week break, my thought process shifted from the detailed level (sweating the small-stuff) to discovering the bigger picture. Almost subconsciously, I was rearranging the tasks on my plate into a realistic order of priority, and even had a couple of “aha” moments – not by sitting down at a laptop and working, but while I was doing something completely unrelated, like lining up to purchase a ferry ticket.
Find your holiday brain
There’s some science behind this. Earlier in 2017, Procurious interviewed James Bannerman, a Creative Change Agent and phycologist about the best ways to unlock creativity. He said “Trying to be creative is like trying to go to sleep. If you’re too busy focusing on going to sleep, you’ll stay awake because there’s all sorts of brainwave activity linked to beta waves that will keep you from falling asleep.”
Bannerman explained that there’s a sweet-spot that allows creativity to flourish. “We tend to be most creative when we’re focused but not over-focused, and relaxed but not too relaxed. You’re more likely to think creatively when you step away from your desk, and do something like go for a run, or go for a drive, or simply look out the window. It’s about finding that optimum state.”
So, there you have it. Stepping away from your career allows you to perform better in that career. Time to book my next trip.
Our webinar, Out of Office: Your Career Break (Through), takes place at 1pm on 10th August 2017. Register your attendence for FREE here.
Fretting over your imminent redundancy? Let’s put a positive spin on this! A career break is the perfect time to re-calibrate, cruise and power up!
Our webinar, Out of Office: Your Career Break (Through), takes place at 1pm on 10th August 2017. Register your attendence for FREE here.
It’s the stuff nightmares are made of. Your legs are like jelly as you walk down the office corridor You’re responding to a summons from head office, only to be told the business is downsizing and you’re in the firing line.
Being made redundant is rarely in the career plan but taking an unexpected career break can actually be the making of you. You just have to do it right.
Your first reaction will be to panic-apply to every job advert you can get your sweaty palms on with little consideration for their suitability or appeal. The best advice I can give you is to hold your horses! You’re experiencing the entire spectrum of emotions; shock, denial, anger and upset. It’s not the time to apply for a new role and it’s definitely not the time to be making huge, life-changing decisions.
Taking a significant career break, whether by choice or due to redundancy might be a once in a lifetime opportunity. It’s a chance to get your life in check, turn your attention to all the things you’ve been putting off and take a step back to assess the future.
It’s not often we’re de-shackled from the pressures and stresses of working life. If your brain is mossy from years of career servitude, it’s time to do a spot of gardening. Here’s my three-stage guide to preparing to come back from a career break with a bang!
Stage One – Re-calibrate
Admin, Admin, Admin
It’s more than likely that you’ve still got your workplace autopilot switched on so you may as well kick of your career break with personal admin whilst you’re still in the zone! Think about what’s been causing you stress; what’s niggling at the back of your mind. If you’ve got a pile of paperwork in your home study- sort it! If you’ve been meaning to redecorate a room – do it! And if there’s whole bunch of appointments you’ve been postponing, pick up the phone and schedule them!
Reconnect With Your Life
Whether it’s spending time with your family, your children or your closest friends, this is the perfect time to reconnect with everyone important in your life. Do the school drop off, get to know some of the other parents and engage with your children’s teachers. Re-integrate yourself with family life and catch up with your friends. Don’t underestimate the value of this – as well as being an important reminder of what’s really important in life and what makes you, you – you also never know who could connect you with your future job or give you some valuable advice.
Health, Beauty, Fitness
We all know the benefits of keeping in good health but when you find yourself between jobs it’s more critical than ever to get the blood pumping to the brain, oxygen in lungs and endorphins released. Go for long walks, take up a kick boxing class or sign up for a (half-) marathon. If you’ve got a twinge in your knee, organise some physio…get that tooth fixed. When you finally get back to work you’ll be prepped and healthy many months to come!
Stage Two – Cruise
If you embrace and apply all of the above advice then you’ll gracefully enter into the cruise zone. Which mean it’s time to take a deep breath (or gulp!) and enter into Stage Two of your career break. Be ready to open your mind to the many possibilities open to you and take the time to really explore what you want to do with your future career.
Map the Market
Have a think about some of the companies you’d like to work for based on your desired work culture. Do you want a flexible working environment, a tech-savvy forward thinking organisation, a sociable culture or the best salary possible? Your Stage One reflection-time should help you out here. You’ve had a chance to work out your priorities in life. And if you’re feeling angry and bitter about your old job, that’s ok! Harness it to establish what it is you DON’T want from your new role.
Activate Your Network
Once you’ve drawn up a list of dream companies, it’s time to do some cross-referencing! Is there anyone in your network that works for these companies? Can they help you get an introduction to any of the key decision makers? You can also use your connections for reference checking. What are their experiences of working for this company? Are they an advocate?
Craft Your USP
What is your unique value proposition? Identify what you can do better than anyone else. If you were a product on the supermarket shelf, what would make you stand out as the candidate of choice?
Stage Three – Power Up
You’ve had your chill time, you’ve reflected on everything from utility bills to dental hygiene and you’ve identified your USP. Congratulations! You’re ready to get back in the game!
Remember you’re in a sales process
The number one rule of selling is to uncover the buyer’s needs and that’s exactly what you need to do when you’re researching the perfect prospective employer.
This is going to require a lot of listening. Listening to your friends, your connections and how your employer of choice is marketing itself online.
You know what your unique skills are so start matching them up with the organisation’s needs and sell yourself!
When you finally meet someone with the hiring decision you’ll able to perfectly articulate what you can bring to your role within the company.
Too many people attend interviews and only talk about themselves The trick is to turn your meetings into conversations! People will feel more comfortable and your interactions will be all the richer for it!
Don’t underestimate the value of keeping in touch. After an interview, be sure to send a follow-up note (or two!) and leverage social media to keep yourself in the spotlight and your name on people’s minds.
Connect with the companies that you want to work for on LinkedIn, Twitter and Procurious. Post issues and news that demonstrate your interest and commitment to your chosen career and employer. Set up Google alerts so you’re kept in the loop on current affairs, your target companies and all things procurement.
Ask for the job
You know that you’re the best person for the job- but they don’t! Make sure you ask for the job – tell the employer how much you want to work for them and why. You’d be amazed how many people don’t actually ask for the sale!
Information on demand. Constant connectivity. Global coverage. Are these a boon to our working lives? Or can there be too much of a good thing?
We live in a world of unprecedented connectivity. No matter where we are in the world, we have a host of information at our fingertips. Which is great when it comes to accessing vital data on the go, but could be having a detrimental impact on our personal lives.
The benefits of being constantly connected are easy to see. But it’s leading to a situation where people struggle to switch off when they’re not in the office. Checking emails on the way to work, or before going to sleep. Doing that “last bit of work” on the train home. Catching up on work over the weekend, or even the night before returning to work following a holiday.
Work phones and laptops, internet-based document storage and the increase in working from home leaves that bit of temptation to do a little bit more. After all, if you clear some of those emails tonight, you can start afresh tomorrow. Right?
Wrong! If this sounds familiar to you (and yes, there are plenty people in this position) then you should think hard about what you’re doing. No-one minds working beyond contract hours or staying a bit later when there’s urgent work to finish. But why, when there aren’t pressing deadlines, do we voluntarily give up our free time, weekends, or even our holidays to do extra work?
At best you get a reputation for not being able to switch off. At worst, it can impact on your personal life, and could even create an expectation that you’ll be on hand to respond to any query, no matter when it’s been sent.
Right to Disconnect?
Some countries are helping workers rebalance their scales. At the end of 2016, a new law was introduced in France, which meant that organisations had to give employees a “right to disconnect”. Companies had to work with employees to establish a basis for out-of-hours or home working, or make clear what expectations there were of workers.
In other European countries, companies are allowing employees to delete any emails that are sent to them while they are on holiday. Given the choice of a clean slate on your return to the office, it might also help remove temptation to access your inbox in your own time.
The Millennial generation is the first to really confront this issue (though this doesn’t mean other generations aren’t failing foul of it too). However, it’s hard to diagnose an issue until you know what it looks like. Author and motivational speaker Simon Sinek sheds light on some of the key points in this video.
(The key part is at 3:15, but if you have time, then it’s worth watching the whole video.)
So how do you change these habits and start to regain control of your work-life balance? Here are some top tips:
The Phone. Down.
It might not always be possible, but it’s time to create some space between you and your phone. It doesn’t need to be all the time, but having no-go areas in your home, or certain times when your phone is off is a good place to start.
If you have a dedicated work mobile, then leave it somewhere that you’ll just pick it up as you leave the house.
Why not start by not having your phone next to your bed overnight? This will help to remove the temptation to check emails first thing in the morning or last thing at night. It might help you sleep better and start your day off on the right foot.
Time Off is Your Time
You’ve earned the right to some downtime at the weekend. You’re entitled to your annual leave, and to enjoy it as time away from the office. And you’re entitled to be left in peace outside of working hours. Don’t voluntarily give this time up checking your email or finishing work.
It’s not always going to be cut and dried. But try to set yourself a time to stop working each evening, particularly on a Friday. This is particularly important if you work from home. Try to create a separation between work and home.
After all, does it really matter if that email is sent now, or document completed, when no-one else is going to see it until Monday anyway? Your brain will thank you for it (and your family/friends/loved ones probably will too!).
Stop and Smell the Roses
Life doesn’t have to be lived in front of a computer screen or glued to a phone. Get outside and enjoy spending some time away from your desk. Challenge your friends and family to leave their phones behind (or in a bag at least) when you’re out.
Keep phones, tablets, computers, and technology away from the dinner table. Who knows, we might even rediscover the lost art of conversation!
Some of this is tongue in cheek. Most of it needs to be taken with a healthy dose of realism and knowledge that we can’t just drop technology. But we can make it work for us, instead of making it seem like a completely indispensable aspect of our lives.
So take control of your technology, and tip your work-life balance scales back in your favour!
Heading off to begin a new procurement chapter abroad? Make sure you’re preparedto accommodate, and adapt to, a new culture.
Have you ever wondered what courage it would take to pack your bags and set off across the globe in order to start an entirely new chapter?
Juggling a new home, new job and a new life isn’t a challenge for the faint-hearted but it’s one you’re unlikely to regret and something that ISM board member, Kim Brown, knows all about!
Throughout her impressive procurement career, Kim has enjoyed roles at Reynolds and Reynolds Company, General Electric, Toys R Us and, most recently, at Dell, Inc as Vice President, Global Materials.
Kim’s lengthy career has taken her around the world so it’s unsurprising that she’s honed and developed her cultural intelligence (CQ) over the years. When we interviewed Kim, we were interested to hear about her global experiences, both what she’s learnt and how she’s adapted to different circumstances, and gain some advice on what it takes to hold a position on a board as noteworthy as ISM.
Procurement around the world
“I’ve lived in quite a few places, four or five US states and two countries,” explains Kim. ” I also did a stint as an ex-pat in Mexico city for a year and spent on year in Singapore.”
Was she able to observe distinct differences in working cultures during her time abroad? “Very much so, particularly at the beginning of my time in Mexico, which has a very, verY different culture. I was working for General Electric at the time and accustomed to the direct and process-driven culture in the US. In Mexico, the conversations with suppliers, local people and colleagues were very family-based. They wanted to know about me, and understand what my family life was like before doing business with me.”
In Singapore, Kim faced the challenge of managing a widely dispersed and culturally diverse team. “I had team members in 26 or 27 different countries, all of which had cultural nuances.”
Pulling together a strategy for a large team is challenging at the best of times but it becomes even more so when you must be cognisant of how different cultures are motivated by different things. “Something that someone in the US would regard as a very small factor might mean a lot to someone in India, for example.
“Singapore itself was a very different culture. It seemed at times cautious and a little shyer than in some other parts of the world. I’m the kind of person who says hello to a lot of people, and in Singapore they would look at the floor in response! However, once you get to know them and they get to know you I found the community to be friendly and outgoing.”
This, in a way, is the motto of Kim’s story. Working across cultures and borders requires patience, tolerance, compromise and understanding from both sides.
“As long as you go about making a change in the right way, it will work. When I first started in a global role I tried to supplement it with videoconferencing. I quickly found I was questioned “When are you coming, when will we see you?” And there is no substitute for that. Employees are often very excited by and enthusiastic about a visit from the regional office – I’d arrive in Malaysia, for example, and find that the room was packed with people who wanted to see me, listen and ask lots of questions.”
What a board wants
If anyone knows the answer to the question “what does a board want?” it’s Kim Brown. As well as being treasurer for ISM, she’s held positions on two additional NFP boards, one of which had 70 board members. “When I went on [the board with 70 people], I wanted to be really involved, to be on the executive committee and be a decision maker, not just a voter. These roles are extracurricular but if you’re going to do it, do it!
“At ISM, we have very robust conversations, which is fun! I learn a lot and have the opportunity to interact with a whole bunch of new network contacts. I try to look positively upon any experience where I can learn something new.”
Kim’s top tips for procurement when presenting to the board:
Keep your strategy clear and concise and ensure you know how to sell it!
You need goals and objectives; lay out the salient points and present them in a way that makes sense
Get your act together! When you’re presenting, make sure it’s in an understandable manner.
Do your homework and always look at alternatives and contingencies.
Use your junior team members! I really like it when CEOs do this. It gives your team an opportunity to showcase the work they’re capable of doing, and allows us, as the board, to show your team that we’ve got confidence in them!
What exactly is emotional intelligence (EQ)? How can you determine if you have those characteristics? And why is it so important?
You’ve probably heard the term “emotional intelligence.” It’s come into vogue in recent years, with numerous books being written about the subject. Businesses are increasingly focusing on emotional intelligence and researchers are increasingly learning its importance.
What is emotional intelligence?
The term “emotional intelligence” (EI or EQ) was coined by researchers Peter Salavoy and John Mayer. Author Dan Goleman made the term mainstream in his book “Emotional Intelligence.”
Typically, EQ includes two related, but distinct items:
The ability to recognise, understand and manage your own emotions
The ability to recognise, understand and influence the emotions of others
The 5 characteristics of emotional intelligence
Emotional intelligence is characterised by 5 distinct characteristics:
1. Self awareness
Those with high EQ are able to recognize emotions in the moment. One of the keys to developing EQ is being aware of feelings, evaluating those feelings and then managing them.
2. Self regulation
Everyone knows that emotions come quickly and with force. It’s rare that you have control over when we are hit by an emotional wave. Even the slightest thing can trigger something deep within you. However, if you have a high EQ, you can control how long that negative experience lasts.
It’s very difficult to be motivated if you always have a negative attitude. Those who are full of negativity don’t often achieve their goals. Those with a high EQ are able to move toward a consistently positive attitude by thinking more positively and being aware of negative thoughts.
Empathy is the ability to recognise how others are feeling. This is essential for functioning well in society and excelling in your career. A person without empathy will end up regularly insulting and offending people, while a person with a high EQ will be able to understand what a person is feeling and then treat them accordingly.
5. Social skills
The final characteristic of EQ is having and developing excellent interpersonal skills. It used to be that access to the greatest amount of information would allow you to succeed, but now that everyone has immediate access to knowledge, people skills are more important than ever. Those with a high EQ are able to wisely and skillfully navigate the various relationships that fill their lives.
How can you tell if you have high EQ?
There are various tests that can help you identify your emotional intelligence, such as the Emotional Intelligence 2.0 test. However, these tests have their limitations in that EQ is intangible, making it difficult to precisely measure.
There are a number of markers that accompany those with a high emotional intelligence.
Some of those markers are:
A curiousity about people
Curiosity comes from empathy, which is one of the most significant elements of EQ. If you are curious about people, you will also care about what they feel and how they struggle.
On the flip side, those with a low EQ don’t have any interest in others. They aren’t interested in what others think or feel. Their primary focus is on themselves.
A thorough emotional vocabulary
Remember, EQ is the ability to identify and understand emotions. Research done by Travis Bradberry, who is the author of “Emotional Intelligence 2.0,” suggests that only about 36 per cent of people have this ability.
This is partially due to an inadequate emotional vocabulary that prevents people from properly identifying what they’re feeling. Every negative feeling is simply called, “Bad,” and every positive feeling is, “Good.”
However, those with high EQ can specifically name their emotions, which then allows them to deal with them in the most effective way.
A holistic understanding of themselves
If you have high emotional intelligence, you have a holistic understanding of yourself that goes beyond just feelings. You know what you’re good at and what you’re not. You know the people and situations that frustrate you. You also understand how to avoid or effectively navigate situations that will hurt you emotionally.
If you have a high EQ, you can tap into your strengths and minimize your weaknesses.
Not easily offended
Emotional intelligence involves a thorough knowledge of yourself and the ability to control your emotions. Combined, this makes you difficult to offend. You are confident in who you are and are able to understand when someone is simply making a joke versus when they are degrading you. You don’t let people easily get under your skin.
An ability to judge character
EQ gives you the ability to read and understand people. You are in tune with their emotions, which then allows you to more readily understand their actions. You can tell the difference between someone having a bad day and someone who is a bad apple. The more you develop your EQ, the more skilled you become at making character assessments about people.
Not haunted by the past
A low EQ makes it difficult to manage emotions when they appear unexpectedly. When a past mistake comes to mind, it’s easy to get dragged down into discouragement and despair.
If you have a high EQ, you are able to think about past mistakes without letting the associated emotions overwhelm you.
Giving without expecting
Those with a high EQ are able to give without expecting anything back. Because you are constantly in tune with the emotions of others, you know the effect that a gift will have on someone. When someone needs something, you want to meet that need.
This giving attitude allows emotionally strong people to build deep relationships with other people.
An ability to handle toxic people
Toxic, difficult people will often draw a reaction out of you. You feel surges of negative emotions when you are around them and often lash out, which then hurts both you and them. Lashing out also fuels their toxic behavior even more.
If you have a high EQ, however, you can keep your emotions in check when dealing with a difficult person. You don’t allow your anger to boil over. You’re able to see multiple perspectives, calmly.
“If your emotional abilities aren’t in hand, if you don’t have self-awareness, if you are not able to manage your distressing emotions, if you can’t have empathy and have effective relationships, then no matter how smart you are, you are not going to get very far.”
Janae Ernst (M.S. ’17) serves as the marketing communications coordinator for Cornerstone University’s Professional & Graduate Studies. This article was orginally published on the Cornerstone University blog.
Procurement ought to care a whole lot about long tail spend and lay out the best way to manage it in the “consumerisation of tech” era…
I have no doubt that agility, innovation, and adding value to the business should be of paramount focus to procurement teams evolving beyond cost-center status. Who wants to be in the back office pinching pennies while the rest of the business struggles to keep up with the new rules of the digital revolution? But as leaders keep one eye on those critical matters, the other must still cover the basics of the procurement practice to deliver the right experience and results. That means continuous tracking and improvement of spend influence, which includes long-tail spend management.
Long tail spend 101
Long tail spend is not strategically managed or under management. This means any spend without a contract framework agreement or negotiated work order. In organisations that have invested significant effort into strategic category management, managed spend tends to be around 80 per cent of all expenditures, leaving long tail spend at 20 per cent. It also includes a small, but significant amount of spend with managed suppliers, which is known as hidden tail. This spend includes purchases made from managed suppliers, but these purchases are outside existing contracts.
The remaining tail spend tends to come from roughly 80 per cent of the total number of suppliers. Often this will be fragmented: ad hoc purchases from multiple suppliers, low-value transactions at one-time vendors, non-purchase order spend, off-contract spend, etc. When all the long tail spend is added together it becomes the biggest overall supplier! This biggest supplier costs you a lot of effort and time, which is not clearly visible within the organisation.
What is the business value of tail spend management?
Until recently, the generally accepted figure for how much sourcing organisations can save through managed tail spend has been 1 – 5 per cent (the less mature the organisation, the more the saving). However, analysts at The Hackett Group, concluded that this figure might be higher: as much as 7.1 per cent. High-value maverick buying that should have been strategically sourced was cited as a factor in raising this figure (30 per cent of respondents estimated 10 per cent or more in savings). This underlines the importance of gaining visibility of tail spend.
Apart from up to 7 per cent savings, what are the other benefits of managing long tail spend? First, by better managing long tail spend, you can significantly reduce the number of transactions and the related costs of procurement, and in other departments such as finance. This will help minimize the number of internal resources (sometimes senior) working with tail spend suppliers to further reduce procurement costs. These savings can be significant considering that the administrative cost of each pound spent can be as high as 35 per cent. Improving the visibility of low-value spend suppliers will create opportunities to identify sourcing savings and supplier consolidation.
Second, increasing strategically managed spend, and managing long tail spend, will result in increased contract compliance, leading to further savings. Added to this, suppliers are more likely to offer increased discounts when they are the sole providers for a specific category, or when a set volume of purchases is guaranteed.
Third, beyond cost savings, managing long tail spend helps eliminate noncompliant suppliers and consolidate larger suppliers, which leads to reduced business risk, and a reduced risk of fraud across the supply chain. This also increases the chance of your organization being compliant to external legislation.
The visibility challenge
One of the main difficulties with long tail spend management is poor data visibility, caused by factors such as complex supply chains; different IT systems and data sources; and, fragmented and disconnected business processes such as sourcing, contract management, and procurement. Also, the sheer number of suppliers, items, transactions, and the high number of business stakeholders can simply overwhelm some organizations.
There are often not enough available resources with the right skills to analyse the problem and set a corrective action plan. Unfortunately, neither strategic category managers nor operational procurement agents tend to have the knowledge or skills to handle the long tail. Organizations that don’t have clearly set policies or well-defined processes are more likely to lack effective control. Part of this process must be constant maintenance to prevent slippage. A good analogy for this aspect is that of keeping a garden. Just as a neat and orderly garden will become overgrown if neglected, maverick spend will creep into the spend cube. This results in a higher percentage of noncompliant purchases, often with low-value transactions and small-volume suppliers.
Finally, there is often a lack of adequate tools to help the organization analyze and manage long tail spend in an efficient manner. A purely manual approach to tail spend management quickly becomes cumbersome and error-prone without the right tool support. There is no quick fix for overcoming these obstacles, but the benefits of doing so are estimated by different sources to be between 15 – 20 per cent through reduced procurement cost, increased efficiency, supplier consolidation, additional sourcing savings, and decreased business risk.
The smart approach to long tail spend management
Organisations should first analyse their spend data with a thorough spend and supplier assessment. This type of spend analysis exercise helps gain an understanding of the current state and will serve as a foundation for a business case in readiness for the next step. The next step is to gain top management and stakeholder backing. To be successful with a long tail spend management initiative, it is necessary to have the buy-in of your C-suite, i.e., the CPO and CFO, by means of a solid business case and clear description of the savings outcome.
Establishing the support of top management will also help with the third step, which is to set-up clear policies and processes to drive the long tail management initiative. This includes compliance policies, preferred vendor lists, no purchase order–no pay policies, etc. The processes should also include automated procurement, with catalog suppliers, as well as spot buy, and free text orders channeled through a tactical and operational procurement team. The next step involves, selecting and implementing the right tool to the complete solution for long tail spend management. Consider an easy-to-use eProcurement system with a good search engine featuring rich content, efficient buying channels, and support for spot buy and tactical eSourcing.
Finally, setting up a dedicated team to monitor long tail spend suppliers is key to a complete solution for long tail spend. Spot buying and operational-free text orders at preferred suppliers will run more efficiently with a dedicated group managing the process. It is also possible to outsource this work to an external team.
In closing, it is important to realise that there is no silver bullet to managing long tail spend. Without clear policies or processes to guide an organisation on what to do and who needs to do it, there’s little that can be done to optimise and manage tail spend. By combining the right tools with the right approach, you can gain an additional level of visibility and savings, and, in turn, greater spend influence.
This post was adapted from the IBX Business Network white paper, Using Long Tail Spend Management to Achieve Savings, published in 2016. Tradeshift acquired IBX in early 2017.
In a major negotiation, procurement needs to deal not only with the supplier representative on the other side of the table, but with the internal stakeholder sitting next to you. If that person deviates from the script – as they so often do – then don’t be afraid to kick them in the shins. It’s your job!
Procurious was invited to attend a Negotiation Roundtable organised by CABL (Conti Advanced Business Learning) and facilitated by its Founder, Giuseppe Conti.
Conti introduced the subject by pointing out that in many negotiations, it isn’t enough to negotiate with the suppliers. Usually, there’s a minefield of internal negotiation to get through first.
Don’t enter the maze without a map
Håkan Rubin refers to his company (IKEA) as a “matrix organisation”, and therefore sees stakeholder mapping and management as crucial before any sourcing activity. In his role as Supply Chain Operations Leader (Group Sustainability Innovations), Rubin says that identifying who the key players are internally isn’t always that obvious. “We try to get everyone on board, to make sure that resources are available and that everyone feels they are involved.”
Paul André, Emerging Products & Commercial Supply Director at JTI, built upon Rubin’s point: “I find that even though you’ve carried out your stakeholder mapping and have a joint meeting with key people involved, a lot of discussion happens outside of that meeting. What happens between the meetings is often more important, where people agree on things in one-to-one discussions.”
Kemira’s Senior VP of Global Sourcing, Thierry Blomet, examined some of the typical resistance that procurement faces from internal stakeholders. “They have restrictive time constraints, heavy specifications, and often want to select suppliers based on past history and how comfortable they are with using them. It’s often challenging for procurement to convince stakeholders that there’s a better option against so much resistance, especially in a conservative industry not willing to take on the adventure of new technology or new suppliers.”
Xinjian Carlier (Strategic Sourcing Commodity Manager -Honeywell) shared an example of how she overcame resistance to a request for extra resources to deal with a major issue with significant financial impacts. “The reaction was ‘we don’t have time – I can’t give you the resource.’ I explained that the reason I came to them was that the company including both procurement and engineering would suffer an impact of hundreds of million in sales. Basically, I converted the issue into facts and put both of us in the same boat. This helped the senior leader in engineering understand, and reprioritise his resources.”
Resolving conflicting objectives
Laurence Pérot, Head of Global Supply Chain & Procurement at Logitech, comments that particularly in larger organisations, it’s procurement’s responsibility (and challenge) to juggle differing objectives and agendas from varied teams. “When you’re dealing with different functions, it sometimes isn’t clear what the company actually wants out of the negotiation. It means we [procurement] are unsure what we’re going to ask for. I had an experience where we had to make the decision on our own about the objectives on behalf of the rest of the community, because we couldn’t get alignment between the functions.”
Procter and Gamble’s Global Capability Purchasing Leader, Tamara Taubert, adds that procurement owns the discipline to be able to turn around complex, multiparty negotiation effectively. “To do that, our stakeholders need to get educated on what a negotiation is, the do’s and don’ts, and their role in the negotiation itself. The procurement representative might be the only person sitting at the table across from the supplier, but there are others involved in the negotiation, whether they like it or not. Procurement can lead by connecting all parties together and help them come to a value agreement.”
Staying in control
Blomet has found that engineers are generally happy to be guided by procurement as they’re often less experienced in negotiations and sourcing events. But when senior business stakeholders step in, it’s often more challenging for procurement to keep control of the process. “Business stakeholders are more likely to say that they know how the negotiation should be handled. Procurement may be tempted to back off at this point, but my advice is don’t back off. It’s even more important to help set the scene, do the roleplay, and keep them under control both during the preparation phase and during the meeting itself. And yes, this means it might be necessary to kick someone under the table if they deviate from the script.”
Alessandra Silvano, Global Category Director Capex and MRO at Carlsberg Group, says this has happened to her. “I had to ask someone who was not keeping to the script to leave the room. This person was becoming emotional and I could see we would be left in a bad position. I called a time-out, we took a break, left the room, and the supplier stayed behind. Eventually, we went back into the meeting and said we’d like to continue in a smaller group – leaving out the person who was not playing according to the script.”
Francesco Lucchetta, Director of Strategic Supply at Pentair, noted that although emotion can cause people to leave the script, it’s part of the negotiator’s toolset. “There’s a difference between playing with emotions and keeping negotiations under control. In a supplier negotiation, you’re the customer, so you can be much more emotional than they are. In an internal negotiation, you’re more likely to change a stakeholder’s mind by pointing out the emotional/risk side of the issue, rather than presenting facts around savings.”
Interested in attending a CABL Negotiation workshop? Visit http://www.cabl.ch/ to find out more. The founder, Giuseppe Conti, has over 20 years of Procurement experience with leading multinationals and over 10 years of negotiation teaching experience at leading Business Schools (including Oxford, HEC Paris, IMD and ESADE).
“It is not enough to be busy… the question is: what are we busy about?” How do you find the time for valuable strategic thinking?
Last month, I ran a one-day workshop for senior leaders at a multinational organisation. One of the common themes that came up when we were establishing the ground rules for the session was the sense of “busyness” in the group. Many participants mentioned how “busy” they were and how it was not an ideal time for a full day workshop. Nevertheless, the workshop went very well and the level of input and engagement from the participants was high.
As a follow-up, I was debriefing the workshop with the participants yesterday. Their feedback about the session and its impact has been very insightful.
The Benefits of Strategic Thinking
One participant said she appreciated the time and space the session provided in order for her to slow down, think and reflect. She was able to move out of her “tactics” mindset and think more strategically. Another participant mentioned that he was able to step into a more strategic mindset and use the time to think about frameworks that will find alignment with everyone in his team. Others shared similar experiences. Participants realised that they were actually being busy for “busyness” sake, whereas what they were missing was the necessary time and space for valuable strategic thinking and consequently future planning. This is a key aspect of leadership.
As Henry David Thoreau wisely stated, “It is not enough to be busy… the question is: what are we busy about?” Strategic thinking examines and challenges the assumptions that exist around an organisation’s value proposition. It focuses on finding and developing unique opportunities to create value for an organisation. Being a strategic thinker can be difficult, but allocating time for the process is a crucial first step.
Strategic thinking is not only reserved for senior executives, it can, and should, happen at every level of an organisation. The important step is to accept that strategic thinking is part of your job and begin to focus on developing your abilities. Here are a few techniques to help you become a better strategic thinker:
Make a commitment to slow down and do some focused thinking. One easy way to do this is to schedule a time every day or week to simply spend time thinking. It doesn’t have to be at work; it could be driving to work or going for a walk at lunch.
Broaden your horizons
Strategic thinking and curiosity are intrinsically linked. The more ideas and experiences you have, the more insights and connections you can make. Try to read about new ideas or new opinions, or explore new places to help stimulate the mind.
Step into others’ shoes
Discuss your ideas with other people. This is valuable because most likely the people around you think differently from you and can provide alternative perspectives to your ideas. Clients and customers also serve as a good source of inspiration for new ways of thinking.
The more strategic minds generating ideas in an organisation, the better. One effective way to encourage staff to think strategically is to incorporate strategic thinking into their training and/or performance development plans.
Strategy is not just about thinking, it is also about executing. Generating ideas is valuable, but it can go to waste if a decision is not make about what to do with them. This is where budgeting, time, money, resources, and prioritising come into focus.
Strategic thinking will make you a better leader. However, the ultimate value of strategic thinking is that it is looking out for the future of your organisation and its long-term success.