What’s the number one skill required by the CPO of the future? According to award-winning Australian CPO Kevin McCafferty, you won’t get far without mastering the art of persuasion.
Broadspectrum Executive General Manager and 2017 Asia-Pacific CPO of the Year Kevin McCafferty will deliver a keynote session at the upcoming GovProcure2017 conference, running from 5th-7th December in Sydney, Australia. Procurious caught up with Kevin to ask him about top skills required by the CPO of the future.
Kevin, you’ll be talking about procurement in 2018 and beyond at GovProcure2017. How can CPOs equip themselves to meet the coming challenges?
“In my opinion, the number one skill for the CPO of the future is what I’d call the ‘art of persuasion’. Procurement is a profession that a lot of organisations see as a tactical solution to some of the issues that they have. Most organisations spend about 50 per cent of their revenue on 3rd-party suppliers and service providers. If your business spends that much money externally, they need to become more strategic in doing so – and that’s where the need for persuasion arises.”
Which parts of the business generally require the most persuasion from CPOs?
“A CPO’s job is firstly to persuade the organisation when to be strategic in the way they spend it, and secondly, to invest in the profession so they get the best value-for-money outcomes every time they spend money. It doesn’t matter whether they’re buying pens and pencils, or if there’s a $10 million project your organisation wants to invest in; there’s an art involved in being able to persuade your board, your executive team, and your chief executive that investing in procurement to get those outcomes is absolutely critical to the profession.”
In your view, how important is networking for procurement professionals?
“The power of your network is absolutely critical to your career. In this profession, being able to talk to your peers and understand what’s happening in their organisations will help you work through your own strategies and goals.”
Kevin McCafferty will deliver the opening keynote at GovProcure2017 in Sydney on 5th December, where he’ll focus on:
an overview of procurement trends for 2018 and beyond
the age of commercialisation and digitisation, and how it’s impacting the profession, and
common challenges facing procurement and how to tackle the solutions.
Click hereto learn more and download an event brochure.
We got wind of the fact that IBM, arguably the world’s most robotically advanced procurement team, is focussing on its employees’ soft skills.
As Justin Mcbryan, Learning & Development, Strategy, Communications Manager- IBM, explained, why would IBM need a high volume of data scientists in their midst when they have Watson!?
Technological advancements will soon permit the automation of our processes; handling the sourcing and the market intelligence. In this environment, it’s the softer skills procurement professionals must master to ensure a long-term career. That’s the real skills gap procurement should be worried about!
Ahead of next week’s webinar Beat The Bots – How Being Human Will Win The Day, we outline the specific skills procurement pros should be mastering to prepare for the post-cognitive age, with the help of Justin and our second webinar speaker John Viner Smith, Principal-Mercer.
1. Design Thinking
There are some “incredible and transformative technologies that offer solutions to problems that were unimaginable just a few years ago ,but they’re just half of the puzzle.” begins John.
“Subject matter experts will have a role to play in framing [these problems] in the most efficient way.” It’s important that the solutions aren’t simply “sticking plasters but fundamental root cause fixes”.
This is a role for procurement’s best and brightest, and the skill needed to fulfil this role is Design Thinking; “the process of being at the forefront of bringing new technologies to bear on business problems.”
2. Thinking at the speed of digital!
Joh asserted that procurement must recognise that “thinking of digital solutions requires some understanding of new processes and ways of thinking.”
“Procurement people should be learning about methodologies like Google’s Design Sprint or Eric Ries’ concept of Intrapreneurship as defined in the Lean Startup that are used in other types of digital business.
“Too often procurement thinking is slow, bound in process and incredibly risk averse. Technology problem solving is experimental, iterative and views failures as key to learning. The idea of developing hypotheses, testing them, failing fast and iterating or pivoting in the course of a week, as per Google’s Sprint methods, would be alien to many Procurement people.”
Procurement has worked at a certain pace, thus far. And it’s going to have to get faster!
3. Active questioning and listening
This wouldn’t be a piece about soft skills without a mention of communication! We already know how important this skill is for procurement people but it’s going to be all the more valuable in a post-cognivite age.
Justin reminded us that communication is vital for everything “from presentation skills to phone etiquette and how to ask probing questions to your suppliers.”
In a post cognitive world you’re “going to become more of an owner and less of a process facilitator” asserts Justin, which is where active listening comes in.
When it comes to managing negotiations with suppliers, clients and colleagues, “We all have scripts e.g. How many widgets do you need, when do you need them by etc.”
“Every now and then, you’ll have been in a situation where a client has given a little bit more than you asked for. This is where the active [and critical] listening comes in.” How do you use that information to do the best job possible?
“We rely on the threat of competitive pressure to do our negotiating for us” says John.
“We source the spec and don’t always listen to challenges from Suppliers. When we’re engaging them to help solve complex problems, we will need to be more commercially empowered and highly skilled negotiators; able to get the best from our suppliers by offering the best of ourselves while optimising value.”
“The future role of procurement can be solved in one phrase: problem solving” says John.
But procurement’s problem solving needs to take on a more innovative and imaginative approach.
“Not every situation is going to call for an RFX” explains Justin. “That speaks directly to the change we’re looking for [at IBM].” Too often “we see a need and our reaction from a process point is let’s go and do the RFX.” Instead professionals “should take a deep breath and start understanding the client and exactly what they need,” and approach the problem in alternate ways.
John concedes, arguing that “running tender might be the solution (increasingly rarely!) but collaborative innovation with the suppliers we have is important.”
Procurement peoples’ jobs will largely focus on bringing innovation to the supply chain in the first place and really helping the business to understand their demand.
In short, Procurement needs to have a relationship with the organisation that is much more strategic and puts the function in a partnering and consultative role. As Justin sums up, ‘ [at IBM] We’re still looking for the procurement experts, we’re still looking for people who can do the job. But we’re adding to the soft skills portfolio.”
From guest contributor Shaun Hughes, Chief Procurement Officer, Telstra.
In a complex and hyper-connected world, it’s becoming increasingly difficult to juggle every demand on your time without losing sight of important projects. The solution doesn’t lie in downloading the latest time-management app, or introducing the latest project management methodology, but in the development of five key soft skills.
I’ve always been impressed by jugglers. Otherwise known as multi-taskers, the best jugglers are seemingly able to keep an unbelievable number of projects and tasks in the air at once. But underneath the whirl of frenetic activity, impressive as it might look, is it really effective?
Firstly, trying to juggle too many projects at once often leads to short-termism. Rather than make hard prioritisation decisions on what really matters, we often fall into the trap of focusing on the most urgent task at hand. Meanwhile, the big-ticket projects that really make a difference are lost in the swirl of activity. Busy-ness leaves no room for effectiveness.
You may be able to get every task done on your list, but does it really add value? We all know what our best work looks like, but are we setting ourselves up for success? Creating the time to think and to prioritise is essential, but how do we know that we’re working on the right things?
Soft skills remove ambiguity.
Modern procurement is about driving a change agenda. Great organisations have great talent and great talent doesn’t always agree.
I used to think getting things done was about getting everyone to yes, now I believe it’s about getting the “NOs” to neutral and maintaining enough momentum in the “YES camp” to move things forward.
But the task of converting all those NOs to neutrals can sometimes seem overwhelming. If you don’t have existing relationships in place, you’ve simply got no idea why individuals (or entire functions) are resisting your change agenda. Confronted with so much ambiguity and complexity, it can be hard to know where to start.
What I’ve found is if you simply roll up your sleeves, start talking to people and understand their perspectives it’s amazing what you learn about what is important to them and why. Understanding this takes a bit more time sometimes, but change is much more likely to stick.
Five soft skills that will help you win back your time
1. Make the effort to really connect – see the person, not the task. Take the time to understand those around you, what is important to them, their fears and aspirations, what motivates them. While the degree of connection each of us want at work will vary, when we connect as people in a real and authentic way the whole human dynamic of that relationship changes. When our focus is only on the task, it’s much harder to see the person and the impact your agenda might have on them.
2. Ask not tell – start with a question, and then keep asking questions. Even if you want to talk about your agenda, when we ask permission to do so, something changes. We are now being invited into the conversation. The dynamic shifts from one of pushing our own agenda and position, to a pull dynamic where we are being asked to explain it.
When the conversation pauses, inquire with curiosity. It never ceases to amaze me how different things can be in reality to how they appear on the surface. When we simply listen with a view to finding space to talk ourselves, I wonder do we always hear what is being said to us?
When a really important idea that I just don’t want to forget hijacks my ability to listen, one thing that works for me is the simple act of writing that thought down. This seems to remove the need to keep trying to remember it, or the urgency to blurt it out, and allows me to listen.
3. Reasonable people acting illogically – most people in business are smart, pragmatic and reasonably rational. Admittedly, we all have moments when we lapse a little, but corporate norms of behaviour tend to reinforce pragmatic rationalism. So, when we see behaviour that doesn’t quite make sense to us, it’s often because we don’t fully understand what’s important to those around us. What should we do? Start back at point 1 and build a relationship.
Throughout my career I’ve taken many opportunities to do many different things in many different parts of the businesses I’ve worked in. Different roles in different industries, but always coming back to my core skill in commercial / financial management. Breadth through rotation provides a wider perspective on the world around us and I’ve certainly benefited from this. It’s amazing how much you can enjoy learning something new; the broader our own experiences, the easier it is to understand the perspectives of others.
4. Learn to let go – for many overworked jugglers, the problem can be of our own making. If your leadership style means controlling every decision and rewriting everything your team produces, you will always have too much on your plate. Learn to recognise talent, enable it, establish a set of principles to work by and communicate these clearly. Then, simply get out of the way and let talent be talent.
You may be surprised to find that the quality of work goes up as people feel more empowered and valued. Do any of us do our best work when we know the boss is going to get out the red pen and rewrite the whole thing?
5. Know when to call in the umpire – we have umpires in sport for a reason. Sometimes in the heat of the moment the desire to win distorts the player’s perspective of what’s really happening. Imagine a tennis game without an umpire …. In out! In! Out!! IN!! OUT!!!
Nothing can stall a project quite so much as an unresolved disagreement. So, rather than let the relationship falter, or prosecute the same issue repeatedly, be pragmatic about when to find an umpire. Make your respective cases, accept the decision and move on.
Is there anything wrong with acknowledging where you are and saying “Hey, we’re not going to agree on this, how about we get a third party to be an umpire?”
Good communication, transparency and investment in relationships may seem like a counter-intuitive way to lesson your workload, but your soft skills are the most effective method you have of bringing those multiple projects under control, focusing on the big-ticket items that will really move your business and your career in the right direction, and driving lasting sustainable change.
Telstra is a leading Australian telecommunications and technology company, offering a full range of communications services and competing in all telecommunications markets. Hear more thought-leadership from Telstra at Procurious Big Ideas Summit Melbourne on Monday 30th October.
A double-digit increase in salaries over four years, a continuing gender pay gap and similarity in salaries across generations are just some of the insights to be found in ISM’s foremost annual research initiative, the Salary Survey.
To create the ISMAnnual Salary Survey report, for the past 12 years Institute for Supply Management has asked its members thoughtful questions regarding their salaries, benefits, current employment and what they’re looking for in future employers. This report’s purpose is simple: to empower the professionals we serve, through the provision of insightful, actionable information. We believe this information is so important for individual professionals (and therefore the profession) that we take the time to carefully compile thousands of responses from around the United States. The information gathered is then diligently reported back, every May, in an article in Inside Supply Management and in a detailed report available on ISM’s website.
Strong momentum for salaries
This year, the Salary Survey found that in 2016, salaries continued to grow strongly compared to the previous year. This may be due in part to a strong job market, continuing the forward momentum from 2015 into 2016 with the average compensation for responding professionals being $115,440, an increase of 5% compared to 2015 ($109,961). In 2015, there was a 7.9% increase. In the longer term, salaries for procurement and supply management practitioners increased 14% from 2013 to 2016, as released in the 2014 to 2017 ISM®Salary Survey reports.
Widening gender gap
More saliently, the average salary reported by procurement/supply managers was $109,401 in 2016 — and when broken down by gender, male managers reported earning an average salary of $114,207 while female managers reported an average salary of $97,948. While overall salaries have increased over the years, in 2016 men earned an average of 31% more than women, a substantial increase from the 24% reported in 2015.
Professional certifications pay off
The survey further found that those who invested in professional certifications made more in 2016 than practitioners who did not. Respondents who have a professional certification reported that their average salary was $121,523, whereas those who indicated they did not reported an average salary of $108,141.
Generational differences and similarities
Professionals can also start to see year-over-year trends in the detailed report and use information from the inaugural Generational Report, which was released this month. The Generational Report looks at information collected from Salary Survey reports over the years, and follows baby boomers, Generation Xers, and millennials as they move through the profession, reporting salary and other changes. For example, while millennials are a distant third on the generational salary scale (an average of $93,555), Generation Xers aren’t far behind baby boomers ($121,512 and $122,880, respectively).
Considering changing careers?
The Salary Survey report has a specific section dedicated to individuals who are thinking of changing careers or are considering getting a professional certification. In 2016, nearly half of respondents indicated that they transferred into procurement/supply management from another career or vocation, and reported that the change resulted in an average salary of $118,140, 2.3% more than the overall average reported for 2016. Director, manager and experienced practitioner respondents from another field earned 4.7% more, 6.6% more and 7.5% more, respectively, compared to peers who have always worked in supply management.
In just this article’s small recap of Salary Survey findings, practitioners can easily start to identify where they fall among their peers. Information is collected on salary not only by position, but years of experience, education, geographic region, industry and many other categories.
Information like this gives power and perspective to the professionals consuming it, and helps them map out their future. Confidence and knowledge work symbiotically, and in this case, it’s easy to have confidence when possessing facts to back your decisions — whether changing positions and/or careers, negotiating for increased benefits or motivating a professional to pursue a certification. The information ISM provides helps empower procurement and supply management professionals. It’s what we do best.
The ISM’s Twelfth Annual Salary Survey detailed report can be accessed here or you can access Inside Supply Management magazine here.
Basware Connect is just around the corner, and is shaping up to be one of the highlights of the 2017 procurement event calendar. Procurious has the inside word from our knowledge partner Basware on the top eight things to watch out for on Wednesday 18th October.
The very latest on Industry 4.0
Whether you’re from the procurement or finance function, it’s almost certain your role is already being impacted by the many facets of the 4th industrial revolution. From ‘business as usual’ technologies such as PDF e-invoicing to large-scale futuristic disruptors including blockchain, robotics, machine learning and predictive analytics, it’s up to you to keep up with the latest news on how the revolution is progressing and Basware Connect will help you to do just that!
Engage with a blockchain guru
Blockchain has well and truly arrived, and organisations are scrambling to understand how they can incorporate this technology to reap the security benefits, keep ahead of the competition and avoid getting left behind. It’s a hot topic: Procurious’ own articles on Blockchain have attracted a lot of attention, demonstrating that procurement professionals are increasingly eager to get to grips with what this technology can actually deliver. Simon Taylor, one of the most recognised thought leaders on Blockchain and DLT, previously established Barclays bank as one of the leaders in blockchain thought and action. He is set to deliver one of the most anticipated sessions at the conference.
Learn how to fail forward
We’ve come a long way from the days when failure was seen as career damaging and shameful. Today, businesses are embracing failure as an exciting, enlightening step towards success. Black Box Thinking author and Times Columnist Matthew Syed will demonstrate how to redefine failure in your organisation, taking attendees through his thought-provoking approach to high performance in the context of ever-increasing complexity and rate of change.
Get to grip with megatrends
Don’t miss out on seeing Eric Wilson, Basware’s VP Purchase to Pay, speak about megatrends. We’re biased when it comes to Eric because he’s already proven himself to be a thought-leader in his profession via his excellent contributions to the Procurious Blog. Check them out:
On the spot – 60 seconds with Basware’s Eric Wilson
Will my job be lost to automation?
Automation has been impacting human roles for at least two centuries. In the US, over 50 per cent of the population was employed in agriculture in 1900, down to around 2 per cent today. Chair, Non-Executive Director and Business Advisor Natalie Ceeney will examine the coming impacts of AI and machine learning. Natalie has operated at Board level for fifteen years, holding three significant CEO roles. She is currently Chair of Innovate Finance, the members’ body for FinTech, and a non-executive Director on the Board of Countrywide PLC. She’ll be providing attendees with some examples of why some of the biggest brands have failed to stay ahead while others succeed.
Get your questions ready for Basware’s executive team
Eric Wilson isn’t the only senior exec that Basware is putting on the stage. A line-up of Basware’s thought-leaders and top consultants will be presenting, and (importantly) will be available to answer your questions about the platform itself. Highlights include Ilari Nurmi, Basware’s SVP Purchase to Pay, who’ll be talking about “what’s hot right now” in the company’s solution roadmap, Andrew Dos Santos, Principal Business Consultant will be on hand to offer advice and Senior Product Manager Theresa Lacey will be demonstrating new functionalities and future plans.
Nobody wants to sit back and listen for an entire day, which is why Basware has included some immersive workshops for audience members to roll up their sleeves and participate in. A highlight is the “demo area”, where attendees can see demos from across Basware’s product portfolio and speak to their experts. You can get hands-on with Marketplace, and even go as far as ordering a pair of wireless headphones to take home with you! Now that’s a valuable takeaway to bring back to the office.
Network, network, network
Sessions aside, this event is an important opportunity to grow your professional network. Take along plenty of business cards, seize every opportunity to meet new people, and follow up by connecting with them on Procurious. To get the most out of the day, be sure to introduce yourself to the speakers post-event. Basware will provide the free beer, wine and pizza, you take the opportunity to network, network, network!
Basware Connect will take place on 18th October 2017 at CodeNode, 10 South Pl, London. Learn more about Basware Connect and register for free today.
We know the story; a promising career comes screeching to a halt! But how do you ensure your career break is the start of something brilliant and not the car-crash it, at first, appears to be!
The first part of my professional story sounds exactly like scores of other professional women’s: college, work, apartment, graduate school (nights), wedding, better job, travel, better job, and… family!
Suddenly, the career I had been working so hard to build came to a screeching halt. I went from being the Associate Director of Consulting at Emptoris to… well I didn’t know what. My newborn daughter was completely unimpressed with my title, my two graduate degrees, or my extensive knowledge of spend management principles. I honestly didn’t know if and when I would return to the workplace, in procurement or otherwise.
Then I received a completely unexpected, unsolicited invitation to join Buyers Meeting Point. Anna was 18 months old and her little brother Timmy was expected in a few months’ time. Could I juggle two small children and a fledgling business? I labored over the decision, but ultimately came to the realisation that I might never get such as opportunity again.
I am not a natural entrepreneur!
Here’s the funny thing about that: I am not a natural entrepreneur. I know a lot of entrepreneurs. They are a very unique and amazing group of people. They have vision. They have passion. They act with confidence even when they don’t particularly feel it. They have a tolerance for risk that I can hardly comprehend. In fact, I’m such a NON-trepreneur that when I was getting my MBA at Babson College (home of U.S. News and World Report’s #1 graduate program for entrepreneurship in the nation for over 2 decades) I did not take one class in entrepreneurship. Why? I was never going to own a business… doh!
I found myself at home with 2 children under the age of 2 and no schooling in entrepreneurship building a business. As I look back 8 years later, part of me is still shocked that I made it work. I think the key was my goal: to never, ever, ever, (ever!) return to a cube again.
My kids are now 9 (Anna), 7 (Timmy), and 4 (Joseph). They are healthy, active children, and since the kitchen table is also my executive conference room, my business life and personal life often collide. If your career break becomes a brand new beginning, here is my advice for balancing family and work from the joyful chaos of a home office.
Partner with your calendar and task list
When you have a lot of disconnected moving pieces in your head, your best bet is to communicate with yourself in writing. I am disciplined about keeping my calendar(s) up to date so that podcast interviews and new prospect calls do not collide with horseback riding lessons or meeting the school bus.
The same goes for managing tasks. I am not kidding about this piece of advice: if you do not write it down, it will not happen. Period. There are daily tasks, weekly and monthly recurring writing schedules, and one-off writing contracts. They all have to be kept in priority order so that deadlines are not missed. I find it helpful to work with a hard copy to do list each day, putting work tasks alongside family ones. That way, if the vet calls while I am finishing an article, or I see a request come in from a colleague to share something on social media while I am making lunches for the next day, I can jot it down without breaking off to find my phone.
Build a network
Something I know I share with procurement colleagues working in traditional positions is that feeling of dread that arises when someone at a party asks what I do for a living. “Procurement? What on earth is that?” Sigh.
It is even more important that non-traditional professionals have a strong network of peers to lean on. The major downside of working from home is that you can feel isolated without ever being alone (not even for a second). Using Skype and social media sites to build connections and invest in peer relationships is a must. Figure out who is really a ‘friend’ and who just wants another number in their connection statistics. Make sure you reach out to people and engage with their topics on a regular basis – not just when you need something.
And… most importantly, laugh!
For years, I have scheduled calls around nap schedules, archery lessons, half day preschool, and parent teacher conferences. In the summer (when book manuscripts are inevitably due for some reason…) I keep Italian ice in the freezer because it takes my kids so long to eat it. One of my final book manuscripts received a little additional editing from Anna – she drew a shark on page 137. I have presented webinars with Joseph driving Matchbox cars at my feet and once I tripped over a Minion toy during a podcast interview. Luckily, the sound was not picked up on my microphone!
When work and home life share the same headquarters, your best case scenario is two-way immersion. I like to think that I show my children that the only thing that can hold you back in life is the limitation of your own imagination. They have been at my side (cheering!) as I brought each of my final book manuscripts to FedEx to overnight to the publisher. My husband (a hardware engineer) has been called upon more than once to work ‘IT magic’ for some accessibility or conversion effort. I get to continue working in an industry I love without being tied to a desk.
With today’s connectivity and open-mindedness about contract labor, there are very few things that you can’t turn into a career from home. If you have the determination and discipline, there is no reason that you, too, can’t say good-bye to a ‘cube dwelling’ life forever.
If there’s no exchange, there is no negotiation. Great negotiators know that a willingness to compromise is often the only way to avoid a stalemate.
Negotiation is increasingly prevalent in our daily lives and is a necessary part of a wide range of professions. Given the nature of the globalized and fast-paced world in which we live, negotiating has become ubiquitous in every corporate role.
Due to the step-up in challenging objectives within organizations that wish to remain competitive, fast and sound decision-making, as well as conflict resolution through negotiation, have become more important than ever.
Tips for top negotiators
Do your homework
In order to ensure a successful agreement, the negotiator must possess in-depth knowledge of whatever is being negotiated. Moreover, they must study and understand the nature of the supplier (or client) they’re negotiating with, and have a firm grasp of key dates, financial targets and any negotiation restrictions.
The other person isn’t your enemy
Importantly, you should not see the person across the table as an adversary, but as another “player” who’s trying to solve a similar problem. A negotiation is not a competition where one wins and the other loses. Always seek a beneficial agreement where both parts secure a satisfactory degree of success, particularly if you want to have a healthy, ongoing relationship. Remember, negotiating is basically exchanging. If there’s no exchange, there is no negotiation. When one party makes a concession, the other will be expected to do so as well.
Flexibility is paramount in order to solve eventual stalemates, and it’s important that the professional in charge of negotiations knows for sure what they’re willing to give up. A refusal to shift can lead to a failure to reach an agreement, which won’t solve anything.
If you can demonstrate that you’re 100% confident and knowledgeable about all aspects of the negotiation, the other party will tend to be more careful while making observations, raising objections and even proposing financial targets. Misunderstandings and ambiguities can negatively affect their credibility in the negotiation.
Think about what you need to ask the other party, how to ask for this information, and how you’re going to apply this information to benefit your cause.
Four ways to gain an advantage in negotiations
Always take the initiative
Commonly, the one who controls negotiations from the beginning tends to control the outcome. If you let the other party begin the negotiation, you may end up relinquishing control without realizing you’re doing so.
Formalise negotiations in writing
Many negotiators make the mistake of discussing the terms and conditions of an agreement or contract without committing themselves to a written document. Make sure you want away with a formal written agreement, recording all terms in detail.
Keep it cool
Regardless of stress, agendas, egos, emotions or priorities, it’s important to remain calm and stay in control. Great negotiators know how to keep a level head and find solutions to sudden obstacles.
Stay on your turf
Use the “home team advantage” by scheduling strategic negotiations at your company. Being on your own turf can give you an advantage as people are generally more at ease on familiar ground.
At the end of a successful negotiation, all participants should have a feeling of accomplishment (or at least that they’ve managed to break even). This will only occur if the negotiation has taken place in a transactional manner, that is, with compromises and achievements.
Experts around the globe tracked the terrifying advance of Hurricanes Harvey and Irma earlier this month, plotting and estimating the potential damage to life and property as the monster storms approached the U.S. mainland. Can the deployment of cognitive AI lead to more accurate predictions and better risk management?
IBM’s global supply chain has been acknowledged as one of the world’s most complex. With scale and complexity come increased risk, but the Global Procurement team has it covered with its award-winning risk program augmented by the remarkable abilities of the Watson Cognitive Platform.
Even Watson, however, appreciates some assistance when it comes to risk mitigation, which is why IBM has partnered with an e2e cloud risk service provider named Resilinc. With this new capability, the team provides a composite risk score for every one of IBM’s suppliers based on six risk dimensions – financial, location, recovery, operations, resiliency and sourcing.
The three overall risks that the team has built its mitigation strategy around are:
Loss of supply continuity
The fallout from a supply continuity problem are well-known – missed deliveries, plummeting customer satisfaction and lost revenue. IBM’s risk program is therefore designed to protect supply continuity by monitoring and providing real-time alerts on man-made risks, natural forces or climatic threats, along with financial and economic risks.
Nothing illustrates the disruptive potential of a risk event so much as the recent Hurricanes Harvey and Irma. To demonstrate how Watson can augment risk-management ahead of hurricanes and other crises, the team at IBM shared with Procurious the ways in which Watson’s cognitive capabilities were used to track and provide unique insight into Hurricane Patricia back in 2015 – an approach which contributed to IBM picking up a major award for Risk Management at Procurement Leader’s World Procurement Awards.
Using feeds including The Weather Company and the US Navy Weather database, Watson tracked the storm’s velocity, size, category, intensity and simulated scenarios of possible storm tracks. Interestingly, Watson also engaged in “social listening”, picking up local sentiment by tracking Twitter and other social media platforms. At the same time, Watson alerted IBM about every 1st and 2nd-tier supplier in the storms’ possible tracks.
Once the Risk and Supply Assurance teams had the earliest possible indication of Patricia’s potential impact, mitigation plans (such as closing at-risk plants) were readied for deployment.
IBM’s Conflict Minerals Team must be very well-travelled. From Dubai to China, Indonesia to Vietnam, they’ve conducted on-site visits with smelters and refiners to an impressive 10 levels deep in the supply chain, working with them to certify that they are using minerals controlled by responsible sources.
Every supplier must sign the Electronics Industry Citizenship Coalition (EICC) code of conduct, which IBM has adapted as the single code across its supply base. It establishes standards regarding safe working conditions, fair and dignified treatment of workers, and environmentally responsible and ethical operations. To this end, IBM has conducted +2000 3rd-party audits across 34 countries.
Although noncompliance isn’t as exciting as a hurricane tearing through suppliers’ facilities, the impacts can still be dramatic. Noncompliance can result in fines and penalties, product impoundment, revenue reversal and adverse press.
IBM’s Global Procurement Environmental Compliance team ensures all products comply with environmental directives, laws, regulations and standards; made incredibly complex by the global nature of the organisation. The team tracks changes in regulations, such as eco-design or restrictions of certain chemicals, then determines if the change will affect IBM products and plots a path to compliance accordingly.
Risk and Reward
IBM Global Procurement’s efforts in risk mitigation were recently celebrated at Procurement Leader’s World Procurement Awards, where the team won a major award for Risk Mitigation, and a second award for its transformation program.
Procurious is working with our Knowledge Partner, IBM, over the next 12 months to promote cognitive procurement to our global community. To learn more about IBM Global Procurement, click here.
Career Boot Camp 2017: That’s a wrap! 5 global CPOs, 5 FREE procurement podcasts – available NOW!
Career Boot Camp 2017 is done and dusted! Sign up here (It’s FREE!) to access all five podcasts.
Procurious promised we would upgrade your career.
We pledged that we would transform your procurement future.
We swore our five, global CPOs would prepare you for workplace 4.0.
But we never said it would be easy!
Last week, Procurious and Michael Page Procurement and Supply Chain presented Career Boot Camp 2017. If you joined us, we hope you’re feeling inspired and motivated to make you procurement dreams come true! Now’s the time to take you career to hand; using the tips, guidance and insights provided by our podcast speakers, you’re equipped to take the procurement world by storm. It’s going to be a long journey but we’re right here with you, every step of the way!
Want to catch up on any missed episodes, recap on your favourites or get stuck in to heaps of related content? Look no further.
Over 5000 procurement pros took part in Career Boot Camp. Were you one of them?
I couldn’t make it, can I still take part?
Want to learn how to “fail forward”, why you should be locking up your data scientists or the reason Co-op’s CPO won’t be showing you her cake recipe?
Great news! You might be a little late to the party but that means you can access the whole series in one fell swoop. Whether you want to listen on the go, from your sofa or during your lunchbreak, in one day, one week, or one month, Career Boot Camp 2017 is ready and waiting for you to listen at your leisure!
Anyone and everyone is welcome to partake in Career Boot Camp and it’s totally, 100 per cent free.
How do I join?
If you’re already a member of Procurious simply head over to our eLearning area to access the full series of Career Boot Camp 2017.
Not yet a member of Procurious? All you need to do is registerhere (it’s FREE!) and you’re good to go!
What can I expect?
Career Boot Camp 2017 was designed to help you transform your career and your future if, and only if, you’re ready and willing to upgrade! Our five CPOs provided inside information on what it’s like to work at their organisation, what they’re looking for in new hires and how they see the function progessing in the coming years.
More and more procurement professionals are opting to develop their key skills and gain knowledge through eLearning and other online channels. In a fast-paced, technology driven world, innovation, agility and forward planning are essential if procurement professionals are to succeed and be future leaders.
Need a little more persuasion. Click below to listen exclusively to Day 1 of Career Boot Camp in FULL.
Ramsay Chu, Rio Tinto CPO, How to Fail Forward:
“The best skiers have fallen many times. No one is an Olympic caliber downhill skier from the outset. It’s not a natural or innate talent that anyone’s born with. They get better by learning, pushing themselves to the limits, oftentimes falling, picking themselves up, and moving on.
“I think the fear of failure oftentimes casts a very long shadow, and potentially impairs our ability to really think big.”
Best of the Career Boot Camp Blog
Once you’ve had your fill of our five podcasts you might like to do a little wider reading. There’s heaps of great. related conten in our blog at the moment. Here are some of the highlights.
Personal Development: You Da Brand! By Matthew Friend, Associate Director Michael Page Procurement and Supply Chain – So you’ve decided you need to take your procurement career to hand by proactively managing your personal development? Here’s how to set yourself up for success.
Don’t just come along for the procurement ride! If you want to make it big as a CPO, you’ve got to get in the driver’s seat and take the wheel!
Career Boot Camp 2017 launches on 4th September, featuring podcasts with 5 global CPOs. Sign up here (It’s FREE!)
What are today’s CPOs looking out for in the high performing procurement leaders of tomorrow?
Accepting change is good. But it’s even better if you can embrace it and drive it!
Barclays CPO, Al Williams, is certainly looking for more in his hires than a simple willingness to tolerate change. If you’re in the driver’s seat, you’ve got to take the wheel and drive the agenda!
On the fifth and final day of Career Boot Camp, Al discusses how procurement can generate value, how the function should be positioned within an organisation and how he encourages his hires to think about positive change.
And, if you’re in the market for some new shining stars, find out what you can do to make procurement a preferred and enticing destination for the next generation of professionals!
Five days, five CPOs, five fifteen-minute podcasts to help you upgrade your procurement career.
Featuring tips and guidance from the best in the business, each of our CPOs will dedicate their week to coaching you on becoming the best procurement leader you can be!
On Day 5 of Career Boot Camp we hear from Managing Director and CPO Barclays Al Williams.
Need a little convinving before you sign up? Check out our teaser trailer below to hear what Al had to say in reponse to our quick-fire questions.
Grabbing The Wheel
What attributes is Al Williams looking for in high performing procurement leaders?
“We’ve been building out a new leadership team in our procurement organization so I’ve had an opportunity to interview and select people, both with internal, internal within the organization and external. And some of the things I’m looking for, in addition to what I just talked about around innovation and problem solving and that kind of thing, is their ability and their willingness to embrace change. Not just manage it and tolerate it but they actually drive it, right?
“I want leaders who are in the driver’s seat, sort of pushing the agenda, and not just along for the ride, and certainly not those that feel like they’re victims and end up kind of victims as a part of a larger process. Deriving, embracing and driving change. I would also say a collaborative approach is very important and it’s collaborative in two dimension from both inside the organisations and outside the organization and in the market.
“It’s very important that we’re not the land of no, especially at a leadership level. I think people want to be a part of an organisation like that, that’s a problem solving and collaborative team.”
What’s Procurement’s Position?
How should procurement functions position themselves within larger organisations? It’s a question that all senior procurement leaders are asking themselves. For Al, the answer is three-fold.
“One is we need to make sure that we’re positioning procurement as a strategic, value-adding player in the business, and not transactional. If we act transactional, and behave transactional that’s how the business will treat us, and that’s how we’ll be perceived by the business.
“Second is of course making sure that we align to the key business metrics or the key business outcomes that are important to the overall business strategy. And that would include things like financial metrics. That may be, if you’re a public company, [understand] what are the key things that are important to drive profitability and align determined outcomes to those. I would say the same thing from a risk perspective as well, aligning to the organisational risk tolerance, risk temperament and any metrics that are associated with that. So that’s an important positioning.”
“Procurement used to be consultative, it needs to be in a position of influence, it needs to be helping the business, it needs to be sharing perspective, market knowledge, helping shape strategy, at least from a spin perspective for the business. When I talk about helping the business, a good example is policy compliance. We tend to have to be the communicator of, and sometimes the police of, certain policies in our businesses.
“I think it’s very important that procurement is positioned as ‘Hey, we’re here to help you be compliant to the policies and to help sort of maneuver you through the mirage of steps and checks that need to happen'”.