Category Archives: Career Management

5 Tips On What To Do When Things Go Wrong In Procurement

We share 5 tips on how to manage procurement difficulties when the policies and guidelines fall short and things start going wrong…

Over the course of the last decade, a lot has changed in public procurement. Among other developments, international organisations have gotten more involved in public procurement policy, creating toolkits (think O.E.C.D in Paris), and standardising how procurement is integrated in national strategic plans and development projects (e.g., World Bank programs, and that of other regional and international financial institutions).

There’s also been a big push for procurement legislation to be implemented in evolving and emerging markets, ensuring greater transparency of government spending. In addition, the private sector has found itself more involved in public-private partnerships, and procurement rules have evolved to accommodate this growing trend.

Despite these efforts, one area still lacks sufficient guidance: what to do when things go wrong in procurement!

This article will share 5 tips on how to manage public procurement difficulties when the policies and guidelines fall short. The objective is to avoid or limit potential occurrences that may adversely affect the execution of procurement processes, while maintaining that the expected result must be in conformity with applicable laws, regulations and procedures.

1. Classify problems based impact

Begin by consulting the internal policies and procedures for procurement, and take note of language related to complaints, protests, challenges or errors. Once you identify whether a principle of procurement or an organizational policy has been violated, you must attempt to classify the impact of the problem.
Procurement problems can have either a high, medium, or low impact on the outcome of the process. High impact problems typically affect mandatory aspects of a procurement process and often lead to cancellation. Medium impact errors, may result in a high risk of failure of some aspect of the procurement and can lead to a flawed or failed procurement process. Low impact problems, may be signalled by a disgruntled bidder through a written complaint, or even a formal bid protest, but often lack evidence.

Low impact issues frequently result in “paused” procurement proceedings, reputational damage, or reluctance of potential bidders to respond to future opportunities. You should have a pulse on your organisation’s risk tolerance thresholds. If your organisation is comfortable managing risks, then there may already be a plan in place outlining the resources to assist you in managing procurement difficulties. However, if the organization is risk-adverse, then you will need to develop your own plan, pooling all available resources.

But, before you pull out all the stops, assessing the impact helps to categorise the problem by understanding the procurement risk, then applying practical measures to mitigate.

2. Separate ethical issues from operational ones

Literature on integrity in public procurement tends to focus on conflict of interest, fraud and corruption. Other than advice on disclosure, recusal, or reporting on these incidences, little additional guidance is provided to procurement professionals, unless they’ve received specialized training.

Certainly society has a vested interest in ensuring that public funds are used for their intended purpose, not only because we all benefit when the funds are used for the public good, but also because those funds come from us; the tax-paying public. It is therefore critical that ethical concerns in public procurement be managed apart from operational challenges.

When the principles of fairness, equal treatment, and due process are violated, they can taint the credibility of the entire process, and that of involved public procurement officials to a degree resulting in termination of employment. Worse yet, integrity matters can lead to criminal liability.

Fortunately, there are tools and mechanisms specifically designed to address ethical dilemmas including: ethics codes; declaration and waiver forms; internal and accounting controls; segregation of duties; and access to ethics officers, among other options.

All of the above should be implemented vigorously from the top to bottom of the public procurement hierarchy to avoid even the appearance of impropriety.

3. Keep and follow a procurement audit trail

An audit trail is documentary evidence of the sequence of activities that have affected, at any given time, a specific procurement procedure. It ensures there is an internal control environment that supports a transparent procurement process.

In procurement, the audit trail consists of two main categories:

A. Information about the actual data generated; it’s the who, what, where, what kind, and how many documentation of the procurement process; and

B. Information about how data was analysed (e.g., notes kept by evaluators, information flows in committee, identifying who will be responsible for what, etc.).

Procurement professionals should be informed of the scope of the audit, which would provide a window on the risk areas requiring special attention in any procurement organization. Procurement errors tend to revolve around completeness, timeliness, and accuracy of processes. Resulting recommendations often point to areas for improvement in procurement planning, tools, training, monitoring and reporting, and staffing resources. Pay particular attention to those.

4. Integrate other resources across your organisation

Procurement challenges whether in the form of bid protests, professional error in the process, failure to adhere to the terms of the solicitation, or the like, should not be managed in a silo by the procurement department. Going it alone is not an option!

Team effort is particularly necessary when managing public procurement spend. A good team scenario would involve four to five staff, including:

i)  the manager of the affected department;

ii)  the procurement professional in charge of the process in question;

iii)  a legal procurement expert who can explain the legal implications for the organization and enforce the organisation’s legalstrategy, including who can bring a challenge, under what rules, in what forum, and potential legal consequences;

iv)  a subject matter expert (on call) who can provide specific information on the product or service being procured, including market conditions; and

v)  a financial or accounting member who understands the budget lines of the organisation and keeps tabs on potential expenditure linked to the procurement error or challenge.

5. Seek external expert guidance

Best efforts should be made to resolve the matter internally, however, sometimes, the internal resources are insufficient. If your organisation permits seeking external assistance, and there are no available in-house “experts” with the experience to assist, then external resources may be the best option.

In addition to international agency guidelines, other tools to explore include:

i) national laws, with associated guidelines on how to manage procurement issues;

ii) specialty firms for procurement professionals, offering on-line consultations; and

iii) local, national, and international trade associations which offer case studies, “thought” pieces, and news-setting precedent from procurement experiences gathered from global sources. Many professional associations also offer webinars and chats with other procurement professionals, which allow anonymity, while offering a chance to share experiences and seek guidance to facilitate answers to the most difficult of procurement problems.

In the end, whether in procurement or any other field, experience is your most important ally. The more experience we gain, the more we develop the competencies necessary to manage procurement challenges, along with the confidence to do so with ease. Each challenge brings important lessons, and each lesson will help you overcome new obstacles the next time things go wrong in procurement.

Public Sector Procurement Talent: Fact V Fiction

The search is on for top talent to fill an increasing number of procurement roles. But is the public sector being beaten to the finish line by its private sector counterparts?

In the first in a series of articles charting the key issues facing public sector procurement, we examine the facts and fictions of the public and private sector battle for talent.

Talent and recruitment – just two of the key issues for CPOs and Heads of Procurement around the world. As the role of procurement expands, managers need to know their teams have the right skills for the job. For many, this means searching for the profession’s top talent, the high achievers. The superstars.

But identification is only half the battle. Actually attracting these stars to your team is another challenge entirely. And this is where many believe that the public sector loses out to its private sector counterpart. But how much truth is there in this?

The Facts

According to the CIPS/Hays Procurement Salary Guide 2017, 70 per cent of managers said they were planning to recruit within the next 12 months. However, 51 per cent also admitted that they faced challenges in finding the right talent in the face of a skills shortage and budget constraints.

Let’s set budgets aside for a moment. There is a distinct set of skills required for success in public sector procurement. Sure basic skills are all transferrable, but public sector professionals need to adapt to a very different, highly political, environment.

Add in the requirement to drive new ideas, use specific IT systems, and operate within the bounds of EU Procurement Regulations and you’re starting to look at quite a bespoke skill set.

Speaking from experience, the majority of these skills can be learned or trained. But with budgets (that word again!) tight and time short, training is becoming an increasingly unaffordable luxury for many in the public sector.

This means public sector hiring managers are chasing the white rabbit – those professionals with all these skills, able to hit the ground running on Day 1.

But in a sellers’ market where there are an increasing number of procurement jobs to be filled, professionals with these skills are in demand. And this comes at a price.

All About the Money, Money?

Money isn’t everything and it can’t buy you happiness (according to Rousseau at least), but it is a key driver for procurement professionals when they look for new roles.

According to the CIPS/Hays Guide, 72 per cent of respondents highlighted salary as the key factor for a new role. This is compared to 41 per cent and 36 per cent for flexible working and non-salary benefits respectively.

The money argument seems to be borne out by the average salaries across the sectors in the UK:

  • Private Sector – £46,825
  • Public Sector – £40,915
  • Charity Sector – £40,379

And the trend continues when the average salaries are broken down by seniority within the public and privates sectors (see below):

The picture doesn’t get any better for the public sector when bonuses are taken into account either. In 2017, an average of 50 per cent of professionals received a bonus in the private sector, versus only 13 per cent in the public sector.

However, the public sector may have the beating of the private sector in one facet – non-financial benefits. Over two-thirds (67 per cent) of public sector professionals have access to flexible working (versus 36 per cent of the private sector), along with greater provision for support for study and career development.

The Permanent vs. Temporary Debate

The other option open to hiring managers is bringing in interim or contract workers. This has proven to be a good way of providing additional resources in a flexible manner for specific projects or time periods. The CIPS/Hays Guide states that 61 per cent of public sector organisations will recruit in this way.

While this suggests that there is an attraction for some professionals in contracting, many looking for new roles want the security and safety of a permanent contract. So how much truth is there in the belief that the public sector isn’t able to offer this type of contract?

While it was certainly more fact than fiction when it came to salaries, there is certainly less evidence for the permanent-temporary contract question. A search across UK job sites for public sector procurement roles shows that actually there are almost twice as many permanent roles advertised as temporary, contractor or interim roles.

So taking this factor out of the equation, what solutions are available to the public sector to meet the recruitment challenge?

Redressing the Balance

Unfortunately, there is no easy answer. Budget restraints make it nearly impossible to compete on salaries, bonuses and other financial benefits. However, it’s not all doom and gloom. There is plenty to offer besides salaries that make jobs attractive.

The CIPS/Hays Guide shows that the majority of public sector organisations are making flexible working available to their employees. Having contracts that are as flexible as possible only increases their attractiveness at a time where people (and many organisations) are looking to step away from the traditional desk-bound, 9-5 roles.

Flexible working hours, flexi-time, working from home and contracts allowing greater work-life balance are just some of the non-financial benefits job seekers will look for.

The second area is the attractiveness of the roles. This might seem like a counter-intuitive argument given what’s been said before, but this doesn’t relate to money, contracts, or working hours.

A common (mis)conception of the public sector is that it isn’t as interesting. The truth is far removed from this. From roles that allow procurement professionals to directly impact their cities for the better, to working on major, one-off projects – think the European Championships in Glasgow in 2018, or the Commonwealth Games in Birmingham in 2022.

And these are just a couple of highlights in the vast array of fascinating projects in the areas of sustainability, technology and services only available in the public sector.

Raising the profile of these roles or projects and their interesting, challenging and diverse nature can only help to attract the superstars.

So here’s my challenge to you in the public sector. What are you going to do to help?

6 Ways Procurement Pros Can Be More Effective

87 per cent of organisations have faced a disruptive incident with suppliers in the last 2-3 years. How can we work in more effective ways?

Transforming into a strategic procurement organisation is not an easy journey. But there are a few obstacles that procurement teams should address sooner rather than later when thinking about how to be more effective in procurement. Here are 6 challenges to tackle today for success in the future:

1. Unproductive business relationships

The majority of CPOs rate their current business partnering effectiveness at less than 70 per cent with hopes of greater than 90 per cent in the future.  How can procurement become a better business partner? By creating a purchasing process that is the easiest, fastest and most affordable way for business partners to do their jobs. Users need what they need to do their jobs and they need those items quickly – and that’s all they care about. If you roll-out an e-procurement solution that is truly the easiest way for employees to request those goods and services within the natural course of their daily work, they’ll use the system and they will see the value that procurement is delivering. And when managers see how this process streamlines approvals and helps them better manage their budgets with real-time tracking, they’ll become champions of procurement as well.

2. Slow, inflexible approval workflows

Speaking over approvals, we’ve seen hundreds of approval workflows, each unique based on business maturity, locations, department structures and technologies. But a consistent challenge among many companies is that approval workflows often make purchasing more difficult for the requester. If requesters could make their purchases without needing to understand approvals or the inner workings of the procurement department, imagine how much easier it will be to get them spending in the preferred manner. Procurement professionals should look at ways to minimize the impact of approvals on the end-user. One way to do this is what we call “line item requisitioning.” This is when the approval workflow is configured so a single requisition/shopping cart can be split and sent through separate approval paths at the line item level. This means that items on the requisition that require fewer approvals get approved and POs are submitted, without being held up by other items that may take longer to get approved or require more reviews. And, the approvers only see the items on the request that pertain to them, making it quick and easy for them to sign-off on the items.

3. Supplier risk & fraud potential

87 per cent of organisations faced a disruptive incident with suppliers in the last 2-3 years. Risk inside of the supply chain remains a focus for procurement leaders. So, what’s the key to reducing risk? Transparency. The more transparency you have with suppliers, the more you can build up those relationships and better understand your suppliers’ needs. Perhaps you find out you have a key supplier that is struggling with cash flow needs – work with this business partner to understand their position and look at strategic payment programs that benefit both parties to mitigate that risk upfront. You can also leverage the wealth of data at your fingertips to pinpoint issues like this early on and better manage supplier data to prevent fraud.

4. Lack of spend visibility

If you want to know how to be more effective in procurement, I have two words for you:  spend visibility.

Every strategic procurement initiative starts with knowing how 100 per cent of the company money is being spent – not “some” of the money, all of it. 40 per cent of CPOs are focused on consolidating spend, but if they’re not seeing the full picture, those efforts will prove futile. Spend visibility – from both direct and indirect spending – allows CPOs to do what they do best, including: consolidating spend, rationalising the supply base, leveraging volume buying, negotiating better contracts, sourcing strategic suppliers and more. The data needed to support all of these activities is in the company spend data.

5. Manual reporting and analytics

65 per cent of organisations are accelerating investment in procurement-related analytics. But you really need to accomplish 2 things before making this investment: 1) Capture 100 per cent of financial data 2) Focus on data science within the procurement department. If you aren’t capturing 100 per cent of your data by on-boarding all your suppliers, achieving 100 per cent user adoption and processing 100 per cent of your invoices through the purchase-to-pay solution, your analytics tool won’t have the data needed to give you the right insight. And, once you have that data, you need someone who understands how to turn actionable insight into results – so make sure your procurement team is thinking about the skills they need for the future.

6. The talent gap related to technology

Related to the skills needed for the future is the talent gap procurement is experiencing, especially when it comes to technology. 87 per cent of CPOs believe talent is the single greatest driver of procurement performance, and yet organisations spend less than 1 per cent of their budget on equipping and training their procurement teams. Think about the tools, technology and training your procurement team needs to keep up with organisational transformation and deliver value, then start developing skills in those areas now – procurement is only going to get more digital. Check out my recent post on bridging the talent gap in procurement for other tips on attracting, hiring and developing new talent for this function.

If you’re questioning how to be more effective in procurement, overcoming these challenges will put you on the course for success. At Basware, we have a heritage in helping companies transform, so you don’t have to go it alone. Reach out– we’re here to help.

These stats are taken from Deloitte’s Global CPO Survey

PLEASE FIRE ME: I JUST CAN’T QUIT!

Stuck in a miserable, but well-paid, job you can’t afford to quit? Don’t get yourself into that position in the first place!

Philip H. “hates his life”. Those are his exact words. Specifically, he hates his all-consuming job. The work bores him and he no longer believes in his firm’s mission. The gruelling hours he puts in cost him time with his family that he can never recover.

Here’s the kicker: Phillip earns several million dollars a year heading a major office of a top-tier advisory firm. So, you might ask, why doesn’t he quit?

He’s says he can’t afford to.

There’s a big mortgage on a luxury apartment, and another on the beautiful beach house he and his wife bought two years ago. (“The summer weekends we spend there are the only thing that keep me sane,” he says.) Then there are the three kids—all enrolled at a private school. The eldest will start college in a year; the others will follow soon. Tallying up his obligations, Philip envies his Wall Street friends who earn ten times as much as he does.

A couple of days ago I mentioned this story to a well-known financial columnist. “I hear this all the time,” he said. “Lots of people moan about how miserable they are at work but they can’t see a way out.”
“Boo, hoo,” you might say. “I’d trade places with Philip in a heartbeat.” But would a huge income really make up for feeling horrible about your life?

You might think that you could put up with a few years of misery for the freedom it would buy you. You’d put a lot of money in the bank, and then walk away to do whatever you like: launch a small company, or spend the rest of your days lolling on the beach. Maybe you’d devote the rest of your life to doing good in the world. Whatever your goal, you’d collect your last paycheck and say, “Adios.”

It’s not that easy, though. You wouldn’t make a bundle starting out. You’d have to put in your time first. And when serious money began to come in, it would be tempting to reward yourself creature comforts for all the stresses you endure. The higher you climb the ladder, the harder it will be to leave. Then one day you’d turn around and find yourself in Philip’s unhappy shoes.

It might seem that I’m writing about a problem that affects only a small set of people. But I think Philip’s case illustrates issues that apply wherever you are now in the organisational hierarchy, and whether you love your job or loathe it.

Most work choices aren’t either/or

It’s late in the game for Philip, but assuming a different role in his firm might be rejuvenating. Going on sabbatical might set a great example for other colleagues. By framing his decision as stay-or-go, he’s missing other opportunities.

If you’re unhappy at the office, other people know it

Philip’s negativity must come out sideways. If he hates his own job, how can he be enthusiastic when a colleague lobbies for a new project? A big part of his job is evaluating other people’s performance. His attitude is bound to warp his judgement. (I also worry about what he’s like at home.)

Toughing things out is not a career plan

Somehow Philip drags himself to work every day. Maybe he takes pride in his perseverance. As they say, however, “persisting in the same behavior expecting different results is the definition of insanity.” The way things are headed, he risks getting pushed out by his peers. Maybe that’s his subconscious agenda, but it would be an ugly way to go.

Plan your end game

When you take on a job, set a date when it will be time to move on to something else. You can always revise it one way or another, but it’s usually better to leave a year early than a year too late.

The most important lesson of Philip’s story is not getting into his situation in the first place. If Philip had kept these precepts in mind, he would have been alert to his growing feelings of frustration. At an earlier point, a lateral move to another firm or an entirely different field might have been easier. And if he had allowed for the possibility that the job might get stale, he might not have saddled himself with so much debt. But by the time he realised he was on a treadmill, he had gone so far he felt he couldn’t step off.

Sunk cost traps aren’t just financial. They can also be social, emotional, and deeply personal. Philip may have trapped himself with worries about what others will think about his walking away from what most regard as a dream job. I’d remind him of Samuel Johnson’s advice – that we’d worry less about what others think of us if we realised how seldom they do.

In the end, Philip’s self-respect is what counts. Walking away might feel as if he’s repudiating how he’s spent his recent years. But to me, belatedly changing an unhappy life sounds a lot better than doubling down.

This article was written by Professor Michael Wheeler and was originally published on LinkedIn. 

It was first published on Procurious in August 2017.

Professor Michael Wheeler’s Negotiation Mastery course on Harvard Business School’s HBX launched earlier this year. Applications for the next wave of students, starting in September, are now being accepted. Version 1.4 of his Negotiation 360 self-assessment/best practice app is available for both Apple and Android devices. It includes coaching videos and a tactics exercise.

5 SOFT SKILLS PROCUREMENT PROS SHOULD BE DEVELOPING…NOW!

If you want to hold on to your procurement career  in the long term, you ought to be worrying about mastering your soft skills!

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!

In this blog we outline the specific skills procurement pros should be mastering to prepare for the post-cognitive age, with the help of Justin and 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?

4. Negotiation

“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.”

5. Imagination

“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.”

This blog was first published in October 2017. 

Exploding The 4 Social Enterprise Myths

Social enterprises require a LOT of extra procurement work and handholding. So it’s totally fine to avoid them…right?

We love busting the most common myths in procurement.

And there’s no myth more satisfying to bust than one that can benefit everyone.

There’s a lot of misinformation going around about the pros and cons of social enterprises. So we decided to find out the actual facts from an expert.

We spoke to Mark Daniels, Head of Market & Sector Development -Social Traders and asked him to clarify a few of the most common misconceptions about social enterprises.

What is a social enterprise?

Social enterprises (SEs) are businesses that trade to intentionally tackle social problems, improve communities, provide people access to employment and training, or help the environment.

Using the power of the marketplace to solve the most pressing societal problems, SEs are commercially viable businesses existing to benefit the public and the community, rather than shareholders and owners.

Social Traders, Australia’s leading SE development organisation, define a SE by the following three factors:

  1. They are driven by a public or community cause, be it social, environmental, cultural or economic
  2. They derive most of their income from trade, not donations or grants
  3. They use the majority (at least 50 per cent) of their profits to work towards their social mission

We asked Mark Daniels, Head of Market & Sector Development at Social Traders, to bust some of the most common myths associated with SEs.

Myth 1: SEs are less capable

The idea that SEs are limited in terms of capability are generally not founded, explains Mark.

“But many are limited in terms of scale. There are very few SEs that can be a major tier 1 supplier, which is mostly what procurement teams are looking for.”

Procurement teams, instead, “have to become more creative and look to tiers 2 and 3 to buy from or work with organisations like ours to work out new and different ways to buy from them.”

Another option is to encourage tier one suppliers to buy from tier 2 SEs.

Myth 2: SEs are a risky business

“To date, we haven’t seen any examples where SE have failed during contracts,” asserts Mark.

“Delivery is comparable to private sector suppliers.”

Myth 3: SEs are expensive

“Just like any other supplier; some [SEs] can be expensive, or the same, or cheaper.”

“We run a SE audit of any new buyer members. Coca Cola Amatil, for example, was spending over one million dollars on SEs and didn’t even know it!”

“There are 20,000 SEs turning over 3 per cent of the Australian economy. They’re already winning work without preferential treatment!”

“In some cases corporates do assist SEs with capacity building. This might involve paying more now but they know that in three to four years they’ll achieve scale and prices will drop.”

Myth 4: SEs require a lot of handholding

A lot of the time, SEs won’t require any more support than their private counterparts. “Coca Cola discovered that they had four or five SEs that didn’t require any hand-holding – they simply won the tender processes.”

On some occasions, however, “procurement may realise that these suppliers need help.”

“Social Traders has shifted to invest heavily in capability building for SEs. Some SEs need help to transition from a $1m to a $5m business. That’s the sort of assistance we’re giving – strategic support, accessing capital and so forth.”

“We’re also seeing things like 90-day payment terms being an issue.” Which is something procurement teams can work to change.

“The industry is starting to change the way they do payment terms – Broadspectrum, for example, has moved to 14 day payment terms for SEs and indigenous businesses.

“Suddenly more suppliers can work with Broadspectrum.”

Social enterprise policy

As we explored in last week’s blog , countries around the world are taking different approaches to improving their supplier diversity.

Buying from SEs is a great way to start.

In Australia, the opportunity around SEs came off the back of indigenous procurement proactive policies, which set targets and created social procurement systems in government to enable targets to be met.

“Level Crossing Removal Authority requires that 3 per cent of the supply chain must be indigenous-owned or SE businesses, or SE.

This has been quite powerful in changing behaviour in the infrastructure industry. We will see hopefully something to the tune of $300 million spent with SE or indigenous businesses.”

“France, Germany, Austria have requirement that around 6 per cent of your workforce and supply chain have to be people with disabilities. If that isn’t the case you have to pay a higher tax rate.”

“That tax was used to create more SEs to help people with disability. It’s an impressive policy.”

About Social Traders 

Social Traders is an Australian organisation that works to put social enterprise into business and government supply chains. They do this in order to create employment for the most disadvantaged by increasing the trading activity of social enterprises and to create new value streams for buyers.

It emerged over time was that there was a new marketplace starting to establish, which was corporate and government buyers interested in delivering social value through their procurement processes.

Social traders enable more organisations to buy from SEs, certifying them to give buyers the assurance that they aren’t being deceived. Because, as soon as social enterprise becomes a competitive advantage in a tender process, people will claim they are when they’re not

The impact of Social Traders work is impressive. In 2017 they enabled approximately $20 million in deals, which translated roughly to 300 jobs for disadvantaged people.

Their target in 2021 is $105 million in deals, creating 1500 jobs.

“We can see a market where hundreds of millions will be going to SEs every year.”

This can start to make a real dent in the unemployment of disadvantaged people.  Social procurement is a real lever for addressing social inequality.

Procure with Purpose – Join the movement

Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.

Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery; to Minority Owned Business; and from Social Enterprises; to Environmental Sustainability.

Enrol here to join the Procure with Purpose group and gain instant access to our exclusive online events.

6 Ways Procurement Pros Can Dominate Their Data Strategy

Building a nimble process, speaking the right language and gathering your data from the right sources will have you nailing a flawless data strategy in no time!

When most procurement professionals think about data they imagine a darkened back-office room and a huddled group of silently-working number crunchers.

But it’s data that gives your organisation’s senior leaders the most important insights, helping them to win new business.

Data can help procurement climb up the value chain and earn you a seat at the table.

If could only change the time we spend gathering data and the time spent actually using it  from a 80/20 split to a 20/80 split, its potential is limitless.

And this is a mistake procurement makes too often.

Ahead of today’s webinar Basic Instinct: Are You a Data Hunter or Gatherer, we’ve outlined some top advice from data experts; Marco Romano, Procurement Chief Analytics Officer, Global Procurement, Transformation Technology – IBM and Edward D. O’Donnell, Chief Data Officer for Procurement – IBM, on how to dominate your data!

1.Build a nimble process

Ed has, in his own words, enjoyed ten years working in transformation but admits he has made plenty of mistakes along the way! His advice? “If you’re going to fail. Fail early.”

As he points out, making mistakes is not the problem, it’s the way it’s done that makes all the difference, “The most significant challenge [for procurement pros] is managing data of all size and scale.”

In the past, IBM have approached this challenge with the old-school  waterfall methodology; the development team is engaged and a plan is might be made and executed with care over the course of a year.

“It’s smarter if you can do it in more agile chunks,” explains Ed.  “The drops are not quarterly or annually for the big bang but rather maybe in weeks we’ll run sprints.”

“This allows smaller, more manageable content.” Which, of course makes a lot of sense. Why spend a whole load of money to wait for the last two months of the year to realise the value?  “Can’t we build a process thats more more iterative, more nimble, more flexible more agile?”

“Then, of course, if the client doesn’t like it we can get immediate feedback and correct it straight away.”

2. Use your time more wisely

Procurement pros have, for too long, been gathering data from too many sources because that’s what they think they should be doing. It’s time consuming and, often, it’s also futile.

“So much time spent is spent gathering data. Procurement pros need to start at the end and work backwards. First and foremost you need to ask what’s the outcome or insight you’re trying to achieve and what are the business behaviours you’re trying to change.”

Develop a joint understanding of business requirements. From that you work backwards to determine three things:

1. What data you need

2. How you acquire  it

3. What enrichment that data needs

In doing this “you’re not only gathering data that’s fit for purpose, you’re also considering business process that drives that data and building improvements into this process to ensure data quality and data consistency.”

“Of course it doesn’t stop there our role is to automate that takes gathering filtering, sorting data away from practitioners

Ideally we don’t want our practitioners spending time analysing or shipping raw data rather looking at results or process insights. but spending time

So what drives this behaviour off trying to get all sorts of data?

It’s driven by wrong metrics or misunderstanding of those metrics.

“You absolutely have to make sure you measure what really matters, such that you drive the right behaviours in data acquisition and move away from concept where people are just acquiring a whole lot of data and not able to put it to good use or understand why they’re acquiring in the first place.”

3. Gather your data from the right sources

IBM source their data from a wide variety of sources.

“We look at RFX data, procurement and customer contracts, internal client demand and pipeline data,” explains Marco.  “Internally it’s a very broad base of data which includes procurement and our clients.”

They use “market intelligence from MI providers as well as MI from structured and unstructured public data sources, social media and various other sources.”

“The data we get from suppliers  is really important and includes things like machine failure rates, product life-cycles [and ]configuration options.”

“It’s a broad base but it’s not about gathering all of that data but rather targeted to achieve a specific objective.”

Do IBM have a particularly ‘hot’ data source? “Not so much the hot data source” says Ed. “It’s the way you use that data!”

“assembling the data in a coherent way where the buyers can have it at their fingertips – assembling quickly, linking the data and then presenting it to the buyer in a new user experience is where the power comes from.”

4. Listen to your client

“Listen to the voice of the client” says Marco.

“Start with an understanding of what you’re trying to solve, really understand what the practitioners needs are and work backwards from there to figure out what you really need”

Set up engagement meetings, engage with the client regularly and continuously share and showcase your work with your internal team.

5. Focus on data quality

“Focus on data quality and ensure that your procurement processes enable the acquisition and enrichment of good quality data,” says Marco

“It sounds very obvious but it is so often overlooked and it causes tremendous frustration in the system.”

6. Speak the same language

Spending more time in front of our customers or clients and less time behind closed doors, simply gathering and analysing data, is crucial.

When procurement teams start a program it’s important that everyone is on the same page; speaking the same language and communicating regularly with all the key stakeholders.

“One of the things historically that the procurement practitioner hasn’t done so well is being completely transparent with the data,” explains Ed.

It’s important to present it in a way that “it’s clear and simple to understand [and so] that the outcomes are obvious. The best chart is one you don’t have to try to understand, where the messages are clear.”

If you’re referring to units per hour, what do you mean by units?

If you use the term FTE, does everyone know what exactly that represents? Is it a 40 hour week at x cost or a 35 hour week at y cost?

Our webinar,  Basic Instinct: Are You a Data Hunter or Gatherer takes place at 1pm BST TODAY . Register your attendance for FREE here. 

3 Ways To Win The Internet (You Don’t Have To Be Justin Bieber…)

The social media world is a scary place and unfortunately it’s scaring away the professionals and organisations who need it the most. How do you embrace today’s internet culture and use it to your advantage? 

The Procurious London CPO Roundtable was sponsored by Basware

Elizabeth Linder, Founder and CEO of The Conversational Century joined YouTube in 2007 and often thinks back to that year, a significant time for YouTube, in order to understand the social media space.

It was an exciting and life-changing time for skilled amateurs.

A time that had millions of people singing in their bedrooms, connecting with huge audiences across the globe and finding fame.

Perhaps the most successful YouTuber in this space was Justin Bieber, who’s YouTube performances were discovered  by chance by record label manager, Scooter Braun.

Others, to this day, rack up millions of video views for a commentary on something they would never otherwise have been considered an expert in, or had the chance to be!

Take 7-year-old Ryan as an example of this in action. His YouTube channel “Ryan ToysReview” where he (you guessed it!) reviews the latest and greatest in children’s toys has seen him become one of the richest YouTubers ever and a multimillionaire.

Or there’s Lindsey Stirling, an American violinist, dancer, and composer…

Youtube ultimately offers us the opportunity to be heard, and some people have seized the opportunity with both hands.

Building trust on the internet

Elizabeth Linder is a strong believer that the internet is the best place to build trust.

Clearly  “The People” ( i.e. you and me) have already got this all figured out.

The problem is that so many of the worlds experts; that is the professionals, the politicians, the press, have really struggled to figure out exactly where they fit in. And that’s why so many people still believe the internet is destroying trust.

All too often, as Elizabeth points out, we focus on the sinister corners of the internet, only promoting the negative effects social media is having on our society.

When governments, the press and businesses perpetuate this idea they fail to acknowledge the value and importance that online conversations can bring, and the huge impact they can have.

The public’s use of social media is way more sophisticated than what we see in most professional bodies and businesses across the globe.

That means, as professionals, we’re on the back foot.

And it’s time to change!

At last month’s Procurious roundtable, sponsored by Basware, Elizabeth Linder provided three key pieces of advice to procurement pros who want to start, and win, conversations online.

1. Go at your own pace

Leaders fear that they have to move at an increased pace because of today’s internet culture.

You don’t.

Elizabeth stressed that it’s crucial to take things at your own pace as long as you let people into your thought processes.

A politician in the throws of a disaster situation can’t be expected to have all the answers or all the solutions. But what they can do is keep the public posted on the events as they unfold, maintain a constant dialogue and reassure people that they are doing everything they can.

As a business leader, it’s ok to communicate that “the discussions are still in progress” or “we don’t have information on this yet” so long as you’re communicating something!

You don’t have to speed up because the internet is speedy. It’s just a different kind of dialogue.

When United Airlines hit the headlines for forcibly dragging a passenger off one of their planes, it took them so long to figure out their communications strategy, that they made things a whole lot worse.

They didn’t need a strategy.

They just needed to say something!

2. Believe in the power of primary

We need to believe in the power of primary sources because the public certainly do.

Hearing directly from the source rather than a paper adds a lot of value to your communication.

If you’ve ever been quoted in an article, blog or feature you’ll know the producer of that piece never quite gets to the meat of what you were trying to say. And that’s because you don’t own the conversation or drive the discussion – they do!

The opportunity to speak directly to your audience is an amazing opportunity for leaders and professionals but it’s taken, particularly western, leaders a long time to grab this space and run with it. Perhaps this is because it demands a greater bravery and vulnerability compared with hiding behind a newspaper column or official statements from your organisation. But the pay off is worth it.

The 2011 London riots  were a big wake up moment for the London Police force, who had to figure out how to communicate directly, and effectively with the general public.

And in the UK county of Staffordshire, the police have invested in real authenticity and conversation on social media, building a strong community relationship.

3. Embrace the hacker culture

Embracing in the hacker culture, i.e. making it up as you go along, is key.

EU politicians, for example, only see social media as a tool for outbound communications and not for their inbound policy making.

Hacker culture dictates that they need to consider the latter, and create as they go.

In the early days of Facebook your profile photo was meant to be one photo of yourself.  The idea was that you uploaded it and you kept it.

But Facebook engineers watched a trend emerging of members rapidly changing their profile picture; every time they went to a party, every time they went on holiday. They realised that users wanted to ability to share their photo albums on Facebook and so built in the functionality to do that. Simply by following the patterns of behaviour.

travel business is struggling with this right now – they used to be able to invite critics to review a hotel/ stay somewhere and write up a review – now all it takes is one guest to write a terrible review about crappy plumbing and it can go around the world- feeling of being out of control is prevalent in leadership circles.

Top tips for getting started online

  • Involve people, whether it’s colleagues, clients, customers or the wider community  in the early building stages of your online presence.  What do they want to hear from you? What’s useful and what’s not?
  • Keep a consistency and truthful tone to anything you post online. Post things that represent you or you organisation because it’s so much better to be yourself rather than a contrived version of yourself. If you’re not funny don’t try to be. If you’re earnest be earnest!
  • Don’t let your voice become part of the PR machinery. The UK lost count of the number of times they heard  Theresa May’s Brexit was going to be Strong and Stable – it was a meaningless consultant’s phrase.
  • Be honest! If you don’t know, say you don’t know! It’s much easier to do this online than it is live on TV.

Pick the right people to communicate with your audience. Your business might have a clear hierarchy but it’s important to consider who should be the spokesperson vs who will be the best spokesperson. The Estonian parliament Facebook page asked their maintenance man to run the page, and he’s become a local celebrity, and great PR for the government.

Elizabeth’s take away advice on owning the social media space? “Be yourself online and talk to people in a way that lets them in but not in a way so casual that you’re treating them like family.”

Procurious are hosting CPO roundtables on 30th May, 19th September and 14th November. If you’re a CPO and would like to attend one of our roundtables in person please contact Olga Luscombe via [email protected] to request an invitation.

Procurement Pros: Make Like Lady Gaga

If your procurement job is making you feel like you’re stuck in a Bad Romance you need to make like Lady Gaga! Embracing collaboration will have you on The Edge of Glory in no time!

When you think of great, inspiring role models for the procurement profession, pop-music superstar Lady Gaga might not be the first person who springs to mind. But just hear us out… (if you can get the tune to Poker Face out of your head!)

At last week’s Ivalua NOW conference in London, Peter Smith, Managing Director – Spend Matters UK/Europe argued that Lady Gaga is the perfect model for CPOs and procurement leaders across the globe, and not just because of her wildly catchy tunes!

Rolling Stones vs Lady Gaga

Flashback to the 1960s/70s and imagine you’re Mick Jagger going out on tour with the rest of the Rolling Stones, Peter proposes. You’re part of a pretty small team. You might be playing the biggest venues and drawing in the biggest crowds but you’re out there on stage with only your bandmates and perhaps a small supporting crew.

Fast forward to the noughties and Lady Gaga is ruling the music scene, and under very different circumstances. A global Lady Gaga tour might recruit hundreds of people. There’ll be choreographers, dancers, backing singers, caterers, tech team, musicians, management, merchandise sellers…the list is endless.

A one-woman show is actually a team effort, a collaboration, with the star herself at its helm. She’s the leader, the strategist who must pull everyone together, in true gig economy style, to deliver the spectacular that’s expected of her.

If we look at the American music charts today, over 50 per cent of the top ten entries are collaborations and, in the UK Top 10, 7 entries are collaborations.

Artists have realised that 2 + 2 can equal 5.

Procurement needs to start thinking this way. Think about how Lady Gaga puts on her show. Think about how collaboration can deliver real value for your team and the wider organisation. By bringing together the suppliers, the engineers, the solution providers and the data experts, procurement can deliver a whole lot more.

Every industry is being shaped by digitisation and the rapid change in today’s world. Given that new sources of risk and competition are emerging all the time procurement needs every hand on deck!

Improving the bottom line with collaboration

Hemant Gupta, CFO & Head Commercial, Legal & Secretarial Blackberrys knows a thing or two about the benefits of collaboration.

Blackberrys, now a leading menswear brand in India has endured its fair share of supply chain struggles in recent years.

Hemant admits, during his keynote at Ivalua Now, that sourcing has been “a very tricky subject for Blackberrys” and their efforts to drive margin improvement and competitive advantage has been a journey.

Only a few years ago, Blackberrys still employed very traditional methods of sourcing. They had no visibility, no transparency and no way of maintaining a centralised system for their data. “Searching the vendor database for sourcing to look at our historic pricing was not possible.”

“The consumer is not brand-loyal any more. They just want the best price, which is increasing demands on the retailer – our discounting has increased by 25 per cent. As CFO I need to improve the bottom line and improve our sourcing process.”

“cost cutting is no longer the solution to sustainable profitability, the key to success is finding creative ways to optimize it” he asserted.

With the help of Ivalua, Blackberrys were able to start their transformation journey, which did face some resistance from employees at first. “People are always skeptical about new processes so collaboration is key,” Hemant explained.

But within a couple of years Blackberrys data started to improve with the involvement of internal customers and they began to automate some processes. They had improved control and transparency and benefited from lower risk and increased efficiency.

4 tips to make your sourcing transformation a success

Hemant shared his key learnings from Blackberrys’ sourcing transformation journey.

1. Challenge status quo

It’s human nature to think whatever we are doing, we are doing it right. You have to train yourself to change that.

2. Collaboration is key

Resistance to change is normal but you need 100 per cent commitment from leadership and strong champion. You also need to ensure you’re pulling all of your procurement resources – teamwork is dream work!

3. Identified -> Realised savings!

It’s imperative to follow through post sourcing processes.

4. Make it a lifestyle

eSourcing is not just about saving cost but cost avoidance and transparency – compliance.

Ivalua Now, The Voice of Procurement is coming to Paris on 29th March and New York on 17th May. Find out more here. 

How To Deal With The Office Timewaster In 4 Videos

There are few thing more frustrating in life than a workplace timewaster. And the worst thing? They come in all different shapes and sizes, which makes them harder to spot!

Colleague: “Hey there buddy, did you have a good weekend?”

Me: “Sure did! But I’ll have to tell you about it later because I’ve got such a busy …”

Colleague: [Sits on the desk] “Great, great… let me tell you about my weekend. Let’s see, now. It all started to kick off on Friday, just after our last conversation…”

Sound familiar? We’ve all encountered chronic timewasters at work, which is why I’ve created this quick and easy video guide on how to shut them down so you can Get Sh#t Done.

Let’s start by working out what type of timewaster you’re dealing with.

1. The Chatter

Some of us like to keep our work life and social life separate. For others, their work life is their social life. Of course there should be a fun, chatty environment at work, but again, there’s always one person who doesn’t understand the limits. So, next time you find yourself making sympathetic noises while your colleague is telling you about their various cats’ medical histories, consider the fact that it will be your neck on the line when a deadline is missed.

How to shut down a chatter: Put a cap on their time – tell them before they begin that you’ve literally only got two minutes to spare. If you really want to drive home the point, get your phone out and set a countdown timer and place it on the table between you.

2.The Delegator

I’ve worked in the past for line managers who are guilty of this, although you’ll often come across colleagues working at the same level who think it’s okay to handball mundane tasks your way.  Specifically, my beef is with people who basically treat you like a search engine. For example:

“Mate, would you mind telling me the time difference between here and Beijing?”

“How much is that converted into Euros?”

“How long will it take me to drive to head office?”

Here’s why it’s frustrating – firstly, they’re really undervaluing your skill set. You were hired for your education, your experience and your intelligence, not your ability to type words into a box. Secondly, they’re just being lazy! I’ve rolled my eyes in the past when I’ve received an emailed question (like the above) which would have been answered straight away if my boss had simply typed it into Google instead of sending it to me.

But luckily, there’s a handy tool for just this situation.

How to shut down a Delegator: Six words: Let Me Google That For You. This tool is a brilliant way to answer a question that should have been googled. It generates a short, tongue-in-cheek tutorial about how to use a search engine (starting with “This is the internet”) and finishes with the answer to the original question. Check it out.

3. The sounding-boarder

Extrovert: “Man, I LOVE open-plan offices! They’re so great for bouncing ideas off people!”

Me: “Yes. Every single idea you’ve ever had.”

Okay, it’s true. Open plan offices, and even collaborative online workspaces like Slack, are ideal for airing and sharing ideas. But some people take the concept of the “sounding board” too far. This might involve a colleague regularly reading aloud emails that they’ve crafted before hitting send, or running stuff past you that really doesn’t require your input or opinion.

How to shut down a Sounding-Boarder:

  • Invest in a pair of noise-cancelling headphones and pretend you’re on an important call whenever your colleague gets that “sounding-board” look in their eye.
  • Give them a very short list of high-level areas where you feel you can add value.
  • Give them a taste of their own medicine by sitting them down and reading aloud the longest, dullest report you can find.

4. The Meeter

Me: “Oh, hey, just a reminder that we’ve got that client meeting tomorrow. Everything is under control, and I’ve sent you all the information you’ll need.”

Colleague: “Let’s have a meeting about that.”

Me: “Why? WHY?”

How much time and resources will corporates keep pouring into unnecessary meetings before they see the light?  Unnecessary meetings are so despised that they’ve become a meme. They’re a regular feature in Dilbert, and you can even buy a coffee mug that says “I survived another meeting that should have been an email”.

How to shut Meeters down: Insist that the person gives you some good reasons for the meeting. This includes a stated purpose, a start and end time, and a valid reason for each person to be there.

Do you know any other types of timewasters in the office? Leave a comment below!