Category Archives: Career Management

Unleashing the Real Power of your Supply Chain

The human element will make or break your supply chain career. Procurious Founder Tania Seary reveals the human strengths that AI will never replace and how to leverage that competitive advantage.

There comes a time when you forget why you ever started.

I’ll never forget my first meeting as a procurement executive with a supplier. For me, it was one of those moments of illumination. I can still remember the desk, the room, (funnily enough, not the particular supplier) and how I felt. I must say, the one word that continually comes to mind to describe what I felt was … power.

Not in a newly-minted supervillain kind of way, but “power” in the sense that for the first time I really felt the tangible ability to make an impact. To tell the truth, I’d had a lot of fancy jobs up to that point – marketing for Walt Disney in London, PR for the Mexican beer company Corona, hosting trade missions for LAX, launching listed companies. But moving from one side of the table from the role of seller to being the buyer … that was a buzz. 

There’s procurement gold in them there hills!

You see, procurement 20 years ago, was – for the first time – sexy. It was on a new trajectory – its very own moonshot. It was a time for firsts.

B2B was all the rage. CEOs and Boards were ponying up millions of dollars to build fancy eProcurement solutions and invest in procurement exchanges. Procurement was coming in from the wild west and being tamed and urbanised through leveraged buying, reverse auctions and blanket contracts. Everything was a first.

MBA graduates were like blurry-eyed prospectors, rushing for the gold fields to claim their stake on their ambitious careers by making their employers a fortune. I distinctly remember asking one of my fellow Penn State classmates, “Why are you going into procurement?” He answered, “Because you can save your company millions and be a corporate superstar overnight. It’s the fastest way to the top.” In other words, “There’s gold in them there hills!”

This is where my passion for procurement started and has continued. Like the chief cheerleader, I have been singing procurement’s praises ever since.

A lot has happened in the last 20 years, but we need to ask ourselves if we’re getting today’s graduates and future leaders excited enough to join our ranks in the search for exponential value? Do they see a bright future in our profession? Because now is certainly the time!

Procurement’s new moonshot opportunity

For the first time in more than two decades, a new moonshot opportunity has emerged for our profession. Cognitive procurement is upon us.

AI and cognitive give us the opportunity to provide a quantum leap in delivered savings. The opportunity to move away from all those back-office administrative tasks that have been holding us back.

Cognitive is going to take away everything we’ve been whining about, launching us out of the transactional malaise and into the strategic stratosphere. Our role in Industry 4.0 will be to orchestrate, collaborate, and negotiate within a complex, technology-enabled global supply network.

Our future will be e-enabled, but humanity most definitely still has a place in procurement. At the odd times when Watson, other robots, and the data seems to be at cross-purposes and pointing us in different directions, we are going to have to step in and use our uniquely human skills to untangle the gridlock of competing interests to find a resolution to the supply challenge.

You see, the secret to our success in Industry 4.0 lies in something that no AI being can match – relationships, along with our ability to leave people with the feeling that they are special, important, and of real value.

As you can see, I’m so excited about the “moonshot” opportunities currently available for procurement. I’m personally energised by my work with IBM on Watson, partnering with SAP Ariba to promote Procure with Purpose and with Procurious itself growing at 25% per year with nearly 30,000 members today and on track to have 50,000 members by 2020.

But of course, in life, nothing is ever perfect.

The human element

My mother is only 71 and has advanced dementia. Many of you will relate to this story. There are lots of things my Mum can’t remember, including most people’s names, what year it is, and how old she is.

But, surprisingly, she can still remember her feelings at different points in her life. She may not remember someone’s name, but she can definitively (and accurately) describe the emotions she associates with that person.

It reminds me of that important leadership lesson: “People may not remember what you said, but they will remember how you made them feel”.

Playing to our human strengths

For me, the human element is what makes business:

  • interesting
  • challenging
  • innovative
  • rule-breaking
  • risk-taking, and
  • friend-making.

For me, the joy of procurement is the personal. It’s the unique relationships I create with people: the deals, the secrets, the preferential options. My relationships are my competitive advantage.

Up, down, and across the supply chain, it will be interactions between people that will be the real determinants of success and failure. To prosper in this next Industrial Revolution, we need to play to our human strengths – collaboration, connection, innovation, influence – the things only we humans can do.

We need to embrace our human-ness, our humane-ness, and really get connected with our stakeholders, our suppliers, our teams and our communities.

We have developed Procurious for current and future generations of “Procurers”. We want to empower our future procurement and supply chain leaders to change the face of the profession from the inside out. We’re on a mission to enthuse a new generation, putting new moonshot opportunities through the power of conversation, collaboration, and connections.

Let’s stop worrying about the future and start creating the future we want to live in.

Let’s embrace cognitive and all that Industry 4.0 has to offer. Let’s equip ourselves and our teams to really make a difference with the advanced skills AI cannot – namely the power we have as human beings – or the power to connect.

Procurious Founder Tania Seary delivered this message to inspire audiences at the Procurious Big Ideas Summit in London, SAP Ariba Live in Amsterdam, The Faculty CPO Forum 2018 in Melbourne and ISM2018 Nashville.

4 Ways Procurement Could Better Manage Risk

Procurement pros need to get better at managing risk. Because supply chain disruption can come from any angle, whether it’s caused by a supplier site failure, environmental or geopolitical factors, or even adverse weather… 

If it’s not already, risk management should be a top priority for businesses. The consequences from not actively identifying, managing and mitigating supply chain risk can significantly impact an organisation’s profitability, not to mention brand reputation and potentially, its sheer existence.

riskmethods set out to determine the current “state of risk management and mitigation” in today’s global business ecosystem by surveying more than 250 senior procurement executives from across the globe. The study unveiled important findings around how prepared procurement leaders are to tackle rapidly evolving business environments brought on by new, more complex threats, and the current methodologies employed to manage risk in the supply chain. Here are four areas the survey explored, which indicate where procurement teams are failing in terms of risk management.

  1. Preventing disruption

All senior procurement professionals identify ‘avoiding significant disruption to the supply chain’ as a top priority, but when survey respondents were asked whether their organisation had a significant disruption in the past 12 months, more than 47 per cent indicated that they had experienced between one and five.

Additionally, a surprisingly high 13 percent indicated that they had 20 or more significant disruptions in the past year. Arguably the most alarming statistic – 12 per cent of respondents did not even know whether there were any serious disruptions to their supply chain during this time.

This is a testament to the 12 per cent’s minimal visibility into their operations. According to this data, nearly all organisations faced a disruption in the past year, speaking to the prevalence and nature of supply chain threats at they continue to increase. 

  1. Improve ability to uncover risks

The current landscape has made it critical for procurement professionals to have real-time, thorough views into potential risk and their impacts to make well-informed purchasing decisions. Many organisations have implemented some form of tracking mechanism for risks, but how often the data is updated is another issue.

When we asked respondents about the frequency in which data is refreshed, less than one third of respondents answered continuously. This is an alarming percentage.

Risk monitoring in today’s digital business environment needs to be a 24/7/365 task. Organisations that aren’t receiving continuous updates are falling behind and can’t possibly be making the best decisions for their business.

The underlying cause of this lack of complete information is usually associated with traditionally highly manual processes. Not only is the manual approach an extremely tedious and time-consuming task, it also takes away resources from other critical objectives. Most importantly, it severely limits big-picture insights and increases the chances of a serious supply chain disruption. When survey respondents were asked what level of automation their organisation employed to refresh critical information, less than one per cent of respondents indicated that it is completely automated.

An additional 39 per cent indicated that they were in the low to moderate rage of automation, relying heavily on manual tools such as Excel in conjunction with some outside sources. A full quarter of respondents indicated that they have no automation capabilities at all and are completely reliant upon manual search.

  1. Supplier risk impact assessments are key

Understanding a supplier’s potential impact on the business is key for procurement teams when it comes making purchasing decisions. For example, if a major supplier gets hit by a severe weather event which causes a delay in shipping, that could cause a ripple effect that halts production and eventually leads to a loss in revenue.

When survey participants were asked if their organisation had a mechanism in place for measuring the impact a supplier has on the business, almost half said that their organisation had no structured assessment of supplier criticality or impact.

Having no such assessment means organisations are at times putting their fate in the control of someone’s best guess. Organisations must have clear visibility into their supply chain, including which suppliers have the greatest potential impact, so they can refocus resources on reducing risk and preparing for a crisis.

  1. Organisations must be better equipped to mitigate emerging threats

While being able to identify potential risk is a crucial procurement workflow, having the ability to act on that information and mitigate evolving threats is equally, if not more, important.

Only slightly more than 20 per cent of study respondents indicated they have plans in place. An additional 27 per cent indicated that no such plans exist and 53 per cent indicated that there were only partial plans in place. These numbers demonstrate how difficult it is to evolve into a mature organisation when it comes to prioritising risk because businesses lack the necessary level of stakeholder collaboration.

Supply chains will never be free of risks, but an organisation’s ability to prepare for, identify and mitigate emerging threats will set them apart from the competition. Procurement teams can’t possibly make well-informed business decisions without a risk management strategy in place. As the number of risks continues to increase in this environment, the need for accurate, actionable insights will only become more critical.

When it comes to risk management, companies need to consistently be moving forward as the current threats will only continue to evolve.

Download the report: Procuring Risk: The State of Risk Management and Mitigation in Today’s Global Supply Chain to read riskmethods’ full findings.

10 Questions to Ask in a Purchase-to-Pay Demo

$1 million is wasted every 20 seconds collectively by organisations around the globe. So, here are some areas to dig into and questions to ask during a purchase-to-pay demo. 

$1 million is wasted every 20 seconds collectively by organisations around the globe.

Yes; you read that correctly – organisations are losing money to the tune of $1 million every 20 seconds due to poor project management practices, according to a recent survey from Project Management Institute (PMI).

This same survey also reported that 52 per cent of projects in the last year experienced scope creep, with one of the main reasons being erroneous requirements gathering.

Seeing these stats and given my profession, I immediately thought of purchase-to-pay projects and how procurement and finance professionals can ensure they have what they need when evaluating purchase-to-pay solutions against their requirements document.

With over 7 years in the business, I’ve seen prospective customers led astray by solution providers making them unsure of exactly what they’re looking for in terms of functionality, and more importantly what they need to solve their business challenges.

Sometimes cleverly crafted demos can gloss over important nuances or mask inadequacies, which can cause major problems later during implementation – and the dreaded scope creep. So, here are some areas that I recommend digging into and questions to ask during a purchase-to-pay demo.

10 questions to ask in a purchase-to-pay demo:

  1. Does the e-procurement solution do line item requisition approval workflow? 

That’s a mouthful, so let’s break it down. Imagine you have a user that wants to buy three items requiring three separate approvers in the e-procurement solution. This person fills the virtual shopping cart with these items, just like on Amazon.

But unlike Amazon, these items need to be approved and POs issued before ordering happens. And because you want your users to get the items they need quickly, you want to make sure the e-procurement solution automatically issues POs and places orders as each individual request is approved without waiting for the other approvals – this is line item requisition approval workflow. The alternative is a linear approval workflow where each step is dependent on the previous step, meaning all the POs are held up until that approval workflow is complete.

This means all POs are reliant on the final approval in the linear chain and the entire process slows way down. Ultimately what happens in the latter scenario is your users get fed up with the slowness of the system and start purchasing outside the system – often referred to as maverick spending – so they can get what they need faster and more easily.

  1. Will I be able to create complex workflows? 

Related to the first question is the ability to create complex approval workflows. While the goal should always be to streamline approval processes, certain business scenarios and regulations call for more complexity, and you should not forgo that requirement because the system isn’t sophisticated enough to accommodate. Don’t let the solution provider try to oversimplify matters or sway you with a sharp user interface – what you need is flexibility. The tool should give you the flexibility to create comprehensive workflows that address all your needs – not create multiple work-arounds that you must maintain. You also should be able to configure the workflow once and leave it mostly intact – which is better from a compliance standpoint – instead of having to constantly adjust to meet business needs.

  1. Will I get budget visibility during the requisition or approval process? 

This is a biggie. Perhaps the greatest advantage of automating your procurement and accounts payable (AP) processes is the visibility you get across the entire buying process. But here’s the key – you need that visibility proactively, not reactively with month-end reports. A proactive approach gives managers the visibility to see how purchase requests impact budgets as the requests are being made in real-time, so they can make informed decisions as to whether to approve or deny the requests based on their budget amounts. If managers can only see how purchases impacted budgets at month-end after the money has been spent and budgets used up, that’s a reactive approach and it’s not good enough.

  1. Is the sourcing tool easy to use?

Most purchase-to-pay solutions now offer sourcing as part of the full suite. In terms of value, this helps streamline more of Procurement’s job so they can focus on suppliers and other strategic procurement initiatives. If you’re adding on this functionality to make someone’s day-to-day tasks easier, it should be user-friendly and not more cumbersome than manual sourcing activities.

  1. Can the system perform partial returns?

Say you get a shipment of 10 laptops and one is broken. You want to be able to acknowledge receipt of ten laptops in the system and note the return of the one broken computer. And, you want to be able to track that broken item through the return process. Returns and tracking returns should not be an all-or-nothing process.

  1. Can the invoice automation solution truly process ALL invoice formats?

Remember those cleverly crafted demoes and nuances I was talking about earlier – invoice automation is a landmine for hidden inadequacies. I often hear of solution providers try to mask solution shortcomings by harping on getting more PO-backed invoices, when in reality driving a higher PO percentage is not going to solve your problems. So, let’s be clear about a few things here: you will always have a certain percentage of non-PO invoices and paper/email invoices are not going away just yet, but there’s no reason you can’t automate the processing of those invoice types anyway.

Therefore, you should choose a solution that can truly ingest and process any invoice type automatically (paper, electronic, EDI/XML, PDF, etc. – covering direct, indirect, PO, Non-PO spending) and convert these documents into true e-invoices (i.e. – invoices with structured data formatting for machine reading without human intervention). Your suppliers don’t need to change how they operate today – if they send paper invoices, they can continue doing that – but you can still get an electronic invoice. Automation of this process is key. Leveraging automation should eliminate the need for your AP staff to key invoices into the solution. It should also automate approvals, handle exceptions like extra costs, create all book-keeping information automatically and map the spend accurately to correct categories, regardless of invoice quality and with zero change management for suppliers. This means there is no disruption in the supply chain and you can get 100 per cent of your supplier on-board.

This was a lengthy section of highlighting nuances, but it’s key to understand why this is so important. The point of achieving this level of automation and sophistication in your accounts payable department is to capture 100% of your enterprise spending data by automating all invoices – not just some – so ultimately you get 100% spend visibility.

  1. Can the invoice automation solution do split coding on invoices at the line and header level?

Let’s say you have a trade show coming up. The event is an investment for three departments: marketing, sales and pre-sales. When you’re coding invoices for the event, you want to have the capability to take the sum amount and split it between the three departments. If you can only split at the line level, you will have to split-code each line three ways and that gets to be time-consuming and inefficient.

  1. Does the analytics solution offer out-of-the-box reporting and customisable reports?

You don’t want to reach out to a customer service representative every time you want to see your own financial data in a certain way – that’s time-consuming, annoying and can be costly depending on your service agreement. Make sure the analytics tool offers configurable dashboards and reports that have standard views to provide a starting point for your analysis, allowing you to drill into the details when necessary, and also gives you the ability to easily create, configure and export your data in the format you need.

Analytics should make your life easier – not more complex.

  1. How are upgrades handled?

The advantages of using Software-as-a-Service (SaaS) technology are plenty, but to reap those benefits you have to be receiving upgrades regularly. Ideally, you want to be on a multi-tenant SaaS environment (if you want the real techy stuff, ask the head of your IT department – this person will know exactly what that means). But in short, this enables every customer in the environment to upgrade at the same time to the newest version.

Other environments stagger upgrades for customers, meaning that not everyone has access to the latest functionality and bug fixes (including features that ensure compliance) and worse, they fall behind on their upgrades. This begins to pose real problems due to fragmented support across various versions, some customers opting to skip upgrades and falling further behind and challenges maintaining the solution.

  1. What happens to custom fields during upgrades?

The custom fields you create and the data associated with those fields should remain intact when upgrades occur. You spend a lot of time and energy defining custom fields during implementation; there is no reason your solution administrator should have to go back in and do re-work every time an upgrade happens. This is a waste of time and you risk loss of data capture if those fields are not re-activated in a timely manner.

30 Under 30 Stars Prove This Enduring Stigma Is Disappearing From the Profession

Procurious uncovers the five factors in common across this year’s inspirational group of 30 Under 30 Supply Chain Stars.

Delivering over $20 million in cost savings, building a new procurement function from scratch and creating a cutting-edge suite of analytical tools are among the outstanding personal achievements of 30 young professionals named winners in the ThomasNet and Institute for Supply Management (ISM) 30 Under 30 Rising Supply Chain Stars Program.

This award shines the spotlight on a trend that is taking place in companies large and small all over the globe, where Millennials are being asked to step into senior roles earlier than expected in order to fill the vacuum created as an entire generation of Baby Boomers retires.

The generations in the middle, X and Y, are also moving into executive roles, but the problem is that there simply aren’t enough of them to do so. That’s why Millennials are leap-frogging through the ranks in nearly every profession – including procurement and supply management.

This year’s 30 Under 30 winners have been chosen for unique achievements that are particularly impressive so early in their Supply Chain careers. There are, however, five factors that are held in common across the group.

  1. They’re not afraid to change roles and companies

This year’s group of 30 Under 30 winners provides further proof that any remaining stigma around frequently changing roles (or to use the disparaging term, “job-hopping”) is rapidly dissipating in the profession. Rather than being seen as damaging to procurement or supply career prospects, working across different organisations or varying roles within the same organisation is now recognised as an enriching experience that brings crucial diversity to any team.

Flex’s Elizabeth Richter, for example, completed internships at MeadWestvacso, Kohl’s and Cisco before landing a plum role as chief of staff for the CPO at Flex, a company that she calls “supply chain heaven”.

Examples abound among the 30 winners, with similar stories of experience across multiple companies, while a small handful have remained at a single organisation from graduation to the present day.

  1. They’ve all had experience on strategic projects

In general, the 30 Under 30 have rocketed beyond the role of purchasing officers impressively early in their careers. These winners are all strategic procurement and supply professionals, and are being recognised for more than just achieving cost savings but for driving truly game-changing projects. Megawatt Winner Charlotte de Brabandt, for example, successfully coordinated a global team at Johnson & Johnson to find a single global service provider to assist with global energy procurement for 920 sites across three continents. Google’s Neta Berger managed the daily war room meetings that focused on resolving immediate supply shortages after the 2011 Japanese earthquake and tsunami while she was at Cisco.

At Google, Berger has managed materials for international expansion into seven countries of the Google Home and Google Wifi products and was tasked with mitigating risk for the Google Home Mini.

  1. BUT… they still generate significant cost savings

If someone were to total up all the cost savings these young professionals have won for their companies, the figure would prove once and for all the true dollar value of a top-performing procurement professional. For example, United States Steel Corporation’s Chelsey Graham (age 27) drove $20 million in cost improvements with a single high-visibility project with manufacturing stakeholders, while Madeline Martin (Mars Petcare) has saved an estimated $14 million in her short time with the company.

Every one of the 30 Under 30 winners has a similarly impressive cost savings achievement under their belts, demonstrating that while a strategic lens is important, it’s also vital to retain focus on the bottom line.

  1. Falling into the profession is no barrier to success

Is the fact that many people move sideways into supply management the profession’s greatest strength, or weakness? ThomasNet reports that 60 per cent  of the 30 winners planned on a career in supply chain. The winners include a former attorney, a mechanical engineer, a civil engineer, a technology entrepreneur and even a former chef.

Backgrounds like these can only serve to enrich procurement and supply management team skill-sets, especially when combined with the skills of professionals who have a “pure” professional and educational background in supply management.

Megawatt Winner Charlotte de Brabandt, for example, did not originally plan on pursuing a career in supply chain, but soon discovered the opportunities that the profession could offer. “It quickly became a clear career choice for me [after I’d] led a few supply chain projects in different fields of strategic procurement, project procurement, logistics and quality,” she told ThomasNet.

  1. Some organisations are producing 30 Under 30 winners every year

For those of us who have observed the 30 Under 30 program since its inception, a pattern is beginning to emerge where certain organisations have produced supply chain stars nearly every year for the past four years. These companies, including USSC, Johnson & Johnson, DuPont, Dell and the United States Postal Service, are not only talent magnets in the profession but are gaining a reputation for being fantastic supporters and promoters of their top performers in supply management.

In a previous interview with Procurious, ISM CEO Tom Derry talked about the importance of coaching trees in the procurement and supply management profession.

“Sometimes it’s companies, sometimes it’s individuals”, he said. “Certain CPOs have gained a reputation for coaching and developing people who have subsequently left, and gone on to make their mark.” Their organisations benefit by being seen as an employer of choice for top procurement talent, and the CPOs themselves benefit from the dynamism and vitality of a team made up of the brightest the profession has to offer.

Learn more about ThomasNet and ISM’s 30 Under 30 Supply Chain Stars program here.

Procurious will catch up with the 30 Under 30 winners at the Institute For Supply Management’s flagship event, ISM2018 in Nashville, Tennessee. Learn more about the ISM 2018 Emerging Professions Experience: http://ism2018.org/2018events/emerging-professionals/

4 Realities of a Cloud Spend Management Implementation

Implementing new tools and systems is enough to make the bravest of procurement pros shudder with dread. So what are the four biggest risks associated with cloud spend management implementation…

With a wide array of cloud-based applications on the market, many organisations are saying goodbye to out-dated, legacy systems and adopting new Software as a Service (SaaS) solutions. These tools are changing the game in spend management, providing companies with increased visibility across all areas of spending and identifying new opportunities to drive cost savings.

However, despite all of the obvious benefits associated with these cloud systems, implementing a new tool across an enterprise can still be very challenging. For example, change resistance is often problematic when it comes to encouraging end users to utilise new systems. Without proper planning, you risk running into multiple issues that could derail the process and prevent a successful implementation.

Below are the top four risks associated with implementing cloud-based spend management solution:

  1. Getting Suppliers On Board

To successfully implement a new spend management solution, supplier enablement is imperative. The amount of work that’s necessary to get all of your suppliers on board with the implementation is commonly underestimated. In order to get it right, you should develop a supplier enablement strategy that carefully outlines each step of the process. Make sure you clearly communicate all of the changes that will take place, what your expectations are for suppliers, and how implementing the new tool will improve day-to-day workflows.

  1. Navigating the Integration

Don’t believe all the hype that you hear during sales demo—take everything with a grain of salt and follow up with questions about the integration process. Even if the integration sounds simple, remember that somebody has to do the work. There are several things to address regarding integration: Who is doing the mapping and file transformation? Which Enterprise Resource Planning (ERP) system will be used? Whose standard is being adopted?. You will also want to learn the integration method and inquire about any limitations per integration object. Make sure the vendor spells out all of these details before you sign a contract. This will guarantee you aren’t met with any unwelcome surprises down the road.

  1. Achieving End-User Adoption

Although it has become much easier with SaaS-based source-to-pay (S2P) and procure-to-pay (P2P) systems, achieving end-user adoption is still one of the biggest challenges that organisations face when implementing a new tool. The resistance to adoption typically begins when specific use cases are overlooked or not addressed appropriately. Lack of support from senior leadership, poor communication, and inadequate training can also be roadblocks to end-user adoption. You can avoid these roadblocks by considering all applicable use cases and crafting a detailed communications plan that includes all key stakeholders.

  1. Addressing All Use Cases

To avoid resistance and ensure your new spend management tool is meeting your needs, make sure you have selected a solution that will address each unique use case. Ask yourself: Who will be using the tool and for what purpose? Simply having an assortment of features and functions isn’t enough. In order for the implementation to be a success, you need to make sure you understand how the tool’s features and functions specifically address all of the use cases to ensure the solution meets your business needs.

Although it’s certainly important to keep these major risk factors in mind, don’t let these challenges get in the way of implementing a cloud-based SaaS solution at your organisation. Creating a carefully outlined implementation plan will help mitigate risks and ensure the process goes smoothly for everyone involved.

Are you having trouble selecting a new spend management system or navigating a complex integration? Contact RiseNow today for a free supply chain consultation to help get you started.

This article, written by Matt Stewart, was originally published on Rise Now 

3 Ways To Keep Up with the Social Media ‘Joneses’

What do you mean you had time to read The Economist cover to cover – don’t you have a job to do??! Kelly Barner advises how you can keep up with the Social Media ‘Joneses’.

We all know one… that person in your network that not only mysteriously has the time to think, read, discuss and be oh-so-intellectual about the day’s leading topics, they also broadcast that fact everywhere. Here are some sample ‘shares’ to give you an idea:

“Really enjoyed this article the third time I read it in this week’s issue of the Economist”

“Back from our week-long innovation retreat / chakra cleansing with a revised vision for procurement”

“Pleased to share volume 4 of my treatise: ‘Reflections on the Meaning of Corporate Procurement’”

Honestly. Don’t these people have real jobs? After reading status updates like these, it’s hard not to feel horribly overwhelmed. Let’s face it – the rest of us are scrambling from top priority to top priority. We’re trying to cover the fundamentals while also finding the time to look for opportunities to create additional value.

Here’s the thing: just as people gild their personal experiences on social media to make it look like they have the ‘perfect’ life, they are tempted to do the same at work. Although you may feel a combination of stress and envy in response to their abundant discretionary time, you can convert that energy into something that is not only productive, but realistic to achieve.

Procurement has long been hesitant to engage on social media (eek! a supplier might be looking!!), but the tide is beginning to turn. Here are some suggestions for how to keep up with the ‘Joneses’ without actually becoming them.

Read One New Thing Every Day (Max investment: 15 minutes)

There is so much content published on a daily basis that it may seem just as easy to let it all float by as to pick something to read. And yet… not reading anything is a huge mistake. Don’t think too hard about your selection – it is wasted time. You’re better off reading something mediocre and moving on than making it an hour long task. There is something to be gained from every piece of content – even if it is so complex or boring that your mind wanders to other topics. Let it go! Stepping away from project-related tasks and phone calls may be just the distance you need to foster a great idea.

Post a Comment (Max investment: 30 minutes)

Not everyone is a writer – and not everyone who writes should. That said, there is just as much value to be realised in commenting on or challenging other people’s work as there is in publishing your own thoughts. If you’ve already invested the time to read something, why not make a comment? We are all made better when we are challenged, and sometimes all it takes to get the conversation going is the first comment. You’ll find that articulating your point of view helps you formalise your thoughts in a way that just reacting in your mind doesn’t.

Host a Lunch & Learn

One of the things we have to give procurement credit for is the abundance of high quality – free access – webinars and podcasts. If you come across one that is relevant to your team, reserve a conference room and invite others to join you. If it is during lunch, encourage people to bring something to eat. If not, grab coffee or see if the company will spring for bagels (people love bagels…) The resulting conversation will move everyone forward and add to the shared knowledge base of the team.

The key thing to keep in mind is that you can learn and grow without shoving it in other people’s faces. If you’re focused on using that investment of time to put yourself above other people, you’re missing the whole point of building virtual community and advancing professional development. Plus, we all know the unspoken reality… the more showy people are about their own accomplishments, the more likely they are to be updating their status from their parents’ basement. 

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…

Sundays Photography/Shutterstock.com

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.