Category Archives: Generation Procurement

Why Procurement Should Flex Its Muscle

Tania Seary

Tania Seary is the founder of Procurious – she is talking today at the Big Ideas Summit, the world’s first digitally-led procurement event. Join the Big Ideas Group to hear 40 of the most influential thought-leaders air their ‘Big Ideas’ on cost, risk, technology and people management.

Late last year, I was fascinated to see images taken from a low-flying aircraft in the far western Brazilian state of Acre (AH-cray), the images depict frightened tribal warriors brandishing spears and arrows as they peer up from palm-thatched huts in the middle of the jungle.

Brazil’s indigenous affairs agency, FUNAI, has confirmed the presence of 27 indigenous groups living in extreme isolation in Brazil’s vast Amazon region, making it the home of the largest number of uncontacted tribes in the world.

The exact meaning of “uncontacted” is a matter of debate, but experts agree that such communities have extremely limited contact with the outside world and that they survive in nearly complete isolation from the global economy.

Sometimes I worry that large portions of the procurement profession are “uncontacted”.

That is, working in isolation, unaware that there is a whole universe of knowledge available, to help them do their jobs better and learn.

Today we are faced with complex supply chain challenges. In fact, it is hard to think about an area of business that modern procurement doesn’t touch – employment law, climate change, human rights…and now social media.

Social media is at the epicentre of a storm created by the exploding digital landscape and the rise of ecommerce, which is causing many industries to pivot.

We are witnesses to a “social” force that is disrupting and enabling just about every type of business on the planet – recruitment, retail, banking, communications and entertainment… and we are now finding out what it means for supply chain.

As the complexity of our supply chains have increased – so too have the number of issues we need to deal with.

Most of these issues – child labour, unsafe work practices, exploitation and neglect for the environment, copyright – are too big for any one person – or even any one company – to solve alone.

We need to overcome our silo-thinking and competitive mindset and start focusing on what we can achieve for mutual benefit.

Harvard Professor Linda Hill says it’s a mistake to think that creativity is a solo pursuit (or perhaps more so, that innovations are usually a flash of individual genius).

When many of us think about innovation, though, we think about an Einstein having an ‘Aha!’ moment. But we all know that’s a myth.

She says, “Innovation is not about solo genius, it’s about collective genius”.

Pixar is used as an example of ‘innovation’ in the movie space.   But let’s think for a minute about what it takes to make a Pixar movie: No solo genius, no flash of inspiration produces one of those movies. On the contrary, it takes about 250 people four to five years, to make one of those movies.

To come up with the best ideas we need many, diverse perspectives. By involving more views, life and career experiences, demographics, cultures etc… we increase the pool of talent and therefore ideas that are working to solve problems.

Robin Chase (co-founder and former CEO of Zipcar, an innovative car sharing service) has some great thoughts on the benefits of building community resilience or community reflex.

She believes – the more community resilience we can build into things, the better.

She believes – we need to exercise our community muscle.

So when bad things happen, or when we’re looking for solutions to big problems, we turn first towards thinking that we’re going to solve it in a community way.

So… let’s just say there is a typhoon in your South East Asian supply chain, you don’t have luxury of days/weeks to travel there, talk to people and figure things out.

Why not go straight to your procurement community on Procurious and alert them for help?

You will be amazed how the community responds with alternate suppliers, solutions and on the ground contacts.

If we start, and maintain, this level of support, it will become an instant reaction – a community reflex – and if we keep repeating that action, then we will build community muscle. How powerful would that be?

It is very exciting to think of what the global procurement community could achieve if it started to flex its muscle… literally!

We need to achieve positive interdependence where every person in the profession perceives that they are linked with each other in such a way that one cannot succeed unless everyone succeeds.

We need to realise that each person’s efforts benefit not only him – or herself, but all other group members as well.

So, rather than being isolated, we could connect with other professionals and work together to use our collective commercial power to take procurement to “the next level” at the minimum, or to do something great for the world at the maximum.

Imagine if we could all work together for the collective good? But a call to action for the procurement profession…

Given all the benefits of collaboration that I have outlined here today, I think the procurement profession should take on the open source programmers’ mantra… or code of conduct if you like.

We need professionals who will be:

Egoless – The only way we can improve is to be open to feedback and give honest, non-judgemental feedback to others.

Team players – Share information that everyone can benefit from. We need to give back to the profession as it gives to you.

Learners – What’s relevant today didn’t even exist 5 years ago. We have to constantly learn new things.

T-shaped – It’s OK to specialise in one narrow field, but we need to have a general understanding of a broader range of business issues.

Relentlessly resourceful – You don’t have to be able to solve every problem yourself, but you should know where to go to find the answer.

Once we start to flex our muscle as a global community, the opportunities for procurement to make a difference are boundless. What is your BIG IDEA for our first collaboration project?

How can we make progress through the jungle of procurement?

Big Ideas panel session

In the first of our ‘Big Ideas’ panel discussions Sigi Osagie, Helen MacKenzie, Andrew MacAskill and Sarah Trota took to the stage to provide their perspectives on authentic leadership, and the challenges of trekking through the procurement jungle.

The panel are asked: What is the role of the leader in reengaging the humanity?

Helen starts things off by offering a personal story taken from her experience of working as Head of Exchequer Services in local (Scottish) government.

We’ve been on a significant journey of change in the way we do procurement. To have a vision of where you’re going, and to get the passion into the vision.

Helen likens it to adventuring through a jungle, machete in hand, clearing the way for the team in tow. There are always blockers in business, so you must find a way for your team to make things happen.

It’s also important to act as the cheerleader – she gives the great example of winning awards, and the rallying effect this has on the team. Recognition shining through.

Andrew says that it’s always about setting the belief. When you meet C-Suite people from other organisations they are more excited about the potential.

Sarah reckons it’s more of a brand challenge. How is this achieved? By working collaboratively and changing perceptions (for instance, HR is notorious for having a bad image).

Jules: There’s a belief in the IT industry that they are under-valued.

So why is it so hard to get collaboration across the board?

According to Sigi, the one industry that never has this victimhood mindset is Finance. Dollars is the value of business – even if you’re in the charity or public sector we still measure in dollars.

This opinion proves controversial: should Finance be the poster-child, and is it not the one business function that’s first to fail? (Indeed it is usually the first function to be held accountable).

Sigi says procurement has always faced an uphill struggle. There’s legacy challenges. However it has come a long way – but progress tends to be seen first in large businesses.

In a parting statement Sigi ends on a philosophical note, claiming we’re not here to do procurement, we’re here to do business.

Sarah Trota`s Big Ideas on Bringing Your Whole Self to Work

sarah-trota at Big Ideas Summit

Sarah has over 20 years experience in the commercial sector, latterly as Employee Relations Manager for Sainsbury’s. She then joined the Board at a large not for profit Housing Group, where she spent seven successful years, enjoying broadening her areas of responsibility. Today she is sharing her insights on ‘Bringing your whole self to work’ at the Big Ideas Summit. Find out more about the Summit and gain access to exclusive videos, interviews, articles, discussions and more.

Procurious asks: Sarah, you’ve been the employee relations manager at Sainsbury’s, the HR director at Waterstones and have held a board position with the NGO Circle Homes, it’s an impressive CV, tell us a little bit about what you’re working on now.

Sarah: I have set up my own offering, sarahtrotaalchemy, which offers organisation level consultancy, executive coaching and leadership intervention. My experience enables me to quickly spot the ‘word from the trees’ which enables acceleration of positive outcomes. I have a unique approach which is commercially driven, with people as the focus of positive outcomes.

Procurious: At the Big Ideas Summit you’ll be part of a panel discussing ‘bringing your whole self to work’. Do you feel like some businesses have created a organisational culture where people are not able to be themselves at work?

Sarah: For sure. Culture is simply the collective ‘way we do things around here’. Organisations need to stay tuned in (through employee surveys and discussion) on the reality of how things are. It’s a real challenge for senior leaders, who in their very senior roles can become isolated to ‘how it really is’, and often can be surrounded by leaders who maintain the status quo. Over time this can become quite damaging when culture becomes institutionalised.

Procurious: One of the things we’ve spoken about a lot at Procurious is the need for procurement professionals to develop their own personal brand. Have you got any insights around this you’d like to share with us?

Sarah: Brand is important. Brand is the external (and internal) perception of you, your organisation and your profession. Perception is a vehicle for ‘setting your stall out’ and as we now know authenticity is really important, commercially and to drive employee engagement. Shifting perception (Brand) is the work to be done, and needs to start with a reality check of measurement. The measurement can then helpfully target and prioritise what needs doing, and also help to keep track of progress.

Procurious: You won the the HR Director of the Year at the Personnel Today awards for you role at Circle Housing. We read that one of the main projects you oversaw in your time there delivered more that 1.5 million pounds in savings through HR efficiency improvements. Can you tell us a little about that project?

Sarah: I was really fortunate last year to be a judge for the annual awards for the UK overall HR Director of the year, and the finalists had delivered some really significant outcomes across different sectors. However, most organisations are commercially driven (even in not for profit organisations that measure SROI) and HR Directors are part of an executive team that are jointly responsible for delivering commercial success. I think the award that I won, recognised the commercial benefit that had been delivered from the transformation outcomes, which in the social housing sector were leading edge at that time. The 1.5m you mention was a smaller HR project that involved a complete overhaul of the recruitment process and shifting some mandatory training to an e-learning platform.

Procurious: We’re reading a lot about more flexibility in the workplace. People are working from home more and we’re starting to see firms implement innovative HR policies like unlimited leave programs. Are these sorts of changes something that you think will become business as usual in the HR space?

Sarah: I think that as human beings we broadly do what we think is right, and what will deliver positive outcomes. Engaged people deliver successful outcomes, and organisations need to measure levels of engagement and critically, identify the levers for engagement. Most organisations have big challenges and identify what they believe will deliver positive outcomes. People are key to that agenda, and in order to tap innovation and engage the whole workforce, then different ways of working will emerge and deliver successful outcomes. The successful outcomes will then deliver change in working practices. 

Andrew MacAskill`s Big Ideas on Dinosaurs In The Boardroom

Dinosaurs in the boardroom

Andrew MacAskill was once Managing Director at The Source, a sister company to Procurious and The Faculty. Andrew built the organisation from scratch into a leading procurement and supply chain industry search practice. A move to London saw him take the helm at Executives Online, the aim? To Transform Executive Recruitment.

Andrew will be attending the Big Ideas Summit on 30 April, to hear his Big Ideas on attracting and retaining talent join the Group!

Procurious asks: We particularly liked your post [on Procurious] about dinosaurs in the boardroom – could you talk about what needs to be done, the profession’s inability to change etc? 

Andrew: Firstly, business leaders need to confront the brutal facts and have acceptance that the world of work has changed for good.  This can be hard when your previous successes were built on previously considered solid and proven foundations that no longer exist.  However, to avoid the fate of the dinosaurs it is entirely necessary for the progression of yourself, your team and your organisation that you are agile and adapting to change constantly.

Procurious: At Executives Online (your Executive Recruitment & Interim Management Company) you are using science, craft and technology to de-risk critical hires, and to attract top talent. Those are some suitably Big Ideas! Can you tell us more? 

Andrew: Executive Search is a classic example of an industry that is rife with dinosaurs!  In essence at EO we believe that the traditional search model is broken and have spent the last 18 months disrupting the industry with a fresh approach that de-risks our clients critical leadership hires through the use of our executive-intro™  platform.  The platform is accessible via an app that allows you to review a shortlist confidentially from anywhere in the world and provides candidate insight through the use of video’s, role specific behavioural testing, benchmarking and competency testing. 

Procurious: How does social media and networking play a role in today’s hiring procedures/and then retaining said talent?

Andrew: Social media now plays a vital part on both sides of the hiring equation.  When we are headhunting top leadership talent for our clients the first thing that the potential candidate does (often whilst we are still on the phone call) is to start researching the hiring client and leadership team online.  This means that everyone should invest in social media all of the time to build strong personal and company brands – it is far more than just a job hunting channel for candidates and can help you establish your group as an employer of choice that holds on to their superstars.

Procurious: How is people management and culture changing? We’re hearing more and more about changing attitudes to flexible working, charity work, other incentives etc.

Andrew: People management is becoming more transparent, less autocratic and more authentic.  The changing world requires a collegiate bond and trust across the workforce to gather together and succeed in the challenges and opportunities ahead.  Culture is becoming an ever more important factor in how candidates select employers – generation Y in particular also favour those organisastions who they view as good “corporate citizens”.

Procurious: What value can truly strategic procurement bring to organisations? 

Andrew: A huge amount – procurement leaders are uniquely placed to take a view and add value across the full value chain.  Having a CPO at the table during risk management strategy discussions, mergers and acquisition events and strategic alliance engagements is vital to commercial success. 

Procurious: Which companies are innovating right now? (Whether that be in procurement technology, people management etc.)

Andrew: Inspired by the likes of Basecamp and WhatsApp the tech start-ups in London across areas such as Old Street and Shoreditch are throwing out the traditional people management rule book and work completely against outcomes.  They are flat in structure, have no dresscode, no fixed hours, no fixed holiday allowance and minimal internal meetings.  The approach is obviously working as tech start-ups in London are receiving more funding than ever and attracting top talent from the larger players. 

Procurious: Why should other professionals make time in their diaries to participate in the Big Ideas Summit?

Andrew: The Big Ideas Summit is an industry first that will benefit all involved.  Dedicating time to explore ideas with peers and dream a little is healthy and allows you time to reflect on the industry, your career and the future.  I have known the team behind the Big Ideas Summit for many years and can recommend the investment of time for any serious procurement professional with absolute confidence.

Procurious: And finally, gaze into the crystal ball. What’s your Big Idea for 2030? What can be achieved, what has the potential to be a true game-changer?

Andrew: My big idea for 2030 is to turn the talent acquisition industry on its head through focussing primarily on behaviours over technical skills.

Hear from 40 of the world’s biggest influencers and thought-leaders. Join the Big Ideas Group to access exclusive content from the event. 

Sigi Osagie`s Big Ideas On Bringing The Real You To Work

Sigi Osagie, author of Procurement Mojo

Sigi Osagie arrived in the UK as an African immigrant with holes in his shoes, penniless and no address book. Fourteen years later, he was a global director in a FTSE250 blue-chip multinational. Today he works as a writer, speaker, business adviser and coach, drawing on insights from his atypical life journey and career success to inform and inspire others.

Ahead of Procurious’ Big Ideas Summit on 30 April, we caught up with Sigi to get his opinions on the development of a procurement brand, to discuss his thoughts on bringing the ‘real you’ to work and find out more about his new book, Procurement Mojo – Strengthening the Function and Raising Its Profile. An excerpt of said book is available to read here.

Procurious asks: You’ve just released a new book titled Procurement Mojo. Tell us about the title of the book. What exactly is Procurement Mojo?

Sigi: “Mojo” is about our ability to be the best we can be and attain success. And we should all be aiming for that; because we only get one life to live, and life is not a dress rehearsal – we won’t get the opportunity to live life again.

Most of us will spend most of that lifetime at work. So bringing out our best selves in the work we do is part of our personal success.

For Procurement folks in particular, it’s vital; because purchasing is a people-centric activity – our ability to manage ourselves effectively and nurture productive relationships with others is a critical component of our work success.

The title “Procurement Mojo” brings those two things together – finding our mojo in the Procurement work we do. That’s exactly what the book does: it shows readers how to up their game and get the Procurement function firing on all cylinders.

Procurious: In your book, you discuss ‘procurement effectiveness’ as one of the key tenants to procurement success. Can you provide us with some background to this concept?

Sigi: In Procurement Mojo I explain that ‘Procurement effectiveness’ is the route-path to sustainable functional success. Effectiveness is central to success in any realm of life. It means doing the right things to achieve our desired outcomes.

In some senses, it’s quite a simple notion to grasp: if your desired outcome is to head off to your right, then you take a step in that direction; if you want a clean car, you wash it yourself or take it to the carwash; if you want some dangerous excitement in your marital life, you get a lover.

The outcomes most Procurement functions want are not as simplistic as having a clean car or marital excitement. But the same basic tenet applies – do the right things, or take the right actions, to achieve what you want.

Procurement wants more relevance and recognition in the enterprise. Many Procurement functions still focus their actions entirely, or principally, on “cost savings” and other rudimentary elements of purchasing. Or they invest significant resources on “transformations” centred on process or systems enhancements. But they pay scant attention to what matters most: people.

The challenges that hold most Procurement functions back tend to be people-related or ‘soft’ issues – organisational cultures that don’t adequately recognise Procurement’s value; egotistical or ineffective executives who make short-sighted decisions; talent gaps inside Procurement; territorial stakeholders outside the function; and so on.

If the actions we’re taking in our Procurement approach don’t address these root-cause issues robustly, then they are not the right actions to focus on!

This is one of the simplest indicators of the inherent level of Procurement effectiveness.

Procurious: One of the issues that really jumped out at us from your book was the discussion around developing a procurement brand. Can you provide some insight into the importance of developing a procurement brand both within a business and externally with suppliers? 

Sigi: A superb Procurement brand is the pinnacle of functional success. Nurturing a credible Procurement brand requires an integrated approach internally and externally, which is part and parcel of improving effectiveness.

Everything we do properly in the first 4 steps to enhance Procurement effectiveness – the organisation; the enablers; the supply base; and the performance framework – helps nourish the Procurement brand, within the enterprise and with suppliers. Additionally, it is necessary to be organisationally savvy and apply some marketing approaches, like incorporating customer-centricity to Procurement’s ethos and leveraging effective PR.

It is important for Procurement people to grasp this, because perceptions can often be more important than reality. And it is the perceptions people have of Procurement that shape Procurement’s brand image.

Procurious: Some of our member have suggested that the ‘pay to stay’ scandals at Premier Foods and the ongoing saga with Tesco’s supply chain has damaged the procurement brand across the board, do you feel this way?

Sigi: I understand those sentiments. And I agree with the requirement for ethical practices. However, I’m not sure how damaging it’s been for Procurement as a profession; because the average man on the street knows “Tesco” but doesn’t have a clue what “Procurement” is.

I think some people in the professional class might have raised an eyebrow, but I imagine many of them are mature enough to recognise that such ethical issues are likely to stem from, or be sanctioned by, the top team, not just the department functionally responsible. A fish rots from the head down; and I think most people know this.

It’s more likely that Premier Foods and Tesco have suffered much greater corporate reputational damage than any damage the Procurement brand might have sustained. 

procurement-mojo-by-sigi-osagie-og

Procurious: At the Big Ideas Summit you’ll be discussing “Authentic Leadership and the Importance of Bringing the Real you to Work”. Can you provide us some background on this concept and why you believe that encouraging people to be themselves at work will facilitate a more effective work place? 

Sigi: I’ll be talking about the importance of ‘people’ issues to Procurement success, under the summit theme you mention. I’ve somewhat indicated why this is important in my response to your first question.

I should add that when we manage organisations in ways that don’t release people’s enthusiasm, energy, excitement, emotion, effort and expertise – what Charles Handy called the ‘E’ factors – it’s a ‘lose-lose-lose’ situation.

It’s a loss for the individual who gives us more of their lifetime than they spend with their family, because we don’t help them expose their true potential and abilities to excel. It’s a loss for the organisation, because we miss out on the opportunity to leverage those abilities for enterprise success. And it’s a loss for society at large, because, in the end, societal development is dependent on our collective abilities and efforts.

We can certainly do more in this regard, and attain greater success for more organisations by helping more people find their mojo.

Sigi will join 40 influencers and thought-leaders at the Big Ideas Summit on 30 April. You can attend ‘digitally’ by registering on our Group page. Stay tuned for exclusive video interviews, articles, discussions and more.

CIPS David Noble: Big Ideas On How Procurement Will Seize The Day

CIPS David Noble will be speaking at the Procurious Big Ideas Summit

David Noble was appointed Group Chief Executive of The Chartered Institute of Procurement & Supply (CIPS for short) on 1 June 2009. He’ll be appearing as one of our 40 thought-leaders at Procurious’ inaugural Big Ideas Summit.

Click to get involved and submit your questions to David

Procurious asks: How is the new Chartered Procurement and Supply Professional status encouraging professional development?

David: CPD is critical to Chartered Status.  There is a need for some roles in procurement, particularly at a senior strategic level to raise their skill levels beyond MCIPS and keep abreast of new thinking in the profession.  A professional with Chartered Status will lead procurement teams and have influence at board level as well as across supply markets by delivering innovative sourcing solutions. A higher-level status than MCIPS, those with Chartered Status will be qualified up to postgraduate degree level and be able to understand institutional risk and contingency approaches in all parts of the organisation, how the supply chain affects innovation, and risk sharing strategies throughout the business. Professionals who hold this status will be the most sought-after talent and those who will take the profession beyond its current boundaries.

Procurious: Is corporate social responsibility still relevant in a world of stringent budgets?

David: Being commercial and sustainable go hand in hand. To have a long-term sustainable successful business, CSR, responsible procurement, and environmental issues have to be considered.  Most of all it just makes good business sense to keep our energy bills to a minimum, or reduce our landfill costs.

It’s a reality of modern life that we have to take into account sustainability and CSR. Not doing so is a risk in itself which could result in damaged reputation, loss of market etc. It is imperative in the public sector – there are targets to reach in local government action plans and at national level. In economic terms, it is far better for a country as a whole to adjust and adapt now to become more sustainable and take into account environmental and CSR issues than to deal with them further down the line. There are already increases in tax on landfill waste, fuel, and disposables. These taxes will become greater as time goes on, as will the fines imposed on companies for abusing the evolving laws relating to environmental and CSR issues.

And then there’s consumer pressure. You only have to look at what happened to Nike when it was revealed to consumers that further down the supply chain, workers in the Far East were working in horrendous conditions. It resulted in mass marches and demonstrations outside NIKE stores in the US, resulting in a damaged reputation and a considerable loss of market share.

It’s time to consider what it is your company cares about; what it’s objectives and key drivers are; and how can these be achieved and strengthened to achieve the most sustainable outcome. How can you prioritise and find an opportunity to do things differently?

It’s not commercial issues versus sustainability issues; it’s the same sort of argument as commercial versus quality. Implementing sustainability itself is not an end point. Nothing is sustainable indefinitely. What should be achieved is a more sustainable option. It needs to be continuously monitored, updated, and improved. There has to be a balance, and it’s about the best balance with regards to the priorities and situation of your organisation. Anything that reduces resources, reduces waste, and increases efficiency is a win/win in terms of optimising sustainable and commercial benefits.

Procurious: In this time of economic uncertainty what can organisations do in order to mitigate risk down the line? 

David: I firmly believe that having professionally qualified people in these roles will help to safeguard organisations against risk.  Procurement professionals are required to horizon scan, and do deep dive audits into their supply chains to get under the skin of what’s really going on.  More than ever, it’s important that we understand our political and economic environment and its impact on business.  Recovery from the 08/09 recession has been one of the biggest challenges of the past century for business.  As the Eurozone faces a potential triple-dip recession and China and Brazil’s growth is slowing, it’s clear that we are still nowhere near out of the woods.

We have worked on risk tools over the past few years to better equip procurement professionals to understand their environment and manage risk.  The CIPS Risk Index quarterly reports helps you to understand the risks to which your supply chains are exposed. You can use the CIPS Risk Index Quarterly Report as an early warning of changes in the macro environment that may affect suppliers and your supply chain. You can then drill down from a global, quarterly, headline figure to a regional and country level perspective, enabling you to develop robust risk management strategies and mitigate against risk.

Procurious: Can you discuss the impact of supply chains in modern-day slavery? (David was invited to the Vatican to witness the signing of a bill to eradicate slavery by 2020, and the recent stories in the media surrounding the Indonesian fishermen). And looking forwards to procurement in 2030, what struggles do you hope we’ll have overcome?

David: Like most professions, old parameters are changing and there is a need to adapt to survive.  Procurement and supply is especially so and in our belief it has reached a significant crossroad.

Two hundred years ago accountancy was strictly regulated because there was a burning platform: incorrect submissions of company accounts led to investor misery and fraud, so the government acted.  Our burning platform is the supply risk side getting further out of control and people being harmed. In that sense, this profession is no different to accountancy – in fact you could argue the public good is more directly affected.  Poor quality food, modern corporate slavery and procurement fraud affect many more people across the planet and the institute does not believe the issues we hear about on an almost daily basis will ever be solved until licensing is embedded.

With the hard work and dedication of thousands of procurement and supply chain professionals, our perspective has now changed beyond all recognition, as global companies experience seismic shocks to their earnings and share prices when a supply malfunction occurs.

We have witnessed some unprecedented events in recent years, from natural disasters such earthquakes and floods alongside numerous product recalls based on faulty component parts and therefore putting consumer safety at risk.  Fraud, corruption and the mis-management of supply chains have caused untold issues and reputational damage for organisations as well as endangering human lives.  Certain sectors have become synonymous with poor supply chain practice from the garment industry through to conflict minerals in our mobile phones and laptops.  According to the World Bank corruption undermines our prosperity by imposing a cost equivalent to 5 per cent of global GDP (or $2.6 trillion –World Economic Forum) every year. It adds up to 25 per cent of the cost of procurement contracts in developing countries and can add up to 10 per cent to business costs globally. They estimate that over US$ 1 trillion is paid in bribes each year. Corruption also facilitates organised crime and terrorist activity.

Accountability for inadequate or exposed supply chains now goes right to the top, with the company’s reputation on the line.  Good corporate supply chain governance demands accountability and to have accountability means the appropriate authority and capability to act.

What does all this mean in terms of removing some of the poor practices we are still witnessing across global supply chains – whether it’s child labour, inhumane working conditions, forced labour and slavery and not least the ever rising issue of procurement fraud?  There is no doubt that the procurement and supply profession has a unique opportunity to step up to this challenge and effect real change – stepping up as a professional community.

Procurious: And finally, is there anything you fear will hold us back?

David: We’re not always very good at shouting out about our successes.  Procurement has much more to offer beyond savings and a clear communication channel must be forged with the CEO.  But this kind of communication between CPO and CEO is still relatively rare in business. Booz and Co in a recent report highlighted that less than 5 per cent of Fortune 500 companies have a CPO in their C-suite. In a separate report, Ardent Partners Supply Management Experts highlighted that less than 20 per cent of CPOs globally report to their CEOs.

So, if you work in one of the 80 per cent of companies where procurement has no direct line of communication to the top, you need to find a way to make yourself heard.

Procurement professionals need to talk the language of the business, get out more and become story tellers to demonstrate the wide reaching value they offer. Understand how your organisation  defines value and growth. This goes way beyond the terminology and knowledge you need for your day-to-day job. It extends to learning what is important to customers and to the other people who work in your organisation – particularly in areas that generate the most revenue.  There is a real opportunity for procurement to seize the day.

For more information about CIPS head to their website.

Discover who else will make up our 40 influencers at the Big Ideas Summit on 30 April. Click to join the Group on Procurious and get involved.

Mark Perera’s Big Ideas on startups, technology & disruptive procurement

Mark Perera of Old St Labs

Mark Perera fronts Old St Labs – builders of technology that enables enterprises to forge deeper and more valuable relationships with their buyers and suppliers. He will be appearing at our inaugural Big Ideas Summit on 30 April, the world’s first digitally led event for procurement. Mark – no stranger to innovation himself, talked to us about his world and shared some of his own Big Ideas.

Procurious asks: Mark, you’re heavily involved in the London start-up scene. How are we seeing this disruptive start-up mentality breaking into the procurement world?

Mark Perera: The London startup scene is really booming at the moment, and it’s great to be a part of it. There have been some real success stories coming out of London, and we’re now thought of in the top tier of startup cities, behind Silicon Valley and New York City.

In terms of how the startup community is disrupting the procurement scene, I think the best is yet to come. We’ve seen some great companies like C2FO changing the game in the B2B and the finance sector, but I don’t think we’ve seen truly disruptive technology hit procurement yet.

Procurious: How about Coupa and Procurify? Aren’t they the flag bearers for the new disruptive model of procurement?

Mark: What Coupa and Procurious have achieved is impressive, but I’m not sure I’d call it disruptive innovation. Coupa is probably disruptive for Ariba because they are doing what Ariba does but they are offering a better user experience; however, I’m not certain they are disrupting the way that procurement operates.

Procurify is similar story. By offering a more competitive price point, they have opened up the market for small and medium organisations to start leveraging procurement technologies. However, the services they are offering are not unique in the market.

If you look at what C2FO has achieved, you’ll see that they have changed the way companies are managing working capital. At Old Street Labs we’re looking to fundamentally change the way businesses collaborate, we don’t see why procurement software should miss out on the brilliant user interfaces and technology platforms that companies like Google and Facebook have implemented.

Coupa and Procurify may have slicker interfaces and more affordable price points, but they are essentially solving the same problem that Ariba solves.

Procurious: You are one of the founders of the Procurement Leaders Network, a business that was established more than a decade ago, how have you seen procurement technology come along in that time?

Mark: If I was to sum procurement technology over the last decade in a word, it would be “consolidation.” Ariba bought Procuri, then SAP bought Ariba. This is a trend that has been replicated across the industry. Prior to being bought out by IBM, Emptoris had acquired some smaller firms. Very few new tech companies make it through without this happening.

If someone comes up with a great idea, it is quickly bought out by a larger firm. Ariba bought Procuri for its cloud capability, which is the same reason that SAP went on to buy Ariba.

I think the most interesting developments in tech in the past few years have been around the collaborative models of companies like AirBnB and Uber. It will be exciting to see how this approach and the sharing economy will be leveraged into the procurement world.

I think there will be some drastic changes over the coming years as new, slicker, more nimble firms begin to fill gaps left by the large ERP providers. The real changes will occur when we stop looking for 10 per cent improvements and starting using the Google’s 10X mentality (changing the way businesses run to enable improvement by a factor of ten).

Procurious: Tell us a little about your latest venture, Old Street Labs.

Mark: Old St Labs, is a software company that enables enterprises to forge deeper and more valuable relationships with their buyers and suppliers. Our first product is called Vizibl (http://vizibl.co/) it’s a cloud-based platform for individuals and teams to deliver a real return on their commercial relationships.

We’ve created an environment in which buyers and suppliers can work together in productive collaboration. We want both buyers and suppliers to understand each other in as much detail as possible and to be able to match the right individuals, teams and skills to the right tasks.

Vizibl enables you to carry out effective Performance, Innovation and Risk management through intuitive dashboards and reporting.

Procurious: So if unlocking innovation is the key to procurement success, can you point out any organisation that you feel has done this well?

Mark: I’m not sure that unlocking is the key to procurement success, but it certainly is a driving factor. The businesses that have done well to date are generally from the FMCG and Automotive sectors. It’s hard to argue with Apple’s track record of developing innovative approaches through close relationships with its suppliers. Apple continues to produce great products that sell, and they can do this because they are close to their supplier base. I’d say that makes them the benchmark from an innovation POV.

There are a lot of businesses that achieve innovation in isolation but struggle to sustain and integrate it into their business culture. A big part of this is that firms have not found the right technology to support the process. Often, people are forgotten in the process, so the challenge remains to build a simple, beautiful, powerful business tool that can support organisations in their efforts to be more innovative. We believe we’ve achieved this with Old Street Labs.

Procurious: Big data, wearable devices; what’s next in procurement technology?

Mark: This is an interesting question. I don’t think we’ve really seen big data in procurement yet. There have been attempts, but we’ve yet to see a truly great solution. Part of this is that procurement struggles so much to manage their own internal spending data. The complexities of big data solutions seem a step too far. At Old Street Labs, we’re currently looking into a big data solution for procurement, so watch this space.

Big data is a huge opportunity for procurement, but I think first we need to focus on building technology that people love to use. After years of clunky experiences on SAP and ORACLE, our expectations of procurement technology are pretty low. But across the tech industry, we are starting to see applications that are a mixture of behavioural science and technology—this is where the future of procurement technology lies: in building something that truly resonates with users.

In terms of wearables, I think we need a little time to see how these technologies work before we understand their commercial potentials. There is still so much that we can do with mobile devices that we aren’t doing yet, and these devices have been around for a decade. The Apple watch looks like a huge opportunity, but, from a procurement point of view, we really haven’t utilised the mobile phone to its full extent so it could be best not to get too far ahead of ourselves here.

Want to hear more from Mark and our other Big Ideas influencers? Join in with the discussion by registering on our Big Ideas Summit Group

Samantha Coombs on the challenges facing Millennials going into procurement

The challenges facing millennials going into procurement

Samantha Coombs will be joining us at the Big Ideas Summit on 30 April. A gathering of 40 of the most influential thought-leaders from across the procurement profession and beyond. Here she discusses the challenges facing today’s young professionals, and the skills they bring to the table.

Procurious asks: Can you speak to us about the challenges facing the Millennial workforce. Competition, the contract vs. perm debate etc.

Samantha: Competition is high now that there are more procurement professionals than there used to be 10 years ago when purchasing was more a transactional-operational function. Nowadays many businesses are seeing the value add that procurement teams bring in terms of benefits, quality and cost savings.

The contract market tends to be highly counter-cyclical, so in a boom, you may find that the market is actually tougher than in a bust.

For me, I became a contractor after being made redundant from a perm job when the company outsourced the function over-seas. It was bad timing and the economy was in a state of recession. I found it difficult to seek perm employment due to permanent recruitment freezes.

This left me with the contract option of working on projects which gave me an advantage to gain a wider range of experience in different industries.

Job variation leads to skills. Contractors normally take contracts ranging between 3 and 9 months in duration. By working on shorter contracts you will gain experience faster, work on more varied projects and hopefully get some big-name companies on your CV. Changing projects on a regular basis gives you an opportunity to update and further skills and to learn from the best. In general, contractors have more advanced skills than their permanent counterparts, which will give your career a boost.

In my experience contractors are seen as if we’re all about big money, having no commitment and companies often use contractors because they want us to transfer their skills to their permanent staff, since we often have a higher level of technological competence.

Every contractor has a different story and motivation.

Contractors who undertake projects allows them to build business contacts and if a client likes your work they will be happy to hire you again or recommend you.

Procurious: What have you found to be the disadvantages of living life as a contractor?

Samantha: Job security. Entering a weaker market, termination of your project, or having skills that are out of demand are all threats to your job security.

Administration. As a contractor you will always have more administration work in your spare time than you would if you were a permanent employee. You must read up on how umbrella companies work, and may also need to hire an accountant to ensure you are legally compliant and tax-efficient.

Applying for contracts. Imagine job-hunting every six months; this would drive most people crazy, and it’s worth keeping this side of contracting in mind.

Short-notice holidays. Essentially, these don’t exist. You need to plan your holidays for when you have gaps between jobs. Sick days are a thing of the past, so we must ensure we make provisions for any eventualities.

It is not a myth that you can earn vastly more as a contractor than you could as a permanent employee, but it’s not a given either. A senior permanent employee can earn nearly as much as an equivalent contractor, but will, in addition to his or her salary, have a range of benefits that aren’t offered to the contractor. These can include pension schemes, private health care, car allowances, professional development funds, to name a few; however, such roles do tend to be very senior, and are few and far between.

In many ways, the greater earning potential that a contractor enjoys is compensation for the lack in job security

In my experience recruiters see contractors as having little commitment and are afraid of taking on a contractor in a perm role because they fear the contractor will leave after a short period of time and find something with more money.

This is very frustrating as is NOT the case. Contractors move from the temp to perm side because motivations change, and we want and deserve all the benefits that permanent employees receive.

What happened to equal opportunities?

Procurious: What [skillset] do today’s professionals bring to the table, that perhaps the CPOs of yesterday lack?

Samantha: Candidates from a contracting background bring a fresh pair of eyes, are used to meeting new people thus dynamic in personality and thrive on networking, gumption to push boundaries and challenge the status quo, and aware of modern technologies, and can hit the ground running.

Procurious: What needs to be done to transform the profession, and bring it up-to-date?

Samantha: A ‘Try before you buy’ Experience Ramp solution. It would provide both sides an opportunity to trial working with each-other.

This could be offered on a reduced yet affordable pay rate over a period of 11 months giving the candidate adequate time to understand how the business works operationally, align their work to the strategic objective and deliver in terms of what is required.

Procurious: Let’s talk ‘Brand You’. How important is it to have a clearly defined brand today?

Samantha: It’s vital to have a strong brand for recognition of quality, knowledge and performance you can deliver.

Weakening the brand makes you disappear down the bath plug.

Procurious: Let’s talk innovation – who/what is innovating in the procurement technology space right now?

Samantha: Procurious is innovating the way procurement professional network and widen their network by bringing us under one roof, so to speak

Apple launched new Apple watch which will affect how businesses use digital tools/software

Procurious: Is more innovation needed in the building and maintaining of supplier relationships?

Samantha: I believe there people are either born personable or not. It’s a natural flair developed in childhood and adulthood, then put to the test in the work place and developed overtime.

The old ways of supplier building used to be structures and models but it’s too prescriptive and not real. The best method I feel when building and strengthening relationships, is to find common ground, understand the values and opinions of others and be supportive in feeding back between the supplier and stakeholder for example. Establishing ‘partnership’ type relationships will help you leverage more in terms of innovation, technology and trustworthy relationships.

Procurious: Looking forwards how do you see the future of e-purchasing changing/evolving?

Samantha: With shopping sites like Amazon, travelsupermarket.com and other ‘compare costs websites I see procurement coming alive in consumer world without many of them actually realising.

e-Purchasing is replacing the old ways of paper purchase orders and excel spreadsheets generating quotes to a more sophisticated yet easy to use platforms which can house of operational purchasing and strategic projects under one umbrella. Many platforms have bolt on modules such as contract management and catalogue search functions where anyone user can access contracted supplier products that can be delivered directly.

The future will be seeing a reduction in resources required to purchase as the system can do this and a lot more.

Are you a Millennial thinking of joining the profession? Maybe you can relate to Samantha’s experiences? Join us (digitally) at the Big Ideas Summit by registering here and stand-by for a day packed-full of challenging discussion. Learn more about Big Ideas on www.bigideassummit.com

Professor Olinga Ta’eed on Turning Procurement Professionals into Agents of Change

Professor Olinga Ta’eed on the ‘God Metric’, social innovation, the work of the Big Society, and his ideas for 2030.

Professor Olinga Ta'eed interview on social value

Professor Olinga Ta’eed  is just one of our 40 influential thought leaders appearing at Procurious’ inaugural Big Ideas Summit on 30 April. To hear Olinga expand on some of the ideas presented in this interview, why not become a ‘Digital Delegate’ and register for the online event? You can do so here.

If you missed part one of our interview with the Professor, you can read it here:
Professor Olinga Ta’eed’s Big Ideas For Helping Your CEO Understand Social Value

Procurious: You’ve spoken at The Vatican, and have been called ‘The Angel of Social Value’ – does religion have a big role to play, and do we need it to instil a sense of greater good?

Olinga: I must say it was ironic for S/E to be called the “God Metric” by the Vatican Press. Embarrassing and flattering. Financial value is older than organised religion. Religion has long conveyed sentiment long before Facebook ‘likes’ and LinkedIn ‘connections’ appeared. Religion can help set the mood music, and give us attributes to aim at. But it has turned out that religion is a very poor vehicle to articulate in the language of each stakeholder why they should change. It tends to be pious and judgemental – we are good versus they are bad – and so I think the influence is limited but the aspiration is immense.

Procurious: Social innovation: can you tell us what it is, and why it matters?

Olinga: No one, especially me, gives a fig about metrics. It’s the outcomes and what we can do with it that matters. Social Innovation is about delivering positive change in society. It is unfair on procurement professionals that everyone is turning to them to be the agent of change in society merely because they deal with the largest budgets. So we need to arm procurement with instruments that make it easy for them to do their job.

We are now the go-to metric for the Social Value Act 2012 and Modern Slavery Act 2015. Let’s drill down how it works. For the public sector we have UK£ 12 billion of procurement under management in the UK, launching in Spain and other countries, and we only started this in September 2014 after publishing a 250 ‘bible’ on Social Value in Public Procurement! Our proposition was a unique win-win-win-win for all sectors involved. Basically we charge 1 per cent of a contract value to deliver 20 per cent social value.

Our first contract for UK£ 385m in February 2013 for social housing –  we delivered 14 per cent of that value as social value according to independent government reports. The public sector pays nothing so they are delighted. The winning bidder pays 1 per cent which is nothing given variation of contract after award is typically 19-20 per cent. The third sector NGO’s are the multipliers that multiply any resource they receive and thus deliver say 10x the social value that a private company could do for the same UK£ 1. And finally the community are the recipients of all this goodwill.  What has enabled this social innovation – the S/E metric without which procurement would have surveys and narratives to compare oranges and apples.

What we offer for our 1 per cent is measurement, reporting, compliance against your legislation, ideation of social innovation, monitoring of the contract on a monthly basis displayed on a SaaS dashboard, but above all delivery of up to 20 per cent social value. It’s hard to argue against it and for this reason we have a very open door internationally.

Similarly, other social innovation ideas need instruments to make them work. Social Investment Bonds (SIB) are basically a financial bet on a social outcome. But without measuring outcomes and what good looks like, then it’s not possible to accelerate and embed social innovation around us. 

Procurious: Will the outcome of the UK General Election impact on the work of the Big Society?

Olinga: Social innovation industry has trends like all industries. A hundred years ago it was good old philanthropy – you makes pots of money and mercifully feed the poor. About 20 years ago it became Corporate Social Responsibility (CSR) which is transactional – then 10 years ago moved to Sustainability  – now it’s Social Impact because it’s the suffering we have now that matters, and already there is a shift towards Citizenship. Barclays, Nationwide, Imperial Tobacco, John Lewis etc abandoned CSR departments and now call them Citizenship. Whilst in the UK we call blended solutions ‘Big Society’ you will find the term will not be heard again after the elections. It has helped develop our understanding of what works and what doesn’t work, but we have to build on our experience and articulate using more precise language and numbers.

To capture this burgeoning Zeitgeist we have embarked on capacity development initiatives such as the journal of Social Value & Intangibles Review, The World Intangibles Conference 2015 X – Series: a disruptive set of conferences navigating the noise in the social impact market, a free MOOC (massive open online learning) system, heading up EU SEiSMiC Social Value and EU PROCUREMENT Social Value & Transparency in Supply Chains, etc. We are fortunate that no one would dare voice concerns supporting Modern Slavery, or against added Social Value. This is why we have enjoyed cross-parliamentary support in all our work and elections will affect the future. 

Procurious: Finally – in-keeping with the theme of the Big Ideas Summit, looking forward to 2030… What’s your BIG IDEA? 

Olinga: To establish a currency to articulate intangible values. We  consider that Total Value to be the sum total of Financial Value and Social Value. As the $ is the currency of financial value, social impact is the currency of social value. The globally accepted single number index to financial value is called the Price Earnings Ratio (p/e); I have developed the corollary to this – the Social Earnings Ratio (s/e). It is open source (Creative Commons 4.0), free for non-commercial applications and is provided for us all to share in understanding, articulating and making a better future for us all.

If you missed part one of our interview with the Professor, you can read it here:
Professor Olinga Ta’eed’s Big Ideas For Helping Your CEO Understand Social Value

Professor Olinga Ta’eed: Big Ideas For Helping Your CEO Understand Social Value

Professor Olinga Ta'eed on procurement and social good

Professor Olinga Ta’eed has led a life spanning private, public and third sectors which perhaps is most accurately described as “entrepreneur, investor and social activist” (Professor Conlon, Dean of University of Notre Dame,  April 2011). And despite embarking on plans to retire from a successful business career at 48, Olinga remains active and is instrumental in championing social good throughout business and industry.

Olinga is just one of our 40 influential thought leaders appearing at Procurious’ inaugural Big Ideas Summit on 30 April. To hear the Professor expand on some of the ideas presented in this interview, why not become a ‘Digital Delegate’ and register for the online event? You can do so here.

Procurious asks: You’ve spearheaded the Social Earnings Ratio initiative that will see the annual reporting of social value of 1 billion organisations by 2020. First of all can you explain to the uninitiated what this is, and why its important. 

Olinga: Currently there are very sound robust metrics around financial value based around UK, USA and international GAP (general accounting principles). Financial value is measured because it matters. Increasingly all the ‘other soft stuff’ is starting to also matter– social value, personal value, consumer index, provenance in products, modern slavery in our supply chains, animal cruelty, impact investment, arts, etc. So in 2011 we set about developing metrics as robust as financial value to articulate these intangible values. As we know, in business if you can’t measure it – you can’t bill it and so it is with other values in our society.

Modern society is built on sentiment, about how we feel, about our values. It drives consumer purchasing right through to contracts being awarded based not only on price, speed and quality but also on delivering created social value. For example in public sector procurement, as government funds recede they are increasingly looking towards the private sector to deliver the same services into the community through third sector agencies; this is at the centre of UK The Social Value Act 2012, 2 per cent CSR Law in India, Indonesia 2 per cent CSR Law, 2.5 per cent Zakat in the Islamic countries, the Italian 0.5 per cent Cinque Mille, … the so called Big Society concept. To articulate between these blended solutions requires a common currency. We developed that common currency to translate sentiment into financial value. As governments utilise legislation and procurement to transform society, we found ourselves right in the centre of that need to articulate non-financial values.

Our mission is to translate complex inputs into simple, singular measurements of true intangible outcomes, the Social Earnings Ratio or S/E Ratio. 

Procurious: Regarding the 2020 deadline: Is this realistic/what needs to happen to make this achievable?

Olinga: We currently conduct yearly UK or US GAP (general accounting principles) audits of 35 million companies in USA, 165 million in USA, 40 million in China … c. 1 billion organisations in the world.

Unfortunately using traditional social impact metrics (there are 1153) means surveys, translation proxy tables, etc which cost UK£ 5,000 to UK£ 200,000 to conduct and 3-18 months. This has proven to be a  very significant barrier to resourcing the measurement of social value. Imagine the supply chain of a city like Birmingham with 34,000 suppliers, or a housing association with 18,000 suppliers, or of a food retailer with 35,000 suppliers. Who is going to pay for to evaluate these organisations, projects and processes? In any case no one has the time. The typical turnaround from a formal PQQ/ITT to contract award is a matter of days so this is simply not possible.

We set about building the first Model-T Ford of Social Value – fast, cheap, high consistent quality, fit for purpose, accessible to all, and in a lot of cases does not even require the intervention with the target company. Big Data, Social Media and Sentiment Analysis have changed the world of social value measurement. Shockingly, our disruptive metric takes 10  seconds and costs UK£ 5, and can be undertaken on a SaaS platform, Seratio.com, allowing 1 billion organisations to be measured by 2020. This is why we have been labelled as “the fastest adopted social impact metric in the world” (Vatican press, January 2015).

Procurious: How can procurement help CEOs understand social value?

Olinga: Changing CEO sentiment is a 100 year task but changing behaviour is a lot simpler. For example, if s/he wants to get that UK£ 1.5 billion contract, EU directive now says that impact funds must deliver 20 per cent social value. No ifs, no buts. So the driver here is easy. CEO’s are becoming bewildered by the range of KPI’s they have to perform to. It used to be simple – shareholder value and everything else was a slave to that. But now they find if they cough wrong in one part of the world, customers can walk away in other parts of the world due to social media, governments can pick on them for avoiding tax for example, suppliers don’t want to be associate with their toxic brand, etc.

But it’s not only about self-preservation, it’s about good business. To do that you have to articulate ‘good’ in terms that CEO’s understand. So we give them 3 distinct metrics – social value as a percentage of their capitalization ie what it means to their bottom line; and S/E Ratio which is an efficiency score just like the P/E Ratio – they could spend less but get more impact. Finally, and most importantly, we benchmark them against sectors, competitors, globally – no one wants to be at the bottom. 

Procurious: Modern-day slavery and supply chains are intrinsically linked. Do we need greater transparency? 

Olinga: Let’s not mix up transparency with ethics; they are not the same. When a company demands say 3 per cent cut in supplier remittance, they are making a conscience decision to transfer value. In a capitalist framework, financial value is an artefact between the board and shareholders; everyone else is a ‘slave’ to that. Customers, suppliers, community, statutory bodies, environment, staff … detract from dividends. Pay them more (eg tax, CSR spend, suppliers) and you have less to share with your shareholders and your own bonus. But we now recognize that we operate in a multi-stakeholder Citizenship framework, where all this ‘other stuff’ is social value – and they can contribute towards the total value.

So when a company takes out 3 per cent from their suppliers they have made a deliberate and conscience decision to take out value from their supply chain and give it – usually – to their shareholders. What they are saying that their success is contingent on someone else being deprived of their value ie. underpay, poor conditions, etc in their supply chain in a developing country. We however are not here to admonish companies but merely to measure them. Being university backed we are neutral, non-partisan, no agenda of our own. We merely point out that we can measure that you have taken value from the supply chain and perhaps increased your shareholder value by the same. It may be however, that they give the value to their community initiatives – that’s why  we don’t judge. We simply allow them to measure value so they can track transference.

To hear from Olinga (and many others), watch exclusive videos, read more interviews, and contribute to discussions please register as a ‘Digital Delegate’ on our Big Ideas Summit page.

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