Category Archives: Generation Procurement

Taking The Heat Out Of The Resolution Room

If you can’t take the heat get out of the resolution room! Or invite Watson! 

We’ve all been there. Something’s gone terribly wrong with a major customer delivery. Emails are flying around and there are rumours from HQ that “heads are going to roll”.  Everyone concerned has been summoned to “THE meeting” in order to resolve the supply chain issue.

We know what happens next; fists slamming, red faces, an embarrassing lack of data and a lot of verbal ping, pong. Eventually, a resolution is found.

But what happens when Watson is in the resolution room? Could this take the heat out of your supply chain disputes?

 What is a Resolution Room?

A Resolution Room provides the organisation the ability to collaborate quickly to resolve supply disruptions. Users can discuss and resolve issues with other colleagues, business partners, or their suppliers. What distinguishes Resolution Rooms from all other collaboration platforms is Watson.

What does it mean to have Watson in the resolution room?

The big benefit of Watson being in the resolution room is that it recommends experts, provides insight from all data and actionable advice based on learned best practices.  Over time, it leverages Watson’s capability to develop a body of knowledge by learning how issues were best addressed in the past.  This enables greater speed and accuracy in responding to future events.

“Watson provides the opportunity to deliver business value and insights from all of these data insights – structured and unstructured, data from weather patterns, news, D&B and supplier IQ,” explains Joanne Wright, Chief Supply Chain Officer, IBM.

“It does this with speed and accuracy. No more are we saying ‘OK…let’s get the data and meet again tomorrow’ because Watson takes my team’s input and incorporates that into the next iteration as we go.”

Watson In The Resolution Room: A Case Study

IBM Watson is always a room participant, so you can draw on Watson’s expertise using natural language to ask a question, for example: @Watson what is the status of order ABC123?

Imagine the following scenario; A Late Shipment alert in the Ops Center reveals that orders of your most popular drone are in jeopardy because the shortage of the entire supply of a critical part, a lithium battery, has been delayed. You create a Resolution Room to manage the incident collectively.

Watson is in the room.

Whilst your team discusses how best to manage the problem you have the ease of asking Watson questions such as:

  • Which customer has the most sales dollars that will be late?
  • What are the financial impacts of any late orders?
  • Have we experienced this problem before? Who are the experts who have worked on these similar issues in the past?
  • Are there any alternate suppliers for part number 46001?
  • Why is there a shortage of lithium batteries?

Watson can provide answers to questions such as these based on the data available in the data model and in other Resolution Rooms. Learning over time, it becomes smarter and able to provide better insights about your supply chain.

Click here to try a Resolution Room demo. 

Got a big idea you want to push through a big company or simply want to learn more about Watson and the Resolution Room?

Sign up for next week’s procurement webinar, How IBM Built the Cognitive Supply Chain of the Future. hosted by Tania Seary and featuring IBM’s Chief Supply Chain Officer Joanne Wright. 

3 Reasons Why You Should Multisource Your Procurement Software

Choosing new procurement software should be exactly that, a choice! Duncan Jones on why organisations should follow an eclectic, multi-sourcing strategy for their key business applications.

While doing my research for The Forrester Wave™: eProcurement, Q2 2017, I was surprised and disappointed by how many companies I interviewed had bought an incumbent vendor’s eProcurement product without really looking at alternatives. For instance, one source told me “we didn’t choose Ariba, we chose SAP, and SAP chose Ariba”.

That’s a dangerous strategy, often driven by people who are thinking more about their own short-term job security than about their current employer’s long-term success. Yes, there are advantages in buying software from a known source, but those won’t outweigh the disadvantages if the product is deficient, or fails to keep pace with the market.

An existing supplier’s product, such as SAP Ariba, or Oracle Procurement Cloud, may be the best choice for your organisation, but it should be a choice, after you have compared it with leading independent alternatives.

I see a similar bias towards suites driving market consolidation at the moment, such as Determine/ b-pack, Coupa/ Trade Extensions, Tradeshift/ IBX and BravoSolution/ Puridiom. Many clients tell us they want a complete suite to support all their digital procurement, including supplier risk and performance management (SRPM), upstream source-to-contract (S2C) and downstream procure-to-pay (P2P).

Yet our research suggests that very few companies actually implement a whole suite, even if they buy one. I advise most clients to follow an eclectic, multi-sourcing strategy for their key business applications. I don’t mean assembling a solution from 15 different products, but maybe four or five.

For example, you may want one central solution for S2C, embrace two or three P2P products that different autonomous divisions currently use, with maybe one or two additional specialist products for, say, services procurement, or SRPM. This approach may be more appropriate for your organisation because:

  • It may take too long to choose and implement a single suite enterprise-wide. You have to live with obsolete software while you collect requirements, argue about priorities, and then roll the suite out module by module and site by site. Multi-sourcing is a more agile approach, enabling individual divisions to move forward while still allowing you to quickly implement a global point solution to address an urgent need.
  • Suite approaches cause vendor lock-in that is hard to escape. Software decision makers who prize integration over innovation risk ending up with obsolete software. Software giants’ portfolios are of inconsistent quality; they cannot keep all their products at the head of the market. Some, such as SAP SRM and Oracle iProcure, lag so far behind that the vendor decides to replace them. Independent vendors, such as Hubwoo, IBX and Perfect Commerce, may get acquired more for their customers than for their technology. Those customers are trapped in products with an uncertain future, because switching suites involves changing everything at once.
  • You need to be able to take advantage of valuable innovation from new sources.The eclectic CPO is constantly watching for new ideas that can make him more successful and doesn’t care from which direction they come. The suite CPO, in contrast, has to wait for his chosen vendor to spot, implement and integrate that idea. Right now there is some exciting innovation going on in the application of artificial intelligence to the Purchasing domain, particularly in risk assessment and monitoring. Vendors such as Ecovadis, GRMS, Resilinc, and risk methods help customers identify and mitigate risks more effectively than any manual process could do. Smart CPOs will be evaluating these services now and incorporating them quickly in their SRPM frameworks, while their laggardly peers are waiting patiently for their suite providers to catch up.

The bottom line

Smart CPOs should consider an eclectic software strategy. Balance the benefits of intra-suite integration with the potentially greater benefits from smart, easy-to-use, flexible specialist products. Look at what innovation is available in the market before you woodenly replace your existing product with the same vendor’s new offering. And even if you do base your digital procurement strategy on a suite, ensure you complement it with specialist products that fill gaps or extend it into new areas.

The Best 10 Minutes of Wasted Time I Ever Spent

Have you ever sat in a meeting and thought, ‘I am never going to get these 10 minutes of my life back’? I had that experience and it turned out to be the best poorly-used time I ever spent.

During my time as a procurement consultant, I once met with a client who wanted to introduce me to a supplier she highly recommended. She pulled out a two-inch thick binder filled with supplier business cards – she had accumulated years’ and years’ worth of prized intelligence. She couldn’t remember the supplier’s name, so she carefully flipped through the binder, one – page – at – a – time, hoping to recognise their logo or card design. By the time she found the card 10 minutes later, I couldn’t stop thinking about the number of binders and stacks of business cards sitting under people’s desks filled with intel, but not accessible to anyone else, not leveraged by procurement teams, and not benefiting suppliers.

I copied down the supplier’s information and handed back the card, as she didn’t want to lose their contact information. I walked away asking myself:

What innovation constraints did it create that no one else could access the information?

What would that loss of knowledge do to the organization when that person left the company?

How much time is being spent searching for information in disparate sources of data?

My Break Through Moment

That meeting would become the genesis of tealbook, the company I founded to deliver actionable supplier intelligence to enterprise. Of course, that 10 minutes was also only just the beginning. I spent the following 8 years seeing the same challenges across Fortune 100 and emerging companies looking to reduce process friction among stakeholders while making faster supplier decisions. I looked for a solution, but nothing was available. This was my career break though moment.

I have met many procurement professionals with a strong inner entrepreneur. Stepping out of the security of a corporate function to start a business is scary and requires the bandwidth for risk taking. You can satisfy your passion for entrepreneurship by getting involved in start-ups looking for guidance and advisors as they grow their business. But if the urge is too great to resist, you should take the chance. Before you do, here are a few things that might help shape your future venture:

  • Pay attention to inefficiencies in your day to day work life and validate them with your peers. Understanding your space and being an expert in your field will help shape your business and bring confidence to future clients and investors.
  • Spend some time building a business plan. What is your business? How are you going to develop it? How will you monetize or where will the capital come from to support its growth? Joining an accelerator program while keeping your corporate job (look into The Founder’s Institute) can be a great way to shape and validate your business idea.
  • No one will be as passionate about your idea as you are – keep that in mind as you are reaching out to potential customers and make sure your value proposition is strong enough for someone to champion it and make it a priority (you know best that championing and getting the budget to bring in a startup is not easy).
  • Think about your future and where you want to be. If building a business is part of it and makes you want to wake up every day (and work around the clock!), then go for it and give it your very best shot! You will never regret trying and you will own its success!

Sometimes I think about where inspiration comes from. It is often the simplest moments or actions that lead to the creation of solutions, and the founding of some of the best companies.

About Procurious’ Powered by 5: Procurement Entrepreneur – Tealbook Founder and CEO Stephany Lapierre  

That one meeting would become the genesis of tealbook, the company Stephany founded to deliver actionable supplier intelligence to enterprise. Stephany knew that if she could get those business cards out of her client’s binder and into a centralised, intuitive cloud-based platform, the client would be able to leverage the full capabilities of her suppliers, her peers would have instant access to her rich knowledge legacy, procurement would use the intelligence to make faster decisions, and her company would be able to preserve all of its supplier intelligence through turnover, reorganisation, etc.

Three years ago, Stephany put the pieces together and since then, her team and has collaborated with customers to gather requirements, build out functionality, design a social media-inspired UI, and lay the foundation for incorporating AI capabilities. With every new enterprise client, tealbook gains new insight into the upside potential of accessible intelligence, and every new supplier that creates a profile expands the understanding of buyers across companies and industries.

7 Procurement Trends To Watch Out For In 2018

Which hot topics and trends will everyone in procurement be talking about in 2018…?What’s the buzz in 2018? We’ve done a spot of investigating to identify all the hot topics the procurement world is excited (and concerned!) about in the coming year…

1. Technology Hype Won’t Let Up

Steve Banker, writing for Forbes, concurs stating that “emerging technologies such as blockchain, 3D printing, autonomous mobile robots, IoT, machine learning, and related technologies continue to get a tremendous of amount of publicity.

According to Supply Chain Digital, “The pace of innovation is picking up steam at an exponential rate.

“Robots, self-driving vehicles, electric trucks, blockchain, the Internet of Things (IoT), and new mobile-enabled categories are all poised to explode onto the scene in one form or another.

“It’s hard to predict what’s real and what will fade away, but expect 2018 to become a year of heavy innovation for supply chain leaders, even if it’s experimental.”

Vivek Soneja, writing for EBN online  asserts that “Blockchain capabilities have transformed collaboration across trading partner networks”. He believes Blockchain will “enable much tighter collaboration across supply chain planning and execution decisions. ”

Read our latest articles on Blockchain by Basware’s Paul Clayton and  InstaSupply’s Simona Pop.

2. Brexit Will Continue To Cause Disruption 

“While 2017 was the year of Brexit uncertainty, 2018 will be the year where things start to change,” asserts Francis Churchill on Supply Management.

Last year CIPS revealed that 63 per cent of EU companies planned to move some of their supply chain out of the UK as a result of the decision to leave the single market and customs union.

“The slower-than-expected progression of Brexit negotiations has put off business investments in current or new UK operations,” explains Gary Barraco on Global Trade Mag. Recent readings on economic growth showed investment by companies to be flat in the second quarter.

“Supply chain executives are voicing concerns about tariff and quota changes, hoping to keep trade open and flowing as it does today. For manufacturing to remain strong, the raw material imports from Asia need to remain duty and tariff free, as they are currently in the customs union. Costs could go up without the trade advantages, leading to higher export costs from the UK.”

We discuss the implications of Brexit for procurement in this Procurious blog. 

3. Cognitive will reign supreme

Global Trade Magazine predicts that “by the end of 2020, one-third of all manufacturing supply chains will be using analytics-driven cognitive capabilities, thus increasing cost efficiency by 10 per cent and service performance by 5 per cent.”

And IBM predict that, by this point, all of our important procurement decisions will be made with the assistance of artificial intelligence. We know that our teams must “transform or die” if we don’t want the function reduced to the back office,  facing extinction.

But if you’re still feeling a little overwhelmed by the magnitude and potential of cognitive technology or simply wondering how to get started, this Procurious article has some great advice.

4. Transparency

Paul Martyn , writing for Forbes, spoke to Sue Welch, CEO, Bamboo Rose, on her supply chain predictions for 2018, discussing why “transparency and sustainability will be practiced with more vigor in 2018.”  She said ” ‘There’s been an explosion of demand from consumers to know where their products are originating and the required information is extremely granular. For example, with a package of carrots, consumers want to know not only the farm where they were harvested, but also the row and lot number where the carrots were planted.’

“Welch, whose company, Bamboo Rose, works with a number of top retailers and apparel companies, expects traceability demands to not only shape how consumers buy, but how companies will source and market their services.

“Smart retailers will begin to market their products from an information/sustainability-first standpoint and to be credible about it, they’ll need to invest in integrating technology that makes this level of transparency possible at every level of the supply chain.’ ”

5. Cybersecurity

Global Trade Magazine predict that by the end of 2019, cybersecurity will have surpassed physical security as a top concern for one-half of all manufacturers, and in the transition to digitally enabled, cognitive supply chains, cybersecurity will have become a top investment priority.

“High-profile hacking cases that compromise sensitive information for millions of people will continue in the coming year.” states Soneja, “With the proliferation of data and connected endpoints, companies will need to step up their security and privacy protection protocols in 2018.”

Earlier this year, we spoke to Craig Hancock, cybersecurity expert and Executive Director of Telstra Service Operations on the dangers of cyber crime. Read the full article here. 

6. Back to basics

“While a number of new trends are giving procurement leaders directions to explore in 2018, many supply chain professionals are still aiming for easy-to-understand goals” explains The Strategic Sourceror.

“According to Deloitte’s latest research on chief procurement officers, cost advantages and cash flow improvements are still the bread and butter of the supply chain. Traditional efforts to improve contracts and advanced, tech-driven strategies can deliver favorable costs to companies.”

7. Big data is a big deal

“In the context of the supply chain for most businesses, big data and predictive analytics are still an untapped resource that can potentially provide insights which help anticipate or respond to events or disruptions,” explains Raanan Cohen on Supply Chain Management review. 

“Unpredictable consumer behaviour, traffic or weather patterns, and labour unrest are all external events that can disrupt a supply chain and lead to increased costs and customer service challenges. Big data can help organisations become better trading partners to their customers and suppliers. But before insights and analytics can be leveraged for a better supply chain, there’s a huge task at hand for the many organisations that need to first collate data points from all sources and align them to their business operations.”

Let’s Get Internet of Things (IoT) Ready for Procurement!

What can the the Internet of Things (IoT) do for you and your procurement team? 

IoT is a big buzzword these days. From industry experts to academia to specialised thought leaders, everyone is talking about how IoT as a technology has the potential to disrupt not only the day-to-day workings of our companies, but also the lives of the individual.

The Internet of Things: A History

Let’s go back a bit and see how it all began. In 1999, Kevin Ashton, a British technology pioneer and cofounder of the Auto-ID Center at MIT, proposed the Internet of Things (IoT). It refers to gadgets and applications with built-in wireless connectivity that can harness great amounts of data from their surroundings and help monitor, control and organise things better. From home appliances to fitness gadgets to technology helping industries automate their processes, IoT can do it all!

And two decades later, IoT is the live wire. Smart homes, smart gadgets and smart cars- IoT has already given us a glimpse how is future going to be. But what does it hold for procurement?

Procurement and the Internet of Things

For Procurement particularly, IoT works as an enabler, empowering companies to gain visibility into their spend analysis and keep a vigilant eye on their consumers consumption pattern. The supply chain data generated is monitored continuously and analysed for behavioral sets to make better-informed decisions. Having a proactive overview helps companies to estimate the demand and supply statistics, as they are aware of the needs and usage pattern of their consumers. This empowers them to negotiate with supplier side in a more streamlined manner as they know in advance what material and what quality and quantity is required. All these factors combined contributes to cost savings and brings value for the procurement function.

Another area where Procurement can benefit significantly is in the tracking and monitoring of the movement of goods within supply chains. Deploying the right set of sensors, which are tracked remotely with an IoT-enabled device can identify equipment faults, stoppages and leakages in real time allowing service and maintenance teams to respond to issues more promptly and accurately. This also ensures diagnostic data is obtained in order to deploy the right set of technicians.

These factors directly impact the maintenance costs incurred by a company, contributing positively to the overall cost savings.

There is more that IoT can bring to the table for Procurement function. But to realise the utmost advantages, companies must ensure that they are investing in the right kind of technology, processes and people. They need to invest in setting up the infrastructure that will unleash the possibilities IoT has to offer. In short they need to be ‘IoT ready’.

If you are curious to learn more about how IoT will impact procurement, do join our upcoming webinar where our expert group of panelists will examine the practical impact of IoT on how our supply chains will work and what you will need to do to become IoT ready.

Webinar Speakers

  • Jon Hansen – Editor and Lead writer at Procurement Insights
  • Robert Handfield – Executive Director of the Supply Chain Resource Cooperative
  • Mark Hubbard – Managing Director at Smart Brown Dog Ltd

Webinar on ‘Getting Internet of Things (IoT) Ready for Procurement’ is on January 18, 2018 | Thursday. Register here for free to reserve your seat.

2017 Rewind – IBM CPO: You’re Finished If You Think You’ve Finished

As part of our 2017 Procurious rewind, we’re taking a look at the top blogs of the year. This article features our interview with IBM’s CPO Bob Murphy, who believes there is nothing so important as professional development and human relationships.

The numbers are eye-watering. IBM CPO Bob Murphy looks after a $70 billion spend – $25 billion internally and $45 billion 3rd-party. The company has around 150,000 contracts across 17,000 suppliers, with its flagship cognitive technology, Watson, reading 900 million pages in multiple languages per second.

As we prepared for our interview with Murphy, it’s understandable, then, that we expected to find him entirely focused on data analytics, automation, AI and the other tech that’s rapidly impacting so many professions. We were wrong – what comes across loud and clear is that this is a charismatic, engaging leader where people and relationships matter.

Think 40 and other professional development

Talking to Bob, it becomes immediately clear that his personal commitment to professional development is enormous. “If you want to be a leader, you have to stay current and replenish your IQ through learning and new knowledge. Ultimately, talent development is about making sure you have excellent people to replace outgoing leadership – it’s also vital for driving innovation.”

IBM’s Think 40 program mandates a minimum of 40 hours per year of self-initiated professional development. For the procurement team, this means having the option to select from a range of internal and external courses (often online), including offerings from Six Sigma, Procurement Leaders and ISM. For Bob, it comes down to inquisitiveness and a love of continual learning.

“We look for logical, friendly, humble, smart and inquisitive people. Anyone with a rudimentary knowledge of supply management can be trained to become outstanding procurement leaders. Making people aware of what is possible is absolutely critical – most successful people around the world put aside time to regularly read and educate themselves. They’re inquisitive; they enquire after things.”

Two critical skills for future leaders in procurement

  1. Digital literacy

“Data”, says Murphy, “is omnipresent and omnipotent.” He stresses that leaders who want to thrive in the procurement profession need to develop an understanding of:

  • Data analytics – we can gather data but how do you use that data to gain insights?
  • Robotic processes – how can you automate tactical processes so human capital is used to the greatest effect?
  • Cognitive computing – understanding how to digitise a process end-to-end so it is interconnected and insightful.
  1. Relationship building

Murphy tells Procurious that while leaders need to be able to use technology to get the insights and knowledge they need, their main focus should be on developing their emotional intelligence (EQ) rather than their IQ. “You need to have the ability to talk to clients in a consultative manner. We have one mouth and two ears, and that’s how we ought to apportion our time in any discussion. When we’re talking, we’re not learning.”

How can you train someone to be adept at building relationships? “It’s about attitude, not aptitude”, says Murphy. Whether leadership is innate or taught, the results are the same. You need to be able to work collaboratively with your suppliers, show them what’s important to you and understand what’s important to them. “Your relationship-building skills will ultimately enable your suppliers to drive innovation. For example, we have 17,000 suppliers at IBM. I want each one to wake up every morning and think: ‘How can I make IBM better’?”

Have you got a cognitive journey map?

Where is your organisation headed with cognitive procurement technology? Where do you want to be? How will you use people, processes and technology to get there? What can we automate?

Murphy recommends that every procurement team should have a roadmap that lays out the strategy for its data, analytics and cognitive journey. “All CEOs need a vision for their cognitive journey, and every function needs one too.”

According to The Hackett Group’s 2017 Procurement Key Issues research, only 32 percent of procurement organisations currently have a formal digital strategy in place, and only 25 percent have the needed resources and competencies in place today.

In reality, we can’t all be first-movers. But even if your company isn’t yet ready to act on cognitive technology, CPOs will be rewarded for raising the question, thinking through the issues and putting the challenge on the Board’s agenda. Most importantly, there needs to be milestones and deliverables, as Murphy warns: “Strategy without execution is a daydream”.

To end on a gem of a quote from Murphy, he spoke about how the constantly evolving nature of technology means a never-ending journey. “’Journey’ is a good description, because it is never finished. Anyone who thinks it is finished, is finished.”

2017 Rewind – Do You Have The Right Skills To Deliver On Tomorrow’s Procurement Strategy

As part of our 2017 Procurious rewind, we’re taking a look at the top blogs of the year. This piece looks at why are our procurement teams are falling so short when it comes to delivering on strategy? 

Shockingly, 60 per cent of CPOs believe their teams do not have the skills to deliver their procurement strategy, according to Deloitte’s “Global Chief Procurement Officer Survey 2017.”

Why are procurement teams falling so short?

Originally, procurement was heavily based on process management, negotiation and basic spend analysis. But the procurement function is evolving, and professionals have to adapt to a new environment . There are new and growing expectations that require alternate skills for a more advanced job profile.

Procurement professionals are expected to be much more analytical, with the ability to perform data mining. They also must learn to manipulate and understand financial data and indicators, such as P&L and balance sheets. That’s not to mention that they should be proficient with the latest technologies.

Yet, one of the most important skills to develop is customer centricity. In today’s customer-centric world, this becomes crucial.

In my opinion, understanding internal customers,  being able to communicate in their language, knowing what they want or helping them to understand what they need, is the most difficult skill to learn and develop because it often goes against the conventional and traditional training that many procurement professionals have received.

It’s time to stop hiding behind the processes and get to know the internal customers! Given the back-office environment we are coming from, there is still a lot to do to change the mind-set and the behaviour of those involved. Procurement professionals need to develop their consultative skills and become less process focused, since excessive process significantly impedes speed and agility.

Keeping It Fresh

Another challenge for procurement involves attracting and retaining fresh talent in our industry. This situation needs to be addressed now to prevent a significant skills gap within the next couple of years. While we still have to continue to build traditional procurement skills. We also need to recognise that these skills must evolve as analytic and cognitive solutions provide more refined data and insight. The challenge is less about finding someone who is an expert negotiator and more about recruiting someone who understands data and logic.

At IBM, we are currently hiring maths and statistics majors because they can understand trends and probabilities. Although many procurement skills can be taught,  it’s hard to train someone to find trends in complex data.

Taking IBM’s example, our strategy to recruit and retain talent is reflected in how we communicate our procurement roles. “Our Procurement strategy is about collaborating with customers to ensure they have best in-class solutions, with access to the most advanced technology available on mobile devices. We partner with our suppliers to be as innovative and creative as possible.”

Presented like this, a job in procurement sounds pretty exciting!

The party ain’t over yet!

And the party isn’t over once we’ve found the right skills and talent, we also need to keep that skilled staff within the procurement function! If we help employees build on their competencies as well as add new ones, and if they can see that their contribution to the company’s mission clearly makes a difference, it will help us to keep those employees in procurement.

Ultimately, modernising the procurement profession and making procurement a “cool” place to work will help retain a talented, skilled and motivated workforce.

Guess The Impact: Can You Handle The Pressure?

How can you prepare when you know the worst is coming, but you can’t be sure when, where or how it will come? The Guess The Impact quiz will help!

What would be the impact on your global supply chain if a volcano exploded in the Pacific? How would your supply chain be affected? Would your business continue running as usual or would the devastation prevent access to suppliers, parts, staff?

What about a diesel shortage in France? Do you have contingency strategies in place just in case? Can you source materials or labour you need elsewhere?

Maybe you think you understand the financial implications of a tsunami wiping out a global manufacturer or what happens when a major distributor goes bankrupt.

In an increasingly volatile world, pre-empting catastrophes and assessing the bearing they might have on your business is vital. Major events and even seemingly unrelated business decisions can have a serious impact on your bottom line.

But whilst 87 per cent of supply chain leaders consider proactive risk management important, a mere 36 per cent feel equipped to manage it!

Disruptors: A Case Study

 IBM Watson Supply Chain created the “Guess The Impact” quiz to test just how well you would manage a major supply chain disruption.

Meghan Jones, Content Marketing Manager, IBM Watson Supply Chain, created the quiz to demonstrate the magnitude of disruption that these events can have in a ripple effect on people and businesses everywhere. “I wanted people who took the quiz to rethink their preparedness for disruption scenarios as they were reading about how far reaching disruptions can spread.

“As an example, most people are aware of the devastating havoc that a tsunami will wreak on a country where it happens; though people don’t generally stop to think about the worldwide implications of a disruption-taking place beyond just the physical location of where it happened.”

One of the case studies in the quiz highlights the 2011 earthquake off the Pacific coast of Tohoku, which triggered a powerful Tsunami travelling 6 miles inland. 130,000 buildings collapsed, 1 million buildings were damaged, and heavy damage was inflicted on roads, railways and dams. The Bank of Japan offered 15 trillion Yen, or $183 billion USD to the banking system in March in effort to normalise market conditions.

The World Bank later estimated the full economic cost at $235 billion USD making it the costliest natural disaster in history.

Is your supply chain equipped with the visibility you need to mobilise quickly and source from another supplier to avoid the ripple effects of a natural disaster like this?

Almost anything from a weather incident to an unexpected spike in demand can disrupt a company’s supply chain, impacting cost, productivity and the customer experience. IBM Supply Chain Insights can elevate your existing systems to provide greater visibility, transparency and insight into supply chain data and processes—so you can better predict and mitigate the disruptions and risks that threaten your competitive advantage.

To survive and thrive, supply chains must become thinking supply chains.

IBM Supply Chain Insights

Joanne Wright, Chief Supply Chain Officer, IBM, created IBM Supply Chain Insights to help procurement professionals quickly mitigate these disruptions; enabling them to build a transparent, intelligent and predictive supply chain.

IBM Supply Chain Insights leverages Watson cognitive technology trained in supply chain to provide comprehensive visibility and insights across the entire supply chain. It enables organisations to predict, assess and mitigate disruptions and risks allowing you to improve supply chain operations to deliver greater value to the business.

Take the “Guess The Impact” quiz, developed by the gurus at Watson Supply Chain, to test your ability to handle a major disruption in your supply chain.

Don’t be Fooled and Underestimate Blockchain

Do you find it comforting to dismiss blockchain as “flash in the pan”? Simona Pop believes you’d be a fool to do so and explains why it will live up to the hype.

There is a pattern emerging where new technologies are treated with a certain degree of skepticism. After the initial wave of excitement and expectation, many of the game changing advances are suddenly approached with a “flash in the pan” dismissal.

Is it meant to reassure comfortable people and businesses that carrying on as they are is the better option? Why risk innovation when you can draw out a tradition type stance?

But this isn’t the technology’s fault. Many of these advances are – when divorced from the Gartner hype cycle and the hashtags and actively placed in their proper context – exactly as exciting and game changing as they seem, if not more so.

Blockchain is a high-profile victim of this phenomenon: as a distributed ledger technology that promises faster, more secure payments, many industries have been exploring its possibilities and many more have been writing and talking about it.

Purchasing is no exception. And while blockchain technology may have limited application in other professions, in this one, it will live up to the hype. As a means of reducing costs, improving efficiency, controlling fraud, and boosting transparency, it has tangible, real-world benefits for procurement functions – whatever the market or business they work within.

In a recent article, Paul Clayton, Head of New Service Development for Basware, states:

”In 2017, blockchain is word of the year, it’s absolutely everywhere. But it’s not earth shattering, it’s not the third generation of the Internet it’s just an interesting concept with some obvious benefits and flaws.”

Let’s go through some of the reasons why Basware feel blockchain is not all it promises to be for finance and purchasing:

  1. “Whilst a blockchain itself is safe, an application using it remains hackable” – This is also true of your bank software, or Apple Pay or pretty much any software we are currently using for payments. It should not stop us using it or leveraging its deep transformational effects in how businesses operate.
  2. “It can be too transparent” – Technically true, but in reality the references to user wallets are encrypted key strings which, whilst easy to relate to the originating source and other related transactions, is not as easy to relate to an actual physical person. In much the same way as a credit card number isn’t easy to relate to a person without extra information.
  3. “It’s not the most elegant solution” –  Here’s where we strongly disagree. The elegance is in the simplicity. Banks have been trying to come up with distributed ledger technology since the 70s but they were hindered because they refused to be outside the transaction. By using TLS style encryption and cutting out the transaction verification at financial institution level, the whole transaction becomes significantly simpler.
  4. “You can still lose things!“ – Of course you can. You can lose your wallet too.

The argument that there isn’t really that much value in blockchain when the benefits of smart contracts and removing the invoice are tangible possibilities is nonsensical. Removing  the need for invoice processing is huge and any platform truly helping businesses handle their invoices and payments should know this. Invoice processing, and invoice fraud by proxy, are the biggest threats to company money out there today. Just look at Facebook and Google who were victims of $100M payment scam this year.

Blockchain automates trust

Trust is the cornerstone of every business relationship. On a fundamental level, you need to believe that the other person is who they say they are – and they need to believe the same of you.

In this age of phishing, malware, and general cyber security attacks, this seemingly simple principle becomes complicated. Login details are stolen and turned to criminal ends; high-level executives are being impersonated by hackers, who then persuade other parties to release vital funds; the sheer scale and variety of cybercrime is growing.

Blockchain provides a means of automating trust. By using permanently retained historical data to authenticate everyone involved in a deal, each side can be assured of the other parties’ trustworthiness: the seller and buyer alike are always who they say they are, and the product is the right product. What’s more, because prices cannot be modified, invoices will effectively be rendered obsolete.

This greatly simplifies the complicated, multi-faceted transactions that make up modern supply chains – maximising security and reducing the risk of fraud.

Blockchain is fast

Procurement functions will also benefit from the speed and efficiency of blockchain technology. For one thing, it’s fully digital: by taking the more time-consuming elements of a conventional transaction out of the equation, you immediately save time and resources that would have been spent on these tasks.

Shared access databases mean that it’s no longer necessary to manually scan invoices – dramatically accelerating the reconciliation process as all parties are allowed to view the same transaction.

Blockchain effectively cuts out the middlemen. By removing all intermediaries, it makes the processing of payments and transactions much faster: purchase order data can be exchanged on the blockchain at a far speedier pace than current levels will allow. This technology can also identify the nearest and most cost-effective vendors: decreasing lead and work time, and improving your operational efficiency.

Blockchain creates strong audit trails

Blockchain technology stores every detail of every transaction at every level of the supply chain. This will – as mentioned above – facilitate greater fraud control, and it will also offer transparency into issues of legality such as money laundering and the use of child labour.

And though it’s a digital technology, blockchain will also assist with the tracking and recording of physical items. As they are transported across local and international borders, they can be identified at each location – creating a strong and fully documented audit trail.

This kind of end-to-end visibility ensures that delays are rare and that missing items are found and allocated to supply routes more easily. This allows you to manage and optimize these supply routes with maximum efficiency – ensuring that no space is wasted and no customer disappointed.

It’s clear blockchain will have a significant influence on procurement and finance. The advantages of being able to streamline business processes, secure payments, and automate workloads shouldn’t be understated. Do the research, ensure you’re positioning your business correctly and you’ll be in the camp that benefits – today, and in the future.

See InstaSupply’s co-founders chat about blockchain and its vital role on our roadmap.

Strategic Sourcing Tech Investment Is The Key To Transformation

Are you running a little late to the digital transformation party? They do say better late than never!

As we’ve explored previously, digital transformation is changing in the world of supplier sourcing.

According to The Hackett Group’s Sourcing Cycle Time and Cost Measurement study, firms are spending around $275,000 a year on software that streamlines sourcing — from supplier discovery, to e-sourcing, to contract lifecycle management (CLM).

So while it’s a sector still driven largely by traditional methods — with their corresponding disadvantages and inefficiencies — companies are starting to see the benefits of a software-driven approach to sourcing.

A little late to the digital transformation party? Perhaps. But better late than never!

Insights into increased efficiency

Respondents report that using supplier-discovery software they can reduce the time it takes to find and qualify a new supplier by 31%. The average time spent doing this the old-fashioned way is in the region of 40 hours. That’s an entire week’s work — and even then the process isn’t fool proof. Around 14% of projects fail to meet expectations, meaning the bidding has to begin again.

Powered by the right software, many time-consuming processes are eliminated. With access to system-recommended suppliers based on predefined criteria, sourcing staff can instantly improve their productivity and speed supplier discovery. On the e-sourcing front, the right tech can reduce total sourcing time by 30%. While CLM software can improve compliance by increasing the use of standard terms and conditions by 38%.

Adapt to succeed

It’s obvious that businesses are seeing benefits. Although that’s not to say new technology adoption isn’t without its own challenges. Processes need to be assessed and adapted, and staff have to learn new ways of working. Cultural change isn’t easy, but it’s one of the hurdles that all firms must clear in pursuit of digital transformation.

In a highly competitive business landscape, it’s vital that your processes enable you to get results quickly and cost-effectively. And this is the bottom line of why organisations need to revisit their approach to strategic sourcing.

A little adjustment today opens the door to far greater efficiency tomorrow.

To discover how your organisation can embrace digital transformation and reduce strategic sourcing costs and cycle times, read The Hackett Group report now.