Category Archives: Generation Procurement

Have You Aligned Your SIM & CLM Systems?

Procurement teams with mature SIM and CLM systems can extract greater value from supplier relationships. How can the two be brought into better alignment?

This article was written by Kelly Barner for Determine

Procurement is so accustomed to aligning our technology and processes with the objectives of the business at large that we sometimes miss opportunities to align our own technologies and processes with each other.

Supplier Information Management (SIM) and Contract Lifecycle Management (CLM) provide a perfect case example. Both bring together suppliers and internal touch points, extend beyond procurement’s peak involvement in managing spend categories, and play an important role in addressing (and mitigating) supply chain risk.

Procurement teams that have mature SIM and CLM programs in place reduce their risk, but they also create opportunities to extract greater value from each supplier relationship and reduce confusion within the enterprise.

When we stop and think about how SIM and CLM can be brought into better alignment, three critical shared issues come into focus: information integrity, ownership and actionability.

  1. Information Integrity Through Integration

Information is such an important component of SIM it is included in the name, whereas with CLM the devil is always in the details. An incorrect piece of information in a contract can easily become a legal liability. Both start with essential supplier contact information and metadata and extend to the details associated with supplier onboarding and contract terms. Although the following information is collected for separate reasons, it is critical that it be consistent across SIM and CLM:

Supplier Onboarding

 When a new supplier is on-boarded post award, a standard set of information is usually collected. This includes their contact information, location details, proof of certification, and details regarding the users who will represent the supplier in company systems during the term of the agreement. Making sure as quickly as possible that this information is complete and accurate lays the groundwork for an equally smooth implementation and on-going relationship. Beyond simple collection and centralisation, procurement must also validate supplier information at the time of onboarding – paying particular attention to documentation associated with certifications that were included in the award decision.

Contract Initiation

When creating a new contract, it is natural for procurement to focus on product/service specifications, prices, terms and SLAs, but capturing other more straightforward information is just as important. For instance, specifying a production location might seem like a minor detail — until the supplier makes the decision to outsource their production to another facility, or even another country. Having specified the location in the contract may not prevent the change from being made, but it does create an opening for discussion of the associated quality and oversight expectations. As contracts become an increasingly dynamic part of supplier management, more details need to be incorporated.

  1. Ownership

Since managing risk and increasing performance are at the heart of both SIM and CLM, establishing ownership early on is critical. Who will manage the relationship and who will be the documented owner of the contract? Should it be the same person? Why or why not? Alignment of goals can not be achieved if the individuals associated with each responsibility are not also aligned.

Supplier Relationship Management

Any supplier may have multiple relationships in an enterprise. Procurement is certainly a point of contact, but so are the budget owner and any functions that have a high volume of demand associated with that supplier. Many people may have contact with a supplier in the course of daily business, but information about performance reviews and contract updates should be managed in an organised fashion so that the supplier is kept informed and no one speaks out of turn.

Contract Ownership

 In addition to including a complete set of terms and signatures, each contract needs an owner from the outset. While captured as a simple name field in many CLM systems, a lot of consideration must be given when deciding who will own each contract. The primary value proposition of CLM is that it allows contracts (and the business deliverables they govern) to “leave the filing cabinet” in order to have a measurable impact on the business. Empowered by automated CLM notifications, someone in the enterprise needs to take action based on the information provided; and having an appropriate designated owner from the start provides accountability and ensures a prompt response.

  1. Alignment Actionability

Putting SIM and CLM in place is not about static documentation or information centralisation, but rather the actions each motivates. Unlike information integrity, where consistency is key to alignment, actionability requires each of these systems to “feed” information to each other. There are supplier performance considerations in both systems, and while they are different, it is in their combination that the best result is achieved.

Supplier Performance

SIM systems often include supplier performance details submitted by procurement, as well as the other individuals in the enterprise who come into contact with the supplier’s products or services. In some cases, determinations of performance will be based on buyer perceptions and expectations. This information should be recorded and communicated to suppliers on a regular basis.

Contract Compliance

When viewed through the lens of a contract, supplier performance is about following the “letter of the law.” Just as suppliers can have performance issues that do not rise to the level of legal non-compliance, a supplier can be in perfect standing based on the requirements of the contract and still not meet the expectations of the company. If performance measurement and contract terms are not both aligned and visible, it will be hard for procurement to know the difference and lead the appropriate response.

The full benefits of SIM and CLM alignment are realised over the term of the agreement, as long as 3-5 years in some cases. The sooner the enterprise can achieve alignment in terms of information integrity, ownership and actionability, the shorter the timeframe to evaluate and lower the overall risk.

This article was orginally pubished on Determine. 

Why Public Sector Procurement Consolidation Won’t Take Forever

Driving change within the public sector takes forever… and ever! Right? Tim Hamper begs to differ as he explains why procurement consolidation will only accelerate in coming years, if not months!

A few weeks ago another UK public sector body, Fastershire (a partnership between Gloucestershire County Council and Herefordshire Council, backed by the Department of Culture, Media and Sport), began implementing a major new combined agreement – this one with Gigaclear, a rural Internet Services Provider. The deal is to roll out “ultrafast” Fibre To The Premise broadband to thousands of some of the hardest to reach homes and businesses across the two counties, at speeds of up to 1000Mbps.

After decades of individual procurement teams in separate organisations diligently applying public procurement rules (often with relatively small spend and time-consuming award processes), it’s now becoming normal to combine with others. The results are often not only larger economies of scale, but also better access to relevant products and services.

Public sector procurement consolidation

Combined (in other words consolidated) public procurements have for some time been delivering in areas where it’s fairly easy to see a commodity – energy, office supplies, facilities. They’ll really take off and show benefit when they fully embrace what used to be called “ICT” – now better labeled Digital. Leaders of public bodies won’t be interested in the details of latest products or software solutions, or even in traditional efficiencies. They’ll be concerned about big outcomes. How to better support local economies and communities? How to join up health and social care? How to keep the trains running?

The facts about consolidation are impressive:

  • Although not everyone is a fan, in 2016/17 Crown Commercial Services, the public sector aggregator, channelled £12.4bn of public sector procurement spend through its commercial arrangements including frameworks – £6bn from central government, £6.4bn from the wider public sector.
  • The National Procurement Strategy for Local Government in England was launched in 2014. By 2016, 53% of single tier/district councils and 48% of district councils said their organisation had made savings or achieved other community benefits by “partnering and collaboration”.
  • Owned by six county and city council authorities, one public sector buying group based in Leicestershire, ESPO, now has over £1.4bn of spend going through its frameworks. The organisation consolidates requirements from over 9,000 education customers across the country.
  • Another buying group, Kent County Council’s Commercial Services, is one of the largest trading organisations of its kind in the UK. As the contracting authority, Kent operates in partnership with 12 district councils and 289 parish/town councils. It recently published details of framework contract awards for water and sewerage services potentially worth up to £208m on behalf of a number of public sector organisations.

The tipping point for consolidation

The often-heard view is that change in the public sector takes forever (one digital industry leader recently claimed this is due to a “lack of vision, entrepreneurial thinking and execution”, another that “the last ten years have seen public sector organisations progress only 20 per cent of the way through the business transformation journey, with the remaining 80 per cent to be delivered over the next ten years.”). But with the focus on outcomes, the necessary speed and type of market engagement will mean the trend for procurement consolidation will only accelerate. The benefits will be big: public sector bosses are already seeing better outcomes and stretched budgets being brought back into balance. In Gloucestershire, County Councillor Lynden Stowe, Cabinet Member for Economy, Skills and Growth says “faster broadband is vital for our communities and businesses to thrive and grow. I’m delighted that the Fastershire project, in partnership with Gigaclear, will be taking faster broadband to even more homes and businesses in some of the most rural areas of the county where larger suppliers were not prepared to go.”

We’re probably already at the tipping point where most public procurements look across organisational boundaries, so the need for separate individual procurements will diminish. A lead or buying group will more and more be seen as the right place for consolidating spend, not just for commodity items but strategic stuff as well.

Suppliers will react quickly to this situation and respond to consolidation opportunities – not least because larger volumes are more attractive, and with fewer organisation touch points, the cost to them of doing business will be significantly reduced.

Dramatic change has already started, though not every public sector management team involved in commercial activity has fully embraced it. They should. Consolidation in public procurement won’t take forever – the focus on outcomes and market speed will ensure that it’s now measured in months, not years. Certainly not in decades.

Blockchain: Are You Bothered?

There are so many misconceptions around blockchain and its potential impact. Will the fundamental concept of blockchain really have a significant impact on procurement, finance and supply chain?

Last month’s Procurious London Roundtable was sponsored by Basware

Blockchain is the coolest technology of the moment and the hype surrounding it only appears to be growing year upon year. Whilst the concept was first used for Bitcoin, the digital currency, its potential is far wider, and many industries are actively investigating the possibilities of using blockchain-based solutions.

But despite organisations around the world jumping on the Blockchain bandwagon and advocating for its enormous potential, do the majority of professionals understand precisely what it is, what it can do and the extent to which it will impact our businesses?

At last month’s Procurious roundtable, Paul Clayton, Head of New Service Development, Basware put us through our paces with an overview of blockchain technology and his insights as to why procurement pros need to be cautious not to overestimate it’s bearing on the function.

What is blockchain?

A blockchain is simply a digitised, decentralised and cryptographically secured ledger of transactions.

“The biggest misconception” Paul begins, “is that there is only one blockchain. There are actually many blockchains in use today throughout many different industries.”

“Blockchain is actually only a concept, whose origins go back to academic work in the early 90s, rather than a thing. The concept was first publicly used to allow the crypto-currency Bitcoin to be traded virtually, anonymously, and without the need for a centralised bank.”

“Blockchain technology says where something has been transferred to and retains a trace of the transfer. Conceptually a blockchain acts like is a single ledger, a source of the truth if you like. In reality, it is physically distributed where there are actually multiple ledgers, known as nodes, that all work together to come to consensus on where something has been transferred to, which is then shared between them.”

An obvious advantage of this technology, is that it’s very difficult for you to break the integrity of the ledger. “There are multiple copies of the same ledger and so if someone hacks one it becomes immediately obvious that it is different.”

The flaws at the heart of blockchains

Whilst a blockchain itself is safe, an application using it remains hackable – Security researchers and hackers have proved it’s possible to hack someone’s Bitcoin wallet and empty it of crypto-cash. Mt. Gox infamously lost 7 per cent of all Bitcoins in circulation in 2014, which were worth, at the time, approximately $473 million. It also appears to be an uphill battle trying to prosecute someone for taking a Bitcoin

It’s can be too transparent – With public blockchains, once a transaction and its associated data have been placed onto a blockchain, anyone and everyone who has access to it can view everything, whether you like it or not

It’s not the most elegant solution – The very nature of the deliberately distributed ledger with multiple copies (nodes), means that you have multiple nodes undertaking exactly the same piece of work ie working out where something has been transferred to. From a pure computing power point of view, for certain applications, this is a highly inefficient way of doing things.

The blockchain for Bitcoin for example, has already had to be re-designed to increase its scalability as the number of Bitcoins in circulation and the growth in the associated transactions meant that the ledger became too unwieldy and it was taking too long for it to update.

You can still lose things!

Even if you know where something went, you can still then lose it. Who could forget the unfortunate James Howells, who mistakenly threw out a hard drive containing 7,500 Bitcoins, now estimated to be worth $7.5 million

 

Blockchain for business

There are some who would argue that these problems have been addressed and eliminated for blockchain for business. Paul is not one of them!

“The distributed nature of ledgers means blockchain is good at maintaining the integrity of who owns something but what it cannot do is determine whether the person who put something into a system owned it in the first place.”

This means, when making a transaction via a blockchain, the recipient needs to be able to trust the supposed owner of the thing that is being exchanged. “You are, essentially, reliant on the veracity of the source of what goes in to the blockchain.”

For example:

Does the “owner” actually own the rights to the house they are trying to sell you?

If you’re exchanging metals, does the “owner” have documents to prove they have the rights to the gold?

It might be good at preventing a fraudulent transfer of an asset but blockchain is “next to useless at establishing if a person owned something in the first place”

“As a ledger system it is extremely inefficient, almost clumsy in the way it works. In certain circumstances, where there are a high volume of transactions it uses so much computing power it’s almost not worth it.”

“And it’s for these reasons that, whilst it will have applications in many areas from supply chain through to electronic voting, blockchain won’t change the world!”

Where is the value for procurement?

“Is there value in blockchain tech? Yes. Does the value match the hype right now? Not even close!”

“From a procurement point of view the biggest area of impact right now is most likely to be in supply chain applications. There are obvious applications for the transfer of title and bill of lading. Of particular interest in this space right now are supply chains that can be subject to fraud such as pharmaceuticals and food

Going beyond that the application of so called “smart contracts” to a blockchain can help automate certain business processes. Smart contracts, are pieces of computer code attached to a blockchain that automatically execute an action once a set of agreed criteria have been met. For, example, a smart contract could be used to automatically pay a supplier once the buyer has received their goods without the need for invoice processing and payment.

” 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 its just an interesting concept with some obvious benefits and flaws.”

Last month’s Procurious London Roundtable was sponsored by Basware

Whose Services Are You Really Procuring?

The workforce is fundamentally changing and it’s increasingly important that you can access the skills you need when, where and how you need them. But with the increase in corporate usage of external workers comes additional challenges and risks.

Driven by the digital age, we’re seeing a shift in the way work gets done. Globalisation and new ways of working are rapidly changing how talent interacts with companies, making it increasingly likely that the top talent needed by a business might not be – and might not want to be – on their payroll.

As a result, organisations increasingly rely on the external workforce – including contingent worker, Statement of Work (SOW)-based consultants, freelancers, specialized talent pools and more. In fact, these resources now account for nearly 40 percent of the average company’s workforce.

Why is this happening?

There are four factors impacting the way work gets done:

  1. Data: Data is the currency of the digital economy and we hear a lot about it these days. Big data is powering new insights and enabling better business decisions and outcomes.
  2. Digital technologies: Advancements such as artificial intelligence and machine learning are speeding processes and increasing efficiency. Looking forward, technologies such as blockchain will disrupt industries by facilitating the exchange of goods and services.
  3. Design-thinking or user-centered design: This is driving better experiences by putting people at the center of technology, not the process or the product.
  4. People: Perhaps the most profound change we are seeing in how work gets done is with people. Many of today’s workers – millennials, in particular – are looking for different experiences rather than spending decades with one company. As technology has enabled people to be untethered, the external workforce has boomed.

The result is that a significant portion of the external workforce is now comprised of service providers. To stay ahead of the competition, you need to be able to easily access this specialised and you need to be able to manage it effectively.

Challenges in services procurement

With more and more companies using external resources to fill vacancies, compensating for skills gaps and staffing ad-hoc projects, how do you know you’re getting the best talent at the best price?

With products, it’s relatively straightforward – prices are fixed and margins are small for suppliers. When it comes to services procurement, the situation is very different. Margins vary hugely and tend to be relatively high for the supplier.

For example: you’re looking for a plumber to work onsite at your facility for a specific time. Rates will vary depending on their experience and grade. When engaging your suppliers, how can you ensure that the person they send isn’t someone with little work experience who is charging a premium rate? Without insight into who is actually working for you at any given time and confirming that they are providing the level of service you expect, how can you ensure you’re not overpaying?

Organisations need a single place to go to source, engage and manage service providers. But many are managing this key labor segment with fragmented systems and processes which puts them at risk for excess spend, compliance issues and decreased quality.

A lifecycle approach

A solution lies in an external workforce management model. This model should include:

  • Visibility across multiple service providers and headcount tracking so you know who is working for you across your entire enterprise.
  • True demand management to enable the correct buying channels for each category of service.
  • Financial control, operational efficiency and collaboration, both internally and with suppliers.
  • Risk mitigation and compliance to rates and budgeting against contracts, along with the ability to discover how much a service cost last time to better forecast.

Enabling a services procurement solution to drive better operational control and rigor around services engagements not only enables cost savings opportunities, but enables key value levers including compliance, cost, visibility, efficiency and quality.

Procurement plays a strategic role in helping their organisation gain workforce visibility, be more agile and derive more value from their services procurement management. But executing the service only gets you halfway there – full potential is reached with management of the entire lifecycle.

Interesting in learning about more about the SAP Fieldglass External Workforce Management Model? Click here.

How Much Business Does £300m Of CSR Get You?

That might sound subversive – after all, CSR isn’t about the bottom line. Is it…?

There are many definitions of CSR. In general terms, it is about delivering benefits for economic, social and environmental stakeholders. On the ground, we’ve seen fantastic work going on – exemplified by organisations like Business in the Community. We genuinely believe that for a number of businesses, CSR isn’t an add on – it’s seen as a key ingredient of a sustainable business model.

As a CEO of a for profit, the bottom line is, well, the bottom line. How do we get more customers? How do we make the ones we have happy? How do we get the best out of the team? How do we ensure our product is usable and therefore shippable?

I understand any skepticism around CSR.

But it is there. And it’s not going away. Moreover, in many countries it’s now backed by legislation.

How could we improve the conventional model of CSR? Let’s come back to that. First a few more numbers.

We carried out some research a few months back. We looked at 30 of the biggest suppliers to UK government, including Capgemini, HP, Balfour Beatty, Babcock, Fujitsu and Barclays.

What we found…

  • They account for up to 15% of government expenditure
  • The total UK Community Investment spend of the 8 companies who share their figures is £9,533,461
  • The total Global Community Investment spend of the 12 companies who have share their figures is £328,249,901.

And, according to the Charities Aid Foundation, FTSE 100 companies donated an average of 1.9% pre-tax profits in 2014.

What we ask…

  • Is there a direct link between this CSR spend and sales? Short answer: no.
  • Should there be?
  • Why not? What if you could demonstrate a clear ROI on this spend?

We think this not because we think CSR is an afterthought or an add on. If it is a a core component of business strategy it has to be a core component of your financial strategy – because these two things are so intertwined. This is what we mean when we think we can square the circle of CSR.

Why not do well by doing good, if you could demonstrate that your CSR budgets and resources were going into local community projects that were delivering clear outputs, and were rewarded for that with sales?

Why not do well by doing good and demonstrate this in terms of clear ROI for your CSR spend?

That would be a good thing right? If you want CSR to be a core part of your business strategy it has to be a core part of your financial strategy.

Social Value is increasingly a differential in government tendering – how much you give can determine how much you win. At the Social Value Exchange we use market design to ensure CSR is paid for at a fair and efficient price – the sweet spot between making sure community projects benefit and suppliers don’t break their business models. Suppliers have used this approach to win more than £20m of government contracts.

With this option, why wouldn’t you use CSR to get more sales? 

Firesouls make digital products that drive innovation in, and get more resources to, the public and community sectors. Our latest product is the Social Value Exchange, an online marketplace that gets more funding and resources into local community projects.

Why Procurement Should Give Cognitive Tech A Warm Embrace

When you pushback on the advances of cognitive technology, you’re buying yourself, and procurement, minimial time. Working side by side in a warm embrace is the way to do it! 

Our webinar, Beat The Bots: How Being Human Will Win The Day, takes place TODAY at 1pm BST on 24th October 2017. Register your attendence for FREE here.  

There’s no question that procurement teams needs to prepare for their own cognitive journeys, to consider what their company’s digital transformation will look like, and then think about how to prepare, or even influence it.

But in doing so, are they also mapping out a talent journey?

The 2017 Deloitte CPO survey interestingly revealed that whilst the vast majority of procurement leaders see the need to train and develop their people, only 31 per cent were planning to focus on training in digital skills in the coming year.

John Viner Smith, Principal, Mercer and speaker on today’s webinar has some thoughts on why this is the case, “I think part of the reason is that there’s no consensus at present as to what the skills people need to acquire are to be ready for this [cogntive] world.  It’s just not clear for the leaders concerned yet.”

Last week we outlined the key soft skills procurement professionals should be developing to prepare for the cognitive age.  But what about the attitude on the ground? Procurement professionals are still wary of the impact cognitive technology will have on the function, which results in a level of pushback and reluctance to accept the changes that are coming.

The warm embrace of cognitive technology

“It may be reasonable to look at the state of technologies today and think ‘No worries, I can’t see anything out there that could do my job’, but that’s not the risk.” John explains. ” The risk is that these technologies, coupled with other disruptors, could make your job obsolete and truly redundant. Imagine being a farrier at the very beginning of the 20th century; if you were thinking ‘Thank goodness they haven’t invented a machine that can shoe horses better than me’, you were kind of missing the point.”

So what is Justin McBryan, Learning & Development, Strategy, Communications Manager- IBM ,seeing in terms of pushback within his organisation?

“I don’t know if I would characterise it as a pushback so to speak.

“We see it as a warm embrace across the organisation but a wary embrace as well. As we digitise the organisation and continue to march forward into the cognitive era, certainly the technologies on the horizon are noticed and seen [by our employees.]

“But I say a warm embrace because a lot of the technologies we are building, have built and continue to build need the procurement skills and institutional knowledge that we’ve built over the years including all of our great people. In terms of where we are today and as we’ve been rolling out Watson Supply Chain etc. we see it as more of an embrace.”

Cognitive tech is “not necessarily a replacement of the person, it’s someone sitting next to you and helping you.”

The environment that Justin describes is one of collobaration, with seasoned procurement pros looking to help machines learn and work alongside them. But that doesn’t mean they aren’t doing so with the wary eye of “what’s next?”

But as Justin points out, as procurement teams embrace and integrate these cognitive technologies, they can also be asking themselves “What can I do to begin to point my skill development in the right direction?”

Exploiting the advantages of cognitive technology

There’s a lot of scare mongering out in the field that says that if you’re not a data scientist, you don’t have a future in Procurement.

But we’re reassured by the fact that IBM is working hard on developing its employees’ soft skills and is a strong advocate for how cognitive tech will allow professionals to better perform their roles not seek to replace them.

When it comes down to data scientists versus soft skills experts, Justin believes they’re sequential from each other and likens it to climbing up two different kinds of hills, “We want the majority of our organisation to build up on their soft skills. We’re happy if everyone builds up their analytics skills. We certainly need a solid group up at the top who can drive the innovation and integration of the cognitive tools.

“We need our best and brightest from a data scientist perspective but not all of us need to be there.”

“If we continue down the cognitive path we’re going to have a lot of tools to add to the procurement portfolio. The digitisation of our organisations  free up time for our employees to focus on two big things that are important for procurement:

  1. Getting closer to clients
  2. Creating time and space to innovate on our processes and innovate on the solutions that we’re delivering to our client

“The more we add to the digital cognitive portfolio of tools that procurement pros can use, the more time that is freed up on the innovation and client engagement space, [which is an opportunity for procurement] to exploit the advatages of the cognitive era.”

Our webinar, Beat The Bots: How Being Human Will Win The Day, takes place TODAY at 1pm BST on 24th October 2017. Register your attendence for FREE here. 

Eyes on the prize: 5 ways soft skills can help you focus on the big-ticket projects

From guest contributor Shaun Hughes, Chief Procurement Officer, Telstra.

In a complex and hyper-connected world, it’s becoming increasingly difficult to juggle every demand on your time without losing sight of important projects. The solution doesn’t lie in downloading the latest time-management app, or introducing the latest project management methodology, but in the development of five key soft skills. 

I’ve always been impressed by jugglers. Otherwise known as multi-taskers, the best jugglers are seemingly able to keep an unbelievable number of projects and tasks in the air at once. But underneath the whirl of frenetic activity, impressive as it might look, is it really effective?

Firstly, trying to juggle too many projects at once often leads to short-termism. Rather than make hard prioritisation decisions on what really matters, we often fall into the trap of focusing on the most urgent task at hand.  Meanwhile, the big-ticket projects that really make a difference are lost in the swirl of activity.  Busy-ness leaves no room for effectiveness.

You may be able to get every task done on your list, but does it really add value?  We all know what our best work looks like, but are we setting ourselves up for success?  Creating the time to think and to prioritise is essential, but how do we know that we’re working on the right things?

Soft skills remove ambiguity.

Modern procurement is about driving a change agenda.  Great organisations have great talent and great talent doesn’t always agree.

I used to think getting things done was about getting everyone to yes, now I believe it’s about getting the “NOs” to neutral and maintaining enough momentum in the “YES camp” to move things forward.

But the task of converting all those NOs to neutrals can sometimes seem overwhelming. If you don’t have existing relationships in place, you’ve simply got no idea why individuals (or entire functions) are resisting your change agenda. Confronted with so much ambiguity and complexity, it can be hard to know where to start.

What I’ve found is if you simply roll up your sleeves, start talking to people and understand their perspectives it’s amazing what you learn about what is important to them and why.  Understanding this takes a bit more time sometimes, but change is much more likely to stick.

Five soft skills that will help you win back your time

1. Make the effort to really connect – see the person, not the task. Take the time to understand those around you, what is important to them, their fears and aspirations, what motivates them.  While the degree of connection each of us want at work will vary, when we connect as people in a real and authentic way the whole human dynamic of that relationship changes.  When our focus is only on the task, it’s much harder to see the person and the impact your agenda might have on them.

2. Ask not tell – start with a question, and then keep asking questions. Even if you want to talk about your agenda, when we ask permission to do so, something changes.  We are now being invited into the conversation. The dynamic shifts from one of pushing our own agenda and position, to a pull dynamic where we are being asked to explain it.

When the conversation pauses, inquire with curiosity.  It never ceases to amaze me how different things can be in reality to how they appear on the surface.  When we simply listen with a view to finding space to talk ourselves, I wonder do we always hear what is being said to us?

When a really important idea that I just don’t want to forget hijacks my ability to listen, one thing that works for me is the simple act of writing that thought down. This seems to remove the need to keep trying to remember it, or the urgency to blurt it out, and allows me to listen. 

3. Reasonable people acting illogically – most people in business are smart, pragmatic and reasonably rational. Admittedly, we all have moments when we lapse a little, but corporate norms of behaviour tend to reinforce pragmatic rationalism.  So, when we see behaviour that doesn’t quite make sense to us, it’s often because we don’t fully understand what’s important to those around us.  What should we do?  Start back at point 1 and build a relationship.

Throughout my career I’ve taken many opportunities to do many different things in many different parts of the businesses I’ve worked in. Different roles in different industries, but always coming back to my core skill in commercial / financial management. Breadth through rotation provides a wider perspective on the world around us and I’ve certainly benefited from this. It’s amazing how much you can enjoy learning something new; the broader our own experiences, the easier it is to understand the perspectives of others. 

4. Learn to let go – for many overworked jugglers, the problem can be of our own making. If your leadership style means controlling every decision and rewriting everything your team produces, you will always have too much on your plate. Learn to recognise talent, enable it, establish a set of principles to work by and communicate these clearly. Then, simply get out of the way and let talent be talent.

You may be surprised to find that the quality of work goes up as people feel more empowered and valued.  Do any of us do our best work when we know the boss is going to get out the red pen and rewrite the whole thing?

5. Know when to call in the umpire – we have umpires in sport for a reason. Sometimes in the heat of the moment the desire to win distorts the player’s perspective of what’s really happening.  Imagine a tennis game without an umpire ….
                In            out!
               In!          Out!!
               IN!!        OUT!!! 

Nothing can stall a project quite so much as an unresolved disagreement.  So, rather than let the relationship falter, or prosecute the same issue repeatedly, be pragmatic about when to find an umpire.  Make your respective cases, accept the decision and move on.

Is there anything wrong with acknowledging where you are and saying “Hey, we’re not going to agree on this, how about we get a third party to be an umpire?

Good communication, transparency and investment in relationships may seem like a counter-intuitive way to lesson your workload, but your soft skills are the most effective method you have of bringing those multiple projects under control, focusing on the big-ticket items that will really move your business and your career in the right direction, and driving lasting sustainable change.

Telstra is a leading Australian telecommunications and technology company, offering a full range of communications services and competing in all telecommunications markets. Hear more thought-leadership from Telstra at Procurious Big Ideas Summit Melbourne on Monday 30th October. 

Strategic Procurement: A CFO’s Guide To Getting There!

Ever felt like a different perspective on that age-old plea: “Help! I need to be more strategic!” would do your procurement team the world of good? Here’s what a CFO has to say on the matter…

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What do we hear from procurement professionals all the time in the industry of Procure to Pay? “Help me be more strategic” or “I want to demonstrate the value of procurement” or “Give me the tools to practice strategic procurement” or “How can I influence the big decisions being made?”

The good news is, there is a way to make these things happen – but you must be keenly focused on two things: data and analytics.

Get Perfect Vision with Complete Data

To even think about being strategic, there’s no way around it – you must tap into your company financial data and that data has to be comprehensive and clean. To build the complete data set, you must get 100 per cent visibility over enterprise-wide spending with:

  • 100 per cent of your e-procurement users funneling all indirect spending through the e-procurement solution
  • 100 per cent of invoices, both direct and indirect,  being processed through the AP automation solution
  • 100 per cent supplier on-boarding to ensure all invoices are being converted to e-invoices, regardless of supplier sophistication.

Layer this data with the power of analytics to quickly glean actionable insights and you’re ready to build your strategic procurement team, enabling everyone to see clearly to make informed decisions.

Keep Your Eyes on the Prize

As a CFO, I firmly believe that for both Finance and Procurement to be successful in achieving organizational goals, there must be strong collaboration between the CPO and CFO. The unique talent that exists in these functions needs to be leveraged to build and analyze the full financial profile of the company and see the possibilities for the future. From my perspective, CPOs can foster this collaboration and create a strategic procurement team that has their eyes on the prize by doing these 3 things:

1. Support Working Capital Strategy

53 per cent of organisations use payment terms as a strategic lever to manage cash flow.1 As the owner of supplier relationships, Procurement is in a unique position to support Treasury in the management of working capital by negotiating advantageous payment terms with suppliers. Procurement can help the company keep cash on-hand longer by:

    • Working with large suppliers to extend payment terms and pay later
    • Managing the long tail of the supply chain through a virtual card payment program that enables suppliers to get paid quickly, while the company pays later.

By working directly with suppliers to arrange the right payment terms for the company while benefiting the suppliers, Procurement ensures that Treasury can accurately forecast cash flow, properly invest in growth areas and optimize working capital overall. Supplier relationships also improve as financial volatility is minimized for suppliers, reducing risk in the supply chain. Additionally, a strategic procurement organization can generate a new revenue stream through virtual card payment programs that offer cash back. Read more on strategic payment programs.

2. Use Innovative Technology to Control Costs

Generating cost savings has always been a part of traditional Procurement, but now more than ever CPOs have access to innovative technology and advanced analytics to support these efforts. For example, artificial intelligence built into e-procurement solutions can continually scan procurement data to alert Procurement to savings opportunities like consolidating orders for bulk purchasing, better rates offered by different suppliers, reducing off-contract and rogue buying, optimizing inventory carrying costs and reducing other areas of wasteful or unnecessary spending. CPOs can also give approvers the ability to see how orders affect their budgets in real-time and educate other departments on ways they can make the most of those budgets – spreading the procurement talent across the company to help everyone. Suddenly, Procurement goes from being seen as the spend police to a helpful, collaborative arm of the business. Procurement professionals can also use automation tools to run strategic sourcing events to quickly identify and collaborate with the most cost-effective partners. With the right source-to-pay solution, Procurement is better positioned to quickly save costs and free-up time for more strategic initiatives.

3. Develop the Right Talent:

To achieve a strategic procurement organization, CPOs need to ensure they are developing and acquiring the right skills within the procurement department to focus on data analysis. Strategic procurement organizations steer away from a focus on squeezing cost savings out of suppliers and are moving to data-based decision-making that pivots the business one way or another to get ahead. According to Gartner, “the emergence of machine learning and AI is introducing the need for analytical skills and an understanding of data science and technology.” With rule-based and tactical activities becoming increasingly automated, the skill set needed in Procurement will involve working within that complete data set every day to derive the right insights for strategic initiatives like, right-sizing the supply base, spending smarter, reducing risk in the supply chain, improving supplier relationships and properly maintaining supplier data. Read more about the future talent needed for Procurement in Gartner’s article, Start Preparing Now for the Impact of AI on Procurement.

If CPOs stay focused on these areas, they will be able to realize their goals for strategic procurement and the perception of Procurement across the organization will change. If there’s one thing to take away from this article and my perspective on strategic procurement, it’s that you must set your sights on the data flowing through your organization in order to be effective.

See the Light

At Basware, our customers and their suppliers transact over the world’s largest open business network. That means we’re aggregating data across millions of financial transactions, creating an unmatched data set and layering that information with a powerful out-of-the-box analytics suite. If you’re ready to see how this data can make you more strategic, reach out – we’re ready to help.

On 28th September, Procurious is bringing The Big Ideas Summit to Chicago.  Register now  (It’s FREE!) as a digital delegate to gain access to all of the day’s action and LIVE video from our speakers and attendees. 

The Hunt Is On For 30 Under 30 Millennial Role-Models

Do you know a young gun who’s already making their mark on the supply management profession? Perhaps you’re one yourself? Nominations are now open for ISM and THOMASNET.com’s “30 Under 30” Supply Chain Stars program. 

It’s already happening. In companies large and small all over the globe, Millennials are being asked to step up into very senior roles to fill the vacuum created as an entire generation of Baby Boomers retires.

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

The talent pipeline in procurement

Back in 2014, ISM and THOMASNET.com recognised that there was a concerning gap in the talent pipeline. The 30 Under 30 award was subsequently launched to celebrate and broadcast the achievements of young professionals in an effort to bring more Millennials into the profession. The program is making headway. ISM reports that only 17% of the 2014 cohort had planned for a career in supply management, with most “falling into” the profession instead. By 2016, this figure had risen to 40% as an increasing number of school leavers began to seek out tertiary-level supply management courses.

“It’s really important to have role models in the profession”, says ISM’s Chief Content & Engagement Officer, M.L. Peck. “When young people see others their age who are receiving recognition for their contribution, it helps demonstrate that supply management is a viable and exciting career choice.”

ISM’s CEO Tom Derry encourages managers to nominate deserving superstars for the 2017 30 Under 30 award. “Our goal is to build awareness and enthusiasm for this exciting profession by showcasing the talent and accomplishments of these dedicated young professionals.”

Who can apply and what are the judges looking for?

Nominees must be 30 years of age or younger as of December 31, 2017.  Peck says that the judges will be looking for young people who are already making their mark on the profession and have demonstrated qualities such as leadership, innovation, collaboration, creativity and a contribution to supply management in their organisation or to the larger industry.

International nominations welcome

Originally for U.S. professionals only, the program was opened last year to international applicants to reflect the increasingly global nature of supply chain management. While only 3 of last year’s group of 30 were based overseas, many of the American winners had significant overseas experience.

What’s the prize? 

  • All 30 winners will receive a one-year membership to ISM, complimentary admittance to ISM2018 in Nashville (valued at $2,295), and a THOMASNET.com Team Training Package.
  • One individual will be designated as the Megawatt Winner and will also win an all-expense-paid trip (up to $5,000) to ISM2018 for themselves and their nominator.
  • For the first time, THOMASNET.com and ISM are offering a special Early Nomination incentive this year. Those who submit a nomination by Friday, October 13, 2017 at 30under30.thomasnet.com will receive a free month of ISM Just in Time Learning along with a mug and free coffee gift card from THOMASNET.com.
  • Most importantly, the winners will gain widespread recognition as their achievements are celebrated and broadcast through industry journals, blogs, magazines and newspapers locally and globally.

Do you have a Millennial supply chain star in mind for the 30 Under 30 awards? Nominations are now open – visit THOMASNET.com for more information. Nominations close Sunday December 3rd. 

Is Independence The Next Procurement Disruptor?

In workplaces that have less structure and much greater independence, where we can bring our own technology to work and use it to innovate, what does the future hold for procurement?

Disruption has become something of a buzzword lately. With brands like Uber, Airbnb, Airly and Tesla making headlines in Silicon Valley it’s very easy to get swept up in the momentum; where is technology taking us and how can it lead us to better outcomes?

Is technology fear making you freeze?

After speaking at a Young Innovators conference in Denver Colorado recently, I met with delegates afterwards to discuss their technology challenges.

Our conversation revealed that whilst technology was viewed as a great enabler and business simplifier, they were fearful of the cost and effort required for implementation – so fearful, that many had resisted changing existing legacy technology even when they knew it was bad for business.

It reminded me of Kodak, a story so powerful in reminding us how an inability of a company to act due to fear of change, risk aversion and desire to protect the status quo killed a global business.

When it comes to legacy software, perception might be that it’s better the devil you know. But we have reached a new era of the digitally connected individual, one who values instant access to information. The digitisation and connections of our personal environment is leading to the same changes within the workplace, allowing buyers to become more productive and engaged in the buying process.

Procurement teams have successfully become more integrated into businesses through a combination of people and technology and have delivered strong savings and operational improvements, but where are the future incremental improvements going to come from?

Reinventing the rules with the cloud

It’s becoming very clear that cloud-based applications are and have re-invented all the rules.

Cloud based applications are driving a fundamental shift that will transform many aspects of procurement and strategic sourcing.

Procurement teams are beginning to understand the benefits new technologies can bring to an organisation, even when it means that buyers are working with, and bringing software and applications of their own choice into the workplace.

Traditionally we have focused only on the team, today we are witnessing the rise of the individual within a team. A future where procurement individuals are connected to the organisations approved suppliers but continue to use their own technology to improve those interactions and connections. This is allowing them to find and deliver incremental improvements businesses are demanding.

The trend is right in front of us, our work environments have transitioned from structured workplaces to become open and community based; the same is occurring with our technology decisions. We still come to the office each day but work in an environment that has less structure, more innovation, flexibility and freedom.

Bring your technology to work day

Today you can bring your own technology into the office, use it to drive innovation, supplier connections and collaboration and then connect to the business mainframe to download and upload data.

The future will see more individuals challenging existing processes and demanding better connected applications that are just as fluid and flexible in business as they experience in their personal lives.

Our future procurement leaders will look for solutions that simplify key processes, are easy to implement and use and gather the key data that can be utilised to improve decision making.

Finally, I recently came across the following quote from a CPO in an Accenture article, “it’s gotten to the point now where technology is evolving faster than my mind is conceptually able to digest it”.

Welcome to the world of you, the procurement individual!

Alan is a thought lead and CEO of sourceit, a technology company that has led the market in the development of simple and easy to use sourcing applications for a wide of direct and indirect categories.

Sourceit offers three different products for buyers:

  • RFQ – request for quote software for products and services
  • Market – a specialized procurement and job management application for marketing services, and
  • Catalog – an inventory management and on-demand product/services ordering application.