Category Archives: Generation Procurement

What Does Your Ideal Company Look Like?

Many graduates embarking on the world of work think their ideal company is a large, corporate company, with great offices. But is this the best route to fast track success?

small or large company

Many of us have experienced working for large organisations and been given the opportunity to change positions multiple times within that same business. Larger organisations tend to have sites in different locations, allowing individuals to be more flexible with living and travel choices.

Within Procurement, corporate organisations exhibit strong brand awareness and recognition resulting in strong negotiation with suppliers leveraging economies of scale. Larger organisations bring greater resources enabling better technology infrastructure and subsequent commercial advantage.

Large Company Pressures

Having previously worked for a large international company for a decade, one of the challenges I experienced was establishing social cohesion and culture. It can be harder to get to know your colleagues and co-workers due to the large volume of employees.

For people who appreciate a familiar environment, this can be a disadvantage. High performers and confident individuals get noticed, gaining new opportunities and promotions seemingly more easily. However, this can put pressure on individuals to perform and stand out, creating a stressful working environment.

Change within a large organisation can sometimes be difficult to implement and occurs at a much slower pace. The numerous levels of communication and various approval structures agreeing the transformation mean larger organisations are not perceived to be as agile and responsive as some smaller entities.

These are just some of the challenges leading employees to consider working in a smaller business.

Transitioning from Large to SME

The transition from employment with a larger to smaller business can prove to be a considerable learning curve. Frequently, the cultural behaviours and habits deemed necessary and acceptable in larger organisations do not translate to an SME.

Behaviours such as empire building (often considered a sign of success in a large corporation) can also be detrimental in a smaller business. Instead, it is essential to create a culture of mutual interest and success instead of territorial defence.

In my experience the benefits of working within an SME significantly outweigh any habitual adjustments. You instantly realise that it is more personable, with the ability to build relationships across all levels with direct access to your colleagues.

There is more opportunity to broaden your skill set with exposure to broader roles, which in turn keeps it interesting. Additionally, you can make a real impact daily, and be recognised for it. Everything happens with more agility and ability to respond, implementing change and new ideas with momentum.

When transitioning from a large organisation to a smaller workforce it can be uncomfortable, adjusting to the culture and a more personal working experience. Great opportunities come with this transition: more chances to exhibit your abilities; increased responsibilities and exposure, meaning your hard work gets noticed.

Finally, flexibility with home working and desk-bound hours is something I have personally found immensely refreshing. Trusting individuals to manage their own workload and day creates incredible loyalty and motivated employees.

Emma Lambert is a Resourcing Manager at Procurement Heads, a UK-based procurement recruiter. Procurement Heads is all about getting to know great Procurement people and bringing them together to make outstanding Procurement teams.

Throwback Thursday – Who Gives a Tweet? Social Media for Procurement Executives

Still not sure about giving a tweet? Procurement professionals and executives need to be on the social media front line – and here’s why.

social media for procurement professionals

This article was first published on taniaseary.com.

Will I ever get on top of social media? Slack is the latest team collaboration tool that my 25-year-old whiz kids are pushing me into now. It’s a never-ending cycle of trying to keep up with the Jones’s (in the social media sense).

Since posting my “Who gives a Tweet” blog a few months ago, I think I’ve heard just about every reason why procurement professionals are finding it hard to “pick up the slack” and get social.

We’ve been really fortunate on Procurious to build a strong community of procurement professionals committed to sharing and building the knowledge base of the profession. However, there is still a lot of opportunity for more involvement.

Avoid the Excuses

For the uninitiated (and probably the offline) there are many excuses offered for avoiding being online.

But the most popular excuses are lack of time and not knowing what to talk about.

So, I’m putting forward a “Seary Theory” that is the “Two T’s” – Time and inTimidation (OK, not quite a second T) – are stopping more procurement professionals for being on-line. But more on that later…

procurement-executives

First, let’s all agree that social media is not going away.

I don’t need to explain to this educated group how social media is “disrupting” and “enabling” just about every type of business on the planet. We’ve seen retail, banking, communications and entertainment, and we will soon be finding out what it means for supply chain and procurement…

The way I look at it, social media is something we need to take VERY seriously.

The procurement profession is hosting conferences focussing on digital disruption and talking about the speed of change in today’s world. But I need to ask – are we walking the talk?

Yes, social media could be a fad, but then again, it could be the new way of doing business and therefore we need to embrace it.

I know a lot of procurement professionals think that social media is something that other people do. It’s all selfies on Facebook, cat videos on YouTube, and a plethora of Kardashians on Twitter. All true.

But the reality is, it’s not just Justin Bieber, Oprah and Grumpy Cat that are using social media. Do you realise who else is out there?

So why aren’t the rest of us “out there”? Putting ourselves in the fray? Why should I, as a procurement professional, be on Social Media?

Your Professional Development

By creating a strong network around yourself, you will be stronger for it.

It’s how you can stay informed and get ahead. Be it via LinkedIn, Procurious, Twitter or even Facebook, access the news as it’s posted, discover the world around you, keep abreast of industry gossip.

You need to have your finger on the pulse of the profession; anticipate things before they’ve happened, know who has changed jobs (and where they’ve gone to), identify issues others are experiencing, hone-in on the issues and questions.

You can also use social media to actively seek out information. Identify experts in your specific category or industry and follow their updates. Reach out directly to your network for answers.

Your Personal Brand

Be noticed for being clever and insightful. Don’t let people forget about you. Maintain a consistent and persistent presence on social media.

Social media gives you a voice. It has the potential to transform you into an authority figure. When you share something on social media (or in real life) and people respond, it demonstrates influence.

I appreciate not everyone wants to post their holiday snaps or selfies online and you don’t have to. Sharing online need not be so different to sharing offline.

If you’re feeling a bit hesitant, I suggest you join forums and websites to discuss the things that interest you.

This shows your professional nous, and keeps you front of mind with our clients and lifts your profile personally. It also demonstrates that you’re plugged into the industry, and will have the required knowledge to talk candidly about breaking issues affecting the profession.

What are the topics that only you can talk about? Every procurement professional has a unique vantage point from which they are gathering really interesting information that is unique to the industry, communities and businesses they work in.

Recognise your unique position and share some of the amazing learning’s and insights that come your way.

Your Daily Habit

The easiest way to get social is to incorporate a little bit of social “exercise” every day. Yes, every day. It shouldn’t be a chore and it doesn’t need to take more than 10 – 15 minutes. To prove that’s no exaggeration, here is what you can do in 15 minutes – I timed it.

1. News Scan

Check the latest news and happenings. We’ve made that easy on Procurious with our news tab which sifts through all the major business and procurement publications, so you don’t have to.

Keep your eyes peeled for “water cooler moments”, mentions of your competitors or suppliers in the headlines and be ready to dazzle colleagues and clients with factoids you’ve found on the commute to work.

2. Share

What did you find that was interesting? An article? A comment? A quote? Well, post it to Procurious – get people talking.

3. Be an expert

Start a discussion topic or contribute to a burning issue. There’s already a bustling discussions area on Procurious to dive into, take the initiative!

4. Grow your network

If we are going to be world’s best, then we need to be the most connected. You can invite people to Procurious via a direct email. You should also scan LinkedIn and review the suggested connections often. It is very exciting to see the wide range of procurement professionals present in these forums.

And once you’re in the swing of that maybe consider some of the real pro-moves, for example:

Register for any events you are thinking of attending. Send the invite around your network as others might want to join in.

When you’re at the event, post your thoughts to your network on Procurious. Keep the conversation going even when the party’s ended! On Twitter? Tweet about it.

Want to write something and see your name in lights? Send our Community & Content Editor Euan Granger an email and propose an interesting topic for our blog. Become a published writer!

Givers Gain

Recognise your unique position and share some of the amazing learnings and insights that come your way.

You are all in very fortunate positions but you’re not sharing these insights, so how will people (outside) know the amazing things we’ve all been doing? Feel free to blow your own trumpet, and together we can all be heard!

You are all ambassadors for the procurement profession; you should be using these new tools to help tell our story. What’s more, use Procurious to stay current and remain connected to your fellow procurement professionals.

Throwback Thursday – Who Gives a Tweet?

Why should you ‘give a tweet’? When it comes to getting your message across, there are a billion reasons to.

who gives a tweet

This article was first published on taniaseary.com. All facts and figures are correct as of the original publication date.

If you’re anything like my husband, you’ve done your very best to avoid being “poked”, “tweeted” or “linked” up until this point. And to be honest, I was in the same camp until my team convinced me of the compelling business reasons to “get social”.

You’ve probably heard all the stats about social media:

  • Facebook (which has just turned 10) would be the third largest country in the world with over a billion users;
  • Twitter has 288 million monthly active users, who send over 400 million tweets per day; and
  • LinkedIn sees two new users sign up every second.

The world’s largest “tweeters” have millions of followers. The singer Katy Perry has the largest number of “followers” with over 50 million hanging on her every tweet.

And while none of the CPOs I know are currently preparing to promote the release of their next album to their followers, there are a number of business reasons for you to start considering twitter, along with all the other social media vehicles, as part of your communication strategy.

Finding Your Voice

Anyone following me on Twitter (@taniaseary) will see that I’m an absolute novice and haven’t really yet “found my voice” in this new medium.  Mostly, I report on celebrities I’ve run into. In the last month this has included Robbie Williams, Liz Hurley, Sir David Attenborough, Princess Anne, and Philip Mould (who features in the television show Antiques Roadshow and Fake or Fortune).

On the Saturday morning when Robbie Williams “retweeted” my tweet his 1000+ followers, I started to understand the power of this new medium. Albeit, I was momentarily a commentator in the entertainment industry, rather than the procurement profession to which I belong, but nonetheless, a worthwhile experiment.

In a subsequent test, I sent a tweet about my professional association (CIPS) securing Cherie Blair as a guest speaker. They retweeted it to their near 4,500 followers.

So, now I was a commentator in my own profession. Mmm…getting warmer! I started to understand the power of this medium for communicating, and potentially influencing, your target audience.

So, even though I’m just starting to tweet, I can already see three business reasons why my CPO friends should consider using twitter.

1. Attracting the next generation of commercial leaders

If you believe the research, the next generation of talent – the so-called ‘millennials’ and ‘digital natives’ – have lost confidence in traditional hierarchical corporate structures. They are more likely to choose their next job based on how they rate their boss, over the company they are going to work for.

They will base their opinion not on your title, but on word of mouth, social groups, strong connections, and online presence. So the lesson from this is that to relate to and recruit the best talent, you need to have a strong presence in those places where your talent is talking. And there is no doubt that the next wave of talent is online.

2. Influencing your internal stakeholders and business customers

In terms of personal visibility to suppliers, your team and your management, social media is a great place to get noticed, as well as to reinforce your position as a connected business thinker.

The rapid pace of change has made staying ‘front of mind’ tricky.  Remember, by being active on social media, especially now while procurement is still underrepresented online, you’re establishing yourself as a thought leader in the profession.

You may ask, “but is my CEO really reading social media?”. While they might not be trawling status updates, they are undoubtedly being briefed daily by Corporate Affairs, who monitor and feed trends to the C-level to help tailor their communications.

3. Becoming a customer of choice with your supply base

Marketers have been using social media to connect with customers for years. Although the reverse – using social media to connect with suppliers – is still in its infancy, be assured that savvy sales executives are scanning LinkedIn, Twitter and other platforms to understand your industry (and you as a customer) better.

The Faculty’s 2013 Roundtable research Future-Ready highlighted that use of social media in procurement is still a blind-spot for the profession. The research goes on to recommend that “as a facilitator of connections across the organisation…Procurement should take the lead in the use of online networks….for example setting up a private group for the supplier network to discuss ideas and engage with the organisation.”

Finding Your Feet

So, if you are convinced of the business reasons to use social media, how should you, as a CPO, use these new communication channels?

While I am by no means an expert on the matter, I have been advised by some pretty smart cookies as to the ins and outs of the social space. I’ll now try to relay some of their best tips to you.

  • What are the topics that only you can talk about?

This is probably the toughest part to getting started. What do you have to say that is unique, and who will be interested? This is the biggest hurdle to getting started.

Every CPO I know has a unique vantage point from which they are gathering really interesting information, unique to the industry, communities and businesses they work in.

Recognise your unique position and share some of the amazing learnings and insights that come your way. Believe me, there are very few people with this wealth of information flowing their way every day.

  • Start “following” people you admire and respect

See what they comment on and how they communicate.  This will provide you both inspiration and direction.

  • Don’t overwhelm yourself

Master one medium, whichever you feel most comfortable with (generally LinkedIn is the easiest first step), and become actively engaged with that audience. After starting with LinkedIn, I moved onto a blog (try WordPress or Blogger). And just last month I made my first foray into Twitter.

  • Try to plan ahead

Not everyone can spend countless hours a day on Facebook or Twitter. Fortunately for us there are tools (such as HootSuite or TweetDeck) that allow you to ‘schedule’ social posts.

This means you can spend a few hours every month writing updates, and then spread them out over the month. I told you it doesn’t have to be hard!

  • Social means social not selling!

The reason social media is quickly overtaking traditional media is because it allows people to interact with each other. Instead of simply talking at people, get involved in the discussions that are happening everywhere online. Your credibility will only increase.

Why Give a Tweet?

At the end of the day, why are we doing all this? What’s the point?

The point is that you need to keep on increasing your influence.  Influence is the ability to drive action. CPOs are all about driving action, activity, delivering change and response to the 360 degree audiences that surround them.

When you share something on social media, or in real life, and people respond, that’s influence.

Getting Millennials on Board the Collaborative Procurement Bandwagon

Could the secret to e-procurement adoption success be Millennial engagement? Could more collaborative approaches be the key?

collaborative approach

This article was first published on My Purchasing Center.

No matter how good your e-procurement solution is, its success depends on user adoption. Getting employees to purchase through an e-procurement system is a hurdle that needs to be overcome in any organisation, particularly when it comes to engaging Millennials.

This generational powerhouse is having a major influence on corporate culture and how we interact with technology and communicate with each other.

This generation, which grew up with technology and social media, is accustomed to getting information at the tap of a finger, participating in digital communities, and relying on online reviews and opinions.

And they have come to expect this same level of convenience, immediacy and ease of use with the enterprise technology solutions – including the procurement systems – they use.

Raising Millennial Interaction

Understanding how millennials interact with technology is critical to increasing adoption of procurement systems. And as their significance and numbers in the workplace increase, so too does the importance of recognising their needs.

So how can you effectively engage them? Here are five strategies for increasing Millennial adoption of procurement systems:

1. Make it Relevant

To minimise rogue buying, make sure your system is relevant to the daily work lives of the users. Ensure it is as fast and easy to use and as user-friendly and intuitive as consumer sites. This means offering users efficiencies that resolve challenges unique to their specific roles.

Create a seamless process, enabling users to quickly and easily find what they are looking for and submit travel and expenses on-the-go. By creating these user-friendly systems and processes, you will encourage users to make the best decision possible because it’s the easiest thing to do in the natural course of their work.

2. Leverage Critical Intelligence

Gather knowledge from users across the enterprise to tap into the wisdom of the crowd and promote success. Create your own crowdsourcing environment on your procurement system.

Allow employees to suggest the items they need to do their jobs best so that procurement teams can negotiate the best contracts for those items. Help users save time by creating a system that recognises their needs and serves up the right information at the right time.

Create social opportunities. Consider setting up a reviews section where employees can post and read products and services reviews from their colleagues. This section could also promote corporate social responsibility by allowing them to share information on suppliers with green practices.

3. Instil a Bottom-up Approach

Instil a bottom-up approach to system design, roll-out and management. Empower users to drive and improve the process, instead of trying to control people and force them into compliance from the top down.

By making users active participants in strategic company initiatives, they will have a sense of ownership and feel more engaged. This also ensures you’re delivering a system that meets users’ needs and one that they will like using.

4. Foster Awareness of Actions

Foster awareness across the user base by incorporating gaming and making it fun. The Pokémon Go craze, which has caught on like wildfire, shows the appeal that games have with millennials.

You could create healthy peer competition by showing employees how their efforts compare to their peers, such as who are the smartest shoppers, and who are the most frugal travellers. Recognise them on the system with bronze, silver and gold achievement levels.

Share the visibility you have into spend, and track usage and measurable results across the enterprise so employees can see the value they are adding, how their actions directly contribute to company goals and what others are doing to achieve success.

For example, show the progress your company is making on overall savings goals, user adoption and total spend under management. This will create the mindset that every person who buys goods and services is not only helping to optimise processes that streamline their daily tasks, but also creating spend data that can be used to make better decisions and save money for the organisation.

5. Reward the achievers

In our research, we’ve found that the number-one reason users drop out of a process is because they don’t understand what’s being asked of them and feel their actions are not making a difference.

Create a greater level of awareness by acknowledging company “rock stars” – employees who make big strides toward company goals through consistently demonstrating desired behaviours.

You can reward these individuals through points and badges. For example, “Speedy Approver” for those in the top percentile of the approval cycle. Or “Compliance Champion” for those requesting items that are on contract 98 per cent of the time.

These strategies will help you build a collaborative procurement culture that not only engages millennials, but all of your employees. As users better understand greater company goals and are incentivised to participate, they will gradually shift their spend behaviours to strategic, deliberate approaches that help realise collective goals.

You will not only turn Millennials and other employees into stewards of company funds, but your company will also benefit from the cost savings, and optimised processes that collaborative, strategic purchasing delivers.

Tehseen Dahya is General Manager, North America for Basware, a leading provider of networked purchase-to-pay solutions, e-invoicing and financing services.

Setting KPIs for Beginners: Measuring Success

Now we have our KPIs agreed, how do we measure our data in order to ensure success in supplier relationships?

measure success

Catch up with part one and part two of this three-part introductory overview of the role and relevance of KPIs to support Supplier Relationship Management (SRM).

So, we’ve established the why, the what, and the how for setting KPIs. Now we need to understand how we are going to measure the KPIs in order to provide meaningful reports, and set a recipe for success!

Systems for Capturing KPI Data

In a perfect world, KPI data should come from automated systems. However, when you receive the data from the supplier, you may want to corroborate some of it with your own.

Commercial software vendors like SAP-Ariba, Coupa, Oracle, Emptoris and others have features that monitor and track some KPIs. The base functionality comes through the core purchasing systems. Some organisations, however, choose to develop their own reporting systems to ensure they have the features and flexibility they need.

Another option is to use manual systems and processes. This could include disseminating data through spreadsheets, email or any other format that users have access to.

These methods are simple and can be very effective if applied consistently, but obviously take a lot more time than automated reporting. One concern with manual systems is the higher potential for human error.

Typical Data Points for Measuring KPIs

The types of data points you can collect depend on the system you’re using. Below is a sample list – keep in mind that your list will depend on your organisation’s tools, systems and reporting requirements.

  • At the point of ordering: you can check the order against the contract to track compliance.
  • At the point of receipt: you can verify whether goods are delivered in full or delivered on time.
  • At the point of invoicing: you can check invoice accuracy and blocked invoices.
  • At the point of inspection or usage: you can collect quality metrics, including defects and out of specifications.
  • At the completion of the order: you can poll end-users to gather feedback on the ordering process and the goods or services delivered.

Multi-Supplier Performance Dashboards

These dashboards can be used to compare several suppliers across the same or multiple categories, depending on your objectives.

Comparing the suppliers in this way can be powerful motivator. For example, you could use the comparison data to push your suppliers towards best practice.

Alternatively, you could identify the least competitive suppliers for elimination, or identify other improvement opportunities. If your objective is to reduce your number of suppliers, KPI data could help you make a decision based on the suppliers’ ranking.

Recipe for Success

Keep the following five tips in your procurement toolkit for the next time you’re drafting KPIs and thinking about how to get the most out of your supplier relationships:

  1. Avoid an adversarial approach. Remember, this is all about relationships – and about people. People are more relaxed and inclined to come to an agreement when they aren’t in an adversarial environment. As a procurement professional, you’re going to lead your supplier to success through innovative and progressive means. Essentially, you are the champion of their cause to your senior management.
  1. Work collaboratively with your supplier to develop each KPI and agree on how it will be used. Let the supplier know which KPIs are critical to your organisation – the ones you’ll be listing on the dashboard and sharing with senior management. This enables the supplier to work with you to develop the best approach for success.
  1. Have regular reviews with the supplier – both formal and informal. Always keep the lines of communication open.
  1. When issues do arise, address them as soon as possible. Workshop with the supplier on how to best solve the issue. Remember, don’t focus on the symptom, but try to identify the root cause of any problem and find a solution that will work for everyone.
  1. Let your supplier know how they’re performing compared to others suppliers, while keeping their identities anonymous. This is a form of benchmarking and can help motivate suppliers to improve.

That wraps up our three-part series on setting Key Performance Indicators! Hopefully this will set you on the path to KPI success, but if you have any comments or questions, you can ask them in our new Procurement Tools and Templates Group.

Treading the Fine Line Between Assertive and Aggressive

What is the difference between assertive and aggressive, and why does it matter in job interviews? 

assertive

Assertiveness is saying what you mean without being impolite, asking for what you want without making demands. Assertive behaviour helps you to avoid being manipulated or put off easily. This style is far more likely to create a positive impression than either aggressiveness or non-assertion.

Aggressiveness means that you stand out, but not in a good way. Being overly pushy or contrary will probably irritate and alienate the interviewer. You may get what you want in the short term but it may hinder your progress later. On the other hand, passive or non-assertive behaviour can lead to a loss of your self-respect. This is where you let others get their own way and make yourself into a walkover.

It has been reported that interviewers reach a decision about an applicant within five minutes after meeting them. In this time there is little more to evaluate than how you look and speak, how you carry yourself, and how you greeted the interviewer, all clear indicators of your level of self-confidence.

Being confidently assertive helps you reduce the stress in an interview situation and to exercise more control over your working life. Here are three ways to sail through the interview assertively.

  1. Prepare well

It’s a bit like preparing for negotiations. Research your interviewer and the organisation you are intending to work for. Know how to respond to those difficult, and sometimes inane, questions, like what would you do in a conflict situation or what makes you the best candidate for this job. Remember that assertive behaviour is not specifically designed to get you what you want in every situation; in fact, it involves negotiation and compromise.

Bring your notes and don’t be afraid to use them. It makes you look well-prepared. If something of interest is mentioned about the job, pause and write it down. Be professional and be the best prepared candidate they are likely to interview.

  1. Practice your success stories

It is crucial to create a strategy for communicating your accomplishments to your interviewer in a succinct and memorable fashion.  Do you have a C.A.R?  Skilled interviewers will look for proof of your stated achievements by drilling down into the details of what you say you have accomplished.

C.A.R. stands for Challenge » Action » Result.  Write down a few gems relating to work areas that will come up in the interview. By dropping a story into the conversation you can showcase the action that you took to overcome a problem and can demonstrate to your interviewer that you achieved the desired result.

Mini-stories should be succinct and limited only to relevant details, just a few sentences. They will allow you to share examples of your past successes and let your actions speak.

  1. Polish your communication skills

Candidates demonstrate their assertiveness by the questions they ask, as well as the questions they answer. One trait employers look for is the ability to communicate effectively at all levels in an organisation. Being too tentative with senior managers is not a good sign.  People are just people, so speak with confidence and show a positive attitude but with respect.

Come prepared with questions about the job, such as expected results after the first year, where it fits into the organisation and what happened to the person who had the job before. Practice your questions as well as your answers in preparation for your interview.

Speak clearly and use good diction at a reasonable volume. Talking too quickly and loudly is not being assertive, it shows nervousness. Non-verbal cues influence an interviewer’s impression of you just as much your words do, so keep up the eye contact. Express your opinions honestly, but wisely.

What the recruiters say

Candidates show a poor level of assertiveness when they:

  • Show a lack of confidence in expressing achievements and abilities
  • Sound unsure of themselves when answering questions
  • Are overly agreeable to everything said by the interviewer
  • Trail off or mumble instead of clearly completing a thought

At the end of the interview, ask what’s next in the hiring process.  You may not get a straight answer but it is clear that you want to know.

Setting KPIs for Beginners: Types of KPI

We know the why in the role of KPIs in Supplier Relationship Management. But we also need to be able to identify which type of KPI will bring the best results.

KPI for beginners

Catch up with the first part of this introductory overview of the role and relevance of KPIs to support Supplier Relationship Management (SRM).

So now we have established the role of the KPI in the SRM process, we need to think about the type of KPI we’ll use. Much of the decision making around this will be based on what procurement is measuring with the KPIs.

Remember – procurement should discuss KPIs with other stakeholders and, where possible, involve suppliers too. This engagement could make the difference between success and failure.

Types of KPI

Here’s an overview of the three different types of KPIs:

  1. Quantitative – these are measurable, numeric and objective, like rating on a scale of 1 to 10. An example of a quantitative KPI would be the number of late deliveries per quarter.
  1. Qualitative – these KPIs are more subjective. An example could be how responsive the supplier is to a request – let’s say you have a special order that needs to be delivered to an unusual location. It’s a one-off request, but if the supplier makes the delivery it would save you significant costs in transport and you know they make deliveries to that location for other customers. Is the supplier reluctant to change the delivery location, and is there a fee involved? Is the fee reasonable?
  1. Cultural – are the KPIs aligned with your organisational values? Let’s say your organisation has a drive to always buy locally-made products. You want KPIs to capture whether your suppliers are buying locally as well.

Remember, there’s no one-size-fits-all set of KPIs. Whether you are working on direct or indirect categories, manufacturing or distribution, you need to match the KPIs to the supplier.

For your Toolkit: KPI Checklist

This checklist is a quick summary to confirm if your KPI will stand up to scrutiny.

  • Is it measurable? If it’s not measurable, than what good is it? How will you know if your supplier is meeting the required standards?
  • Is it meaningful? Do you or anyone else in the organisation care about it – if not, why collect it?
  • Is it actionable by the supplier? There’s no use measuring a data point and feeding that information back to the supplier if the supplier is unable to act on or improve the situation. If it’s not within their sphere of influence, they probably won’t accept the KPI to begin with.

Keep the KPIs simple, easy to understand and easy to measure. Ensure they support your overall business strategy and objectives by aligning them to your customer requirements.

Experience shows it’s better to capture a few vital measures that can be tracked consistently and repeatedly. This is much more effective than measuring randomly and or inconsistently.

Institutionalising the measurement process and regularly reinforcing it with suppliers and stakeholders will provide a common ground and common language, support a collaborative environment and make it easier for everyone to understand, participate and achieve.

Finally, you want to reinforce the value of the data collection to support improved business performance – that is, now that you’ve collected the information, make sure you tell the right story.

Contract Level KPI Reports

The dashboard (or scorecard) summarises your KPIs and measures them against a particular supplier.  This tool can be used internally to review a supplier’s past or current performance. It’s also important to share this information with the supplier so they are aware of the data and can act upon it.

KPI status reports should be delivered in a timely manner to enable you to address stakeholder concerns quickly and responsively. The reports need to include all the relevant information your stakeholders require – this includes the good and the bad.

You don’t want the senior management finding out bad news from the inter-office grapevine or worse, the media. This is your chance to deliver important details relevant to the success of the business. It’s your news and you want the kudos that go along with identifying and sharing it first.

You also want to define a clear escalation process to address issues and problems as they arise. For example, in a supplier review meeting you may realise the supplier’s data doesn’t match yours.

The supplier is reluctant to change their process based on your data, when their own data says everything is okay. You need an agreed escalation point to review and resolve this disagreement.

Finally, you want KPIs that will deliver predictive measures, not just historical. This allows you to stay one step ahead by being in a position to identify and act upon issues before they become serious.  Predictive measures will also help you to identify targets for the supplier to meet and beat over the course of the contract.

All of this information fits into the reporting documentation to demonstrate how and why you’re spending your organisation’s money. The highlights of this report can be summarised in the dashboard and presented to senior management.

Stay tuned for the third and final article in this series, which explores systems used to capture KPI data, typical data points for measuring KPIs, and multi-supplier performance dashboards.

Communication Queen – Not Your Typical Procurement Pro

There’s a step change coming in the procurement technology and software industry. And communication and relationships will be the central pillars of it, says this Millennial.

Communication Queen
Simona Pop

There is step-change coming in procurement, and the change is going to be keenly felt in the procurement technology and software industry. But for this change to take effect, it needs support on both sides of the aisle – buyer and supplier.

Simona Pop, Head of Partnerships & Global Communication at InstaSupply, is not your typical procurement professional.

She’s one of a new breed of professionals involved in procurement and supply chain, who believes change is on the horizon, and that it can’t come soon enough.

A tattooed Millennial, with a stake (both monetary and emotional) in the company she works for, Simona presents a refreshing view on buyer and supplier relationship management, and believes in creating emotional connections with clients.

Not only that, but she also walks the walk when it comes to leveraging social media in business.

Procurious caught up with Simona, and chatted to her about her career, her approach to social media, and why she believes we shouldn’t have to leave the real-time efficiencies of our personal lives at the office door.

Tell us a bit about yourself – how did you get to where you are today? 

It has to be said, my career trajectory isn’t what you might call straightforward. I got out of school thinking I was going to be in advertising. Then I moved to the UK and started working with Brakes, the food supplier, in a sales role. I then went 180 from that path and started working in events.

Finally, I started working with InstaSupply as Head of Partnerships and Communication. One thing lead to another really, and in the end, it makes a lot of sense.

I love communication and building relationships. That’s what makes the world go round, as far as I’m concerned. My communications background is ultimately the driving force behind my take on business.

You’ve recently won your place at Virgin Disruptors – congratulations!

Yes, I am very excited about it. It was all about presenting my vision on what industry needs disrupting and how I would do it. I went straight to the core and illustrated how ALL business needs disrupting.

You can see my video below. It’s all about changing procurement and finance. They are the engine of each and every business so they need to be as well oiled as possible.

What role did social media play in the award?

As with every bit of communication I put out there, this was also a social affair. I got to chatting with Virgin via Twitter and found out about this opportunity. As everything in social media moved pretty fast, I only had a couple of days to script and create the video in order to stick to deadlines. I then uploaded it on YouTube and shared it via Twitter again.

I am a true believer in the power of social and its ability to not only bring us information in real time but also challenge us to become more creative and innovative. It’s why I am so happy to be part of the Virgin Disruptors community as a technology company.

So many procurement technology implementations fail – why do you think this is?

It comes down to how people interact with the technology and the company providing that technology. Is there a match there in terms of values? Or is it more about ticking a box and signing a three year contract so you don’t have to worry about it?

So many businesses will go for old technology just because someone else in their industry has used it before. Even if it’s not a great fit for them and their staff, they will implement it anyway just to tick that “tech” box and consider it done.

More often than not, businesses pay the price tag of an Aston Martin, and end up using it like a second hand Ford.

The fact that back office operations, procurement and finance technology involve so many different roles and levels of seniority, makes it paramount that the interface and functionality appeals to all age groups.

There shouldn’t be a difference between the way we interact with brands in our personal lives, and brands that we see at work.

What are the key changes you think need to be made? Can we make procurement/B2B software more like B2C counterparts?

The way I see it, every business relationship is a partnership – it’s not a case of sell and move on. As a tech supplier, you are going to be working closely with your client, as they will interact with your product every single day.

You want to allow them to work smarter, be more efficient and ultimately make their lives easier. You need to provide top notch tech, but also real time support. There’s no place for a helpline that keeps people on hold for hours, or an email they get a response to in three months. That would be unacceptable in B2C nowadays!

There needs to be a shake-up. We need to remove the jargon, the boring pages of bland text, the hieroglyphic appendices, and the contracts that tie you into five years, whether you like it or not.

Software providers want partners, not prisoners. We are here to simplify buyer-supplier relationships, and make life easier for everyone involved in running a business, regardless of role and seniority. Ultimately we want to support them in growing their business, and having a better quality of work.

After all, why should we leave all the efficiencies of B2C, our personal life, at the door, when we get to work?

Setting KPIs for Beginners: Why Bother?

An introductory overview of the role and relevance of KPIs to support Supplier Relationship Management (SRM).

KPIs article 1

In this three-part article, we discuss some of the different KPIs that are used specifically for SRM. This list is by no means exhaustive; it can’t be, as performance indicators must be relevant to your own organisation, customers, and requirements.  However, this list can be used as a guide and can become an essential part of your toolkit.

We’ll also review some of the popular ways people measure and monitor KPIs through systems and reports. Again, this won’t be an exhaustive list because of cultural and technical requirements unique to every organisation.

You’ll also find some key tips for implementing KPIs successfully, including a checklist (more tools for your toolkit!).

We will explore how dashboards can be a fantastic tool for procurement professionals to use when communicating to stakeholders and promote hard-won benefits to the business. An effective dashboard will include KPIs that demonstrate how suppliers or categories are being managed and their impact on the business. Remember, the KPIs you set may influence senior management decisions. Therefore, you need to get it right.

Why bother with KPIs?  

To get started, let’s talk about why we use KPIs.

As procurement professionals, we’re responsible for making smart purchasing decisions that support the values and principles of procurement, such as probity and value for money. These decisions must also support the philosophy and strategy of individual organisations. Importantly, we need to be able to justify and document how (and why) we’re spending money.

KPIs can help us justify spend. In fact, KPIs can be used to identify risk, cost savings, innovation opportunities and successes, value-for-money initiatives, customer satisfaction and any number of other factors that we or our customers feel is important.

The role of a supplier KPI is vast. They set the performance standard and have measurable features used to identify areas of improvement, such as establishing a baseline, identifying where you want to be and developing a path to get there. But it doesn’t stop there – KPIs can also be connected to payment milestones, credit payment and liquidated damages.

The important point to remember is that supplier KPIs must be agreed upon by all parties involved. If your supplier doesn’t know what is expected of them, they won’t be able to comply, let alone excel. That’s just one side of the relationship.

The other side of the relationship involves the professionals within the buying organisation. How do you, the procurement professional, know which KPIs to use? Are cost savings important? Delivery times?  ISO standing? Inventory reduction? You won’t know unless you ask your customers about their requirements.

So, why are KPIs important?

What gets measured gets done. KPIs are a way of ensuring your supplier focuses on your fundamental business needs. We can do this through:

  • Incorporating our customers’ requirements into the KPIs to align supplier performance with organisational goals.
  • Providing constructive feedback (rather than punitive criticism). Why? Because the end goal is a win-win situation where you get what you and your customers need, while the supplier gets to improve its reputation and build its business.
  • Promoting a continuous feedback loop using KPIs to drive supplier performance, initiative and improvement. KPIs should be linked to the terms of the contract but remember, the focus is on the relationship. Indicators should therefore reflect the “spirit” of the contract as much as the “letter”.
  • Bringing clarity to overly generic contract requirements to drive meaningful performance.

Challenges in KPI management

Here are some common challenges that we’ve seen through our own experience:

  • Capturing the data – identifying the relevant data and accurately acquiring the data points.
  • SRM fatigue – motivating yourself, your team and your suppliers to continue SRM activities over the life of the contract, which can be months or even years. Activities can easily become stale and sometimes you’ll need to push them along.
  • Comparing and contrasting suppliers – supplier performance will be very different depending on their size, sector and region. Ensure you’re comparing apples with apples.

Engaging end-users is important

When driving supplier performance over long-term contracts, we want to keep things moving so end-users don’t feel that nothing is happening. Keep end-users in the loop, ensure their voices are heard and let them know how things are progressing.

We often focus on senior management as our primary “customer”, but the end-user is arguably more important – especially when it comes to compliance. After all, they’re the ones who will use the product, system or tool that is being purchased.

Stay tuned for Part 2 of this series, which will explore the different types of KPIs, complete with a KPI checklist and contract-level KPI reports.

Throwback Thursday – Procurement’s Greatest Ambassador?

If we’re to change the image of procurement, we need a figurehead to point to. Could Apple CEO, Tim Cook, be the ambassador the profession needs?

Tim Cook - Procurement Ambassador

One of the key goals of Procurious is to improve the image of our profession. We are the brown cardigan brigade no longer (unless it’s a snazzy, modern cardigan!). The latest generation of procurement pros are highly intelligent, motivated, and tech-savvy.

However, to help push the image change along, procurement needs a figurehead. A high profile ambassador for the profession, who highlights just how far you can go. And Apple’s current CEO, Tim Cook, could be that ambassador we need.

We take a look back at an article from last year, highlighting Cook’s journey to the top.

Procurement’s Greatest Ambassador?

It’s fair to say procurement has received a bad rap over the years. We’ve been dubbed corporate policemen, paper pushers, roadblocks, as well as a raft of other unflattering names we dare not mention.

Thankfully, due to the innovation and hard graft of procurement professionals, the function is shedding this negative image and starting to become recognised as an integral part of any successful business.

Perhaps the greatest exemplar of procurement’s ascendancy to date is Apple CEO Tim Cook.

In 1998, Tim was the vice president of Corporate Materials for the Compaq computer company. The role saw him hold responsibility for the organisation’s procurement and inventory operations.

Despite having no real intentions of leaving this role, the enigmatic Steve Jobs managed to convince Cook to take on a role at Apple (pre iMac, iPod, iPad, and iPhone).

Stellar Performance

Tim’s performance at Apple was stellar, particularly from a procurement point of view. In his authorised autobiography of Steve Jobs, Walter Issacson described Cook’s methodical approach to supplier rationalisation and inventory management.

“Cook reduced the number of Apple’s key suppliers from a hundred to twenty-four, forced them to cut better deals to keep the business, convinced many to locate next to Apple’s plants, and closed ten of the company’s nineteen warehouses.

“By reducing the places where inventory could pile up, he reduced inventory. Jobs had cut inventory from two months’ worth of product down to one by early 1998. By September of that year, Cook had gotten it to six days. By the following September, it was down to an amazing two days’ worth.

“In addition, he cut the production process for making an Apple computer from four months to two. All of this not only saved money, it also allowed each new computer to have the very latest components available.”

The procurement and supply chain decisions made by Cook highlight the critical importance of procurement to Apple’s success. The strength of the company (and arguably its competitive advantage) has been in building and managing a complex network of suppliers.

The company has then successfully leveraged this network to produce ground-breaking technology products. Put simply, without the supply network, there is no product.

Recommendation From The Top

Cook’s performance in Apple’s supply chain clearly caught the attention of Steve Jobs, who gave the follow recommendation of Cook during his departure from the firm.

Jobs stated, “I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.”

The promotion of Cook to CEO shows that the board of Apple understands the critical importance of external suppliers as a source of innovation for the company. Apple clearly sees the procurement function as the conduit to successfully managing these relationships and ensuring the future success of the business.

Apple is the world’s most valuable brand. It has undergone a remarkably successful business transformation, and has produced products that have changed the way we interact with each other and the world around us.

With so much of this success being attributed to great procurement practices, could there really be a stronger endorsement for our profession?

“Tim Cook came out of procurement which is just the right background for what we needed.” – Steve Jobs