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?
Firesoulsmake 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.
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:
Getting closer to clients
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.”
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.
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…
Register now as a digital delegate for The Big Ideas Summit Chicago!
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.
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.
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.
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.
Why are our procurement teams falling so short when it comes to delivering on strategy? Changing mind-sets and attracting fresh talent will help start the party!
Register now as a digital delegate for The Big Ideas Summit Chicago!
Shockingly, 60 per cent of CPOs believe their teams do not have the skills to deliver their procurement strategy, according to Deloitte’s “Global Chief Procurement Officer Survey 2017.”
Why are procurement teams falling so short?
Originally, procurement was heavily based on process management, negotiation and basic spend analysis. But the procurement function is evolving, and professionals have to adapt to a new environment . There are new and growing expectations that require alternate skills for a more advanced job profile.
Procurement professionals are expected to be much more analytical, with the ability to perform data mining. They also must learn to manipulate and understand financial data and indicators, such as P&L and balance sheets. That’s not to mention that they should be proficient with the latest technologies.
Yet, one of the most important skills to develop is customer centricity. In today’s customer-centric world, this becomes crucial.
In my opinion, understanding internal customers, being able to communicate in their language, knowing what they want or helping them to understand what they need, is the most difficult skill to learn and develop because it often goes against the conventional and traditional training that many procurement professionals have received.
It’s time to stop hiding behind the processes and get to know the internal customers! Given the back-office environment we are coming from, there is still a lot to do to change the mind-set and the behaviour of those involved. Procurement professionals need to develop their consultative skills and become less process focused, since excessive process significantly impedes speed and agility.
Keeping It Fresh
Another challenge for procurement involves attracting and retaining fresh talent in our industry. This situation needs to be addressed now to prevent a significant skills gap within the next couple of years. While we still have to continue to build traditional procurement skills. We also need to recognise that these skills must evolve as analytic and cognitive solutions provide more refined data and insight. The challenge is less about finding someone who is an expert negotiator and more about recruiting someone who understands data and logic.
At IBM, we are currently hiring maths and statistics majors because they can understand trends and probabilities. Although many procurement skills can be taught, it’s hard to train someone to find trends in complex data.
Taking IBM’s example, our strategy to recruit and retain talent is reflected in how we communicate our procurement roles. “Our Procurement strategy is about collaborating with customers to ensure they have best in-class solutions, with access to the most advanced technology available on mobile devices. We partner with our suppliers to be as innovative and creative as possible.”
Presented like this, a job in procurement sounds pretty exciting!
The party ain’t over yet!
And the party isn’t over once we’ve found the right skills and talent, we also need to keep that skilled staff within the procurement function! If we help employees build on their competencies as well as add new ones, and if they can see that their contribution to the company’s mission clearly makes a difference, it will help us to keep those employees in procurement.
Ultimately, modernising the procurement profession and making procurement a “cool” place to work will help retain a talented, skilled and motivated workforce.
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.
You don’t always have to reach for the stars in procurement! Sometimes it’s ok to crank it up one notch at a time. AstraZeneca CPO, Dapo Ajayi, explains why.
Career Boot Camp 2017 launches on 4th September, featuring podcasts with 5 global CPOs. Sign up here (It’s FREE!)
We’d never say it’s a bad thing for procurement pros to forever shoot for the stars. Especially when it comes to innovating with suppliers. But don’t be underestimating those smaller successes and achievements!
Dapo Ajayi, CPO AstraZeneca wants to remind you that it’s ok to crank things up one notch at a time! Smaller ideas carry a lot of weight through building trust, improving collaboration and creating opportunities for greater change further down the line.
In her Career Boot Camp podcast, Dapo also discusses what business acumen means to her in the context of procurement, how to better align procurement with business stakeholders and offers guidance on how to become a CPO.
Five days, five CPOs, five fifteen-minute podcasts to help you upgrade your procurement career.
Featuring tips and guidance from the best in the business, each of our CPOs will dedicate their week to coaching you on becoming the best procurement leader you can be!
On Day 3 of Career Boot Camp we turn our attentions to AstraZeneca’s CPO, Dapo Ajayi.
Need a little convinving before you sign up? Check out our teaser trailer below to hear what Dapo had to say in reponse to our quick-fire questions.
Crank It Up, One Notch At A Time
It’s understandable that procurement pros would want to impart huge change in their organisations. But to achieve big, you sometimes have to be realistic and start small, allowing the more subtle changes you make to accumulate into something bigger.
“I don’t want to leave listeners with the view that innovation and new ideas is about the big, massive opportunity in change,” says Dapo. “I think that you can be just as successful in terms of bringing in some of the smaller ideas, the smaller innovations, that maybe just move the organisation a notch as opposed to the big-step change. I think both have a place in the modern corporate environment.
“Sometimes the small steps are the way in which you build the trust and you begin to build the relationship as collaboration, of idea generation, which maybe then lead to the bigger idea, the bigger opportunity further down the line.”
What Does Business Acumen Mean For Procurement Pros?
“Business acumen is the way in which an individual approaches their role. They view themselves as leaders, leaders of the business, and don’t just see themselves as an enabling function that’s just there to meet the needs of a particular set of stakeholders. They feel ownership for the business agenda.”
For Dapo, business acumen is very much about understanding the core of the business, and its priorities. “What’s really important for me, in terms of procurement professionals, are those who are agile enough to consider how their procurement agenda is relevant to the business agenda. Those who can translate “procurement speak” to business-relevant language. That, to me, is business acumen.
“It may be that talking about the unit price saving is not going to engage a stakeholder, but talking about how you can simplify or reduce the lead time will. This, at the end of the day, might also result in a price reduction or a savings in procurement speak. It achieves all the objectives. But it’s just not the place to start!”
“The other thing, for me, is individuals who demonstrate an enterprise mindset. I feel that procurement is uniquely placed to be able to make connections. Quite often, you can see individual business units and individual functions, trying to solve a problem.
“In procurement, you suddenly find that, actually, you’re not on their own. There are multiple parts of the business all trying to address the same challenge. Elevating that to maybe an enterprise challenge and enterprise issue and looking at an enterprise solution as opposed to just a solution to a function A or function B I think is really important.”
Listen to Dapo’s full podcast when you sign up to Procurious. Career Boot Camp 2017 launches on 4th September, featuring podcasts with 5 global CPOs. Sign up here (It’s FREE!)
If your business is engaged in international commerce, you’re probably struggling to toe the line with supplier risk management. Automation, alerts, and third-party data are your best defence.
Managing supply chain risk is no walk in the park. Exogenous events like the recent terrorist attacks in Barcelona have drawn attention to the EU’s rules to combat terrorism financing through stricter anti-money laundering (AML) regulations. These rules impact many companies that are increasingly added to the law’s scope: possibly yours.
Meanwhile, modern slavery violations can surprise even the most astute contract or supply chain managers who may have unknowingly relied on invalid or falsified information. In the U.K., The Modern Slavery Act 2015 includes a Transparency in Supply Chains clause, which requires companies operating in the U.K. to address modern slavery in their supply chains. If you’re at a big company, you’re probably on the hook to comply.
Once you add in the more common types of risk, such as the financial or credit health of your suppliers, changing markets, and natural disasters, the sense of how challenging it is to manage them all—in the age of digital disruption with fast-paced change and volatility—can quickly become overwhelming.
Fortunately, there is technology and automation to help you maintain control, gain visibility into your supply chain, and mitigate much of these risks. The right technology can help you proactively steer your organization clear of minefields that can damage everything from reputation to sales. And it’s only getting better.
Start with real-time monitoring and alerts
The first step is to identify the most likely disruptions to the supply chain, like a natural disaster or a work stoppage at a supplier’s supplier. One way to deal with this type of risk is with real-time monitoring. Real-time monitoring of your suppliers means that you can receive an alert whenever there is a potential for disruption. Such alerts can help you find an alternative source of supply, maintain production, and avoid missed deliveries or even a plant shutdown.
Real-time alerts should be an extension of an overall solution consisting of a platform and business network. This is the ideal foundation to set up, monitor, and manage a portfolio of suppliers to ensure that all essential documentation about labor practices, certifications, certificates of insurance, and so on, is in place before you start doing business.
Integrate third-party data sources
Documentation and data about your suppliers can come from many sources, not just what you gather during an onboarding, contracting, or surveying exercise. There are plenty of third-party sources that have standalone solutions and open APIs or integrations into supplier management platforms that let you address various dimensions of supplier risk and to set up corresponding alerts.
If your company is engaged in trade and has a 10,000-euro or more money transfer in any way, it will need to comply with the EU 4th AML Directive. In addition to digitally onboarding your supplier base, you may want to automate KYC / KYB (know-your-customer, /-business), AML (anti-money-laundering), and EDD (enhanced due diligence) requirements. These steps will help you comply with the directive
One provider that is using cutting edge technology like distributed ledgers is Austria-based Kompany. Their counterparty verification data allows users to streamline the supplier verification process at the point of onboarding (and continually) with up-to-the-minute alerts on any material changes to supplier vitals. Their information comes directly from the commercial registers. Kompany even includes PEP (politically exposed person) screening and sanction lists.
Who says you can’t manage what you can’t see?
Other popular sources of company and industry data include Moody’s (credit ratings), EcoVadis (sustainability scorecards and ratings), riskmethods (transparency into risk exposures in 1-n tier supply chains), and Made in a Free World (visibility into modern slavery), to name a few. These data sources can help you continuously monitor for risks and evaluate your risk portfolio during the sourcing process.
Through technology and regulatory technology systems like those described above, you can design an automated, customized, and intelligent risk management strategy. In turn, this can boost trust between you and your suppliers and you can plan more confidently in an environment full of uncertainty.
In recognition of how central social currency is, procurement pros are using their social networks to build, influence, and deliver results. The question is: do you know enough to be dangerous?
Connectivity is central to how we live and work in 2017. When something exciting or unexpected happens, many people immediately share the news, and a picture, on social-media. We read the updates shared by others and offer up our own. We like a post or status update to indicate support or show we are ‘in the know’ and watching important influencers. This constant sharing and consumption of information has become a global phenomenon.
Over time, these exchanges add up to a wealth of knowledge and connections that improve our decisions and elevate the weight given to our preferences – much like the exchange of ‘social currency.’
Social currency in procurement
A similar trend has begun in procurement and supply chain – perhaps in recognition of how central social currency is to us on an individual level. Procurement professionals have talked about supply intelligence for a long time, but now they are increasingly aware of how important their own social networks are to their ability to build, influence, and deliver results.
Professional social currency includes, for example, the recommendations, endorsements and likes that we assign as we go about our business online. When combined, they create a level of trust, and contribute to organisational reputations of both buy and sell side organisations. When buyers trust that a supplier will be able meet their business needs, or when a supplier trusts that a customer is a good fit for their capabilities in both demand and culture, transaction costs are decreased and the total value potential increases.
The fact that both sales and procurement are investing in their social currency creates a unique opportunity for them to come together and leverage their collective knowledge for the benefit of both organisations.
Being Reactive Vs Pro-active
One of the strengths of social media is its timeliness. Trust is not just about the source or location where information is stored. The more real time information is, the more confidence it gives to decision makers. Having real-time access to information allows procurement to meet the businesses’ needs faster. Timeliness is also at the top of the stakeholders’ priority list when deciding whether or not to engage procurement. When procurement can provide information proactively in real time, identifying which suppliers stakeholders should look at or having the pulse of specific industries, it goes a long way towards demonstrating their value – and adding to social currency.
Having instant access to trusted information alters the range of project options available to a procurement professional. They are no longer in the position of having to be reactive, where the business comes to procurement and says, “We have these new suppliers that we would like to engage – NOW” forcing procurement to scramble, trying to vet them. When procurement has access to real time information, they can readily identify potential suppliers and quickly access industry peer endorsements on those suppliers.
Do you know enough to be dangerous?
Procurement professionals need to know enough to be ‘dangerous’. They should have a foundational understanding of the category or commodity they are supporting, and be able to translate business needs into procurement best practices. This way when they get a seat at the table with stakeholders, they are able to engage in intelligent discussions around what stakeholders are trying to do and what is happening in the industry. Having access to intelligence allows procurement to be the engine driving category or commodity strategy to achieve sustainable value for an organisation.
Today, people call or email each other for supplier recommendations. This manual way of accessing trusted “social currency” is not scalable or visible to the rest of the organisation. The procurement technology user experience has come a long way. With collaborative or social technologies, the data becomes smarter and benefits everyone today and in the future.
The concept of trusted data is not new… the same instant knowledge that allows people to prioritise news shared by their circle of friends or pick a restaurant that has been highly recommended by people with similar preferences… today, decisions are made faster and the outcome is often more successful as a result of social currency.