Category Archives: Procurious News

Calling All Future Procurement Leaders… Start Building Your Personal Brand, Now.

Creating a personal brand as a procurement leader not only helps you do your job better but also boosts your professional standing. So, how do you begin?

‘Personal brand’ seemed such a strange expression to me the first time I heard it.

It sounded like something one of those Gen Z Influencer types would talk about on a beach while flogging an internet get-rich-quick scheme.

Little did I know that building a personal brand would – in time – become a leadership imperative.

Or, crazier still, that one day I would be helping executives develop personal brands while uploading selfie videos of my large, round head onto the internet as a career coach at Executive Career Jump.

The benefits of a personal brand

Whatever your main challenge as a future procurement leader – be it attracting talent, supplier engagement or driving innovation – all these pressures can be reduced by building a strong personal brand.

More and more, jobseekers are told to ‘pick a leader, not a job’. So a strong personal brand will help you no end with recruitment.

It’s not only great for doing your job but also excellent for your career prospects.

When you build a strong personal brand, you’re rarely short of career development, mentoring or employment opportunities.

It is estimated that in today’s digital era 65% of decisions by key stakeholders are made in advance, before you have ever met them. Their decision is almost exclusively based on what they can find out about you online – on social media and on your website.

So what you’re putting out there for people to see is super-important.

It should be strategically positioned and well thought-out.

Three steps to (brand) heaven

Eddie Cochran famously sang that there are ‘three steps to heaven’. Below is a simple three-step process to help establish a strong personal brand as a procurement leader – and then continue to enhance it.

Push yourself out of that comfort zone and give it a go … you’ll be surprised at the results.

STEP 1 – GET YOUR HOUSE IN ORDER

Anything on the internet is findable.

And you will be judged on the basis of what you put out there.

So decide what you want to stand for (make it authentic) and then undertake an online clean-up. There are even apps that can help with this audit process.

Do you have posts out there that you wouldn’t want customers or employers to see? Take them down.

A drunken rant or risqué material? That should definitely go.

Even the pictures in which you appear are important.

I knew one guy who was overlooked for a job offer despite interviewing well as in one of his pictures on social media was next to someone who was smoking cannabis. 

He may have never even touched the stuff, but – fairly or unfairly – hiring him was seen as a risk.

STEP 2 – START PRODUCING ONLINE CONTENT

Once you have your house in order, you need to start producing online content and getting your message out there.

The ROI on this isn’t instant but if you’re consistent it will be significant. Besides, it’s free to use platforms like LinkedIn!

First, you need to decide what you want your personal brand to be. Make sure it is real and authentic.

Next work out which stakeholder groups you want to impress or attract most right now. 

It’s like building up a buyer persona in a marketing exercise.

For example, you may decide that you want your personal brand to be synonymous with promoting the procurement profession as a career of choice and that your biggest priority right now is recruiting entry-level procurement analysts.

That’s your audience.

You could give a name to the person you want to attract . . . ‘Graduate Grace’, for example.

Now start writing articles, producing videos and sharing posts that help promote the profession and will appeal to ‘Graduate Grace’.

Simple as that.

STEP 3 – CONVERT ONLINE BRANDING TO OFFLINE OPPORTUNITY

When you start gaining momentum and building an online brand and community you’ll create an ecosystem that generates offline opportunities, too.

So grab them with both hands. Appear on panels, start mentoring, go to events and deliver talks. Network with peers.

Delivering on your online brand in person is a powerful thing and will only continue to bring you satisfaction and tangible benefits.
Good luck with the journey. Keep striving and experiment often. Use these 3 simple steps to build and maintain your brand – and reap the benefits.

This article was written by CPO Roundtable attendee & Founder at Executive Career Jump, Andrew MacAskill.
In 2020, we will be holding CPO Roundtable events in London and Edinburgh. If you are interested in attending one of these events, please contact Laura Hine by clicking here.

Save the Date! Procurious is your Perfect Partner for 2020

Time to get out your diary and save some important dates. Whatever events you’re looking for in 2020, Procurious is your perfect partner in procurement.

2020 Save the Date
Photo by Isaac Smith on Unsplash

Yes, we know it’s only a few days into the New Year. But we’re so excited about the great events we’re got coming up this year that we just can’t wait any longer! Since Procurious first came into being in 2014, we’ve had the aim of putting on a show when it comes to great procurement and supply chain-related events.

And 2020 is no different.

But, as we know you are all busy people, and that diaries tend to fill up fast, we thought we would share some important dates for you to pencil in. That way we can help you plan, and you won’t miss out on anything we’ve got in store for you during the year.

We pride ourselves on making sure we’re offering great content for every member of our community. Not only will we be bringing you webinar discussions on some of the hottest topics facing procurement and supply chain right now, but we’ve also signed up of the some of best leaders, thinkers and speakers around, all set to help you get involved.

So, whether it’s webinars or Roundtables, Summits or podcast series, there’s something here for you in 2020.

Empowering Webinars

We know how much you like a webinar, so we’ve got a great line-up already sorted. We hit the lift-off button in only a couple of weeks from now on the 23rd of January with the highly relevant, ‘Don’t Quit Your Day Job’.

Procurious’ own Helen Mackenzie will be joined by special guests Lara Naqushbandi from Google, Christina Morrow of Ricoh and Imelda Walsh from The Source to discuss all things careers. With topics covering everything from making sure you have a solid plan before you start the quest for a new role to the one change you can make right now to get you on the path to the top, it’s sure to be a cracking start to the new year.

Following this, we’re keeping up a regular plan of webinars throughout the year. You’ll be able to find dates in the Procurious Events Calendar, and we’ll keep you up to date via the Blog and handy email invitations.

High-Powered Roundtables

We’ve extended our CPO Roundtable programme for 2020, with events in London and Edinburgh. We’ll be gathering some of the profession’s top CPOs in the region, or dare we say in the world to serve up new ideas and spark the wisdom of the crowd as they discuss some of the biggest challenges facing procurement and supply chain now.

Although these events aren’t open to everyone, we still like to share some of the great ideas in the Procurious community, as well as a selection of Blog articles in the lead up to the event, and wrapping up the best of the talking points and key takeaways after.

If you’re a senior leader can want to attend a London or Edinburgh Roundtable event, please contact Laura Hine by clicking here.

Perfect Podcasts

If podcasts are your particular flavour of professional development, then 2020 will deliver for you too. We have a week of supply chain themed podcasts, partnering with IBM, from the 11th of May. Then returning in October is our annual Career Boot Camp, with all new speakers and all the best career advice you need.

One of the best things about our podcast series, besides the great coaches and content, is that, at 15 minutes, they are a short, sharp way to get your learning in for the day. If you want to get a flavour of what to expect, you can find all our 2019 podcasts in the Learning Area here on the Procurious website.

Biggest of Big Ideas (2020)

Big Ideas Summit isn’t just the world’s first digitally-led procurement event, it has a global reputation as the most innovative leadership event for the profession. And 2020 is going to be bigger than ever … and that’s not just because our theme is ‘Dream Big’.

Not only do we have Rugby World Cup Winning Head Coach and former Olympic Team GB Director of Sport, Sir Clive Woodward OBE presenting, but a range of the world’s most influential thinkers, eminent business leaders, and commercially creative minds converging in London on March 11 for Big Ideas Summit London.

As always, we’re offering you the opportunity to join us, either online, or in the room with other global thought-leaders. Registration is already open for this unmissable event. After London, Procurious will be visiting global members in Chicago (September) and Sydney (November), and we’ll be releasing more details on these events closer to the time.

Sign Up, Prepare to Soar

We’re sure this has all whetted your appetite for 2020 and the great events Procurious has to offer. If you have any questions at all on the events, you can get in touch with the team via the website, or on one of our social media platforms.

We hope to see as many of you as possible at these events during the year, so sign up now and get ready for your career to soar high this year.

How to Explain Procurement Using a Christmas Turkey

Still struggling to explain procurement to your friends and relatives? This festive season, why not put it in easily understandable terms – using your Christmas turkey?

Christmas turkey
Photo by Engin Akyurt from Pexels

“So, er … Cindy – what is it you actually do?” 

It’s the holiday season, which means that at some point you’re likely to find yourself making small talk at a social event with someone who is showing polite interest in what you do for a living.

The trouble is, the word “procurement” is quite often met with a blank look. I know that I certainly had no idea what the term meant the first time it was mentioned, and even today I’m still discovering that there’s way more to procurement than the word suggests.

So, how should you answer someone who presses you on what procurement actually is?

Don’t be boring

Let’s have a look at some of the common definitions of procurement that come up with a basic Google search.

From Wikipedia (a quote from MIT press):

“Procurement is the process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process.”

Sorry, I think I nodded off in the middle of reading that! Apart from being wordy and dull, the real problem with this definition is that it talks about process rather than outcomes. Nobody cares about tenders or competitive bidding processes. They’d rather hear about outcomes such as money saved, the eradication of modern slavery, and environmental benefits.

In its whitepaper on this very topic, CIPSA canvassed its members to come up with this definition:

“Procurement is the business management function that ensures identification, sourcing, access and management of the external resources that an organisation needs or may need to fulfil its strategic objectives.”

Accurate, but soporific. What’s needed is a definition that explains procurement in a way any layperson would understand.

Don’t make it just about buying

Usually, my advice would be to keep your definition as simple as possible. But oversimplifying procurement inevitably ends up with procurement being described as “buying” or “purchasing” only.

I once witnessed a CPO dad telling his six-year-old daughter: “I do the shopping for my organization; I’m the one pushing the giant shopping trolley.” It’s a great image, but procurement does so much more than sourcing products and services.

Without trying to cram everything a procurement professional does into your answer (the other person will roll their eyes and walk away), try to capture some of the activities procurement does beyond sourcing: identifying cost savings, building relationships, managing risk, driving innovation and sustainability.

Procurement and the Christmas turkey

Let’s assume you’re sitting around the table at Christmas lunch when your partner’s elderly and inquisitive great-aunt asks you what procurement is. While you take a few seconds to consider your answer, your gaze rests on the magnificent turkey in front of you.

Why not use the turkey to help illustrate what procurement does? Let’s give it a try:

“Well, Aunt Edna, take this turkey as an example. Someone here had to go to the shops and buy that turkey – that’s simple enough. But imagine if you worked for a company that wanted to buy 100,000 turkeys.

It would be procurement’s job to first of all understand exactly what type of turkeys the company needs. Then we’d look around for suppliers who can not only reliably fulfill an order this large, but do it on time, with every turkey meeting quality expectations. Procurement would negotiate with that turkey supplier to get the best-possible price by seeking a bulk purchase discount.

But it’s not just about reliability, quality and price – it’s also about sustainability and social outcomes. Is there a supplier who breeds turkeys in a more sustainable way than others?

Are the turkeys cruelty-free and free-range?

Are the human workers paid fairly, and do they work in safe conditions?

Can we spend our turkey budget with a minority-owned supplier, or one that focuses on positive social outcomes such as hiring workers with disabilities?

What else can that supplier do for us? Is there some sort of innovation they can come up with (such as cheaper or more sustainable packaging) that would be beneficial for both my company and the supplier?

So you see, Edna … (oh, she’s fallen asleep).”

Further reading

Looking for more inspiration to help you explain procurement to others? Check out these other resources:

UNA is a Group Purchasing Organisation that generates cost savings for members across a wide range of products and services (including Christmas turkeys).

Procurement – Are We Our Own Worst Enemies?

We spend so long looking outwards at the wider environment for our key issues. But are we missing the elephant in the room? Is Procurement actually one of Procurement’s worst enemies?

own worst enemies
By MarinaP/ Shutterstock

For anyone who has experience working in public sector procurement, the strictures of the rules and regulations are well known and often highly frustrating. So it would have come as a surprise to many when former UK Prime Minister Theresa May announced a plan that would ‘free the NHS’ from Government procurement rules.

Cue many cornflakes being choked upon around the UK upon hearing this news. And then numerous procurement professionals taking a very keen interest in where the story was going next. 

After all, if you were to speak to any procurement professional with experience of working in the public sector (and their client departments), you would probably get a fair picture pretty quickly of the key barrier, hindrance, ball and chain impacting their work. Administration, bureaucracy, paperwork, regulations – take your pick. Once you enter a public sector procurement process, it’ll be a while before you emerge out the other side. 

That’s not to say that these are bad things. The regulations help to bring openness, honesty and transparency to the process. They also make it fully auditable and able to be used as a shield against bad practice and spurious challenges. That said, there isn’t a single procurement professional who wouldn’t love to drop the regulations once in a while.

Who wouldn’t love a bit of extra ‘freedom’ to spend money in a more effective and efficient way. 

Worst Enemies – Self-Inflicted Pain 

Putting aside the UK and EU-wide regulations for a minute as an unavoidable consequence of public procurement (Prime Ministerial intervention pending…), we can turn a lens on the processes that procurement has set up for itself. Sure, the regulations are a pain, but they’re part and parcel of doing the job. What isn’t is the self-inflicted pain of all the additional administration that procurement loads on itself. 

Take a closer look at the processes in your organisation. Are they as lean as they can be? Do you have a set of toolkit documents that you can use for all your process? Or are you mired in repetitive documents that are all required, but aren’t adding any value to the process? 

This additional burden not only extends an already lengthy process, but also curtails the valuable time of your procurement professionals. Want a happy procurement team? Then it’s value and management, not process and admin. 

In previous articles, I’ve outlined both the importance of time management, but also the use of collaborative frameworks and other procurement routes that can be used to help use this precious time more effectively. What is more problematic, however, are the timescales attached to the procurement process that is specific to the individual organisation. 

Tender regulations aside, we’re talking about the additional time procurement builds into its own process that is potentially avoidable. Think internal approval processes, report writing and flurries of emails that could be taken care of with a short conversation or a really good document storage system. 

Strategies and Stakeholders 

Beyond this is a perceived acceptance by procurement of being strung along by Client department and stakeholders. Not just in taking on additional tasks for these groups, but not being strong enough to push back when things clearly aren’t progressing.

This is not an open invitation to undermine stakeholder relationships or burn bridges. But make it clear that a single stakeholder’s requirements are not the only thing that a Procurement Officer is working on, let alone responsible for. 

By having this bit of extra support for pushing back on project teams that are dragging their feet with important information or documents, and moving on to other projects that are set to go. Send someone to the back of the queue when they’re not ready more than once and they’ll get the message.

Finally, it’s worth considering how procurement chooses to set itself up strategically. Strategic structuring such as Category Management or embedding in project teams all have their pros and cons (enough for another article entirely). But stick too rigidly to any structure and it can cause issues. From imbalances in work levels across a department, to pigeon-holing your team members into one area or commodity, they’re all things that need to be considered on an on-going basis, not just once every 2-3 years. 

Adapt and Survive 

Not to get too Darwinian, but if procurement continues down some of these paths, it’s not too much of a stretch to say that we could see the profession as we know it cease to be. Market environments, technology and even organisations continue to grow and adapt organically. So why does procurement keep tripping itself up with rigid structures and tying itself up in bureaucracy and red tape? 

While I don’t advocate a ‘free-for-all’ approach to procurement, or believe that fully unstructured departments can work effectively all the time, there are changes that could be made to aid the survival of procurement in the long term. 

As a hero of mine once said, “If you’re not part of the solution, you’re part of the problem. Quit being part of the problem.” 

Let’s stop ignoring the elephant in the room and take a long, hard look at ourselves. Procurement has enough challenges to contend with without adding more on itself. It’s where platforms such as Procurious are such a valuable tool. By talking our problems out, we can find collective solutions to the benefit of everyone. I, for one, am trying to do better and I’d love to work with you all to do more. 

I’d love to hear your thoughts on this article and others on the challenges facing public sector procurement. Leave your comments below, or get in touch directly, I’m always happy to chat!

Are Women Better Managers Than Men?

Latest research tells us that not only are women as good as men, most of the time they are better. So what’s holding companies back?

women
By Monkey Business Images/ Shutterstock

There are a lot fewer female managers than male managers. But you’d be wrong to assume that’s because women are not as good at leadership.  The latest research tells us that not only are woman as good as men, most of the time they are better.

According to the latest results from an annual survey conducted by international business advisory firm Grant Thornton, three quarters of businesses worldwide have at least one woman in senior management. 

Notwithstanding that, less than a quarter of senior roles in those businesses are held by women and most of those are at the lowest seniority level.  The glass ceiling for female managers still very much exists. 

While 2 in 5 low level managers are female, just 1 in 20 of S&P 500 CEOs are women.  One in five board members are women and just one in ten are among the top earners in the company.  This is despite women representing 45 per cent of all employees in those companies. 

Men vs. Women – Stereotypical Traits

A recent study in Spanish companies tried to get to the bottom of why by asking workers to evaluate the extent to which gender-stereotypical traits are important to become a successful manager.   Overall the study found what we might expect. 

The workers felt traits normally associated with males (using a standardised questionnaire) such as aggressiveness, superiority and calmness in the face of crisis were important in order to successfully manage.  The respondents also consistently rated males as being stronger in these areas. Unexpectedly, this association was stronger among female employees than males.

But when the Harvard Business Review recently analysed their comprehensive database of almost 9,000 annual management reviews they found that real-life female managers excelled on almost every trait associated with excellent corporate leadership.  

The data comes from 360 evaluations where participants peers, bosses and direct reports are asked to rate each leader’s overall effectiveness and how strong they are on 19 competencies that Harvard’s 40 years of research has shown are most important to leadership effectiveness. 

It showed that women outperformed men on 17 of the 19 traits.  These included traditionally female characteristics like building relationships, teamwork and motivating others but also those normally associated with male leaders, such as driving for results, speed, bold leadership and innovation. 

Females were particularly strong on Taking the Initiative, Practising Self-Development, Honesty and Resilience. Male leaders did better in only two categories, ‘Develops Strategic Perspective’ and ‘Technical or professional expertise’.

A Matter of Confidence?

Interestingly despite being more competent in almost every management facet than their male counterparts the women under 25 were significantly less confident about their abilities than the men.  And their confidence levels didn’t catch up to those of their male colleagues until they reached their 40s.

Other research has shown that women are less likely to apply for a job if they are no confident that they are qualified.  Men and women with the same qualifications may not come to the same conclusion about whether are qualified for a promotion simply due to differing self-assessments as to their abilities.

Added to that, women were much more likely to follow the written rules about necessary qualifications.  Men were likely to apply even though on paper they weren’t qualified. A woman would wait until she was.  The result was that men were frequently promoted more quickly than women even when had equivalent abilities.

The Best Women for the Job

The data tells us that on just about every meaningful criteria, women are likely to be better managers than men, so why are so few of them holding management positions? The Harvard team speculate that besides the tendency to underestimate their capabilities and cultural norms against female leaders -almost all human societies are patriarchal, meaning that men run the show – there’s likely to be a strong helping of conformity to the norm in hiring decisions. 

If 90 out of a hundred managers are male then promoting a women to their ranks is a risk for a hiring manager.   As they say in the computer industry, no-one ever got fired for buying IBM. Perhaps in this case it’s more like, nobody ever got fired for promoting a man.

Hiring decisions like that, could be costing your company money.  According to a large international survey which correlated the percentage female managers with profitability, those that had 30 per cent or more women in the C-suite were on average 15 per cent more profitable.

Hiring more female managers isn’t about being polite. The evidence is in. It’s about better profits and getting the best person for the job – even if she doesn’t think she is.

Building Bridges (Literally) – The Best of Procurement

Challenges and failures are all very well, but procurement only gets to develop if we talk about our wins. And we can all win if we learn from the best. 

By Kiwis/ Shutterstock

The Queensferry Crossing is a magnificent structure and feat of design and engineering. At 1.7 miles (2.7km) long, the bridge is the longest three-tower, cable-stayed bridge in the world. The project features innovative design and forms part of a huge, 13.7 mile (22km) upgrade in infrastructure, including intelligent transport systems and emission reducing technology.

With a project budget of between £1.7-2.3 billion at the pre-tender stage for the Forth Replacement Crossing (including the Queensferry Crossing Bridge and the surrounding infrastructure works), it’s no surprise that procurement was at the heart of the success of the project. Without great procurement and strong contract management, there is little chance that this would have been delivered in the manner it was, and provided the savings it did too. The procurement process itself delivered significant savings resulting in a reduced estimated budget of £1.45-1.6 billion.

An Audit Scotland report into the project undertaken in 2017 determined that the project had indeed delivered value for money, not surprising given that at a total spend of £1.34 billion, it provided an 8-16 per cent saving on the budget at the start of construction.

A number of strategies used by Transport Scotland for the project proved to be highly successful in the procurement exercise, such as the use of an extensive panel of KPIs, as well as allowing bidding consortia the freedom to suggest changes to designs that could potentially deliver savings and benefits.

The quality of the procurement was recognised in 2018 when Transport Scotland won the GO Infrastructure Project of the Year Award and the GO Excellence Scotland Award 2018/19 for the Forth Replacement (Queensferry) Crossing project at the 2018 GO Awards. There was further success for the project at the National GO2019 Awards in Birmingham, where it was awarded the GO Infrastructure Project of the Year.

In order to understand more about just what exactly made the procurement on this project such a success, I spoke to Lawrence Shackman, Project Manager for the Queensferry Crossing and Head of Rail Projects and Technical Services at Transport Scotland. So if you’re looking to learn from the best, now’s the time to pay attention!

What made the procurement exercise such a success to deliver the outcomes it did?

There were many good aspects to the exercise to make it a success. In particular, using the Competitive Dialogue method, which ensured we were able to engage fully with the tenderers in explaining the scope of the project, the reasoning behind the specimen design and the build process, their design and construction proposals and many other which helped to de-risk the project.

This also included supplying the tenderers with full project information, including ground investigation data and specimen designs to give examples of how the bridge, roads and associated infrastructure may be designed to satisfy the requirements.

What was the biggest challenge with the procurement and how did you overcome it?

There was a major risk that we would only be left with one bidder for the Principal Contract, as only two consortia tendered. We overcame the risk by using a Participation Agreement, signed by both tenderers, which guaranteed two things: 1 – that if Scottish Ministers did not proceed with the award of the Principal Contract, the tenderers would be reimbursed with their tender costs up to a value of £10 million; and 2 – if the contract was awarded, then the unsuccessful tenderer would be reimbursed half of their costs, up to a maximum value of £5 million.

This Agreement effectively helped to ensure that the competition remained through to submission of tenders, helping to minimise the risk of us only receiving one bid. That would have required significant additional time to verify that it represented value for money.

What lessons did you learn for future projects?

There are so many that it would be impossible to detail them all here! We intend to publish a Lessons Learned Report in the next couple of months.

If this article publishes after the publication of the report, I will link to it here.

Do you have any advice for other public sector procurement professionals working on tenders or projects to learn from your success?

Again, there are so many lessons we would share, as I have already done with other procurement professionals. Without going into too much detail, you need to ensure that you have good governance, good stakeholder engagement, technical competence, a realistic programme and cost estimating, plus robust risk management. A solid, consistent team is also essential to guide and manage the process.

Apply the Lessons

There won’t be many procurement professionals who have the opportunity to work on a project such as this, but that doesn’t mean to say that the lessons learned here are applicable across the entire profession.

Robust specifications, good stakeholder engagement, good governance and realistic programmes apply to big and small projects alike, and there is always the opportunity to look for more innovative methods to help with risk management or complex tenders.

So let’s focus on the positives, follow the path laid out for us by other professionals who have delivered successful, high-profile projects such as the Queensferry Crossing, learn from them and see what we can do in our own organisations. Remember – there is always someone to learn from who has been there, seen it, done it, so who not learn from them before we start.

Talent And Motivation Are Critical To The Success Of Your Business

Individuals of great talent can have a significant and disproportionate bottom line impact in jobs that are highly complex…

talent
By Dirima/ Shutterstock

According to McKinsey’s global talent survey.  Talent will increase productivity by 800 per cent in jobs that are very highly complex, but by just 125 per cent in high complexity jobs and just 50 per cent in low complexity jobs.

Very high complexity jobs include software developers and high level managers. Low complexity jobs are unskilled or semi-skilled labour such as assembly line workers.

This doesn’t mean the entire team needs to be highly talented.  A highly talented engineer can produce the work of nine average engineers in the same amount of time. 

Even ensuring one in five are highly talented will lift the average productivity of the team in high complexity jobs. It will also significantly reduce the time it takes to complete a project. 

As the late Steve Jobs once famously said after noting that his best engineers were 50 to 100 time more effective than his worst, “Go after the cream of the cream. A small team of A+ players can run circles around a giant team of B and C players.”

Disproportionate Impact

Talented individuals can have a significant and disproportionate bottom line impact in jobs that are highly complex, so, rather unsurprisingly, the competition for talent in those industries is fierce. Almost one third of senior leaders surveyed by McKinsey cited ‘finding talent’ as their most significant managerial challenge. 

And with a predicted shortfall of up to 18 million high skill workers in the United States and Europe by 2020 (and 23 million in China), that is to be expected. 

Based on the labour market sizes, this means 1 in 10 high complexity jobs in Europe and the US, and 1 in 6 in China will go unfilled.  Companies in complex industries will not be able to fill a significant percentage of the high skill jobs at all, let alone fill them with the most talented individuals.

Against this backdrop of significant talent shortage, you might assume businesses were highly skilled at seeking out and retaining talent. And you’d be dead wrong.  According to the McKinsey survey 82 per cent of Fortune 500 executives don’t think their companies recruit highly talented people and just 7 per cent agree with the proposition that their companies retain high performers.

No Engagement, No Talent

Big companies, by and large, are just not good at attracting and keeping talent. This is likely due to a lack of engagement.  A talented individual can work anywhere and usually knows it. If they are not motivated by the job, or engaged with it, they will probably leave.

Gallup conducts an annual survey of employee engagement for US employees.  While the numbers are improving, according to the latest results, more than half (53 per cent) of US workers are disengaged with their work or workplace and an additional 13 per cent were actively disengaged.

A disengaged worker is turning up and doing the minimum required but will leave the company for a slightly better offer.  An actively disengaged worker has a miserable work experience and would quit tomorrow if they had any other choice. These statistics match up to other surveys which suggest about three in four workers are actively looking for another job at any given time.

According to Gallup data, businesses that are in the top quartile for engagement achieve earnings per share growth that is four times that of their competitors in the bottom quartile.  They also experience better retention, fewer accidents and 21 per cent higher profitability.  Attracting and retaining talent by keeping them engaged is a license to print money.  But doing that is far from easy.

According to McKinsey, the key is to correctly identify the roles adding the most value.  Sometimes this is easy. Maybe it’s the engineer who checks in the most code or the salesperson who sells the most but usually its not that obvious.  Companies need to look below the surface for long term value.  Is the code bug-free?  Are the sales repeat business?  Is it actually a brilliant code tester adding the value or an incredible sales engineer?

Honesty Over Money – Honestly!

Once those roles are accurately identified the organisation needs to focus 95 per cent of its retention efforts on engaging and retaining those key individuals.  But it isn’t just about money, according to the McKinsey and Gallup surveys, money is the least important of the four primary motivators for retaining high value talent. 

The other three in order of importance are having inspirational and empowering leaders, working for a company with a reputation for honesty and integrity and having a job that makes a difference (has impact).

In short, don’t employee psychopathic leaders, develop an industry-wide reputation for honesty and integrity, doing something that makes a difference and treat your employees the way you would like to be treated and you will be a long way down the path to attracting and retaining the kind of people who can attach booster rockets the size of a SpaceX Falcon Heavy to your bottom line.

Traditional vs Automated Procurement Process

Got major procurement issues in your organisation? You may well be able to use technology and automated procurement to solve them.

Photo by rawpixel.com from Pexels

The procurement process is much more complex than it looks. The more complex it is, the higher the number of issues. An automated procurement process can help you prevent and resolve these issues. However, many companies still rely on a manual process. 

Let’s understand the challenges of the traditional procurement process and the ways automation can help.

Challenges of Traditional Procurement Process

A company practicing traditional procurement process faces a lot of challenges. Here are some of the major challenges of a traditional approach:

1. It’s Time Consuming

A traditional procurement process consumes a lot of time of both vendors and companies. As a result, it slows down the entire process and affects productivity. In addition to this, it can take days to communicate a single message and get the job done.

2. Chances of Duplication and Fraud

In a traditional procurement process, everything happens on paper so it becomes difficult for your team to keep track of everything. That’s why there’s little to no transparency in the dealings. This can lead to malpractice such as duplication of contracts or fraud. A single incident of fraud can affect your company’s reputation. 

3. Inefficient Data Management

An offline procurement process involves a lot of paperwork, so data management becomes challenging. In addition to that, it also increases the risk of errors. In spite of this, 54% of companies are still using a paper-based invoice process. 

Paper-based records are always vulnerable to tampering or loss of information and data. This can put your company in a troublesome position.

Benefits of Using Automated Procurement Process

Here are some important benefits of using an automated procurement process: 

1. Improves Efficiency and Speed of Procurement Process

By automating your procurement process, you can not only speed up the process but also increase efficiency. This helps your procurement team by saving a lot of their time for other important tasks.  

With an automated process, you can automate all the repetitive tasks. This helps you cut down on the amount of manual work for your team. It allows them to handle much more important and complex tasks. 

2. Creates a Centralised System

As mentioned above, a traditional procurement process can lead to duplication and fraud in contracts. For any company, there’s nothing scarier than this.

However, automation can help you minimize instances of duplication and fraud. It helps you create a centralized system for all of your data and documents. This allows your procurement team to easily track down the required documents.

3. Reduce Manual Errors

Unlike a traditional approach, automation eliminates paper-based documentation and decreases the risk of errors. When you follow a traditional approach, it not only consumes a lot of time but also invites risk.

So, it’s best to automate your procurement process and encourage a paperless process to reduce manual errors. It also allows you to store information and data easily and safely.

Do you want to learn more about issues in the procurement process and how automation can help you fix them? If so, check out this infographic from PurchaseControl.

Major Procurement Issues & How to Fix Them with Technology

Image courtesy: PurchaseControl

Critical Factors for Selecting your Suppliers

What critical factors do you look for in your suppliers? What does an organisation have to offer to get their foot in your door?

When you think of procurement, and get beyond the savings agenda, then the first thing that comes to mind is managing suppliers. While employees may be the life-blood of an organisation, suppliers are definitely the nourishment and support that keep organisations alive.

Without suppliers and their extended supply chains, organisations wouldn’t have any raw materials to make into products, any products to sell, or anyone to deliver much-needed services. That’s why a good supplier relationship (or relationships) can be critical to your daily operations.

However, one bad apple, one flawed contractors could not only stop the seamless functioning of your supply chain. It could also harm those two vital elements for all businesses – trust and reputation.

Your Critical Factors

If supplier relationships are key, then surely procurement should be taking its time selecting the right ones. And given the importance of this, procurement also needs to be applying the right ‘critical factors’ when selecting their suppliers.

As has been discussed in the past on Procurious, there are a number of factors that must be considered when selecting suppliers. The only issue is that these don’t appear to have changed very much over the years, begging the question – is procurement doing everything it can to adapt these criteria in line with the external environment?

Sure, it’s high time that procurement was looking past the traditional criteria of cost and quality when making their assessments. But the truth is, there’s no getting away from them.

However, this isn’t necessarily a bad thing if they aren’t the only factors in the equation. As procurement professionals, you are probably only too aware of the myriad of other factors that you need to be accounting for, from cultural fit and financial stability, all the way through to ethics and sustainability.

So which are the critical factors that procurement should be using? Is there a list that we should all be looking at?

Join our Webinar

Help is at hand in the form of Procurious and Ivalua’s latest webinar, ‘Critical Factors for Selecting your Suppliers’.

Sign up now to join our panel of experts at 11am (BST) on Tuesday the 3rd of September:

  • Tania Seary, Founder, Procurious
  • Stephen Carter, Senior Marketing Manager, Ivalua
  • Fred Nijffels, Accenture Operations ANZ – Procurement & Supply Chain
  • Gordon Tytler, Director of Procurement, Rolls Royce

In the webinar, you’ll hear from a panel of experts on a range of topics including:

  • The importance of cultural fit in your supplier relationships;
  • If sustainability, social value and fair working practices are becoming more prominent for procurement;
  • What your suppliers are looking for in your organisation; and
  • How to start the conversation in your organisation to move away from just cost and quality criteria.

FAQs

Is the Critical Factors webinar available to anyone?

Absolutely! Anyone & everyone can register for the webinar and it won’t cost you a penny to do so. Simply sign up here.

How do I listen to the Critical Factors webinar?

Simply sign up here and you’ll be able to listen to the on-demand. 

Help – I can’t make it to the live-stream of the webinar!

No problem! If you can’t make the live-stream you can catch up whenever it suits you. We’ll be making it available on Procurious soon after the event (and will be sure to send you a link) so you can listen at your leisure!

Can I ask the speakers a question during the Critical Factors For Selecting Your Suppliers webinar?

If you’d like to ask one of our speakers a question please submit it via the Discussion Board on Procurious and we’ll do our very best to ensure it gets answered for you.

Don’t Miss Out!

This webinar promises to provide a fascinating insight for all procurement professionals into the Critical Factors you should be considering in supplier selection.

Make sure you don’t miss out by signing up today!

Navigating the Choppy Waters of the Future – An Expert’s View

Photo by Garrett Sears on Unsplash

The US escalating a trade war with China by imposing additional tariffs on Chinese goods. The ongoing debacle of European trade policies over Brexit. The perennial Middle East crisis over oil. 2019 has not been easy for global businesses and their procurement professionals.

But given that it is only one-quarter of the exhaustion, could we benefit from an expert’s insights and frame strategies such that procurement can navigate successfully through the rest of the waters?

Sure! Zycus got in touch with the CEO & President of SIG, Dawn Tiura soliciting her point-of-view on how procurement professionals can navigate through the uncertain times ahead. Dawn, a former partner in a CPA firm, focused on early-stage Silicon Valley enterprises and high wealth individuals, kindly agreed to explain her actionable list of do’s and don’ts that every Procurement leader can benefit from.

Zycus: What elements should be central to our conversation on procurement in the coming year?

Dawn: One of the important conversations that procurement teams all over the world should reflect on at the moment is their understanding that every dollar-saved might not directly translate into company’s eventual revenue objective but they do improve the bottom line when the focus is consistent. We have the unique ability to impact not only bottom-line savings but also top-line growth. We have insight into all lines of business as they are making decisions, not in the rearview mirror. And, we have relationships with suppliers who are incented to bring innovation to us. If that is not enough, why not use equivalent revenue? That will get the attention of the CFO, CEO, and Board.

Zycus: Most organizations majorly use hard dollar savings as the primary parameter to measure procurement and sourcing performance. Would it be safe to say it is a dated method of measuring current performance?

Dawn: Absolutely. We have to stop using savings as our sole barometer for measurement. Let’s look at an example:

The spend of an organization is $500 million; the cost avoidance from sourcing efforts at 12% comes to $60 million. Net profit margin is 7.5%. The equivalent revenue to generate the same value from sourcing efforts is $800 million (or $60 million divided by 7.5%)

The amount of energy required by the company to generate $800 million in revenue is massive and clearly understood by all members of the C-suite. Therefore, reporting results in terms of “equivalent revenue” instead of “savings” positions the sourcing organization in a more impactful and compelling way.

While you would assume that others will make this calculation and realize this is the case, they don’t, or can’t make the analogy to give us the credit we deserve. We must step up and change the dialogue to get the respect we have earned. 

(Read Dawn’s complete blog that talks about this issue and a lot of others here)

Zycus: So the first focus of a procurement and sourcing professional is getting the C-Suite to shift focus from savings to equivalent revenue, what would you say would feature next in their “things to keep in mind” list?

Dawn: Third party risks. Procurement and Sourcing professionals should be particularly mindful about these threats and therefore should have a foresight aided by technology that would mitigate the potential of loss. A take charge approach towards risks is what the current environment demands. Procurement and sourcing teams all over are responsible for managing goals and key relationships for the organization. It becomes vital for them to work on these objectives while taking into consideration the various risks they might be exposed to. Strategical planning and readiness will help not only tackle these risks better but also ensure the routine operations and performance doesn’t get disrupted.

Zycus: From what we’ve seen, these discussions seem much underrated, what can organizations do to ingrain this line of thought across the team?

Dawn: You make a valid point. However, that is changing. Organizations are becoming more mindful that this change in mindset is long due, and they need to adapt. This is why we’re seeing more and more people investing in education and certifications, so they have the necessary skillset to tackle these changes better.

Zycus: Artificial Intelligence has created a lot of buzz. How do you think that is changing procurement today.

Dawn: There is a breakthrough using Artificial Intelligence to manage risks in tail spend. A lot of companies are still new to the idea of AI, but the use of AI will be a game-changer.

Zycus: Gartner’ predicts, “By 2022, 75% of all B2B tail spend goods will be purchased in an online marketplace.” Do you agree with this?

Dawn: Indeed. As legacy systems continue to phase out, it is only AI that can redeem procurement an improved balance sheet.

Another aspect of change that people might miss out on is accounting regulations changing concerning leases and procurement people need to be aware of the changes and impact on their companies.  While the implementation of the new lease accounting guidance will fall within the accounting department, procurement needs to be a part of this review to provide its perspective on any proposed changes to agreements and to do the cost/benefit analysis.

Zycus: Moving forward, one thing that has always been a concern is how procurement can have a facelift from being a more tactical function to a strategic one. So what steps would you recommend teams take for this significant makeover?

Dawn: A strategic mindset is crucial to this rebranding of procurement. This transition is what will make other functions value procurement’s take on importing sourcing decisions. For this procurement, professionals need to be all eyes on various risks and opportunities. Professionals must be mindful of changing technologies. They need to prepare for it with certification in third party risk management and sourcing professional’s coursework.

Procurement and sourcing teams should consistently measure their contribution to the enterprise. An excellent way to measure one’s impact on to company’s strategic objectives would be to create a chart that cascades from the top management down to the business units, and how at each phase, the person has contributed to every success. On this note report from the Hackett Group also states, “This is a unique time for procurement organizations. Never before have companies been able to derive more competitive advantage from superior procurement capability. The function’s role is shifting from a sourcing gatekeeper to a provider of insight and decision support, made possible by improved access to digital technologies, data, and advanced analytics. World-class procurement organizations consistently get better results with 29% fewer (but higher-paid) FTEs per billion dollars of spend.”

Zycus: One parameter to measure overall procurement impact would be to track contribution in top-level business objectives, what do you think could be other benchmarks procurement teams could use to measure performance holistically?

Dawn:We need to, as proactive procurement practitioners, change how savings from procurement is measured. “Equivalent revenue,” the term will not only consist of hard dollar savings but elements like savings through cost avoidance. Anything that impacts the bottom line and contributes to growth counts!  

Another common and useful benchmark used to measure performance is FTEs. The number of full-time equivalent employees (FTEs) needed to perform a process, or a group of processes is one way to gauge process efficiency. The fewer FTEs required to process purchases, the higher the efficiency and the lower the overall cost of the procurement cycle. However, consider only those who formally report into the procurement organization.

FTEs are employees who devote all or part of their jobs to sourcing activities, and they should factor into the measurement. Meaning, if a non-procurement employee spends a portion of his time to procurement or sourcing activities, he or she is a partial FTE. Their effort will also eventually add up to that of full-time employees.

Zycus: My last question to you is, what are three things procurement should start/stop doing this year?

Dawn: The first thing that Procurement professionals must stop is being transactional and writing checks. The second to stop would be to keep talking about savings over everything else, while the last one would be to learn to communicate in the language of the CFO.

Our Conclusion from the interview

A seemingly strong inference that can be drawn from this interaction is Procurement’s transition from a transactional to a strategic function. This shift in approach has been a necessity for some time now; statements from subject matter experts and veterans advising Procurement professionals advising alignment of goals and their measurement, to learn the language of a CFO instead of focusing on operational goals, go to show how vital that shift is now.

Read our latest eBook “Procurement Experts Outlook 2019” to gain more insights into what eight other experts predict for the procurement future.

References:

–         https://www.linkedin.com/pulse/may-i-vent-lets-change-how-we-talk-procurement-dawn-tiura/