With the world economy in such a state, layoffs, redundancies and furloughs are commonplace – but even so, you can appear indispensable to your organisation.
There’s no denying that this year has been a year that will be remembered, and definitely not for the right reasons. Many of us know of, or personally know, someone who has lost their job, which is unsurprisingly given that more people have lost their jobs this year than during the Great Depression. Fortunately, many of us in procurement and supply chain have been protected thus far, but we do not know for how long. So is there anything we can do to ensure we keep our career on track and avoid being laid off?
When you work for large corporations as many of us do, it can be easy to feel powerless against a potential redundancy. But rest assured, there are a few significant things you can do to keep your career (and your job). Here’s what you can do to keep afloat when everyone else seems to be on the sinking ship:
1. Be visible
In a perfect world, you would be judged on your work and your work alone. But career success requires so much more than that: to learn and grow, you’re also expected to volunteer for extra projects and committees, network, pursue development opportunities, and so much more.
Doing so makes you more ‘visible’ to more people, but it also makes your effort far more visible. And ultimately, if more people value you and your input, it’s more likely that if the time comes to lay people off, your job will be seen as essential.
Of course, visibility has taken on a whole new meaning this year. You may not be able to show up in person anymore, but if you’re looking to keep your career on track, volunteer for that committee you might have skipped in the past. Be as engaged as possible, even when meetings bore you. And make time to connect with colleagues, even if it’s just for a quick social video chat.
Work is not a popularity contest, but the more connections you have, the more likely you will be to stay.
2. Be optimistic
Being optimistic in this environment is challenging at best, impossible at most. And why should you bother? It’s doom and gloom for most of the world for the foreseeable future, with no real end date.
Could optimism actually help your career, though? Science says yes.
When a company is considering layoffs, they will consider how much work each individual or department needs to do. If you’re optimistic and great to work with, you’ll likely get the lion’s share, and will be less likely to be able to be replaced.
3. Support your leader
When times get tough, it’s tempting to make an enemy out of your boss. After all, they often have a say on whether or not you’ll keep your job, and sometimes are in the terrible position of having to deliver you the bad news – while keeping their own job, which can feel crushingly unfair.
Yet if you’re looking to keep your career on track during a recession, going dark on your boss is not advised.
Managers, just like everyone else, suffer through recessions and not many (if any) enjoy laying people off. Recognising this, and showing empathy for them, can help create an important emotional bond. In turn, this bond will help them see you as mature and resilient, and hopefully, all things being equal, an asset to the company, and one that is not easily replaced.
Keeping your career on track in this economy is certainly a challenge, and sometimes you simply go into survival mode. But remember, you’re not powerless. There are things you can do every day to show how invaluable you are to your company, so next year – hopefully – you can not just survive, but thrive.
Dirty data can be costly – but accurate data is always a great investment. Make sure your data has its COAT and you’ll never be out in the cold, writes Susan Walsh
If your data doesn’t have a COAT, there could be a range of bad or costly decisions made which could affect the business performance, financial situation, risk jobs, or even the fate of the company. You wouldn’t go out in freezing temperatures without the appropriate coat and you shouldn’t work with data or make business decisions without the same level of protection – accurate data.
And, just like with coats, there are different levels of quality data services out there. If you buy a cheap jacket, it might not be waterproof or protect you from the elements, it won’t last much longer than one season and you’ll need to buy another the next time winter rolls around again. It’s the same with data – if you don’t invest in good quality service you will end up paying twice as much, if not more, in the long run to fix the earlier mistakes. Don’t be left out in the cold.
So, what is COAT?
Generally data is used by many people or teams, which can lead to multiple classifications of one product. For example, one person might put DHL as a ‘courier’, while another might log it as ‘logistics’ or ‘warehousing’. A taxi might be classified generically as ‘travel’ when it should be classed as ‘Travel > Road Transport > Taxis’ and a project cost should be assigned to the same budget or GL code, not several. Or it could even be a simple as units of measurement. One person may use ‘Litre’, another ‘Ltr’ and another ‘L’ – but these should all be one format. This means everything can be reported accurately, you get a true picture of what’s going on and better business decisions can be made.
Data is only useful if it’s organised. Think of a messy closet: you’re looking for your favourite top but can’t find it as everything has been thrown in there. And, much like your closest, you can organise your data in different ways, depending on what you want to get out of it and that will produce different reports/analytics. You may want to assign data to employees, teams, departments, functions or internal categories, as well as time periods such as months and quarters, or year groups like P1, P2 etc… So, for example, when you need the information on the accounts that Sharon in Finance is working on, or the sales teams’ performance for the quarter – you can pull that information quickly.
This can mean different things to different people. At its most basic level, accurate data is correct. In more detail, this could be no duplicate information; correct invoice descriptions; correct classifications; no missing product codes; standard units of measure (e.g. ltr, l, litres); no currency issues; correctly spelled vendors; fully classified data; or the right data in the right columns.
So, what does this mean? It means greater visibility across your business in several areas, allowing better decisions, as well as time and cost savings and increased profits.
This is critical. Business decisions around jobs, staffing, budgets, cost savings and more are all based on data. Data is used by everyone from the bottom to the top of an organisation. You have to be able to trust that what you’re looking at is the right information, and you need it to be accurate in order for your teams to use the data in their daily jobs.
If they don’t trust the data, then they might not use the fancy new expensive software you’ve just spent tens of thousands installing. Or the new AI you’ve installed may not produce the right results because it’s learning from dirty data.
Like a good coat, data is an investment – not a cost. By making sure it has its COAT on, you’re saving time, money and avoiding future problems. And also like any coat, it needs to be maintained. You need to continually ensure your data is consistent, organised, accurate and trustworthy to get the most out of it.
Have you ever experienced a make or break moment at the hands of your data? Let us know in the comments below!
It’s the digital event of the year that everyone’s been talking about and recommending – so how do you make the most of it? Here’s 7 ways you can maximise every avenue of opportunity the Big Ideas Summit has in store.
You all know what we’re talking about when we describe this. You registered for the biggest procurement event of the year; the one that every industry expert out there says you simply can’t miss. You’re determined to get the most out of it.
But it’s virtual. Your day is still packed with meetings. You plan to login from home (with all the distractions that come with it.) And your to-do list is a hundred items long.
For anyone out there who has ever felt a little intimidated by events, this year’s online Big Ideas Summit will provide you with unparalleled (and many would say, easier!) opportunities to learn, grow and network. But it will also be different.
Over 1,100 of your peers have signed up alongside you. We have an action-packed agenda including sessions on how to think the unthinkable, understand the new risk landscape, protect your career and much more.
To get the most out of the event, you need to prepare. But don’t worry, the prep is quick and easy.
Here’s how to get the most out of Big Ideas 2020:
1. Register for the Event
Once you’ve registered (if you haven’t, do so here), you’ll receive an email inviting you to the Event Hub. To accept this invitation, you’ll need to click on the link and enter your first and last name, and email address you registered with. You’ll then receive an event code, which you can use to enter the event (note that this code is only valid for 24 hours).
2. Block off your calendar
Let your team, boss, family and internal stakeholders know what you’re up to. The best way to benefit from the conference is to give it your time and attention.
3. Explore the Event Hub
You’ll find all of our great sessions in the Event Hub. Each session has its own unique link, and when you click it, it will open a new viewing screen on your browser (or phone/tablet etc.). Take time to review the sessions in advance to ensure you don’t miss the one you most want to attend.
4. Partner networking
Within the Event Hub, there are also Partner Virtual booths. These information-rich booths enable you to network and get to know our partners (online!) Simply click the booths to enter.
5. Live networking sessions
There are 2 live 20-minute facilitated networking sessions, to cover all of your networking needs.
6. Share ideas and ask questions
Have you ever had a burning question during a presentation, only to have forgotten it by the time the session ended? Cue another benefit of a digital event! This year, you’ll be able to comment on each session while it’s happening, so you never forget a question or forgo an opportunity to have your say.
7. Bring it home
Okay, this is more of a post-event action. Take notes, share ideas and make a concrete plan to bring your learnings back home.
And as always, we’ll be with you every step of the way. If at any point you need any help, reach out to [email protected]
This year, we need more Big Ideas more than ever. We can’t wait to see all of your virtual smiling faces and help you dream big.
The Statement of Work (SOW) is the heart of any contract – so ensure you get it right the first time, thanks to this expert guide by Lawrence Kane, COP-GOV, CSP, CSMP, CIAP
The Statement of Work (SOW) is the heart of your contract. It defines requirements and success factors for your supplier, describing what services, tasks, and/or resources must be delivered along with metrics that govern whether or not those obligations have been met successfully (such as acceptance criteria, Service Level Agreements, and the like).
It is costly to change a SOW once set in place not only because your negotiating leverage is reduced after contract signing but also because any modifications can drive operational, financial, legal, and reputational risks for both parties. Unfortunately unresolved disputes harm the relationship and may even end up in court, so it is imperative to get your SOW right the first time.
A quality SOW will be distinctive for each type of contracting relationship (such as supplemental staffing, managed services, outsourcing, or Vested outsourcing) and will vary substantially depending on the type of work acquired (such as labor, hardware, software, services, etc.). The document itself tends to have some background information that levels the playing field for non-incumbents during the bid process along with your requirements for such things as request fulfilment, governance, implementation, transition, innovation, transformation, technology, operations, knowledge management, business continuity, incident management, security, performance management, information protection, change management, etc.
All SOWs should be aligned with your sourcing strategy so that you’re buying the right things (and retaining the appropriate functions). SLAs and other metrics must be reasoned, reasonable, and achievable so that you’re paying for a solution that meets your business need without costly over- or under-engineering.
Since the people who negotiate the deal often change roles and/or companies before the contract expires or is terminated it is important that the original intent is clear regardless of who reads the document. That means using clear, unambiguous language and enforceable terminology.
Choose your verbs carefully. “Shall” is a requirement the supplier must follow whereas “will” shows intent, “may” is optional, and “expect” is aspirational. I may expect to win the lottery, for instance, but that’s unlikely to happen unless I buy a ticket and probably not even then… As you can see, grammar matters in contracts. To reinforce that point, there’s a huge difference between the following three sentences:
Lets eat grandma.
Let’s eat, grandma.
“Let’s eat,” Grandma.
To delve a little deeper, proven practices vary with the type work you need to buy. The following are some tips for assuring first time quality when writing your SOW for supplemental staffing, managed services, outsourcing, and Vested outsourcing deals:
Supplemental Staffing is used to acquire qualified workforce from a supplier. This is “pay-for-effort” work, so onboarding and off-boarding processes must be predetermined and followed, and integration with retained efforts well thought out. For supplemental staffing SOWs:
Focus on job descriptions and daily management
Normalise requirements with industry benchmarks, describing any certifications or bona fide occupational qualifications necessary
Include badging, background checks, and other vetting requirements and processes that help assure the supplier employees will be capable, competent, and appropriate
Clearly specify any non-labor elements provided by both parties (supplier and buyer)
Describe how and where the work will be performed, establishing governance for daily management
Managed Services contracts are used to put a performance agreement in place with a supplier. This is “pay-for-unit-of-service” work, so clarity in service obligations and performance levels is essential. For managed services SOWs:
Focus on transactions, business rules, measurable objectives, and acceptance criteria
Levy only minimal requirements for interoperability or security to the extent feasible so that your supplier can do what they’re best at (which is why you hired them after all)
Specify any export controls, legal, security, or badging requirements that apply to supplier’s on- or offsite personnel
Describe the “what,” and also the “how” where necessary
Develop clearly defined and measurable outcomes (but not too many) to set SLAs and other key metrics
Optimize cost/service trade-offs
Establish governance for oversight
Outsourcing is a long term, results-oriented business relationship with a supplier. This is “pay-for-result” work, so deliverables must be closely aligned with business needs. For outsourcing SOWs:
Focus on business outcomes and most significant service levels
Facilitate supplier’s ability to do what they’re best at by not over-prescribing obligations, levying only minimal requirements for interoperability or security
Specify any export controls, legal, security, or badging requirements that apply to supplier’s on- or offsite personnel
Describe outcomes, not transactions, focusing on the “what,” not the “how”
Identify inputs, outputs, and interfaces, and develop clearly defined and measurable service levels (but not too many) to set SLAs
Optimize cost/service trade-offs
Establish governance for insight more than oversight
Vested Outsourcing is a long term business relationship with jointly designed solutions to a business imperative. This is “pay-for-outcome (solution)” work, so innovation is mandatory. For Vested outsourcing SOWs:
Must be linked to a shared vision (often outlined in a statement of objectives instead of a traditional SOW)
Focus on innovative solutions to your business imperatives
Requires extensive “open-book” collaboration to design an affordable solution that simultaneously meets both buyer’s business needs and supplier’s objectives
Solution taxonomy includes processes managed by both parties to show an end-to-end view
Uses flexible Statements of Objectives rather than a traditional SOW and architect the details together
Guard against constraining the scope too tightly, allowing supplier to accept all work scope (and risks) that are not core to the buyer’s business
Develop clearly defined and measurable outcomes, focusing on the “what,” not the “how”
Establish a governance for joint insight, not oversight
It can take 4 to 6 months to write a quality SOW (and associated SLAs and other key metrics), but the end result is worth it. For example, the US Air Force saved 50% by specifying that their floors must be clean, free of scuff marks and dirt, and have a uniformly glossy finish, rather than requiring that their contractor strip and re-wax their floors weekly. Seems obvious, perhaps, but this simple example shows why good, clear requirements matter.
Putting it into action… Let’s pretend, for a moment, that you are a busy professional and need someone to cut your lawn rather than doing it yourself. Here are three possible ways of writing the SOW to buy a lawn-cutting service:
A bad SOW would be, “Cut my grass.”
A better SOW would be, “Supplier shall cut my grass to a height of 1” and trim along the walkways once a week between the hours of 10:00 AM and 6:00 PM local time.”
The best SOW would be, “Supplier shall provide care and maintenance for the lawn at [address], including all fertilization, weeding, trimming, edging, thatching, and debris removal necessary to keep it healthy per American Lawn Care Industry organic lawn care standards. Supplier shall assure that the height of the lawn remains between 1” and 2” at all times, there are no bare patches, and that it does not overlap curbs or walkways or spread into flowerbeds. Supplier shall perform all work that creates noise levels over 100 decibels between the hours of 10:00 AM and 6:00 PM local time. All Supplier employees shall pass a criminal background check and conform to OSHA safety standards while on the job site. Supplier shall provide all tools, equipment, and ingredients necessary to perform the work. Buyer will provide water, power, garden hose, and sprinklers.”
It takes time and effort to get it right, but the better the SOW you write the more likely you are to receive all the value you expect when engaging with a supplier. Ultimately an investment in first time quality leads to a better, more affordable outcome.
During times of uncertainty, you need to make yourself stand out to help you keep your job. This is where your CIPS membership is worth its weight in gold.
If you are one of the over 200,000 procurement professionals globally with a CIPS membership, the chances are high that you are studying, or have studied, towards your MCIPS qualification. You may even have started your chartership journey through Continuous Professional Development (CPD). As said previously, there are great benefits available to those who are lucky enough to be in this position.
There will come a time in your career where holding these qualifications will prove even more valuable than before. In times of uncertainty, either globally or even just for your organisation, belts will be tightened, and headcounts will be reduced.
And your FCIPS, MCIPS and/or Chartership could be the means by which you weather the storm.
Can qualifications help me keep my job?
As procurement and supply chain follow other professions down the route of chartership, qualifications will increasingly be sought and expected by employers and CPOs. There is an expectation in role development that procurement professionals will have, or at very least be studying towards, these qualifications.
Leaders of the profession both expect and are expected to have MCIPS and will look to build teams in this image. When it comes to times of turmoil, not having qualifications may result in you being the one without a chair when the music stops.
How, then, can the time and effort put into your exams and CPD help you be the one to hold on to your job? Here are our five top reasons.
1.A willingness to learn
When it comes to your qualifications and job, it’s not enough to settle with what you have and where you are. Your CIPS membership and CPD show your organisation that you are invested in your career and have a keenness to better yourself and keep working.
Your willingness to put in extra time and effort to earn and keep these qualifications is not only a benefit to you, but to your organisation too. Not only that, but self-study and CPD show you can direct yourself independently, something that will be noticed by your managers and may be important when it comes to that next round of promotions or cuts.
2.Up to date knowledge and training
Earning your qualifications based on specific exam-based knowledge is one thing, but subsequently keeping that knowledge up to date is something else entirely. Your CIPS membership, complete with its numerous sources of information and learning, is a great way to ensure that your knowledge is always on point.
You will continue to learn new skills, and understand key industry trends and requirements in the wider procurement profession. You can then bring this new knowledge and concepts back to your organisation, helping to keep it up to date, and potentially even providing it with a competitive advantage.
3.Show yourself as a committed professional
Organisations continue to recognise the importance of professional qualifications, CPD and networking for their procurement teams. For those who are wanting to undertake further studies, organisations are increasingly aiding this by choosing to invest in their employees’ studies.
However, beyond the monetary investment, organisations will recognise your commitment to them and procurement as a career by choosing to further your studies. Those people who don’t go down this route may not be seen as committed in the same way, which could count against them in the future.
4.Part of a community and network
An important part of expanding our own sphere of knowledge is networking with peers and collaborating in procurement-led, highly interactive communities, like CIPS and Procurious. Information from textbooks can help provide a foundation, but the real benefit to you and your organisation comes from understanding what has been successful in the real world.
With a global membership of over 200,000 procurement and supply chain professionals, the CIPS network is a cornucopia of ideas and knowledge. Being an active part in this network means you bring your learning, as well as ideas from others, into your organisation, increasing your value and future potential.
5.A strong future prospect
A willingness to learn and then keep that learning up to date. Commitment to your chosen profession and your organisation. A wealth of knowledge and experience at your fingertips. On top of this all, professional membership and qualifications. Having some of this will help your career; having all of it will mark you out as a strong future prospect in any organisation.
Your qualifications will open up new routes and job roles and ultimately make you a better candidate for promotion, rather than a candidate for headcount reduction.
While there are no guarantees that your CIPS membership will mean you keep your job, it provides a compelling case as to why it’s in the interests of your organisation to hold on to you and support your studies. With most organisations asking for MCIPS for new roles and recruitment, you would question why you wouldn’t study towards it given the opportunity. It’s the start of the journey to a long, and hopefully prosperous, career in procurement.
You have the opportunity to use data in a similar way to improve resilience.
But you might have to think about the way you see data, says Penn.
Great data meets three criteria:
Structured in a way that’s easy to consolidate
Combines information from lots of different areas
Penn calls this ‘thick’ data, “which means that as opposed to just hiring let’s say a data scientist to crunch your numbers you’re also bringing in remote sensor engineers or ethnographers, sociologists.”
Those different perspectives are crucial to finding the best solutions.
We can drive innovation
And that includes collaborating with your suppliers.
Just look at Apple.
When Steve Jobs unveiled the first iPhone in 2007, the screen was plastic.
Yet the next day, Jobs noticed the screen was covered in scratches and called his VP of Operations, Jeff Williams, demanding a glass screen for the official release.
Williams said it couldn’t be done in just six months. Every glass prototype they tried had smashed, and it would take years to create a shatter-resistant, thin glass.
With digitisation focused on Operational and Tactical aspects of function, and the next wave predicted to focus on technology that enables Strategic work, what are the implications for our future Category Manager’s skillset? Gregory Romney shares his expertise.
In a recent post, I made the observation that in large part the Procurement digitisation that has happened over the years has been focused on the Operational and Tactical aspects of the function (i.e. Buying, Sourcing). I also made the prediction that the next wave of Procurement digitisation will be more focused on technology that enables the Strategic work that organisations still struggle to prioritise. If I’m right, this will have significant implications on the skills that will be required to be successful in the role of a Category Manager and poses a fundamental question:
What is the future role of a Category Manager and what skills will be most important?
I’m not sure the answer to this question really differs all that much from what we would see on most aspirational job descriptions today, however, there won’t be any room for compromise. Future success in the Category Manager role will be dependent on the ability to closely mirror the skillsets of 3 roles: Strategist, Advisor, and Broker.
Similar to a game of chess, a strategist has a well defined plan in where he/she knows the the steps necessary to win the game, or in this case to bring the most value to the organisation both from a traditional bottom-line perspective, but top-line as well. As a Strategist, deep understanding of strategic frameworks will be required and their practical application for the category the CM supports. Additionally, sharpened data analytics capabilities will be increasingly important. However, the most important skill the Strategist will have is the ability to interpret the analysis, “connect the dots”, and then effectively communicate this internally to key Business Partners & Stakeholders. This leads me to role #2.
I recently read the book The Trusted Advisor by Robert M. Galford and it expounds upon 3 core skills that are key to becoming an Advisor: earning trust, giving advice effectively, and building relationships. I believe it sums up perfectly how to transition from playing the Strategist role to the Advisor role. The activity of “advising” may sound more familiar when you use it in the context of engagement with internal Business Partners. According to a study conducted by CAPS Research, only 24% of organisations consider their advisement or engagement Strategic, meaning it is highly collaborative and proactive, there are shared dashboards between Procurement and the Business Group they support, as well as aligned metrics. Despite such a low percentage of Strategic engagement, the study did find that 72% of engagement was Transitional, meaning engagement was increasing, and Business Partners were engaged with the category strategy. This certainly is a positive trend. The reason I believe achievement of Strategic engagement or advisement with our Business Partners is still so low is due to the fact that this work looks very different from the Tactical and/or Operational work that Procurement teams have been tasked with managing historically. However, if we are able to make the transition to “Advisor” successful, it will open the door to significant opportunities that Procurement is already well-suited to help deliver due to role #3.
Most Category Managers play this role decently today and in most cases have sufficient skills to broker deals between the company he/she represents and its suppliers. We have tools and well-defined processes to help us in this role, however, most of the deals that CM’s are brokering today are focused heavily on delivering value in form of cost reduction and less in the form of supplier innovation that can impact the top-line. In order to capture this form of value from the supplier base, a Broker needs to truly be willing to learn from the supply market and foster an environment within his/her own organisation so that they are prepared not only to receive, but act upon the supplier-led innovation. The skillset required in this type of deal brokering is different from what we have traditionally done when playing this role and so will the tools that we leverage to enable this activity (hint: eSourcing will not be the optimal tool from the toolkit for this kind of brokering). A perfect example of this is found in the recent announcement from Coca-Cola European Partners (CCEP) in regards to the introduction of CanCollar, a sustainable paperboard packaging solution, for multipack cans in Spain. Through collaboration with its packaging supplier WestRock, the company projects that the new solution will save more than 18 tonnes of plastic annually and has invested €2.6 million in its Barcelona plant in order to support the initiative. Hats off to the Procurement team that I’m sure was intimately involved in brokering this deal!
As I mentioned earlier, these roles at face value are not a drastic shift from what Category Managers are being asked to play today, but if we are honest with ourselves and the members our organisations, there are very few that excel in one let alone all three. This is the capability gap that Procurement faces and in a parallel there is a Technology gap to help enable it, both of which will require an overhaul across a myriad of current mindsets, practices, and investments.
This is why I predict the future wave of digitisation will be focused on empowering the Procurement function across these 3 roles and I’m confident that the function, as well as the supply market, will rise to the occasion and make the necessary changes to address these gaps. In doing so, I’m hopeful Procurement will become a profession of choice not mishap.
Agree? Disagree? Please share and let me know your thoughts in the comments section!
End to end or best-in-class? It’s an age-old discussion in IT and became an issue in procurement – an issue which Greg Holt can resolve.
I have been working in the IT industry for a good 20 years and one of the recurring themes continues to be the “end-to-end” versus “best-in-class” saga. Like the central characters in a long-running soap opera, these two adversaries may fade into the background now and again, but they always return, even from the dead. As is the case with soap characters, fans tend to take one side and denigrate the other. You either loved JR Ewing and hated Bobby Ewing, or vice versa. You could not love both.
(Younger readers who never had the opportunity to sit through all 357 episodes of Dallas can catch up here.)
End-to-end versus best-in-class is an argument that lately came to the fore in procurement, where end-to-end solution means a complete source-to-pay or source-to-settle solution. That is to say, you invest in a software suite or platform that supports everything you do in procurement from finding the suppliers to rewarding them. A solution that combines both upstream and downstream sets of processes. The alternative is to select and invest in the best software (sometimes referred to as a “point” solution) to do each particular task or process on the continuum, and string them all together to build a world-class solution.
So, allow me to share what I’ve learned from my own experience and from my colleagues about selecting software so that you can make the best decision between point solutions and end-to-end software suites for your company.
The first and most obvious remark is that procurement software is a major investment, and you will need to work with your IT department and possibly an external consultant to help you to make the right choice, which will take into account what you have now (your legacy systems) and upcoming investments in other areas and functions of the business. You will need to carry out a cost-benefit analysis of the various approaches to business transformation, including the payback period, and where you want to be in five or ten years. Consider the total cost of ownership, not just the upfront investment.
That said, let’s return to our specific question.
When to go for best-in-class
The main benefit of a best-in-class software solution is the depth of its functionality. Think of it as a yard wide and a mile deep. Because best-in-class software is hyper-focused on one area it offers robust capabilities and features to address specialised needs. That means it is absolutely essential that it should be capable of easy integration with other systems. The best best-in-class software solutions easily sync with other systems that focus on other areas.
The promise of vendors of best-in-class software solutions is that you can custom-build a software suite with exactly the solutions each area of your business needs, with focused functionality in every area. This is why they are often loved by end users. What they see is what they want. “I work in sourcing, so I want a sourcing solution. Period.” On the other hand, depending on your organization and your industry, it is likely that your sourcing needs are limited, in which case you may end up paying for mile-deep functionality when you only need to dive down a few fathoms.
A further argument in favor of best-in-class is that you can expand capabilities on your own terms. They are scalable so you can start with the software that addresses your most pressing area of need and then add additional capabilities when the time is right. For example, once you have sorted out sourcing, you look for the best specialist provider of contract management software. On the face of it, this is also the low risk path of least resistance. Rather than buying everything up front, you can incorporate other best-in-class solutions as your business’s needs change and your budget allows. It’s a gradualist approach. Or “evolution not revolution” as the cliché runs.
On the other hand, integration is in practice more of an issue because each best-in-class system has its own data dictionaries, data formats and other sources of incompatibility that can make even a bilateral integration difficult. And when it comes to several systems, the problems multiply. It is likely that you will need to employ a specialist firm of systems integrators to make it work, and even then, the solution may be unstable, processes may not be streamlined, and visibility across all systems rather limited.
When to go for end-to-end
An end-to-end solution can fulfill every operational need for a specific business function, in this case procurement. Companies that choose end-to-end solutions should pay attention to overlap in what the full-service solution offers compared to the solutions they already use. For example, ERP systems may already offer some limited procurement functionality that can be shifted to a source-to-pay implementation.
A further advantage of an end-to-end solution is the avoidance of disputes between various point system vendors when things break down or go wrong, perhaps because there is no clean transfer of data between the contracts management system and the procurement system. With a source-to-pay implementation you only have to deal with one support desk. There is just “one throat to choke”, as the saying goes.
End-to-end software solutions should therefore be used when there is an obvious solution that can streamline processes and provide global visibility through the use of shared data. And that is increasingly the case these days as organizations seek to manage source-to-pay functionality holistically and seek to gain insights through spend analytics software to enable continuous improvements.
End-to-end solutions can also be useful even when there is functionality overlap with existing solutions when the end-to-end software adds more value than existing point solutions or legacy systems like ERP. On the other hand, the following considerations may deter you from choosing an end-to-end solution:
1. Your business need or process can easily be broken into separate parts
2. You have already invested substantially in a legacy system
3. The end-to-end solutions on the market have serious weaknesses in terms of the specific processes that are most important to your business
4. You do not want to be “locked in” to a particular vendor
5. The vendors you have seen who claim to be end-to-end are in fact only strong in certain areas; at some points in the value chain the functionality is limited, to put it mildly
6. The end-to-end solution does not integrate easily with other systems
On this final point: a source-to-pay solution overcomes most of the integration issues that arise when taking the “best-in-class” approach, but you still need to consider integration with other software such as ERP or accounting systems.
Having your cake and eating it
Since the advent and development of SaaS (software as a service) suites, it does not have to be a straight choice between the two extremes. If you are not yet ready for the whole shebang, look for an end-to-end, source-to-pay but modular software solution, and invest in the modules that best suit your immediate needs. You will be able to expand your system horizontally, from the same supplier, so there are no integration issues. Some vendors, including JAGGAER, offer strong functionality and depth of expertise across the entire source-to-pay spectrum.
A SaaS system means you benefit from system enhancements and extensions as they happen, and the cost is shared across multiple participants in the “multi-tenant” implementation.
You can review your contract at any time and if you are dissatisfied, it is relatively easy to move to another supplier – you are not “locked in” as was the case with on-premise end-to-end systems.
Soap operas will run and run with unresolved plots and dozens of loose ends, but this is one storyline that seems to be reaching a final resolution! I’d love to hear your thoughts on this debate in the comments below.
As the workforce bounces back, the gig economy is expected to boom. So how will this mode of employment suit Procurement? We asked Prometheia Procurement CEO Jody Rowe.
COVID-19 has raised many challenging questions about the way in which we work. It’s causing individuals and companies the world over to review their operating models. The procurement profession is not isolated from this and will need to think about the security of supply chains, how we work, who to work with, what an effective operating model is, what systems to use, the questions are endless…
This changing environment is driving the need for procurement solutions to be flexible and virtual, and toprovide simple access. We need processes and tools which empower all users and ensures continuity of knowledge, especially for the gig economy which requires access at any place, at any time.
We are also under a lot of pressure to make smarter decisions that mitigate risk, leveraging the best consulting knowledge in the business, while still ensuring retention of key personnel.
It’s becoming obvious that we now need to embrace open systems thatprovide instantaneous connection that enables group collaboration and creates a valued global network and access to knowledge.
The drivers of these changes are simple – it’s down to cost and managing risk. The question is how to get things done whilst keeping overheads down and providing real value? The opportunities of enjoying full-time work at one company for the entirety of your career has greatly reduced. Some industries, such as Oil and Gas, are already acutely aware of the steady shift towards the gig economy, which has been driven by both companies’ and individuals’ needs as people seek improved work-life balance.
Do companies need to maintain a large physical footprint or would they be better reducing their liabilities by gaining access to a diverse, flexible and talented workforce when required? As a result of the COVID-19 pandemic, companies have downsized and placed recruitment freezes, yet have still managed to operate effectively. To me, this demonstrates an underutilisation of resource pre-pandemic.
When the rebound from COVID-19 comes, companies will move even more towards the gig economy to meet their needs for short-term contracts and freelance work. With commodity price fluctuations and layoffs continuing, it is likely we will see this kind of marketplace continuing to grow for the foreseeable future.
In a gig economy, employers have access to a flexible workforce with the appropriate talent available at short notice. There’s no upskilling required as contractors are typically experienced specialists in their field, which can result in projects being completed more efficiently. Contractors often enjoy much greater flexibility in terms of work location, schedule and leave, as well as the excitement and experience obtained moving from one project to another; all of which ultimately adds to their valuable skillset.
Digitisation is paramount for a gig economy to be effective; reliable global access to systems exists and is well-tested. Access to global resources can be sought easily and work can be undertaken anywhere in the world. There are multiple workforce gig economy websites that successfully provide ad-hoc services: you can send a scope, obtain a price and get the work completed.
So why not access procurement in this way?
When you reflect on the way in which we are working in multiple countries – UK consultants working with an Australian client, Australian consultant working with an Indonesian client – you can conclude this new smarter way of working is upon us. Adapting to this change would be pivotal in continuing to deliver value within the Contracts and Procurement function. There’s no denying the function is critical to any business in managing risk, providing strong governance and soundly managing spend.
The answer was to develop a digital platform which provides access to talent across the globe via a flexible and virtual model which provides a cost-effective opportunity to fast track performance, access to procurement professionals that can save time and money, and assistance in managing risk and spend by offering easy-to-use services that can be accessed from anywhere.
And so was born Promitheia Procurement: A comprehensive online procurement tool that provides business with the opportunity to purchase procurement templates and work with online professionals to design any business procurement function to meet their unique requirements.
What are the essential skills you need to possess or develop if you want to become one of tomorrow’s supply chain leaders? Is it enough to have a business-related degree and a little supply chain experience, or is supply chain leadership a vocation for which you must work hard to acquire specific qualities?Rob O’Byrne from The Logistics Bureau shares his expert advice.
In reality, it’s probably a little bit of both. Indeed, many elements of supply chain leadership can’t effectively be learned through academic channels alone.
In any case, an excellent place to start is by knowing what the most vital supply chain leaders’ skills are and, of course, why you need them.
That’s what you’ll find in this article, so you can check which essential skills you already have, and which ones you might wish to enhance with some pragmatic supply chain education.
These Are the 7 Supply Chain Leaders’ Skills You’ll Really Need
1. Information Technology and Automation Knowledge
Before getting into this first section proper, I want to make one essential point, which I’ll expand on later in this article. Supply chain leadership is all about people using technology as a tool. Nothing is more important than working on your people skills if you want to be a successful supply chain leader.
Nevertheless, few supply chains run successfully today without the support of sophisticated technology tools, like warehouse management and enterprise resource planning (ERP) systems. For that reason, you need at least a modicum of IT understanding to work in a supply chain environment, particularly if you intend holding a leadership position.
To be a supply chain leader, you will need to be familiar with the use of enterprise software applications like WMS, TMS, and ERP, not to mention analytics software, which is increasingly becoming a staple source of leadership decision support.
Enterprise IT Skills at User-level
There was a time when supply chain leaders could rely on subordinate employees to do the hands-on work with business information systems, and be content to receive reports and Excel spreadsheets containing data for decision-making.
Those days are gone, however. Today you’re expected to find your way around the modules of your company’s ERP and business intelligence applications on your own. Furthermore, your need for technology understanding extends beyond hands-on use.
Understand IT as a Buyer
As a supply chain leader, your input into IT procurement will be crucial, and you must know enough about your company’s technology needs to discuss them with vendors. You’ll need to understand the relationship between ERP workflows and physical processes, for instance, to help prevent classic mistakes from being made, such as applying new technology to outdated, inefficient processes.
It will help if you know automation technology, too, since more and more companies are applying automation in distribution centres and warehouses.
Ultimately, strong interpersonal skills still trump technological expertise as a supply chain leader’s forte. However, a career at the head of your company’s supply chain is not one to consider if you don’t have some affinity for technology and its application in business.
2. A Grasp of Economics and Market Dynamics
The supply chain world is changing rapidly and sometimes unpredictably, in line with the market dynamics across many industries, all of which are being affected by rapid shifts in customer and consumer buying-behaviour.
Many markets that used to be purely local or regional have become global, as have the supply chains that serve them. As a supply chain leader, you will need to focus on what lies ahead and, to some extent, predict it. That can only be possible with a thorough understanding of the market dynamics relating to your industry and your company.
Of course, each industry and the niches within them are subject to unique and specific market dynamics. Supply chain leaders can work in any industry as long as they know their stuff, but this does mean that a change of employer can require some in-depth study, especially if the market is unfamiliar.
As a basis to quickly adjust to supply chain career moves, it will help a lot to be familiar with economics’ basic concepts.
To see ahead and lead a supply chain team effectively, you’ll need to understand what drives demand, supply, and pricing for the goods and services provided by your organisation and its competitors. These forces impact a variety of supply chain management elements, including the cost of goods sold and the cost to serve your company’s customers.
3. Understanding Cost-to-serve
Supply chain leaders play a very active role in the profitability of their employing companies. If you’re running a supply chain operation, your decisions impact the costs involved in supplying your organisation’s customers.
You will have a huge advantage and the potential to shine as a leader if you can quantify how your supply chain leadership decisions affect your bottom line. For instance, too few companies focus on the real costs involved with serving customers.
The result of this inattention is often a one-size-fits-all approach to service, inevitably leading to the over-servicing of some customers and the under-servicing of others. A single service offering can even impair profitability, perhaps creating a situation where logistics costs cause some sales to generate losses instead of profits.
If you understand the cost-to-serve concept and can apply it to your company’s supply chain activity, you’ll be able to identify unprofitable customers and products.
By developing a thorough cost-to-serve understanding, you’ll even be able to make decisions that improve the profitability of those customers and products instead of taking knee-jerk measures to cut losses.
Every company wants supply chain leaders who can make direct and positive impacts on the bottom line—but not every company has such leaders. That’s why familiarity with cost-to-serve is one skill that can help you stand out as a competent supply chain professional.
4. The Skill of Flexibility
The one thing you won’t find on this list of supply chain leaders’ “must-have” skills is innovation. You don’t have to be an innovator to be an outstanding supply chain leader, but you do have to support and drive innovation. Flexibility is the skill that will help you to do that.
Flexibility gives you the ability to let others do the innovative thinking. Your flexibility will give those creative thinkers the confidence to present their ideas, since they know that you will adopt them if it makes sense to do so.
Flexibility will keep you from feeling too comfortable in the status quo ever to let it go. Flexibility will ensure that change (often termed the only constant in supply chain management) will not faze you or cause you undue stress. In turn, your team will be encouraged to embrace, rather than resist, change.
Flexibility is one of the soft skills that differentiate successful supply chain leaders. That’s not only because of the changing nature of supply chain operations, but also because things don’t always go to plan—far from it if truth be told.
For example, during supply chain improvement projects, it’s not uncommon for things to crop up, requiring plans to be changed. An inflexible leader may doggedly try to drive through with the original strategy, becoming ever more frustrated in the process and hampering, rather than helping the situation.
Inflexibility often manifests in the belief that changing a plan is an admission of poor planning, but in many cases, that is an erroneous presumption.
Don’t fall into this trap. Work on your flexibility as a leader. Accept that plans should always be work-in-progress, and adapt your approach when required. You can’t plan for every eventuality, and while flexibility is a virtue for supply chain leaders in general, it’s an absolute essential in project management.
5. Project Management Skills
Aside from flexibility, there are many other project-management skills that you’ll need as a supply chain leader. Of course, a lot depends on what leadership role you are in, but if you are headed to the top, you’ll probably hold several management positions on the way up, most of which will see you leading projects from time to time.
If you make it to the C-suite or, indeed, to any senior leadership position, it will help you and your managers do a better job if you understand the fundamental principles, pitfalls, and challenges inherent in project management.
The most crucial project management skills to acquire as a supply chain leader are as follows:
The ability to negotiate successfully for resources, budgets, and schedules
A high degree of personal organisation
A proactive approach to risk management
Of course, the above-noted skills are also valuable for supply chain leaders generally, not just as part of a project-management skill set. I’ve simply noted them here because they are the carry-over skills most likely required in a supply chain leadership role. To elaborate:
Personal organisation will be vital for keeping track of numerous projects for which you are likely to be a sponsor and meeting your obligations toward them.
You may sometimes be called upon to support project business cases, hence the need for negotiation skills.
When deciding if you’ll approve a requested project, knowledge of risk management will help you ask the right questions about the proposal and business case.
6. The Ability to Get the Best from People
So how about those people skills I briefly mentioned earlier?
I can’t put it any more plainly: the ability to lead, manage, influence, and inspire other people is the number one fundamental, essential skill that all supply chain leaders and managers should possess.
It is entirely possible to learn the necessary skills, but a word of caution is due. If you don’t enjoy team building and developing professional relationships with lots—and I do mean lots—of other people, don’t choose a supply chain leadership career.
On the other hand, if you love working with people but just don’t see yourself as a great leader, you probably have exactly the right mindset to succeed in a supply chain leader’s role.
There is nothing wrong with being self-critical, as long as you have the will to learn what you need to learn, and the energy to commit to your personal development. Being passionate about teamwork and enjoying interactions with others is half the battle in succeeding as a supply chain leader.
The 3 Cs of Supply Chain Leadership
Communication: First and foremost, you need to communicate well … to articulate sometimes complex concepts in a way that anyone within your company can understand, regardless of whether they have supply chain knowledge or not.
Dependent on whether your company operates internationally, you might benefit from communication skills that extend beyond your native language. It’s becoming ever more common for enterprises to give preference to bilingual or multilingual leadership candidates.
Collaboration: Secondly, you will need to be able to foster collaboration, a critical element in any modern supply chain.
It won’t always be easy, because sometimes you’ll be asking teams inside and outside of your business to collaborate and work together despite competing priorities and expectations. To ensure these parties collaborate, you’ll need to draw on communication, persuasion, and relationship building skills.
Change: Change management is another people skill in which you might wish to receive some special education or training. If you are planning to graduate from a role where you’ve been used to participating in, but not leading change efforts, experience alone may not be sufficient to help you take people through challenging changes. Resistance to change can be hard to overcome.
The impact of changes within your supply chain can affect employees on a very personal level. You’ll need to know how to empathise and to listen actively to what people are telling you. Without these skills, your leadership can quickly be rejected during periods of change, purely through fear of the unknown and a sense that you don’t appreciate employees’ concerns.
Get the Best From Yourself
Finally, while the need to interact effectively with other people might seem obvious, you shouldn’t neglect the development of the person most impacted by your skills and abilities—yourself.
Supply chain leaders should be able to conduct regular self-assessments and identify their areas of weakness.
We never stop learning and developing, but by having the ability to self-appraise your skills honestly, and work on those areas that need it, you can acquire new expertise at a rate that keeps pace with the ever-changing supply chain environment.
Getting the best from yourself also means having the ability to curb your ego. Learn to recognise when somebody else in your team exceeds your aptitude for a specific task or responsibility.
Let that individual take the lead, and be happy to follow and learn from her. Not only will that free you to play a part in which you can use your strengths, but you’ll also be empowering the other person and helping her to reach outside of her comfort zone.
7. The Know-How to Negotiate
As a modern supply chain leader, it won’t only be your reports and colleagues that you need to interact with effectively and skillfully, but also those outside your organization. Moreover, both internal and external interactions will often involve the need to negotiate.
Supply chain leaders must negotiate often, and even if you’re not doing so on a one-to-one basis, you’ll probably find yourself in scenarios where you’re part of a team of people trying to broker a deal or arrangement.
Negotiation Scenarios for Supply Chain Leaders
Some examples of possible negotiation situations that you might get involved in, and in many cases, lead, include:
Procurement of IT services and solutions
Contracts for logistics services
Brokering deals with product vendors (for direct or indirect supplies)
Putting together contracts or service level agreements with customers
Negotiations with employee groups or trade unions
Business merger/acquisition negotiations
Why do Negotiation Skills Matter?
Negotiations are typically transactional, but often take place between entities or teams engaged in long-term business relationships. Whether you are the lead or a mere participant in the negotiation, your skills will influence the transaction’s outcome and the trajectory of the broader relationship.
It’s easy to make mistakes during negotiations, but with relevant training and education, you can hone your skills to avoid some of the most common errors.
For example, skilled negotiators know that the process does not have winners or losers. They don’t go into a negotiation aiming to win as many concessions as possible, and they don’t feel that they have failed when they have to give ground to arrive at a settlement.
A win/lose type of attitude will lead to negotiating mistakes. Even if you come out of a negotiation feeling that you have won, you might find further down the line that your “win” has done nothing to strengthen what might be a vital partnership.
Mistakes that Skilled Negotiators Avoid
If you have developed your negotiation skills, you will always enter into discussions looking for an outcome that will satisfy both parties. You’ll also be able to avoid other common mistakes such as:
Failing to prepare by identifying what the deal-breakers are, which outcomes are essential, which ones are useful to achieve, and which ones don’t matter in any concrete way.
Asking only for as much as you expect… It is better to ask for more than you expect.
Modifying an offer you have made before getting a response to the original. It’s important to understand that the other party may use silence to bait you into relaxing your conditions.
Offering compromises before you have heard all the demands of the other party. By getting all the facts first, you can be selective in identifying where compromise may be possible.
Focusing too much on your party’s input and achievements. Strong negotiators pay close attention to the opposite party’s behaviours, ask plenty of questions, and take time to understand and analyse the answers.
How to Boost Your Supply Chain Leader’s Skills
Your business degree and/or hands-on experience in a supply chain role will undoubtedly help you gain and maintain a supply chain leader’s position in your current company—or in a new organisation if you should be planning a move.
However, supply chains have become so complicated that an extensive toolkit of required skills is required if you want to thrive and make a difference as a supply chain leader.
Some of the skills in that toolkit can be difficult to attain without many years of supply chain experience, simply because they are rarely taught outside of the workplace. Your best option might be a program of specialised supply chain and logistics education.
Our Supply Chain Secrets program, for example, was developed and designed by people who work in the industry. It can help you learn about each supply chain area pragmatically, using real-world problem-solving and relatable examples of commonly made mistakes—and methods to avoid them.
If you’ve read this blog post, perhaps you’ve been searching online for ways to enhance your supply chain leader’s skill set. If so, you don’t need to look much further. Join Supply Chain Secrets today, and access the skills you need to be a supply chain leader of tomorrow.