Category Archives: technical procurement

A Rare Opportunity To Reset And Accelerate

Will businesses go backwards due to necessity and survival or will they step up and push forward to go further and faster to achieve the right balance?


Many of us are in a post-covid state of mind, I most certainly am. But will you and your organisations come out of this stronger, weaker or just different? Of course, the crisis is still very much real, affecting many people and businesses with long-lasting effects.  Perhaps there are slight signs of a slow down in certain parts of the world but who really knows how things will fare without a vaccine. Either way, we have to overcome this and look towards the new normal, which I believe can be a better one.

The pandemic is surely one of the greatest affecting the world and for many it has or will be a pivotal turning point. On the personal side, it may bring focus back to the things that really matter, be it family and friends or health and lifestyle. Or, it may send you down a new path. On the business side, it may question the raison d’être and bring focus to finding the right balance between society, the environment and the economy. From certain perspectives, the pandemic presents businesses a rare opportunity to accelerate on digital transformation initiatives that have been dragging over the last few years. Not for the sake of digital transformation but rather to rapidly ensure more resiliency and hone in on or further develop competitive advantages.

Who better to bring balance, build resilience and solidify competitive advantages than Procurement and Supply Chain.

Balancing the Imbalanced

Until recently it would have been fair to say that most businesses operated in an imbalanced manner with regard to society, the environment and the economy. With the main focus being on economic development, too often at the cost of society and the environment. Of course, there have been big strides made in recent years to balance this out but the big question is – What Happens Next?

This is a pivotal point. Will businesses go backwards due to necessity and survival or will they step up and push forward to go further and faster to achieve the right balance? I do hope it’s the latter and guess what, I believe Procurement is a key player in this. How you spend can transform your business and beyond. Where a business directs its spend can make the difference between an unsustainable imbalance and a sustainable balance to develop society, the environment and the economy equally. I strongly believe (and hope) we’ll see more and more organizations taking a stronger stance on this issue. Be it stronger support or stricter policies around supplier management for sustainability and diversity or more efforts to improve the communities involved in and around a business. Overall, Procurement organisations can influence entire ecosystems of suppliers to develop with this balance in mind.

Building Resilience

Resiliency has always been an important business strength but naturally during times of crises, there is more focus on this. For Procurement and Supply Chain leaders, while this is very likely not a foreign concept, it is likely that they have not had the opportunity to fully execute on a strategy to be more resilient to external events. This is the opportunity to show real business value. Now is the time to show the business how Procurement can add value around supplier risk management, new sources of supply, changes to contractual arrangements and much more.

Building resiliency begins with suppliers but must involve collaboration with the business. How much information do you have on your suppliers? How well connected are you to your suppliers? Are you monitoring risk across your suppliers? Do you have a mechanism to communicate and collaborate with suppliers in times of crisis? Do you have a clear view of supplier hierarchy to understand parent / child relationships? Do you know who your suppliers subcontract to? The list of questions that need answering is long. Needless to say that Procurement must accelerate on its plans to digitally connect to its suppliers to get better information, better assessment of risk (and performance) and overall infuse the multitude of Procurement and Supply Chain processes with better supplier information to improve decisions.

Solidify A Competitive Advantage

Lastly, the opportunity to establish or further develop a competitive advantage is too great to ignore. Some may ask, how can Procurement help here? We have seen first hand from our customers that Procurement does, in fact, have a lot to contribute in developing a competitive advantage. There isn’t an easy answer, however, as it really depends on the business and industry. We have a leading telecom customer where procurement was instrumental in generating significant revenue. Another where Procurement impacted the financial performance of the company by launching more new products, faster and more profitably.

Procurement is a gateway to probably the most significant source of innovation that any company has, its suppliers. By harnessing this rich resource companies can build great competitive advantages but they also need the people, processes and technology to take full advantage.

Technologies such as strategic sourcing, procure-to-pay or full source-to-pay that are instrumental in managing spend must empower versus limit. Often however, software solutions are designed in a way that forces organizations to compromise due to the limitations and restrictions presented. For those organizations that are ready to develop a competitive advantage (and many won’t be, as they still need to attain a level of maturity), technology must empower the skills and ideas that people have to be implemented and executed. Technology must empower creativity, this is how a competitive advantage is both born and executed.

Working From Home Is Resilient, But Is It Sustainable In Procurement?

The coronavirus pandemic disrupted Procurement in unimaginable ways. Running Procurement from home is possible, but is it sustainable?


The coronavirus pandemic has disrupted the workforce in ways we have never experienced, affecting also Procurement departments and Procurement Outsourcing (PO) providers. Shared service center locations first across Asia and then the rest of the world became hot spots, leading to a rush of company initiatives to enable procurement professionals to productively work from home. IBM was successful in moving 99% of its Procurement Outsourcing teams from 60 centers across 40 countries into a home office environment in only 10 days without service degradation (1), proving that running a Procurement business working from homeis possible and productivity can be maintained when a business can react quickly, but is it sustainable? Have critical activities just been postponed or is this is the new business as usual? Three considerations for sustained resiliency.

#1. Make regularly working from home part of your team’s DNA

While many of us are used to working from home in some capacity, over 80% of our procurement professionals have never done so on a regular basis.  And just because our workforce can work from home does not mean they are able and willing to do so long-term.

But returning to the office means finding the balance between safety and productivity for our teams, and deciding whether to aim for a quick return to the office or a more comprehensive re-modeling toward “borderless workplaces” where staff works from a combination of office, client site and/or home. Returning to the office is based on smart, quick and simple fixes: social distancing, mask wearing, and setting up sanitation protocols, such as rethinking where and when we eat and gather, how we open and close doors and use elevators. Re-modeling more fundamentally looks at how we work and defining what the worker’s purpose and intent is inside the office. Buildings become much more purpose-driven; deliberately sought out for team meetings, new employee onboarding, and collaboration sessions, with more hot desks and larger shared spaces, instead of being the default place to go for work.

But no matter in what capacity we return to the office, working from home regularly or even primarily will have to become part of our DNA going forward, as future infection waves are likely to force us out of offices again multiple times over the next few years.

Achieving this will require us to focus more than ever on internal communication. We have already seen a personalization of written communication over the past few months, with people expressing genuine care for each other, but we need to also listen to our employees and keep an eagle-eyed focus on engagement. By taking time for one-on-one discussions, acknowledging everyone’s individual challenges, ramping up appreciation and recognition, and ensuring we create virtual spaces for socializing we can maintain a sense of belonging and feeling of pride. On a collective scale, short pulse surveys can be a simple way to gauge the team about how they feel and adapt measures for greater engagement and productivity.

Ultimately our teams and their willingness to be flexible will be the first line of defense for sustained productivity in the new world.

#2: Bootstrap adjustments in operating models to accelerate your digitalization journey

Just a few months of working from home on a large scale have successfully increased the sense of urgency for digitalization and more intelligent end-to-end workflows. IBM and our clients have already seen an explosion of home-grown dashboards and trackers, aimed at gaining more visibility into procurement operations, allowing for more granular insights and daily views of the business. In the spirit of agility, we should initially allow for the creation of these “quick and dirty” data collection and visualization tools, even if it is manual and there is duplication. As we learn more about what our post-COVID-19 world will look like and the effort required to maintain a plethora of semi-manual tools becomes a burden, we can start distilling down to only a handful of tools and a new operating standard, creating the enablers for a broader roll-out of “no touch” procurement solutions, including traditional tools like catalogs, as well as newer solutions like marketplaces, chatbots, guided buying assistants, robotic process automation, and analytics to accelerate speed to insights and decision making.

Even more delicate and trust-based processes like Category Management and Strategic Sourcing can benefit from digitalization, for example by running “Virtual Sourcing Bootcamps” with business stakeholders using a series of video calls to map out purchasing plans, identify additional addressable spend and define more robust category wave plans for the year.

Additional incentives can be created for those internal clients or BPO customers who are resistant to a more permanent work from home delivery environment by redistributing real estate charges and differentiating expected employee productivity to create a price differential between home- and office-based setups.

#3: Learn to build trust virtually as a buyer and a seller

Until recently, meeting face-to-face was a non-negotiable prerequisite for the signing of large contracts, which we at IBM have experienced both as a supplier of Procurement Outsourcing, but also a buyer agent with our own and our customer’s suppliers. Finding a way to make customers comfortable pulling the trigger on multi-million-dollar contracts with little to no human contact is going to be a key success factor for our new future.

In the outsourcing world, visiting one or more delivery centers is a staple in every sales pursuit, but with increasingly distributed teams and a desire to reduce non-essential business travel, we are now showcasing our teams and their capabilities virtually. Using a mixture of live and pre-recorded videos, online whiteboarding tools and virtual roundtables with practitioners we have been able to create an authentic virtual delivery experience to aid in the sales process.

Experiment with virtual collaboration tools not just internally, but get comfortable using them with clients and suppliers to co-create, or hear from experts and practitioners that wouldn’t otherwise have been flown in. Focus your travel dollars and effort on one key meeting or workshop and augment it with a few virtual “visits” to round out the picture.

Summary

Leading a borderless workplace Procurement team is possible and can even deliver superior results if employees are engaged, but ensuring sustainability requires active shaping of your team’s DNA, a more digitalized operating model and the confidence to build trust in a virtual environment. Sometimes creativity requires constraints to really flourish, and let’s use the existing restrictions as an opportunity to emerge from this crisis stronger than when we entered it.

By Matthew Bounds & Martin Esser. For more information about operational resiliency, read:

·       Business Process Outsourcing (BPO) Services for business continuity and resiliency ibm.com/bpo

·       Building operational resiliency for anytime, anywhere and any situation

Footnote: (1) IBM Services blog, “Building operational resiliency for anytime, anywhere and any situation”, May 4, 2020, https://www.ibm.com/blogs/services/2020/05/04/building-operational-resiliency-for-anytime-anywhere-and-any-situation/

C’mon Procurement Pros – Pucker Up And Get Your Tech Dollars Now

NOW is the time to start a robust process to select, fund and implement a new technology system. 


Your CFO needs some love right now – supply chain isn’t something they’ve had to worry about much before…because you had it all covered!!  For the first time in their careers they’ve had to get into the details of how you keep it all going.  Your poor pandemic-battle-scarred CFO is now looking for some new ways to mitigate future business continuity risks.

Procurement and supply chain leaders around the world have the answers to future potential business disruption woes – what’s needed is some serious investment in technology!

COVID-19 has placed the risk of future global supply chain disruptions at the top of the C-suite’s agenda. Not wanting to be caught out again, company leaders are desperate for a better, faster way to recover the next time a crisis strikes.

Their eyes are firmly fixed on supply chain.

So, it’s time to wipe the dust of all those technology business cases – and get on Zoom, pucker up to the c-level and ask for the cash.

It’s the right time

The pandemic caught us out. It stripped away the luxury of time, revealing the real supply chain risks that we knew had been lurking just below the water line for years.

The tide went out and our weaknesses were exposed – a lack of visibility into our multi-layered supply chains, an overdependence on single geographies and single supply source and a lack of agility to pivot and close the supply gaps.

As we move forward, supplier risk, supplier collaboration, value analysis, cost reduction, quality, and compliance will be more important than ever. 

NOW is the time to start a robust process to select, fund and implement a new technology system. 

How to pucker up

But how can you make sure you select the right system and construct a convincing business case, especially when budgets are being slashed across the board?

Here’s your guide to technology selection and adoption, pulled together from years of experience.

Step One – make sure you meet the business needs

It starts with understanding needs. As procurement and supply chain pros, we all know how to run a solid needs analysis….so I don’t need to labour this point.

To decide what works for your company and suppliers, remember the 80/20 rule.  For example, if 80% of your spend is on contingent labour, you are better off looking at a system that specialises in that functionality. 

What system is best?

Once you know your company needs, it’s time to narrow down the provider playing field.

This can get confusing, because you might pick your top three and accidentally end up comparing apples to oranges. One system could be a full end-to-end suite, and you’re comparing it to a contract management point solution and a sourcing tool!

It’s easy to get overwhelmed; there are literally hundreds of e-procurement technology suppliers in the marketplace right now.

About 10 years ago we saw a big push towards ‘best of breed’ solutions. There were very few fully-integrated suites that were intuitive and easy to use. Plus, a lot of companies had budget limitations, so they looked to point solutions for contracts, P2P, sourcing, supplier management, analytics, etc. 

That worked for a while, but then it became a nightmare to maintain all those integrations and the systems lacked true interoperability.  

Then came the race for fully integrated suites, which led to the likes of SAP Ariba, Coupa, Ivalua and Jaggaer who emerged to lead the pack today.

Will the strong preference for the fully integrated suites continue? That remains to be seen. One thing is for sure, we will see a thinning out of the market as some of the best of breed start-ups struggle for cash.

But only you will know what’s right for your company.

Finding the love…and the cash

Once you’ve chosen your tech system, it’s time to get senior-level buy-in. How can you make your case convincing?

It comes down to giving a clear, compelling ‘why’. Why now? Why this system? What will it mean for the company?

Some great messaging that would resonate with the c-suite right now would be:

  • Systems give transparency
  • Systems give control
  • Systems give confidence

As well as these overarching messages, you should tailor specific business case messaging and justification for investment in your system for different members of the c-suite.  For example:

Chief Executive Officer – mitigate business continuity risk and future profitability

Chief Financial Officer – cost control and visibility

Chief Marketing Officer – reputation risk, protecting brands and fostering innovation

Head of Operations – efficiency and continuity

Financial Controller – well, it’s obviously about control!

Another tip for developing your business case messaging is to reach out to your online peer community and look through social media, to find stories that support your reasons for investing in tech.

There’s nothing the c-level likes more than to do better (or avoid the same mistakes) than the competition. Your stories and examples on how peers are handling problems will be a powerful tool for motivating your senior leadership team to invest in your recommended technology. 

Keep a c-suite huddle

It’s critical to ensure you have a wide base of support across the senior leadership team so that your project has strong foundations.

Stay close to the c-suite throughout the project.  Don’t ever assume the support you secure today will endure. Keep them regularly updated to ensure your technology project stays top of mind (and the corporate strategic priority list!).

Also, beware the trophy-seeking sponsor who could be using your supply chain technology project as a pawn in their political power play. It is always difficult to pick these people, but the wrong choice could threaten your project’s success. You don’t want everything to go down the drain when your board sponsor’s career bets don’t pay off. 

Ensure change management isn’t funded out of small change

Business cases for tech have always focussed on headcount reductions (hard numbers based on FTEs taken out of Accounts Payable, administration etc) and efficiencies (more of a soft number) on the value side, and licensing and implementation on the cost side for investment in technology. Don’t forget to also factor in the total cost of ownership. Customisation costs, implementation, and productivity losses and gains are all important financial considerations.

All of these cost and other benefits are important, but you must ensure you include a significant budget for change management, training, user implementation.

As a profession, we have not had enough focus on how to implement technology; that’s our weak point. It’s difficult to ensure the organisation is gaining the full benefit of the system they have invested in – and for the most part, we do a pretty lousy job of it.

That’s because these are change management projects, not technology projects. It’s so little about systems and so much about the people who use them.

Too often, the implementation budget is the first thing to go when CFOs want a quick financial win. Don’t fall prey to their argument that people will work it out, or that it’s all straightforward. That logic is precisely how and why many technology projects fail.

Fiercely guard your change management budget, and make sure you have a dedicated project team to make it a success.

You can do this

This is your chance to step up and lead, showing your potential for a more senior role.

Given the high failure rate of these systems right now, it may be a high-risk strategy to take on the leadership of a procurement or supply chain technology implementation. But with risk comes reward; your successful project will be a great asset to your career progression and increase your visibility.

More importantly, it will prove that you understand the business and know how to solve complex issues.

As we work our way through this latest supply chain disruption, we are (sadly) capturing the real costs of this pandemic and will have much stronger financial proof points for investment in technology.

If this kind of disruption happens again, we know the magnitude of what it is going to cost. So we must put systems in place that will respond much faster to mitigate these potential losses.

Now is the time to step up and put forward your argument for investment. We may never have such a fertile and receptive audience as we do right now.

Act now, while the spotlight is on supply chain.  Don’t waste a crisis.

This blog is an excerpt from a talk given by Procurious founder Tania Seary, as part of the SIG Procurement Technology Summit. Want even more expert advice on choosing and implementing a new procurement technology system? Register for Matt Stewart’s podcast series

How To Prove The ROI On Your Tech Solution

Your tech solution should be delivering the benefits and ROI set out at the start of the agreement – but how do you prove this to your CFO?


Making a substantial investment in a technology solution is not something that any organisation takes lightly.  Getting the green light to go ahead often involves significant stakeholder engagement, a comprehensive sourcing and supplier selection process and, of course, making the business case for the investment required.

Once you’ve gone live with your new tech, your C-suite will want you to report back and validate if the money they invested was well spent?  Are you on track to achieve your projected return on investment – that essential ROI?

So, how do you prove your technology is providing the benefits outlined in the business case? How can you demonstrate that savings are actually being achieved?  Ideally, you can go to a single savings tracker that contains all of your key metrics and ROI outputs.

But if you’re leaving things to the post-implementation phase to capture and easily report on that information, then you’ve probably left it too late.  I’ve seen the inability to demonstrate and prove ROI being one of the key factors leading to a major tech fail. 

1. Know What Your Organisation Requires in Terms of ROI

Your process of identifying and delivering on ROI needs to start at the inception of your tech implementation project.  You need to be clear on what your organisation needs in terms of ROI.

Before preparing your presentation for project approval, make sure you know the answers to these key questions:

  1. What is your cost of capital?
  2. What does your organisation require in terms of payback?
  3. Over what period does your organisation measure Net Present Value(NPV)?
  4. What kind of return on capital expenditures does your organisation require?
  5. What projects were recently approved and what projects were recently rejected?  Talk to those that were involved and see what lessons you can learn so you don’t make the same mistakes.
  6. What other projects are you competing with?  How can you position your project as a bigger priority than the rest?
  7. Based on your project size, what is the process for obtaining approval?
  8. Who are the key players?  Once you know the process, identify the key players who will be determining your project’s fate.  What are their priorities and how can your project align?  If possible, get introduced to them and start building a relationship.

This will help you eliminate any potential surprises you may encounter as you seek for approval of your business case.Key here is to not make assumptions on what goes into your business case and what will, or will not, be approved. 

2. Know Your Numbers

Begin with knowing and owning every number in your business case.  In order to deliver, you first need to have sufficient detail of your targets.  If not, how will you ever know what you are aiming for and if you achieved them?  I mention that because I find many business cases are template-driven and lack the defendable detail when it goes under the spotlight.

For example, many times I will see a blanket percentage applied to all spend.  Or an efficiency savings applied across all POs and invoices.  Basically, I see many organisations adopt a one size fits all approach to many of these business cases.  That may work for some organisations, but it doesn’t for many of the CFOs we work with. They want to know specifics. 

They also understand that each category of spend is different and should be treated as such.  What is realistic to be achieved in one category, may not be realistic for another.  What was achieved by one organisation does not inherently mean that you can experience the same result in your organisation. 

There are a lot of factors and assumptions that must be considered in the process of creating the business case.  .  This includes being able to know how each category of savings was calculated, so when the time comes to present the business case for approval it is easily defended

We coach our clients to never go into a meeting with their CFO to get their project approved if they are not 100% clear on how each number in their business case was calculated.  If they don’t know their numbers at the start of the project, they will have a really difficult time knowing how to realize those savings after go live. 

You have to know and own your numbers better than anyone. Those that don’t, rarely succeed.  If you don’t know how those savings will be realized and what the critical path and key performance indicators are to realize those savings, it will be very easy to get distracted during implementation and lose sight of what is most important.

If you want to be able to go into your CFO’s office and show off how you have over-delivered on your promise of savings and efficiency, then it would be wise to take the time to know and own your numbers before you kick off your next project. 

 3. Measure What Matters

Part of our success blueprint process is making sure we’re clear how to capture and report on the measurements that are going to demonstrate positive ROI. Being clear about cost baselines is an essential starting point.  Making sure you are clear as to how you’re going to capture the following financial metrics can help ensure your ROI can be tracked throughout the life of the project:

Make sure to capture any REVENUE impacts:

  • Are there back end supplier rebates that the project is improving?  
  • Are you enabling product innovation that can be tracked? 

How will the project contribute to less spending:

  • Operational Spend reductions, your plan to track future spend and compare your historical spend 
  • Where your project creates the opportunity to avoid historical spend altogether.  Is that historical spend in an existing budget or is it leakage that needs to be tracked?
  • And where are there reductions in capital expenditure or overall lower Total Cost of Ownership?  As an example, are there license and hardware costs from retired systems that are removed from the budget? 
  • And lastly, resource utilization and efficiency: Are you doing things faster and better and thus requiring less resources?

The Right KPIs are going to drive the project ROI.  They need to be presented and agreed upon during business case approval.  From there, the path to monitoring the financial benefits are easier:

  • Building Dashboards that can handle the data and calculations for your metrics.  
  • Capture the current state as well as your goals over time, and then track the advances throughout the implementation and rollout.  

This will translate to easier benefit analysis.

In the absence of the right dashboards and savings tracking process, resistances within the organisation have stronger voices during any project setbacks.  This ultimately can erode the confidence inside and outside the project team.

Soft benefits go alongside your financial benefits, though they are usually much harder to quantify accurately. They can be factors such as your employees having improved utility, skill, and even joy with their activities.  That investment in your people should be measured and recognized continuously.  It should be captured through periodic feedback surveys as well as activity audits. 

Engaging with end-users and suppliers both at the outset and on an on-going basis will give up-to-date information and allow for changes to be tracked.  Ensuring cross-function coordination is also necessary, as the tech solution will touch all areas of the business.

There is no single solution to providing a fully accurate ROI calculation.  Take the time upfront to fully quantify costs, including those that may require more research to identify.  Capture processes and work patterns so that efficiencies can be identified.  And secure key stakeholder sign-off, so you’ll have consensus on what returns you expect and how it will be measured.

How Covid 19 Affects What Gets Measured

We cannot ignore the times we are in. CEOs and CFOs will be adjusting key KPI’s.  Whether you are driving change or reacting to their changes, as Procurement and Supply Chain leaders, it is imperative that you are in synch with leadership. 

In recent times, more and more companies are measuring their performance towards diverse, green and ethically compliant spend goals.

And now Covid-19 has forced risk avoidance into the front lines of KPI tracking.  

The agility of your supply chain will become an essential measurement.  For instance the percentage of your business that can be fulfilled through alternative distribution channels, modes and suppliers will be key to measure.

And all these primary and alternative options will come under more stringent risk criteria.  Risks will be evaluated by geography, ethics, politics, as well as financial stability.

In Closing

It’s a cliché, but what gets measured gets managed and what gets managed gets measured.  

Whether you choose to implement a savings tracking module within Source to Pay or not, I feel that it is very important to create a standardized intake and validation process for each KPI.  Pair that with a robust and flexible analytics solution to best monitor those KPIs that roll up to the overall project ROI.

Those that have followed these footsteps, are confident when they get the request to meet their CFO in a few hours to review how their project is tracking towards the business case.  They are actually excited because this is what they have been waiting for – a great opportunity to not only prove the ROI, but to also advance their career. 

To go deeper on how to find your perfect tech match, download our e-book ‘How To Select Source-To-Pay & Procure-To-Pay Systems That Deliver Results‘ and tune in to our series ‘Major Tech Fails.’

Procurement Technology – What It Can And Can’t Replace In A Manufacturer’s Journey Towards Supply Chain Resilience And Agility

A review of the key elements in supplier management for manufacturers and how Source-to-Pay procurement technology can support the journey towards supply chain resilience and agility in times of crisis.


As the COVID-19 pandemic disrupts global supply chains, procurement organizations around the world are scrambling to react. There are many supply chain management lessons to learn from the Covid-19 crisis.  However, some organizations are better prepared to weather this storm than others. Many of these organizations are already using Source-to-Pay technology and are now realizing more than ever that technology is a “must have” to ensure their supply chain remains resilient and agile throughout a crisis. In this article we’ll review how supplier management capabilities in Source-to-Pay technology can free-up and enable a manufacturer’s direct material procurement team to do what they do best to ensure the supply chain remains resilient and agile: be creative and strategic.

Supplier Data Quality & Management in Decision Making

It may be the most basic level, but data management may also be the most daunting for some organizations. Supplier Data is at the core of every procurement activity, and it is critical for those dealing with direct materials in manufacturing. Often, what procurement teams end up with are multiple collections of data stored in tiny, disconnected data silos, such as: spreadsheets, MS Access databases, email and even the dreaded manila file folder and sticky note.

Obviously, these methods of capturing and recording data have limitations, and these limitations can hamper decision making in several ways, and ultimately impact the management and resilience of the organizations supply chain. Some of these challenges include limited:

  • Ability to collaborate, identify opportunities or issues and act
  • Transparency, or ability to scale data, across an organization
  • Ability to enrich data sets with other, related data sets.

These challenges in the direct material supply chain pose a real threat, especially in a time of crisis and let’s face it, there is no shortage of events that could jeopardise and/or disrupt a business, potentially impacting their profitability, business continuity, image, and reputation. Often, organizations try to band-aid the data problem, which can cause long term problems and inefficiencies long into the future. This is where Source-to-Pay systems can help – by providing procurement teams with a system that centralizes information and ensures data quality meets a high standard. This in turn enables procurement teams to better evaluate a situation, make decisions and act.

Managing a complex network of direct material suppliers

Manufacturing supply chains are notoriously complex, and this fact has been a common topic of the news media throughout the COVID-19 pandemic. It’s a manufacturing organizations’ procurement team that is on the front lines fighting for the supply chain’s survival. However, procurement teams often lack consistent visibility beyond their tier 1 strategic suppliers for each product line, and this limits a company’s ability to ensure the materials and processes required to produce a product are consistently available.

It’s not uncommon for direct materials procurement teams to capture information on sub-tier 1 suppliers. However, organizing and making sense of this data is so challenging that it is uncommon for all but the most critical product elements in the most mature procurement organizations. This is where Source-to-Pay (S2P) technology can help, by enabling procurement teams to capture important information across the entire supply chain so they can identify potential issues early, initiate collaboration with the necessary parties and take action to support suppliers and mitigate potential issues.

Risk & Performance Management

The evaluation of direct material suppliers is often nuanced and complex depending on the final product, regulatory concerns, and other requirements. However, it is up to the procurement team to find a way to ensure that suppliers:

  • Are not risky;
  • Perform well over time;
  • Meet quality & regulatory requirements;
  • Maintains the right certifications, and more; and
  • Meet Corporate Social Responsibility (CSR) expectations.

Empowered with all this information, procurement teams can ensure supply chain continuity and resiliency, and that value is maximized for the company. But it just isn’t possible to achieve the levels of organization and collaboration necessary to collect all the data from suppliers, 3rd party data providers and internal business processes to give buyers a complete picture of each supplier across the supply chain without a serious database and supporting processes. To get started and keep the process more manageable, many companies focus on a smaller subset of key suppliers.

Source-to-Pay technology can help procurement teams establish and organize campaigns to collect & update supplier information and receive real-time supplier risk management updates on important risk factors (e.g. Financial, etc.). Furthermore, these solutions can help procurement collect feedback from stakeholders, track and maintain certifications and more. With this information, procurement can rapidly identify and classify issues and then collaboratively work with suppliers on improvement plans.

Developing Suppliers: Establishing & Implementing Supplier Strategies

One of the benefits that effective supplier development programs have in common is they establish mutually beneficial partnerships between the supplier and buying company. These programs enable bilateral feedback, opportunities for product and service innovation, access to new markets and investment. The key to the success of these strategies begins with communication and transparency, both of which are also essential in times of crisis. Additionally, manufacturers with mature supplier development strategies in place tend to have:

  • Access to reliable data,
  • The ability to identify critical suppliers across all tiers of the supply chain,
  • Capabilities to monitor and manage supplier risk and performance,
  • The ability to closely collaborate with the supplier, often including commercial, operational and technical strategies and plans.

Accomplishing and maintaining each of these elements over time is often a challenge for all but the most mature procurement organizations, but it is never too soon to lay the foundation. Source-to-Pay technology can help procurement lay the foundation, by fostering communication, collaboration and better visibility across the global supply chain. 

Supply Chain Resilience and Agility

Due to the COVID-19 pandemic, the world is now painfully aware that even the best run supply chains can encounter significant challenges. However, some supply chains will recover faster than others because of their resilience and agility. What the best performing supply chains most likely have in common is a procurement organization with a strong data foundation to support effective decision making, the ability to collaborate and communicate with and support all tiers of their supply chain, monitor and track risk and performance and effective supplier management and development strategies that has produced close partnerships.

Throughout each of the elements described in this article, Source-to-Pay technology replaces much of the manual, non-strategic effort necessary to support and manage supplier relationships. The result is a foundation that empowers procurement teams to add more value to the organization and be better prepared to manage their supply chain through times of crisis.

Design Thinking Applied To Procurement

Don’t reinvent the wheel, apply design thinking tools to help you plan your next procurement.


Agile processes and design thinking are not fads, they are here to stay. During a three day design sprint that I participated in recently. I was bombarded with many different models designed to stimulate creativity. The result was a continual stripping down of our ideas until they were polished and on target.

Using these tools to break down our assumptions and continually test and probe ourselves for new answers was both exhausting and inspiring. Tools to aid design thinking don’t have to be high tech, new or complex to be effective. They are simple and freely available, so why aren’t we utlising them more in procurement?

Design thinking in action

Here are some of the design thinking exercises that I have used recently in my work:

  • Lightning Demos: before a workshop set the attendees homework to discover relevant tools or examples of either how your problem has been dealt with elsewhere, and/or things you’ve interacted with in your daily life that you find easy to use e.g. pay wave credit card for ease of transacting, a website you’ve used, etc.
  • ‘How Might We…’: takes challenges and poses them as questions.
  • User Journey Maps: These help to build empathy and understanding. Start with how your user first encounters your business / product and map out their experience end to end.
  • Crazy Eights: You fold your A4 piece of paper into eight sections and set the timer for eight minutes. Try and think of any solution possible, no matter how out there.
  • Game theory: Using cards to stimulate combinations of thinking differently e.g. event cards, theme cards, product idea cards. Draw one each from the pile and see what ideas it generates.
  • The Five Whys: the idea is to keep interrogating the cause of the problem to ensure any solution has dug to the actual root cause. In the example below often the response would end at fixing the leak.
  • Personas: Another empathy building tool. Build up a detailed persona of the core or target user and use them when designing ideas.
  • SCAMPER: The acronym represents seven techniques for idea generation: Substitute, Combine, Adapt, Modify, Put to another use, Eliminate and Reverse
  • Dot voting: With an overwhelming amount of post it notes and ideas, each person gets two dot stickers to place on the post it note that they feel is the most important and contributes to addressing the problem statement.
  • Decision matrix: Because everyone loves a four box diagram in procurement. This Is a great way to clear on priorities, especially if there are a lot of dot stickers!

Want to find out more? Google has made their design sprint kit free, its open source and available for anyone to use. You can find further information about each design thinking tool cited above by visiting their website.

How can you apply these to your procurement project?

Many internal customers come with pre-formed solutions and ideas of how to solve the problem or opportunity they wish to approach the market about. The design thinking exercises are quick ways to ensure that the right solution is being reached for. If the customer is not willing to participate, you can do these by yourself.Test for new ways to solve the issue and test that the problem or opportunity has been correctly identified in the first place.

Ditch the 400 page strategy

The Lean Canvas is where we can start to bring all the creative thinking together on one page. It should be clear, concise and make a convincing case for change. There are many free examples online. The lean canvas can be used to replace the traditional procurement plan document for low risk procurements. It can also cut down a category management paper to it’s essence, making the perfect executive summary for others to digest at a glance.

This sounds bonkers

Are people really doing this? Yes! My current workplace is central government agency and we are using the lean canvas approach in the place of traditional procurement plans.The co-design process can replace tenders effectively. The theory of change model is the perfect framework to accelerate an idea and unlock its true impact.

Get inspired and start thinking outside of the procurement box!

This article is solely the work of the author. Any views expressed in it are those of the author and do not necessarily represent or reflect official policy of the New Zealand government or of any government agency.

Rise Of The Procurement Ecosystem

Why is an ecosystem approach better than an end-to-end source-to-settle (S2S) suite in procurement and buying?


Digitisation of procurement and sourcing is in full swing. And the applications that provide these services are booming.

But these vendors typically offer full end-to-end source-to-settle (S2S) suites, with only part of their solution dedicated to procurement and sourcing. 

In the latest ‘2019 Gartner Magic Quadrant for Procure-to-Pay Suites’, only 59 per cent of respondents indicated that they used a sole solution for their P2P processes. 

But times are changing. And the days of an end-to-end S2S suite are coming to an end.

According to Gartner’s report, Don’t Assume You Have to Use an S2S Suite to Digitalise Procurement and Sourcing, ‘By 2021, the major source-to-settle providers will all offer extensive APIs and rearchitect their solutions to provide “unifying platforms” rather than one-size-fits-all solutions.’ 

There may be some organisations in which a sole S2S suite works just fine for their sourcing and procurement needs. But for the majority of larger organisations, and especially those operating on a global scale, that’s not the case.

Change your view of integration

According to the Gartner report Don’t Assume You Have to Use an S2S Suite to Digitalise Procurement and Sourcing, ‘One of the main reasons that buying organisations are attracted to the full suites is to minimise integrations. While this is understandable, it can’t be prioritised over having the right solutions.’

More advanced applications, like Basware’s, are built with integration in mind. In the 2019 Gartner Magic Quadrant for Procure-to-Pay Suites report, Basware won awards for our strong integration capabilities. 

We received positive feedback from customers as to our integration abilities with back-end ERP systems, especially.

Basware solutions come with certified ERP intelligence, enabling seamless interoperability with the world’s leading ERP systems, including SAP, Oracle and Microsoft Dynamics. 

But our network of plug-ins also allows customers to pick and choose, then plug in, the applications and solutions that best fit their needs.

And while we’re proud of our history of innovation and P2P solutions, we’re also aware that in order to remain a leader in our field we’ve got to adapt and understand how we fit into the larger landscape of the future of S2S.

Gartner supports this sort of ecosystem of preconnected partners. And though this may cause a conflict for many S2S vendors, that’s not the case with Basware. 

We agree that ERP omnisuites have failed customers and believe that S2S suites will, too. Instead, we’re offering customers Networked P2P with a strong API framework and 100 per cent spend capture. 

Using this as the core solution, customers can build category-specific strategies to use the latest innovations such as cognitive sourcing, services governance or contingent workforce management, while capturing all spend into a single platform.

Consider a specialist

A ‘one size fits all’ approach might seem like an easy solution to your S2S problems. But this sort of blanket approach isn’t practical. It’s clear that no vendor offers a full S2S suite that is best in class across all modules. 

By going with a full S2S suite, customers are locking themselves into suites of uneven quality that will often take years to roll out.

This can lead to low and slow adoption rates.

And in order to achieve user adoption, Gartner says you ‘should focus on finding solutions that fits your buying organisation’s needs as closely as possible. This means that, in many areas, it makes sense to consider alternative specialist solutions to replace or — in some cases complement — the suite offerings.’

At Basware, we firmly believe in a future in which a microservices architecture will enable customers to manage vendors and spend in a core spend management platform like ours but also allow them to capitalise on the latest in specialist services. 

This could include:

  • Solutions for complex sourcing categories, like packaging and logistics
  • Linkages via API to data sources addressing sustainability, supplier diversity and other dimensions of supplier risk
  • Procurement savings forecasting.

Out of 13 vendors, Basware was awarded many top placings in ‘Gartner’s “Critical Capabilities for Procure-to-Pay Suites 2019”’.

These placings include the following, among others: 

  • #1 for AP Automation (Critical Capability)
  • #1 in Partner Ecosystem (Critical Capability)
  • #1 for Supply Chain Financing (Critical Capability) 
  • Tied for #1 in Integration (Critical Capability).

Next steps in your S2S ecosystem journey

As organisations become more comfortable with an ecosystem approach to procurement and sourcing technologies, they can also begin to understand their vendor’s partner ecosystem and how it aligns their roadmap.

Leading procure-to-pay vendors have established ecosystems with many preconnected and verified partners across various application markets. This includes partners such as ERP vendors, tax engines, supplier data providers and strategic sourcing application vendors.

To understand the value you can derive from a vendor’s product ecosystems, and to evaluate the effectiveness of its community, Gartner recommends requesting the following:

  • Data from the vendor outlining the number of ecosystem participants, the trajectory at which the ecosystem is growing and insight into those that use it regularly.
  • Metrics that disclose the number and frequency of documents, components or templates being uploaded by the vendor to the community (often called an online library).
  • A summary of the past three years of product updates originating from, or inspired by, suggestions from ecosystem partners.
  • Customer references that you can contact directly for an assessment of the vendor’s product ecosystems, and any user groups that they may participate in.

Ready to learn more? Read more about Basware’s rankings in the Gartner “Critical Capabilities for Procure-to-Pay Suites 2019” report. Download now.

Questions? Contact us! We’re here to help as you navigate the changes of P2P ecosystems.

10 Critical Skills Your Procurement Team Needs Right Now

And how to get them in less than ½ an hour, with a $0 training budget

As procurement leaders or influencers, we all know that upskilling is critical to our success and that of our team. And with the skills required to succeed in procurement rapidly shifting from a technical focus to more soft skills, it can be easy to feel overwhelmed by what’s required and how to achieve it. Common concerns we all experience are: 

Where do I even start with training? 

Who will pay for it? 

Can I (or my team) afford the time away from our day jobs right now – or ever? 

One of the world’s most celebrated thought leaders on human performance, Sir Clive Woodward, believes he has the answer to all of these questions – and it isn’t as complex as it seems. Sir Clive, who shot to fame after coaching England’s rugby team to their infamous victory over Australia in the 2003 World Cup, believes that when it comes to training, we get it all wrong. Instead of focusing on a few areas intensely, he says, and diverting all of our resources to them, we should instead focus on doing many things, 1% better. For example, instead of putting your team through a technical training course that might take months to complete, you could focus on a number of short, soft-skill focused sessions that will lift your team’s capability in a number of areas in a short amount of time. 

But what might this look like? We surveyed a number of influential procurement leaders and managers, and gave them an interesting challenge: How would you upskill your team in half an hour or less, with a $0 training budget? 

Here’s the skills they told us were most critical – and more importantly, how they’d rise to Sir Clive’s challenge and do multiple things that 1% better. 

1. Customer focus skills

The problem

In days gone by, procurement was seen as an internally-focused, cost-saving function only. Not only were customers not our focus, but in many ways, we sometimes felt we worked against them; with the finance team putting relentless pressure on us to slash costs, regardless of the impact on our end customer. Now? This couldn’t be further from the truth. 

Yet still, given that the focus on cost and risk is ever-prevalent, it can still be hard to step outside of our own perspective and put ourselves in others’ shoes, says Keith Bird, former CPO and General Manager – Commercial of Queensland Rail and Managing Director of The Faculty, a procurement management consultancy. 

‘A customer focus is critical,’ says Keith, ‘Because in procurement, a customer focus equates to increased value delivered.’ 

The quick upskill solution 

But how do you get your team to see that? One great way is to do an empathy mapping exercise, where you map your customer’s experience with your service, and try to understand their pain points (and what you can do about them). 

There’s tonnes of empathy mapping exercises available on the internet that can be completed within half an hour or less. Here’s one from Atlassian you can try right away.

2. Category management skills 

The problem 

Keith Bird, Managing Director of The Faculty and lifelong procurement specialist, acknowledges that category management remains a critical skill within the procurement profession. And, according to Keith, it certainly is one that requires honing: 

‘We all know there’s a lot of work that goes into managing any given category. From industry reviews to spend analysis, it can be a time-consuming – yet critical – exercise.’ 

The quick upskill solution 

Yet when it comes to upskilling, says Keith, the secret may not be what you think. Instead of focusing on developing the skill of category management itself, some quick wins can be gained from how category management is discussed with anyone outside of the procurement team: 

‘Many procurement professionals that I’ve seen feel the need to extensively detail their category management activities to their stakeholders. This is not only not necessary, but stakeholders find it confusing – it isn’t what they want.’ 

According to Keith, one of the best skills that can be gained from a category management perspective is how it’s presented to stakeholders: 

‘When you’re speaking with stakeholders, you need to talk their language, which, usually, is in commercial outcomes. How is your category management going to deliver them the outcomes they need?’ 

‘Discussing your activities, or rather, not discussing your activities and talking in outcomes can be a monumental win from a category management perspective.’ 

3. Problem solving skills 

The problem 

Problem solving skills are an attribute often left off job descriptions, but with procurement only increasing in complexity, they shouldn’t be. In fact, so critical are problem solving skills, that the World Economic Forum rates them as the number one skill we all need to thrive in 2020 and beyond. 

Acquiring them doesn’t have to be difficult, says Euan Granger, Senior Strategic Buyer at Soil Machine Dynamics and key contributor to Procurious, the world’s largest procurement professional network. In fact, sometimes it’s simply better to take a break from the professional nature of our workplaces, and step outside our comfort zones with a fun activity. 

The quick upskill solution 

One that Euan has used many times and recommends is the simple ‘marshmallow and spaghetti’ challenge. For this exercise, you’ll need to purchase 20 sticks of dry spaghetti, a roll of tape, a ball of string and a marshmallow. Then, set your team a challenge: Build a free-standing tower using the materials provided! 

Whenever Euan has used this activity for his team, he always recommends that they go away and think about how they can use the skills they’ve learnt in their job. 

‘It’s not so much about who does it or doesn’t do it, but more about working together to solve a problem, and thinking about things in a different way. We always need that approach when solving new problems.’ 

4. Negotiation skills

The problem 

As procurement professionals, we all know that negotiation is both an art and a science. In any given negotiation, we’re always delicately balancing the needs of our organisation, risks, costs, sustainability and the expectations of the supplier. It certainly isn’t easy – and it certainly requires great focus and dedication to execute. 

The quick upskill solution 

Even if you’re already a skilled negotiator, there’s always more you can learn, says Ron Brown,’ former General Manager at MMG Mining and lead consultant at The Faculty. One great way to upskill your team on this is to do the ‘Price of $1’ exercise, a simple exercise that shows how important preparation, communication and a solid command of facts is in a negotiation.  

Here’s how to run the exercise: 

  1. Have two people/players sit back to back, but far enough apart that they can’t hear each other
  2. Select a third person as a ‘go between.’ This person goes to the other two players and asks for their bid (the problem being neither player knows what they’re bidding for). 
  3. Bidding starts. Bidding can start at as little as 1 cent. Each player has three bids in each round if they want, and they can decide not to bid higher than the other player. 
  4. At the end of three bids, one player is awarded the round. Complete three rounds. At the end of three rounds, explain to players that they were bidding for $1.

‘The results of this exercise are always pretty interesting,’ Says Ron. ‘In that often, people end up bidding far more than $1, for that $1. The actual winner is the one that has spent less over the three rounds.’

‘What it teaches you, really, is that a desire to win can drive us, and how crucial information can be to overcome this.’ 

5. Commercial acumen 

The problem 

Commercial skills, or more accurately, commercial acumen, is one of the most essential attributes for any procurement professional or leader, says Keith. There’s a few reasons for this, he believes: 

‘Over the years, we’ve had a lot of shrinkage in companies, meaning that pretty much every procurement team is now expected to do more with less.’ 

‘This means that there’s an increasing pressure on every single person, from those at the top to new graduates, to show they’re adding commercial value in everything they do.’ 

But what does ‘commercial value’ mean? Keith says that it’s far more than just simply an ability to understand financial basics: 

‘Commercial value is way beyond simply profit and loss. It’s an ability to understand the whole value chain more broadly, for example, it’s not simply the “cost of acquisition” from a procurement perspective, but the value of that acquisition or product to the whole business.’ 

The quick upskill solution

Given the broad and complex nature of commercial acumen, Keith believes this can be a hard area to train. A great place to start, though, is to align your job, and more broadly, the strategic priorities and activities of your function, to those of the organisation’s C-suite. ‘If what you are doing wouldn’t matter to the CEO,’ Says Keith. ‘Why are you doing it?’ 

One great way to put this into action is what Google calls ‘OKRs’ (Objectives and Key Results). When creating OKRs, you create a set of audacious, measurable goals that put your stakeholders/customers first, and align those with your organisation’s priorities. You then follow up your OKRs regularly; checking in monthly to see how you’re going. 

There’s lots of templates and tools on the internet that can help you set up OKRs. Atlassian have developed some great downloadables on this, or you can try these ones from Rework.

6. Supplier relationships

The problem

With supply chains becoming more and more complex, relationships are now not just important, but critical, in everything we do in procurement. Yet managing them has never been more challenging – we’ve got to coordinate tens, if not hundreds of moving parts that may include multiple vertical and horizontal dependencies; all poised to break at any minute if we don’t get things right. 

The quick upskill solution

Given the complex and often personal interdependencies between supplier relationships, often learning from others with experience is the only upskilling solution, says Keith Bird, Managing Director of the Faculty. To do so, joining an industry networking program can provide unparalleled benefits. 

One such program is The Faculty’s own Roundtable program, which connects and facilitates collaboration between the top CPOs across Australia. 

‘Using our program,’ Says Keith. ‘I’ve seen some of our partners begin, and also navigate exceedingly complex supplier relationships that wouldn’t have been able to do otherwise.’ 

The Faculty’s roundtables are free for member organisations. 

7. Stakeholder management

The problem

Every single person in procurement has come across issues with stakeholder management at one stage. While it’s easy to blame individuals, though, often issues arise from a lack of information – and ultimately, it’s easy for a stakeholder to get frustrated and hard for them to see the value procurement add when they simply don’t know what’s happening. 

The quick upskill solution

The issue with stakeholder management, says Ron Brown, lead consultant at The Faculty, is that often, it’s just impossible to know who knows what. ‘So you’ll often find that there are people hiding in plain sight that are clueless and getting frustrated, yet you assume they know everything. Or worse, you assume they don’t need to know.’ 

One way to overcome this is to build out what’s called a RACI board (Responsible, Accountable, Consulted and Informed). To do this, you’ll need to: 

  1. Select one of the big categories for your procurement team
  2. Write a list of stakeholders on post-its. Remember to include everyone who will be involved in the category from beginning to end, no matter how tenuous the link. 
  3. Then map out the board, moving everyone around to create a map of whose involved, who knows what, and critically, who needs information and might not be getting it. 

‘Keeping stakeholders appropriately consulted and informed is a great first step in stakeholder management,’ says Ron. 

8. Digital skills 

The problem

In 2020 and beyond, there’s simply no hiding from digital. In our personal lives, we’re using it every day, and more and more, we’re doing so in our work lives as well. Increasingly, all large organisations are undergoing massive digital transformations, if they haven’t already, and procurement will need to play a big part in these, from a supplier to an implementation perspective. In short: if you haven’t got digital skills, you need to get them, pronto. 

The quick upskill solution

But what is ‘digital’? Where do you ever start?!? While the prospect sounds daunting, it needn’t be, says Euan, Procurious contributor. There’s literally millions of free resources online, and a great place to start is with a brand that’s synonymous with the internet itself: Google. 

Google’s Digital Garage provides a plethora of free, expert-level training on digital, on a range of topics that include everything from the digital business security to the basics of coding. You can check out their entire offering here.

Keith Bird, Managing Director at The Faculty, also believes that seeking out a digital mentor can be a great way to upskill: 

‘Admittedly, digital isn’t my forte, so I’ve expressly sought out a digital native in our business who can teach me. A mentoring relationship can really be between anyone; it doesn’t have to be an older person mentoring a younger person’ 

‘It’s more about a person with expertise mentoring someone who doesn’t yet have that knowledge.’ 

9. Technology 

The problem 

We’ve been hearing the same message for some years now: technology is fast replacing jobs! Artificial intelligence (AI) is coming! But those that usher these warnings are in fact a bit behind: there’s already a significant amount of AI in most systems we use, so the challenge now is to learn how to work with it. 

There’s no doubt that technology is evolving – and fast. We all need to keep up to date with the latest, but what’s the latest? And how do we keep up with it?

The quick upskill solution 

For all the latest in technology, says Keith Bird, Managing Director at The Faculty, you can’t go past industry podcasts. 

Keith recommends joining Procurious to keep up with the latest, or alternatively, listening to The Art of Procurement podcast.

10. Finance

The problem

Many outside of procurement might say that procurement and finance work in tandem – but from inside procurement teams, things often look quite different. In fact, when we’re trying to focus on strategic value, our relationship with finance can look a little strained, especially if the value we’re adding can’t immediately be quantified on the bottom line. 

The quick upskill solution 

For some skills, Euan Granger, Procurious contributor, says, ‘there’s no substitute for some good, old-fashioned peer-to-peer learning. And when you’re trying to learn about finance, there’s no better place to go than, well, finance.’ 

If you haven’t facilitated such a session before, Euan recommends, then try the following: 

  1. Get finance and procurement in the same room – this is key. 
  2. Get finance to do a toolbox talk on the key terms and metrics that matter to them – and how procurement can impact these. 
  3. Ask any questions and air any concerns – build the relationship and agree on ways of working moving forward. 

‘You’ll be surprised at what can be achieved in one simple meeting,’ Says Euan. Often being in the same room talking about what matters to each other is all that it takes for walls to come down and bridges to be built.’ 

 More skills, more solutions 

With procurement increasing in complexity, we all need to focus on rapid upskilling to continue to add value and stay relevant. To hear from the greatest minds in our industry, plus hear more of Sir Clive Woodward’s game-changing performance suggestions, join us at Procurious’ Big Ideas Summit 2020 on March 11 in London. 

Can’t make it? We’re currently offering digital delegate passes for free. Grab yours here now.

Contributors

Keith Bird, Managing Director of The Faculty. Connect with Keith on Linkedin here.

Ron Brown, Principal Advisor at The Faculty. Connect with Ron Brown here.

Euan Granger, Procurious Contributor. Connect with Euan here.

Want more? 

Want to learn more about in-demand skills in procurement, and all the other exciting developments and big issues our industry is facing this year? Join us to hear from Sir Clive Woodward and a stellar lineup of other speakers and industry leaders at our Big Ideas Summit. Digital Delegate tickets are currently available at no cost (for a limited time). 

If you’re interested in accessing market-leading industry insights and networking, express your interest in joining The Faculty’s Roundtable Program here. 

Tenders are the Worst Form of Procurement

Tenders may be the traditional form of procurement, but it’s time they were consigned to the dustbin of the past.

This article was originally published on LinkedIn by Austin Harrison.

“Procurement by tender is the worst form of procurement, except for all the others”

Winston Churchill, British politician, army officer, and writer, 1874-1965

Actually, Winston Churchill never said that, but if he’d been a Bid Manager I reckon he totally would have.

Procurement by tender is, by and large, a solution to a whole lot of problems that ought not to exist. Nepotism, backhanding, bribery and intimidation – those old-school gangster favourites – are obnoxious and illegal and commercially inadvisable, and picking with a pin is a terrible way to get an optimal result. I fully accept that tendering is as about as fair and sensible a method of procurement as I’ve come across.

Then again, if aliens landed and were introduced to the concept of tendering, they might wonder why we’ve created an entire sub-industry devoted to a single method of acquisition that doesn’t always get the right result for the purchaser and doesn’t always guarantee a sale for the best vendor.

Tenders – A Hugely Expensive Lack of Control

As someone who supports sales for a living, the issue I have, if one accepts I’m not a gangster, is that tendering is hugely expensive, and doesn’t quite work like it says on the tin. Purchasing, even of large, complex and multi-component tangibles, as well as intangible stuff like ideas and values, works a bit better for both parties if it’s treated more like old-fashioned shopping.

The buyer needs to try it on, to prod and poke and feel the width, and the vendor needs to suggest politely that while tangerine sequins are a bit last season, this one here is timeless and elegant and 20 per cent off.

A glaring anomaly, for me at least, is that as soon as an invitation to tender is issued, both sides lose a significant element of control. From the sales side, there might have been months or years of locating, learning about, and leading a prospect towards a solution that meets and exceeds needs that have been properly and professionally identified.

An RFx is issued, and suddenly any such headway can be diminished or completely negated. For the purchaser, they give up the tactile, lived experience of shopping and replace it with acquisition by form-filling at arms-length.

And if we’re being brutally honest, both the form and the response can be poorly designed and quite a long way from what is wanted or what is actually delivered.

Re-channelling some of the blood, toil, tears and sweat

While the tendering thing fills up my time quite satisfactorily, I’d prefer to expend a little more effort on winning business, and a little less on just joining in. Tenders are unlikely ever to disappear (and nor should they), but that doesn’t stop me from exploring any alternative approaches.

I’m lucky that the field I work in is flexible to some extent in respect of the sales process. It’s been possible for my team, in collaboration with others, to provision my sales colleagues with written collateral that is designed to preempt, or at least influence (in a non-gangster way) procurement by tender. I believe we’ve had some success with the following:

A Buyers’ Guide to Tenders

More of an infomercial than an advert, this encourages a prospect to ask questions of prospective suppliers. They are, of course, the kind of questions that my company would enjoy answering, and our logo and testimonials are prominent, but for those prospects who are in the early stages of procurement, I believe it’s actually a really useful item

The Case for a New [insert your offering here]

A more substantial justification for change, and how to go about it (define why you’re shopping, don’t let the wrong people make the decision, focus on advantages rather than risk, examine the risk of not changing, etc.). Includes plenty of stories of successful procurement (of my company’s products, but then those are the only stories to which we have access…)

How to write a Request for Proposal

If we have to go down the RFP path, it’s great to receive something that we can respond to properly. You may be surprised, but this isn’t a shameless spruiking for my company’s products. Rather it highlights sensible things to ask, and how best to encourage an honest and comprehensive response (e.g.; a spreadsheet with 500 or 1,000 closed questions might actually deliver less information than 50 broad questions that can be completed as the respondent sees fit, kind of thing) 

A Host of One-Pagers

A host of documents, from one-pagers upwards, that serve to address questions from prospects that repeatedly crop up during the sales process. For my line of work, these include collections of case studies focused on a particular market sector (who else like me has your products?), outlines of change management and ongoing support services, descriptions and examples of opportunities for return on investment, explanations of solution architecture and overarching compliance, etc., etc.

While it seems that these documents have had some impact, it’s difficult to measure precisely how much. Certainly, we’ve received RFPs based on our suggestions, but often we’re not sure if a particular document reassured or persuaded a particular prospect sufficiently for a them to sign the contract.

That said, I take the view that my job is to support the salesfolk, and if they consider this sort of thing helpful, that, for me, is a decent result.

Do you do anything to anticipate or guide procurement by tenders, and move forward into broad, sunlit uplands? What are your experiences here? Always keen to learn more….

Guide to Writing a Supply Management Plan

Though it may seem like a daunting task initially, writing a solid supply management plan for your organisation will really set you up for success.

From Startup Stock Photos on Pexels

This is the second part in a series. Read the first on ‘Writing a Brief for the Procurement of Goods and Services’ here.

Supply management is one of the key components of a successful business regardless of its niche or service portfolio. Once you find a suitable supplier or B2B partner with the items or services you need to remain operational at peak capacity, you will want to ensure that a supply management plan is in effect.

However, drafting such a document takes effort and panache for small details due to legalities and mutual obligations that will require careful listing and formatting. According to Finances Online, 57 per cent of companies believe that adequate supply management gives them a competitive edge that enables further business development. 62 per cent report limited visibility in terms of being informed about their supply chain status at any given moment.

This creates an incentive for companies to create a supply management plan which can easily be retrofitted for different applications and allow them to stay informed about their inventory at all times. Let’s take a look at how you can benefit from supply management plan writing and the steps necessary for its successful drafting and approval by all parties included.

Basics and Benefits of Supply Management Plans

It’s worth noting what supply management planning is all about before we jump into writing guidelines and plan outlining. Supply Management Planning is a forward-thinking process that involves coordination aimed at optimising the delivery of goods or services from a supplier to a customer.

Its main focus is to balance the supply and demand through inventory planning, production scheduling, and delivery organisation. Writing a supply management plan for your business’ needs will allow you to streamline product delivery and quicken the general turnaround time of your contracts due to the standardisation of written documentation.

Relying on writing tools such as Grammarly (a dedicated proofreading tool), Studicus (a professional outsourcing platform), Evernote (a cloud-based text editing service), as well as Grab My Essay (a document writing platform) will help you get the documents shipped to clients and contractors with impeccable speed and quality. While these documents are not special and show up quite frequently in companies that rely on shipping or ordering of goods and services, their standardisation will bring about several benefits to your business, including the following:

  • Better stakeholder cooperation and networking
  • Improved supply management efficiency
  • Lowered risk of delays and bottlenecks
  • Increased profit margin and ROI

Supply Management Plan Writing Guidelines

Supply Management Plan Overview

The first thing worth noting is that a supply management plan isn’t bound by length or complexity – it all depends on your contract’s requirements. Supply management plans are typically assigned for a fixed duration of time, be it several weeks or years in advance, thus allowing two parties to manage the supply line between them. In that regard, the first page of your plan should focus on an introductory segment that will outline the supply management document in its entirety.

Elements such as the name of your recipient (company name, representative name, address, etc.) as well as products or services outline (product category, number of items, estimated value, etc.) should find their way into the plan overview. This will allow the reader to quickly scan the document and become acquainted with your requirements without going through several pages of the supply management plan.

Supply Procurement Policies Outline

Every organisation, be it focused on physical goods or cloud-based services, features certain procurement policies. It is pivotal for your business’ reputation and longevity of your contracts to outline any special requests or policies you have in advance for the sake of transparency.

In this segment, it’s good to include information pertaining to your storage capacities, safety regulations and procurement facilities you have access to. This will ensure that your recipient is aware of the environment in which their goods will be stored and to better prepare their shipments in case of special climate or infrastructure requirements on your part.

Detail the Quality Assurance Systems

No matter how good your relation with a certain supplier may be, you should still rely on objective QA systems when it comes to supply risk management. The plan you write and send out as a procurement document should include a breakdown of your QA systems, as well as any regulations it covers based on health and safety hazard standards.

This is especially important when shipping medical equipment, chemical compounds and other hazardous materials that can cause severe human danger if mismanaged or stored inadequately. Most importantly, outline your specific guidelines in case of procurement contamination or product failure on the shipment’s arrival into your facilities to cover all grounds.

List International/State Laws

Chances are that you will sometimes work with international suppliers and companies that don’t share your governmental or legal jurisdiction. When that happens, you should ensure that international and state laws pertaining to your industry are listed on the supply management plan with follow up links or documents.

If you work with suppliers which don’t speak your language, you can refer to platforms such as Is Accurate, which is a translation review website, in order to ensure that your writing is understandable due to its importance. It’s also good practice to requisition legal documents and shipping approvals from the supplier for your own border and customs checks and their timely processing.

Outline your Supply Selection

You should follow up on your initial product or service procurement outline from the opening segment of the supply management plan with a detailed breakdown of your requisition. One of the easiest ways to do so is to create a simple table with clearly outlined product categories, product names, procurement numbers, as well as any special requests you may have, such as limited-time-only procurements.

This will allow your supplier to process the order quickly and to clearly understand which items you will require for the duration of your contract. Make sure to include a quick contact information line in this section to allow for follow-ups in case of unclear requirements or a lack of products on your supplier’s side.

Detail the Distribution Timeline

Lastly, supply management plans should come with a detailed breakdown of the distribution timeline pertaining to the previously outlined order. Do you require the items to be shipped to numerous different retail fronts across the country – if so, in what order and quantity? Will you handle a part or the entirety of the shipping procedure and only require the supplier to prepare your items for pickup?

Do you require any safety or manpower assistance with handling the supply going forward or do you have sufficient capacities to do both? These items should be added to the distribution section alongside a rudimentary contract timeline that will allow the supplier to quickly scan through their obligations toward your business.

Not as Daunting as it Seems

Writing a supply management plan for your company may seem like a daunting task at first. However, it is a pivotal step toward creating a reliable and professional supply management network.

Find ways to implement the above-discussed supply management plan guidelines in your own business practice and contractual obligations. Their inclusion in your supply documentation will help your business’ ongoing growth and stability on the market going forward.