Category Archives: Trending

Lessons in Accounts Payable Fraud

In these days of greater reliance on technology to save us from the perils of fraudulent activity, it’s interesting to consider that tip-offs and accidental discovery remain the two most pertinent methods of detection.

This article was originally published on APN.

So what does this tell us about the way AP departments are run?  Overall, it points to a degree of complacency and perhaps overwork.  With more people unemployed, the remaining employees are expected to do more with fewer resources.  Without doubt this is an environment where fraud can flourish.

In addition, perhaps because of the new technology, there has been a move away from the labour intensive checking evident in the past.  In a busy AP environment, some managers are happy to leave the ‘checking’ and controls to the technology.  However those controls and that technology are only as effective as those who monitor it.

Yes, technology can stop duplicate payments going out for example, but if it’s flagging up errors in the vendor file time and time again without the appropriate action being taken – then somewhere along the line the checking systems have broken down.

Look out for the Warning Signs

  • Unexpected Invoice Number Frequency

Using “Benford’s Law” we can expect numbers to behave in a certain way – i.e. that the number one will be the first digit 30 per cent of the time, and the number six roughly 7 per cent of the time.  Therefore if you have invoices starting with the number seven, 40 per cent of the time – it could be time to investigate.

  • Multiple Invoices Under Checking Radar

A supervisor may only be allowed to process invoices up to a certain amount – i.e. £3,000 or less.  The easiest way to skim a few pounds off would be to create an invoice or two just below the approval amount at say £2,900.  Therefore a part the checking process should include a routine check on all invoices at just below any approval levels in the department.

  • Rounded up Invoices

It would seem unlikely – but this is one of the most frequent reasons why fraud is uncovered – fraudsters use rounded up figures.  So a simple test would be to go through your vendor list and flag up any with a suspiciously high volume of rounded up invoices.

  • Unusual Employee Activity

While 99 per cent of the time employees are working for the benefit of their organisations, occasionally they are working against.  If an employee is consistently and unexpectedly in the office early and/or leaving late, works weekends or nights – it’s probably worth running a quick check.  By nature perpetrators are those who don’t play by the rules, ignore internal controls and who may be contracted workers or temporary.

As I mentioned earlier, fraud is rare and is not something which many of us will come across on any large scale during our working lives.  However, during times of difficulty very occasionally the ethics of some begin to get a little blurred around the edges – whether that’s petty cash, payroll or travel and entertainment fraud – it still impacts on your organisation’s bottom line and ultimately its viability.

How an Agile Supply Chain Can Enhance New Product Development

Is your Supply Chain bolstering or hampering the success of your company’s new products?

Josh Nelson, a Director in The Hackett Group’s Strategy and Business Transformation Practice, discusses Supply Chain and New Product Development.

An agile supply chain can deliver value to the new product development (NPD) process (outlined in Figure #1) by quickly and pragmatically supporting new products / innovation through the core supply chain processes – plan, procure, manufacture, and deliver.

NPD SCIR Report Slide 1

Figure 1: The New Product Development Process

The Hackett Group’s Perspective

Supply chain plays a critical role across the NPD process, because it drives both the investment of capital into production and distribution capabilities and, in many cases, the critical path for launch dates. Yet, the large task of driving agility and flexibility throughout the supply chain may seem daunting to leaders.

As a starting point, The Hackett Group suggests assessing your current capabilities across the supply chain function against best practices to quickly identify the overall maturity level of your NPD process and highlight improvement opportunities. For example:

  • Can procurement identify and incentivise suppliers to participate in enhanced open innovation capabilities?
  • Can the supply chain and finance organisations develop NPD COGS estimates quickly and accurately?
  • Has the company made the correct investment in piloting plants or scaling up facilities?
  • What is the ability of the planning function to mitigate risk by developing inventory build strategies, identifying NPD demand projections accurately, and aligning lead times to common launch date?

Additionally, when assessing improvement opportunities for supply chain’s role in NPD, consideration should be given to:

  • Marketplace trends
  • Establishing or standardising global metrics to track and assess the effectiveness and efficiency of the NPD process

From there, a transformation roadmap can be created to develop the needed structural and infrastructural elements to enhance and enable new product development though agility and flexibility. This enables your organization to:

  • Identify and develop product concepts with the greatest likelihood of success.
  • Reduce costs by relying on your network of suppliers, customers, and other partners to generate ideas and test products
  • Select and manage a portfolio of projects that are aligned with the company’s revenue and margin growth strategies

Download the full Hackett Group Supply Chain Insight Report here to learn more about trends, best practices, and metrics which help supply chain enable the new product development process.

Josh Nelson has over 18 years of both consulting and industry experience, managing and leading large-scale product development and supply chain improvement programs.

Is Brand Paranoia Stifling Debate on Social Media?

More and more people enter the world of social media every day, each with their own thoughts, opinions and values. Surely this is a recipe for open debate? Perhaps not.

True, you see plenty of heated conversations on social media – people airing their views on a host of subjects, from television programmes to films, restaurants to products – but all too often they descend into arguments, instead of a proper debate.

Argument vs. Debate

Take the Scottish Independence Referendum in 2014 as an example. Social media was full of posts from both sides’ supporters, but in many cases these posts only contained campaign rhetoric, rather than hard facts, and frequently resulted in personal insults being thrown around.

When we talk about debate, we mean what you might have learned at school or university – two sides with structured, well-informed and well-supported arguments for or against a topic, which were presented and listened to respectfully, even if you didn’t agree with it.

Social media platforms seem to be set up perfectly for this to happen. Take the concept above, add in a global audience, all with different facts, figures and experiences, and you should have the recipe for quality, informative debate.

But this sort of debate is so seldom seen on social media. Why?

Personal and Professional Brand

The rapid growth of platforms like Facebook, LinkedIn, Twitter, et al., have enabled people to have a publicly visible account of their CVs and career histories, likes and dislikes, thoughts and opinions and pictures of their favourite things.

From a personal point of view, this is great. Our most meaningful social networking interactions happen within a group of friends, most of who will probably shares these interests in some way.

However, taken from a professional point of view, you have a diverse group of users and stakeholders, all of who have access to this public information, and who are able to link you as a person to all of these accounts.

Try as you might to remain anonymous, or limit your public exposure, as soon as you have a social media account, you are there for everyone to see. And in a professional sense, this means your peers, colleagues, managers, right up to the CEO and owner of the organisation.

Brand Paranoia

Like it or not, your public digital face represents your organisation. What you post, Tweet or share could potentially be attributed to both you and your employer. Even the ‘magic’ words, “My views are my own”, used as an attempt to separate individual and organisation may not stop people making the connection.

And there are plenty examples, like this one, of an employer taking a hard line if they think their brand is being misrepresented or negatively impacted by association.

The key here is brand. Whether it is personal brand, something that has taken on a much greater relevance in the digital world, or organisational brand, people are very (and rightly) concerned about how their brand is perceived by the public.

For organisations, it could mean the difference between retaining and losing customers. For individuals, it could damage their chances of landing their dream job, thanks to an errant post on a social network.

A friend recounted a story to me about how she had been contacted by a colleague regarding a post of hers that was “out of the norm”. It turned out it was her son who had posted, while logged into her account. No harm done, but an object lesson on the reach of social media.

Bringing Debate Back

However, I think this has all gone a bit too far. For sure, I would expect to be hauled over the coals by my manager if I insulted someone on Twitter, which was then associated back to the company.

But engaging in a real debate with one or more other parties, where an argument is built around facts, and everyone is treated fairly, where’s the harm in that?

Procurious has over 9000 members in its community, with another 20,000+ followers across its various platforms. The chances are high that not everyone will agree with me (even about this article), and that’s great.

We want to stimulate debate – it’s one of the best ways to learn and develop as a person and a professional. The Procurious Discussion forum is a great place to start, and everyone can get involved.

So the next time you see a point that someone has made on social media that you don’t agree with, and you can back up your opposing point, don’t shy away, post and start a dialogue. You never know what will come of it.

Big Ideas in Technology: 2016 and Beyond

We’ve rounded up some of the biggest disruptive technology trends we expect to see in workplaces the world over in the next twelve months.

Drones and drone lanes

What: As drones have begun to take over our skies in 2015 concerns have grown over the fight for airspace.

Currently the FAA only prohibits drones from flying near airports and their associated airspace, but is this enough?

How: As we peer into the future we expect commercial delivery services from Amazon (and others) to begin rollout, as well as increased numbers of hobbyist pilots carving out lanes for themselves.

Tighter regulations will likely divide the sky with pilots of commercial and business drones utilising the 200-400 ft zone, while those using drones for recreation are limited to 200 ft and below. This will not only better promote safety in the skies but keep lanes clear for priority transport. This advantage will come into its own for those looking to improving logistics solutions in disaster zones, battlefields or delivering aid to inhospitable terrain.

Despite being used for good we should also remember that drones are already being used to the detriment of our profession. Drone surveillance is increasingly on the rise and advancements in camera technology mean drones are capable of spying on factories, warehouses and ports from afar. Thus firmly putting the threat of corporate espionage, competition and imitation back in the spotlight.

Bots

What: Chances are if you’ve been active on the Internet since the late 90s you’ll already be familiar with one of the surprising new trends for 2016: Bots. But while the bots we’ve likely grown accustomed existed solely to frequent chat rooms or perform basic monitoring tasks, the bots of the future are intelligent and much like us, learn with each interaction.

Not to be confused with the likes of your Siri or Cortana (smart virtual personal assistants) living on our mobile phones and tablets, those in the know believe that bots capabilities are now so advanced they could quietly boost our productivity levels and help transform time-consuming processes.

How: In business press offices and newsrooms bots will be poised to automatically sort and tag articles, as well as actively monitor and react to social media. While we’re not a point where bots can realistically replace your social media teams, automation could be used strategically to help manage the strain. Elsewhere bots will be utilised to manage stocks and HR teams will rely on them for getting new employees up to speed. We can also expect to see more automation in services like Slack, making the organisation of meetings and status updates a thing of the past.

Virtual reality

Virtual reality

What: Virtual reality (VR) has been the word on the lips of tech tastemakers since the sixties, now it looks like 2016 will finally be the year to usher in the VR dawn.

VR is best described as a computer-simulated reality. Modern technology grants us full immersion within the imagined environment through the use of a head-mounted display.

How: With backing from some of the biggest names in interactive technology (Oculus VR, Sony, Valve and Google to name but a few),

Unlike Augmented Reality (AR) which uses text, graphics and sound to add a useful extra layer of data to your immediate surroundings, VR transports the user into a carefully constructed world.

Although synonymous with gaming, virtual reality also offers-up an intriguing wealth of uses in the manufacturing, health and transport industries. Dassault Systemes – a European software company that specialise in 3D design and product life cycle management, works with organisations to ensure that costly mistakes are confined to virtual reality and the products rolling off production lines are perfect. Vehicle designers can explore the chassis of a car (both inside and out), food and drinks manufacturers can see their products on shelves, while advanced 3D modelling techniques have even recreated the Pyramids of Egypt and the Normandy D-Day landings.

Wearables

What: Despite wearable titans like Apple, Samsung, Microsoft, Fitbit, Pebble, Garmin, Xiaomi and Jawbone sewing the market up in the last few years, wearable tech is only just beginning to deliver on the promises teased at its inception.

How: Fitness bands, sports watches and smartwatches are clever pieces of kit for sure but we’re on the cusp of welcoming wireless body area networks, neuroenhancers and earables which will shift wearables away from the wrists of the consumer and into real-world applications.

Think of earables as little computers that sit in your ears – according to patent reports, Apple is working on earbuds that are capable of both monitoring and relaying temperature, perspiration and heart rate. Head gestures could also be used to control electronic devices paired with the earable.

Wireless body area networks will also share similar recorded data with medical servers, computers and other interested parties. Utilising data from body-mounted sensors or ingestible devices, they will be able to keep tabs on every minutiae of employee wellbeing and the monitoring of trigger points like stress.

Plus location-aware services will be able to track movements – as manufacturing.net has noted, think of the improvements in efficiency such technology would mean in production lines: “The wearable device tracks their location, “knows” that they have moved to a new production line, creates a job transfer, assigns a new work order, and automatically starts tracking their work. There is no need for employees to interact with a computer or time clock. The technology has already taken care of that for them so they can focus on what’s really important — the work at hand.”

Neuroenhancers will monitor your brainwaves through electrical activity and over time collect data and make assumptions based on its recordings and observed patterns. Crucially this will allow it to pinpoint those times your concentration is at its highest, when you’re at your most productive and when you should take a break.

Such innovations in wearable tech could help to lead a revolution on productivity and effectiveness in workplaces across the world, no matter what the field.

Embracing Technology and Bring Dynamism to Your Workforce

Decision makers can bring dynamism to their workforce in 2016 by embracing technology. Paul Statham, CEO and Founder of workplace technology expert Condeco Software, examines the office trends of 2016.

The office world is changing beyond recognition. Within a generation, the cigarette smoke-filled paper world has been streamlined and replaced by one of personal computers, tablets and clouds. As we move further away from the traditional hierarchical structures of the past, to a much flatter organisation, the need for new technological solutions facilitating this framework becomes more pressing.

In 2016, business leaders will be increasingly turning towards innovative tech to create a full picture of their companies’ office and meeting room requirements. This wider viewpoint of how their workplace operates will not only allow decision makers to rescale their office space and make significant savings in running costs globally, but also introduce lasting organisational change fostering better working cultures and environments across the world.

  • Dynamic Working

One of the main office trends is the push for dynamic working, necessary to accommodate a younger and more tech-savvy workforce that does not share the idea that they should be sat at their desk all day to prove they are doing a good job, but who feel rather that they should be up and about, keeping in touch with colleagues and clients anywhere and at anytime through the use of mobile technologies.

Dynamic working also reduces the need for desks and meeting rooms, which can be an expensive business as they often remain under-utilised, as highlighted by a study by Condeco Software which discovered that overall desk utilisation is as low as 58 per cent.

  • Hot Desking

Hot desking offers another solution to office space waste, as it renders unused space immediately available and allows for a smaller number of desks. Furthermore, hot desking can also contribute in the push for a less hierarchical organisational culture, as senior and junior employees share more and more desk-space together, which encourages a  more collaborative and informal working culture.

By utilising the power of technology and gathering vital analytics, companies can redesign their working space according to the newest organisational needs. This can promote better communication, improve collaboration, and help create a streamlined work environment.

  • Flexible Working

At the same time, hot desking and dynamic working fit perfectly well with new trends in flexible working, where working from home or from different locations is becoming more and more common.  This trend is only set to increase in 2016, as 82 per cent of managers believe that flexible working benefits their business.

However, flexible workers do need to return to the office from time-to-time, so it is vital to have a system in place which allows workers to easily check where available desk space is, rather than having to search around the office looking for an empty chair.

  • Greater Internationalisation

Businesses also need to adapt to the greater internationalisation of workforce. Technology can enable overseas workers to find a place to work in any foreign office while on a business trip, helping firms overcome one of the complications intrinsic to transnational teams. It can also help foster greater interaction and unity in dispersed teams.

  • Big Data and Artificial Intelligence

Another growing trend is the current push for big data and artificial intelligence, whereby data can be stored an analysed in order to inform business decisions. The reliance on data and automated systems is becoming ever more pressing and, in the future, many more management solutions will be performed by automated intelligent systems, capable of gathering and processing data.

Previously innocuous human tasks, such as booking a meeting room, could now be conducted by smart systems. By using intelligent systems, allocating work-space efficiently, and utilising big data, companies can implement the required workplace changes needed to succeed in the 21st century.

What Tinder Can Tell Us About Job Hunting – Part 2: “My mother warned me about people like you”

In the second part of this series, we look at how to make sure a recruiter sees you as the right person for the job.

You can read Part 1 of the series here.

This series of articles was co-authored with Andy Storrar, Digital Marketing Specialist.

The worlds of romance and recruitment have this fundamentally in common: someone is looking for the right person, “The One”, and they know that they may have to kiss a lot of metaphorical frogs before they find that person.

And you, my friend, want to connect with your ideal person or work for your ideal company, so let’s think about the lessons we can learn from Tinder.

In the heady early days of someone’s Tinder usage, all that exploratory frog-kissing is pretty damn fun: everyone looks exciting, glamorous, attractive and intelligent. We love them all! But after a few months, and a number of bad dates, the shine has worn off somewhat.

Make Them Feel Loved

Now let’s imagine that your Tinder user is instead part of the recruitment process. It doesn’t matter whether they’re working for a potential employer or for a recruitment agency, you can be sure of this – they’ve kissed a whole swamp full of frogs and they’ve got a rather nasty taste in their mouth. You are wooing a much more cynical audience, and so you need to take care about how you make your approach.

You want the object of your affections/approaches to feel wanted and appreciated – you wouldn’t start a love letter “Dear Sir/Madam” unless you were writing to a horrifyingly undiscerning audience – so make sure that when you make that first approach you show you’ve made the effort. At the very least you need to know the person’s name (and spell it right!), and as far as possible you should try to understand what they’re looking for.

You might be surprised by how many people, when applying for a job, use a template cover letter without bothering to change any details or to explain why they are an ideal match. To a slightly jaded CV-reviewer this doesn’t seem very different from the “numbers game” person at a disco who doesn’t care about nine offended rebuttals as long as they get a kiss the tenth time.

Why Are You a Good Match?

At the same time, if you’re applying for a job for which you’re not quite right, don’t just fire in your CV without making any effort, like someone trying to hoover up a kiss from the drunken singletons at the end of a party. Take the time to emphasise the areas where you do fit and what makes you a good match: in the end, that job may not be quite right but it may still have an attractive sibling in search of “The One”.

Just as you wouldn’t use clichés in your Tinder profile because that would make you sound unimaginative and stupid, it’s not a good idea to glibly claim on your CV that you have a “unique combination of skills” if two million other people in the country can say the same thing. Another common cliché is to claim that you are “the ideal candidate” – this sounds presumptuous and more than a little conceited. The person reviewing your CV has a strong urge to swipe left.

Of course you want to stand out from the crowd…but in a good way. You won’t achieve this by posting Tinder pictures of yourself with drugged tigers or swilling champagne in a helicopter – these are the people your mother warned you about, although frankly she hardly needed to.

A potential employer also wants to know what is special and individual about you, so make sure to highlight the things that you have achieved: don’t try to boastfully claim the achievements of the whole team but instead flag up the specific difference that you made.

Recruiters read a lot of CVs that just list what happened on a project, without showing the contributions that the individual made, and they tend to think that, no matter how glittering the project may sound, the person probably achieved nothing – fairly or unfairly, the individual behind the CV has just sunk into the swamp. Swipe left.

The “One” Is Out There

Does it sound like your ideal partner will never swipe right on you? Not so. That person (or company) is still out there looking for their ideal match, and they really, really want to find them. In the world of Tinder, we know that Romance never dies (although it does sometimes get very cross indeed and give up for a month or so); in the world of employment, those hiring managers want to get the right match and they are being paid to kiss frogs to do it.

It’s your duty not to make the mistakes that might prevent them from seeing that maybe, just maybe, you’re “The One”.

What Tinder Can Tell Us About Job Hunting – Part 1: First Impressions

In the first part of this series, we look at how to make a good first impression.

This series of articles was co-authored with Andy Storrar, Digital Marketing Specialist.

My friend Anna was a little surprised last month when the 6′ fighter pilot she’d arranged a first date with turned out to be 5’2″ and appeared to have grown a different face since posting his Tinder profile. The ‘date’ lasted all of 30 seconds. There won’t be a second one.

It’s the same with your CV. Just like Tinder, it’s vital that it leads with a short summary capturing the essence of who you are, but ultimately, it also needs to be truthful. Embellishment and downright lies might make you a potential match, and even get you a first meeting, but no matter how vibrant your personality, you’re not even going to get to first base if a couple of well-chosen questions, or, in Anna’s case, a horrified first glance, are going to destroy your work of fiction. It’s a waste of everybody’s time, and word can start to get around, landing you with a reputation you really don’t want.

And in the rare event that you do somehow pass muster with some seriously creative additions to your profile, you’ll still have to live with the possibility of being busted later. Remember Scott Thompson, the CEO of Yahoo who got himself fired after it came to light that he didn’t have the degree in Computer Science his CV claimed? He was massively qualified for the job in every other way, but trustworthiness was the issue. And nobody wants to work, or sleep, with a liar, right?

Accuracy Matters

Both employers and potential dates are looking for specifics. There’s really no point in pretending to be what you’re not, or applying for roles for which you simply haven’t got the skills. You shouldn’t be applying for a senior role interacting with suppliers and internal customers if the only stakeholders you’ve managed are your own knife and fork.

My little pun on ‘stakeholders’ above masks a serious point: spelling and grammatical accuracy matter. Sure, some people care about it more than others, but if you’re aiming for a high calibre outcome you should be sure not to exclude yourself from the consideration set through appearing not to care. As a recruiter, I saw countless CVs from “mangers”, “analists” and other “bussiness proffessionals”. Spellcheck alone won’t pick up all the errors, but first impressions count.

You wouldn’t (I hope) use a profile picture on Tinder that shows spinach between your teeth and food down your front. Make sure your attention to detail is at least as good for your CV. If you’re not sure, or even if you are, it’s a good idea to get a trusted friend to check it over for you. Better to have any errors pointed out in confidence than be rejected by your target audience for being sloppy.

Accentuate the Positive

Attempting to punch above your weight on Tinder is one thing – the worst that can happen is that everyone swipes left – but pitching yourself far too high in the job market can seriously reduce your credibility. That said, successful job hunting is all about taking time to accentuate the positive. View yourself in a positive light and play the hell out of the hand you’ve got.

So, how best to do this? Ironically perhaps, you’ll want to reveal a little more of yourself than you might do on Tinder. Summarise your key achievements. Quantify them too: if you’ve delivered a project of specific value or managed to achieve a notable saving or reduction in spend, make sure it’s shown. Recruiters like evidence of achievement.

That doesn’t mean you need to list every single thing, and as your career progresses you can start to leave some of the detail off your CV (School Recorder Club, Swimming Badges, etc). Your resume needs to represent the detail of what you’ve achieved in recent years, and what you’re good at now, as that’s where the match is made.

Tailoring Counts

Finally, remember what’s appropriate. There are some pictures that (most) Tinder users just don’t want to see – you know what I mean, don’t make me spell it out. Unlikely though you are to put such a thing on any job application it is worth remembering what you’re applying for, and emphasising the appropriate parts of your experience to ensure you fit with the role profile.

Take the time to tailor your CV for each job application. This isn’t Tinder, where you’re putting yourself in front of a pool of millions of different requirements and may be a perfect fit for one, or some. Job hunting is all about making sure you’re the perfect fit for a particular suitor.

A little extra time and care to ensure your resume is appropriate to your application may pay dividends in the end. It did for Anna. She’s getting married next week, but not to that guy.

Working Capital: The Role of Procurement

Procurement has a central role to play in the effective management of working capital, enabling investment, growth and supply chain efficiency.

This article has been written by Neil Ross, Regional Manager, EMEA Trade Credit.

Working capital is the fuel behind any successful mid-market organisation, representing the amount of cash available at any one time. If managed effectively, it ensures the business is able to invest in new products and services, optimising its existing operations, while also shoring up against future risks. Failure to maintain control of working capital will inevitably force companies to rely on borrowing, often through expensive bank finance, putting further pressure on the business.

There are three primary factors dictating working capital – Days Sales Outstanding (DSO), Days Payable Outstanding (DPO) and Days Inventory Outstanding (DIO). Essentially, if DSO and DIO are too high and DPO is too low, then companies will encounter cash flow issues. Simple economics mean money will be going out of the business faster than it is coming in, so striking the right balance between these three factors is imperative.

The Role of Procurement

Responsibility for the day-to-day management of working capital ultimately sits with the treasurer, whose role it is to ensure the company has the necessary funds to operate and meet its objectives for the months and years ahead. But the treasurer cannot work alone. He or she must collaborate closely with numerous departments across the business to ensure working capital is maximised. The procurement team forms a crucial part of this network.

As the primary interface between a business and its supply chain, procurement can make or break an organisation’s working capital strategy. Procurement has numerous factors to consider within its remit, not least management of cost vs. value from suppliers. However, a fixation on costs alone can be a mistake, masking other factors which can also seriously impact working capital.

For example, high logistics and warehousing costs can make working with a particular supplier unviable. Similarly, the ease of doing business with suppliers is a prime consideration – if their contractual terms or the process of purchasing are overly complex, this will eat up hours of administration time that could be better used elsewhere.

Favourable Payment Terms?

But perhaps the most important working capital consideration for procurement is the ability to negotiate favourable payment terms with suppliers, ensuring that money isn’t leaving the company bank account until it absolutely has to.

Extending payment terms is a popular method used by large and increasingly by mid-market companies to maximise their working capital and cash flow. Research by YouGov on behalf of PrimeRevenue and AIG[1] found that over three quarters of supplier businesses have been asked to accept longer payment terms, potentially holding up over £29bn.

A smart move by buyers you might think? Well not necessarily, when you consider the impact this could be having on the supply chain. YouGov’s research found that these longer payment terms are affecting suppliers’ cash flow (55 per cent), leading to additional administration (33 per cent) and putting a strain on client relationships (29 per cent).

The knock on effects can be huge, forcing suppliers to borrow money at a high cost, or to cut costs in production and investment. These issues ultimately drive up prices or impact quality, potentially reducing efficiency and sales, while increasing risk all along the chain.

Supply Chain Finance

Procurement professionals are now waking up to this dichotomy and looking at a more holistic solution to the problem. This means building greater collaboration with suppliers, fostering mutually beneficial relationships, and minimising the risk for the supply chain in the long term.

One key aspect to this more holistic approach is supply chain finance, a financing tool that enables businesses to offer their suppliers early payment, while retaining their own longer payment terms. This is possible through third party financing based on the credit rating of the larger buyer organisation.

Until recently, supply chain finance platforms have been limited to supporting the largest, investment grade businesses. However, innovative online and credit insurance backed solutions mean that it is now an option for thousands of mid-market, non-investment grade companies. This can offer a working capital ‘win-win’, while also helping to streamline processes for all involved.

With the economy on strong footing, many businesses are in growth mode, with ambitious plans for investment and expansion. But these plans won’t be possible without a comprehensive and strategic approach to working capital management. Procurement has a central role in making that happen. The tools and technology now available mean it has never been easier to optimise working capital, across both individual businesses and the broader supply chain.

Supply Chain Finance from PrimeRevenue and AIG frees up significant funding for mid-market (£100m+ turnover), non-investment grade companies and their suppliers, providing low cost access to working capital on both sides of the transaction. More information can be found here.

[1] AIG and PrimeRevenue research carried out by YouGov. Total sample size was 250 adults with responsibility for invoicing and payment terms within businesses which provide goods and services to large organisations (with revenues of £100m or more).

Businesses were asked how much of their revenue is currently tied up in invoices with payment terms longer than the standard. If these results were replicated across all businesses in the UK which provide goods or services to large organisations they suggest that around £29 billion is tied up in this way.

A Game Changer is Born

Digital disruption is inevitable, it’s happening everywhere. But who are the disruptors and how do we ensure they are working for our organisations, changing our landscape and transforming the way we work?

Leaders are crying out for people who have the ability to change their organisation’s landscape. These individuals are the people who have the ability to completely upend the way a particular organisation, market or industry works – they are the Game Changers.

Think about the likes of Uber, who reinvented the transportation business, and Instagram, who changed the nature of photography – we need the Game Changers to transform the way we do things.

These are two examples of the high level impact Game Changers can have, but not every organisation needs this level of change. The reality is Game Changers are out there changing things every day. Whether it be reinventing an administrative process or the way a department works, having Game Changers on board gives our businesses the opportunity to accelerate evolution at every level within its operation.

The DNA of a Game Changer

Our study, The DNA of a Game Changer, identifies the key traits of a Game Changer and delves a little deeper to investigate what these individuals need to deliver results. It gives us the code we need to identify the Game Changers and identifies the ten key behaviours of a Game Changer:

  • Big picture thinkers
  • Very strategic
  • High on vigour
  • Creative idea generators
  • Passionate about the idea
  • Ambitious, obsessive drive to succeed
  • Risk takers
  • Strong influencers of people (above and below)
  • Great at articulating a vision
  • Likeable

Game Changers exist at every level of our organisations – in fact, 84 per cent of leaders believe people can change the game in their company without having to be put in a senior management position. But do you know who your Game Changers are?

Now our study has identified the characteristics of Game Changers it is easier for us to develop a framework to recognise those within our organisations who have game-changing potential, and to better utilise their obsessive imagination, passion and drive.

Richard Branson, CEO of Virgin, got it right when he said, “The most talented, thought-provoking, game-changing people are never ‘normal’.”

The leaders we surveyed echoed Branson’s comments saying they believe Game Changers are often considered disruptive by others.

Without the right business culture or management mindset these game-changing individuals will often leave organisations as a result of being stifled, get removed for being too disruptive, or simply become the “vanilla” and conform to the continuum of corporate complacency.

Ticking boxes

Game Changers don’t tick standard corporate boxes and they will certainly challenge the status quo, which often means managers find them difficult. We need to move away from this tick-box mentality and encourage our managers to take a risk and give Game Changers the freedom to fulfil their potential if we are to reap the benefits.

This is reflected in the process that needs to be implemented when recruiting Game Changers. Recruiting managers need to be able to take a different approach and have the freedom to take a risk. The standard “experience, qualification and skills” recruitment model won’t allow them to identify these characteristics within individuals, which means Game Changers could slip through the net.

This freedom to take risks doesn’t stop with the recruitment process. Managers need to adopt a different management style to allow game-changing individuals to achieve their potential. They need to become more open minded, be willing to listen to potential ideas and support them moving forward, all of this while creating a safe environment for these risks to be taken.

This is where the ‘safe to fail’ culture has its strongest benefit. A Game Changer needs to have the flexibility to challenge the status quo, explore new opportunities and be able to present them to the open ears of management.

The Conclusion

These Game Changers are out there, quite often they are in teams but without the right culture in place we are at risk of losing them. Now we know their “DNA”, it’s in our best interests to utilise these exceptional individuals and give them the freedom to grow and help improve our businesses.

We need to take a risk giving them freedom, that safe to fail culture and in return for our risk they’ll provide our organisations with fresh energy, new ideas and deliver growth and development.

eg.1 is a business insight and talent consultancy. We work globally with organisations when they want to scale, make a strategic step change or simply disrupt the status quo. Our methodology encompasses the acquisition of game changing people, teams and companies underpinned by bespoke market intelligence and talent frameworks.

Future Proofing Procurement – Social Sourcing and Supplier Networks

Traditional procurement processes and methods are being overtaken and replaced. While they still have a role to play, how can you make sure your procurement organisation is ready to meet the future head-on?

A few weeks ago, I was involved in a Twitter chat on behalf of Procurious on the subject of social media, supplier networks and social sourcing. It got me thinking about how procurement can prepare for an expanding strategic role in the coming years.

Social media is well established for connections and networking for individuals, and forward-thinking procurement teams are ensuring that their brands are positioned to take advantage. But where should they be going next?

Supplier Networks

Supplier Networks are built on the premise of using social media to create a pool of organisations, which have the same or very similar requirements, and combine resources in order to achieve favourable rates on large-scale purchases.

The favourable conditions are not just for the buying organisations. Suppliers who are part of the network are able to access more organisations, combine orders (allowing for more efficient manufacturing or production processes) and reduce their own costs too. Think of this as a ‘win-win’ situation.

It was on this thinking that Innovo was created. Innovo is a free online business-to-business (B2B) marketplace for all goods and services. The platform aims to connect buyers and suppliers on the basis of requirements.

Buyers outline what they need and suppliers are notified when buyers are looking for their products. The site then facilitates volume sharing between buyers, rebating savings for bulk purchasing across the group, and enables suppliers also to share volumes and reduce their own prices.

While not directly linked to the ‘traditional’ social media platforms, sites like Innovo are facilitating online relationships and allowing procurement to both add value for organisations through improved supplier relationships, but also deliver savings for the bottom line.

Social Sourcing

Social sourcing is defined as buyers or purchasing organisations using social media platforms, such as Twitter and LinkedIn, to access a wider supplier market, where new solutions, supplier innovation and alternative products can be found.

What may be holding procurement back in this regard is the need to be open in a public environment with requirements or products issues. While this is not something that has been widely done in the past, there are a few organisations that are using social media to good effect in this regard.

This openness tends to be around lower value, non-critical products currently, but the possibilities of using this more widely will grow as more organisations become comfortable with it.

Currently there are a few examples of good practice in the market, but we’ve highlighted two of the best here.

  • LV= (Liverpool Victoria): The UK-based financial services organisation realised that they could use social media to share issues and ideas and attract responses from a wider community of small to medium sized suppliers.

This approach, seen as less formal and more flexible, has enabled LV= to have more collaborative discussions with a much wider community and benefit from innovative thinking.

  • GE and Quirky: General Electric and Quirky, a crowd-sourced innovation platform, to create a new platform to enable innovation. The platform enables crowd submission of new products and small-team designs, giving suppliers access to GE and GE a ‘renewable’ source of crowd innovation.

These smaller organisations also have the advantage of being able to access retail relationships that would have been difficult previously, as now they have the support of GE.

(Note – Quirky filed for Chapter 11 bankruptcy this year. However, their innovation journey continues on Wink.)

Securing Procurement’s Future?

Procurious are big advocates of using social media as part of the procurement process. Through conversations we have been having with procurement professionals around the world, as well as technological and industry experts, we believe that these are the conditions the majority of procurement will be carried out in the future.

Adopting a new approach to procurement is a big transformation for organisations, however, in order to ensure that procurement remains relevant, adds value for organisations and retains a strategic presence, the profession needs to keep up with the times.

The benefits of social media are there to see – you don’t need to jump in with both feet straight away, but can ease into it slowly in order to make a smoother transition. Our challenge to you would be – what could you be doing differently in your procurement process? Why not be the one to take the first step and ultimately get ahead of your competitors and up your social media game.

If these organisations are leading by example, what is yours doing? Is your organisation future-proofed? We’d love to hear more from you if you have a great example to share!