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Are Procurement Professionals Stuck in the Stone Age? – Part II

Is procurement losing ground by having antiquated, “stone-age” technology solutions? Why are B2B solutions struggling to keep up?

Stone Age Computers B2B

This article was originally published on Market Dojo.

In the second article in this series (you can read the first part here), Anya McKenna, of Market Dojo, and Ed Cross, of Odesma, ponder why B2B software remains stuck in the past, while B2C software is moving forwards in leaps and bounds, providing users with the experience they want.

The question is why big B2B software solution providers have not changed and emulated B2C? We would postulate the following reasons:

  1. Customer demand or acceptance.
  2. Drive for consulting revenues by providers.
  3. Decision makers equate complicated to valuable.
  4. Industry  Research organisations are in the pocket of those who pay and report as such.
  5. Existing suppliers balance sheets stifle innovation or change due to the impact on profit of asset write downs.
  6. Big business inherently do not trust small innovative start ups / CIOs don’t get fired for selecting the old guard.
  7. B2C companies are not interested in selling to the B2B customer base.

In order to fully understand this, we need to look at each of these points in more detail:

  1. Customer demand or acceptance.

Interestingly there does not appear to be a huge clamour amongst B2B customers to secure simpler, easier systems.

Take SAP or Oracle for example. They continue to dominate their sector (SAP acquired Ariba for $4.3 billion), and continue to thrive, making little effort to simplify and re-invent with ease of use at the heart of their solutions.

Whereas, in the B2C arena, there is no choice for the providers. Millions of users’ voices are being heard, and all leading solutions, from Amazon to AirBnB, are simple and easy to use. Perhaps the imperative to change amongst B2B players is just not being voiced by action.

  1. Drive for consulting revenues by providers.

The prevailing model for providers is to maximise revenue (after all they answer to shareholders), and they have predominantly built models that support this goal. They do this by securing licence annuity, and augment this with implementation, training, consultancy and delivery services.

Take a leading and long established eSourcing provider for example. They provide a complicated and unintuitive, but effective, solution for e-Sourcing, which they support with a very large consultancy practice (600 professional staff delivering revenues of greater than €70 million).

Though figures are not available we might hypothesise that at least 50 per cent of the revenues are consulting and support related. Clearly it is not in any legacy B2B providers interests to simplify the user interface, due to the resulting loss of support revenues.

  1. Decision makers equate complicated to valuable.

Is it human nature in business to expect business solutions to be inherently complicated?

Look at Jive, a sort of Facebook for business. Whereas Facebook is really easy to navigate and personally manage intuitively, Jive is not.

Given Facebook came first, and Jive built a similar tool, albeit for a closed company environment, is it that those that selected it, measured its value in terms of its complexity?

  1. Industry Research organisations are in the pocket of those who pay and report as such.

A rather contentious point perhaps, but when looking at Gartner’s report on the e-Sourcing market a few years ago, they had only just added a 7th criteria to their analysis: Ease of Use.

Gartner had historically focused on functional components – i.e. spend analysis, contract management, etc. (making up 4 of 7 criteria) – alongside technology platform and business services.

Additionally the analysis of providers generally only lent itself to the bigger or more established players. The 2013 report included fewer than 30 suppliers, with the leaders in their opinion being the likes of IBM, BravoSolution, Ariba, GEP, and SAP.

Very few emerging and new players are included. This may be due to time constraints, but clearly is at the detriment of newer, and easier to use, solutions.

  1. Existing suppliers’ balance sheets stifle innovation, or change due to the impact on profit of asset write downs.

It is a fact of business that the balance sheet plays a large part in driving companies’ behaviour, especially if they have many millions of $/£ intangible asset value.

SAP had Intangible Assets of €25.6 billion on revenues of €17.6 billion in 2014. A write down in an asset, results in an equal write down in profits. Institutional shareholders typically take fright (and flight) at write-downs. Therefore re-inventing the hegemony of existing solutions, requires a potentially significant investment and potentially a write down in previous investments – this is not something the neither executive nor board will countenance.

Is it therefore a surprise that existing solutions lack innovation in the user interface, which may well require re-programming in a newer language?

  1. Big businesses inherently do not trust small, innovative start ups; CIOs don’t get fired for selecting the old guard.

When was the last time the CIO of a large corporate suggested taking a risk? Corporate behaviour is typically risk averse. It is much safer to select a proven provider such as IBM or SAP, than take an opportunity to shake the tree.

This therefore precludes newer, start-up technologies that will deliver often much more cost effective, easier to use solutions. Coupa are making real inroads here, but few others are.

  1. B2C companies are not interested in selling to the B2B customer base.

The question is why don’t Amazon, or Tesco for that matter, move into the B2B space? They provide a huge range of products that businesses use. Yet they generally haven’t, other than grudgingly, thought to move into the B2B market – it is not part of their strategy.

However, we understand this is changing at Amazon! They believe their market is the consumer, not business, possibly because they are much simpler to deal with, pay immediately and do not add massive administrative, process and management burdens (i.e. contracts, risk questionnaires, etc.), which corporates do add as a matter of process.

But will this change? We postulate it is slowly shifting, with B2C principles slowly coming into the B2B World. In our follow up we will discuss this shift in some detail.

Market Dojo and Odesma have partnered to combine their intuitive eSourcing software and expertise in offering business advisory services to offer clients a winning procurement solution.

Cloud Computing – Don’t Get Stranded with Sharks

If you think that cloud computing is not for you, you may be left stranded…with sharks.

The Cloud - Sharks

You can download the latest GEP white paper on the impact of cyber security, and the benefits of a cloud-based procurement technology solution here.

“If you think you’ve seen this movie before, you are right.” So said David Linthicum, author of ‘Cloud Computing and SOA Convergence in Your Enterprise‘.

He went on to say, “Cloud computing is based on the time-sharing model we leveraged years ago before we could afford our own computers. The idea is to share computing power among many companies and people, thereby reducing the cost of that computing power to those who leverage it. The value of time share and the core value of cloud computing are pretty much the same, only the resources these days are much better and more cost effective.”

In biological science there is a concept called convergent evolution, which essentially describes how different organisms have independently evolved the same solution to a particular problem.  The similarity in body plan between sharks and dolphins is a perfect example. Despite one arising from a fish and the other from a land mammal, the particular circumstances of life in the pelagic ocean have resulted in the gradual adaptation through survival of both groups into superficially similar morphologies.

New Era Solutions

The cloud computing model of this era is indeed offering a similar solution to a similar problem that the shared computer access model used to. Indeed I recall having to book computer time in my university days, and that on a machine with a fraction of the computing power of my wristwatch!

In that case it was simply a matter of limited availability of the machines themselves and sharing the cost between groups was the only model that made sense. Today the equation is a different one.  Raw computing power and data storage are dirt cheap…

As an aside, a quick sketch calculation confirms that data storage twenty five years ago cost around seventy thousand times the equivalent cost today. (To check my working: I installed a 100MB hard drive in a business system in 1990. It weighed 120Kg and cost about £1100 Sterling. Last week, I put a 1TB card in my camera for just under £140.)

…but it isn’t the cost of the machine resources any more that are the limiting factor. It’s the overhead. The cost of management and operation, the risk of failure and consequential loss, and the inertia lumped on the enterprise in times of radical and accelerating change.

Putting Software to Work

What is driving business systems into an effective shared computing model in the cloud is not the need for more resources at lower cost (although this is undoubtedly an unplanned upside). No, it is the need to decouple the business processes from the technology.

Yes, of course, the technology – and by that we mean software of course – is central to the business process. I mean, do we really need to say e-this and e-that anymore? But in the past our business processes were determined BY the software. Today cloud software can give us the flexibility to conduct business how we think best and the software can be put to work for us.

Perhaps that’s sounds a bit too rosy-tinted for some.  But the fact remains, the risk and cost of making the wrong decision in selecting a cloud software provider, is the merest fraction of what it was in the old, customised-behind-the-firewall days.

A recent conversation I had with a consultant suggested one client of theirs was looking to migrate their systems as-is to an SaaS platform over the next five to seven years. In that same time, a more decisive CIO could make the wrong decision about a cloud provider twice(!), and still be further advanced in ROI by the time that migration is over.

Overcoming Intertia

So, the imperative to move into the cloud is compelling but the skepticism around security can apply the brakes in many organisations.

Because cloud computing evolved from a different ancestor to the shared computer model – out of the chaotic, anarchic, everyman’s internet, run by nobody-knows-who, instead of out of the traditional, conservative club of private supercomputers run by accredited Systems Analysts –, and because of a slew of high-profile hacking cases, there remains a core of uncertainty in the procurement industry.

To that end we work closely with our customers to help them understand where the security risks today really lie, and the greatest of these is inertia.

As I think about the case of the company taking upwards of five years to take what they have today and put it online, I can’t get the image out of my head of a diver coming up from a leisurely reef excursion only to see the dive boat heading for the horizon.  Of course, if he can’t tell whether that fin belongs to a dolphin or a shark, you now know why.

It will take a company with very deep pockets and very great resilience in a rapidly changing world to be able to ride out the cost of being left that far behind.

There do remain reasonable questions around technical security that should be asked and answered in any selection process, and our two-part paper Securing Procurement in the Cloud of Tomorrow is designed to help that conversation.

Vivek Kundra, former federal CIO of the United States said, “Cloud computing is often far more secure than traditional computing, because [cloud providers] can attract and retain cyber-security personnel of a higher quality than many governmental agencies.”

The question is not whether, or even when. It’s how.

Enterprises should be moving their procurement processes to the Cloud, say GEP. For more on this, download the latest white paper research.

For more help on avoiding the sharks in procurement software, visit the Smart by GEP website.

Week In Tech: IoT Security Spending, Spiceworks & Drones

Does the future of IoT security lie in the Cloud? New research published suggested that security spending is set to take off.

IoT Security

If the latest research from Gartner is to be believed, security spending on the Internet of Things (IoT) is set to accelerate in 2016. The figure could well top $348m in 2016, meaning an increase of 23.7 per cent compared to $281.5m in 2015.

Research director Ruggero Contu, commented that the current IoT security market is small, but ripe for growth, as both businesses and consumers  migrate towards smart and networked devices.

“Gartner forecasts that 6.4 billion connected things will be in use worldwide in 2016, up 30 per cent from 2015, and will reach 11.4 billion by 2018. However, considerable variation exists among different industry sectors as a result of different levels of prioritisation and security awareness,” he said.

Looking further afield, Gartner predicts that spending could rise to as much as $547m in 2018. This assumes that IoT adoption continues to gather at this same increased pace. These figures assume a march towards connected cars, heavy trucks, commercial aircraft, farming and construction equipment.

With more and more transport and equipment becoming part of the connected world, Gartner say that cyber attacks stemming from IoT will amount to 25 per cent by 2020. A lot more clearly needs to be done because as it stands IoT security spending accounts for only 10 per cent of IT budgets.

What can IT do then to better prepare itself for the connected future? Contu says we must look towards the cloud for answers to our security concerns, commenting:

“IoT business scenarios will require a delivery mechanism that can grow and keep pace with requirements in monitoring, detection, access control and other security needs.”

He goes on to say: “The future of cloud-based security services is in part linked with the future of the IoT. In fact, the IoT’s fundamental strength in scale and presence will not be fully realised without cloud-based security services to deliver an acceptable level of operation for many organisations in a cost-effective manner. By 2020, Gartner predicts that over half of all IoT implementations will use some form of cloud-based security service.”

Spiceworks Deploy Mobile Help Desk

Spiceworks has debuted a new app that takes its cloud-based help desk solution mobile for the first time.

The app will allow IT professionals to deploy and manage its services on smartphones and tablets, and allow push notifications to help them stay on top of tickets while on the go.

“We’re focused on helping IT professionals become more efficient by enabling them to run their help desk entirely from their phones or tablets,” said Sanjay Castelino, VP of Marketing at Spiceworks. “With a tool that’s easy to deploy and use on the go, IT professionals can now support their growing business in a way that works best for them.”

The platform also doubles as a social network and allows members to share their own technical know-how with others in the community. What’s more, users can submit requests for quotations for IT purchases to vendors direct from the app itself.

The Spiceworks Help Desk mobile app is available for download today on iOS- and Android-based smartphones and tablets.

When Will Drones Lead to Loss of Life?

As drone flight increases in popularity, and with Amazon’s delivery plans seeing no signs of abating, aviation officials say it’s only a matter of time before the inevitable.

On 17 April, a British Airways plane was believed to have come close to a drone that had flown into its airspace. James Stamp, global head of aviation at KPMG commented on the recent near-miss at London’s Heathrow Airport:

“People who fly drones in controlled airspace are potentially putting lives in danger, and should be subject to the strongest possible sanctions available under the law. A number of practical steps should be taken, including requiring drones to be registered, tougher penalties for irresponsible behaviour, and technology based solutions that will prevent the drones entering restricted airspace in the first place.

“More research is also required into the potential impact of collisions because, while the impact of bird-strikes has been well researched, the impact of drone impacts is less well understood.”

On Valentine’s Day, a drone came within 20-150ft of an Airbus A320 flying at 12,500 feet near Biggin Hill in Kent. The incident was made all the more serious by the fact that drones are permitted by law to fly only under a height of 400 feet.

Incidents are only gathering in pace – to put things into perspective, there were nine near misses in 2014, but this increased to 40 last year.

Have you got an interest in IoT security, networks and drones? Want to connect with fellow procurement professionals in IT? Then head over to Procurious’ dedicated Group for IT Procurement.

Are Procurement Professionals Stuck in the Stone Age?

Ed Cross, co-founder at Odesma, and Anya McKenna (of Market Dojo) ponder the neanderthalic and stone age ways of B2B software…

Stone Age Procurement Technology

The peculiar thing about business technology is that generally it is not very easy to use. I might exclude here email, but the rest of it seems to need a training course and some sort of super user, or a training provider (or even worse a consulting firm) to come and show you how or work it for you. Whereas the most used technology that we interact with outside of work generally does not require any support.

The irony here is that business technology came first, and the use of technology first appeared in the office, long before we all had tech at home or on our person. Yet, it remains unintuitive, expensive, and, as a result, does not get utilised fully or at all by a lot of people at work.

Compare this to B2C technology, how hard is it to work? ebay for instance. Or Facebook. Or even Candy Crush. The simple answer is they are intuitive, straightforward and certainly do not need any training or consulting support to get the benefit of them. In fact even Generation X (us older types) can work them on any number of portable or fixed lumps of technology. And a lot of them are free to the user.

Where Did it all Go Wrong?

So what’s gone wrong? For this, we’ll let Ed share an anecdote from 1999. While working for PwC, I presented to a local CIPS event in Staffordshire on e-commerce. This topic was perceived as very much the new kid on the block, and a whole host of new tech start ups were receiving incredible valuations.

At this session I laid out the view of the future described by the firm, ignorant to the nay sayers. In fact there were quite a few in the audience, most notably those with a few more years under their belts than me. One or two challenged my hypothesis on the topic.

I later left PwC to set up a Private Equity backed branch of a US e-Sourcing firm Sharemax.  A year or two later the dot.com bubble had burst and I was back in Consultancy, and the nay sayers were proven right.

So, what was, or still is, the problem? From an historic perspective the leading market insight companies and so forth, focused heavily on functionality, as did many buyers of solutions. And ignored the user experience, the maturity or demographic of the population expected to use the technology.

Many people in senior or middle management positions did not grow up with computing technology, and when making selection decisions, focused on elements outside of ease of use, and considered technology against an historic understanding – one where tech is always hard to use.

They therefore condoned supplier behaviour where training and consulting support were deemed acceptable costs of enablement. And this thinking has not much changed, given the demographics of leadership.

Of course, the existing providers have not been driven to step up, because the customer has not demanded it of them. Whilst in the B2C arena the demographic is younger. The expectation is of instant gratification, solutions that are compelling, easy to use and free or very low cost. With Generation Y coming through in business we expect the current issues are about to change.

So why have B2B software providers not followed the B2C route, and provided better, more compelling solutions to pull procurement out of the stone age? You’ll have to wait for the next part of our series to find out.

Market Dojo and Odesma have partnered to combine their intuitive eSourcing software and expertise in offering business advisory services to offer clients a winning procurement solution.

What Tinder Can Tell Us About Job Hunting – Part 4: She’s Just Not That Into You

There are more similarities between Tinder and the job hunting process than you might think. Here’s how to deal with rejection from both potential partners and dates.

Job Hunting & Tinder Rejection

Read Part 1, Part 2 and Part 3 in this series.

It all started so well. You went into it with high hopes, and it seemed like a match made in heaven. You’d told your friends, you’d even told your mum and of course she’d told her friends. But then…nothing. They never call, they never write. Those potential employers can be every bit as heart-breaking as the “ideal” match that you thought you’d made through Tinder.

Coping with rejection is an inevitable part of the job hunting process and because it can feel both painful and humiliating you need to remember to deal with it properly.

Rejection can happen at any stage of the Tinder or job hunting processes. Although it’s tempting to try to spare your own feelings by quickly saying “plenty more fish in the sea” and moving swiftly on, it’s a much better idea to sneak a peek through your fingers and try to work out what went wrong.

Saying the Right Things

If your Tinder profile is fundamentally pictures of you with your friends, you may think “I look sociable, that’s great” but your prospective dates may be thinking “who am I supposed to be looking at?” Similarly with CVs, a lot of people talk about the projects that they’ve worked on, and what the team did, without saying what they personally achieved. It’s important to stand out so that people can see you. Otherwise you may simply get a Swipe Left – CV in the bin.

If you’re getting a lot of rejections without meeting anyone, go back and see if what you’re saying about yourself is really selling you as well as it could be.

On the other hand it may be that you’ve not quite tried hard enough. Maybe some of your Tinder photos are blurry, or taken from a bad angle, or in harsh lighting. Similarly, your CV may be littered with spelling mistakes, or grammatical errors or written in an ugly font (Times New Roman for CVs? No!). So, do the painful thing and try to find what you’re doing wrong.

One advantage that job-hunters have over Tinder-users is that if they don’t hear back they can always try again. If you’ve applied for a job but not heard back, then why don’t you look again at the job spec, reconfirm that your CV really is a good match and that it’s well-presented, and then ask the potential employer for their comments.

Your CV may have been lost amid a mass of applications, and if you show the initiative and enthusiasm to follow up then you are much more likely to at least get a response.

Be on the Level

Now let’s say your prospective date/employer likes what they see and invites you to chat over a coffee. You’ve told them that you’re a highly-skilled tennis coach/brain surgeon/fighter-pilot but when they meet you they discover that, well, you’re just not.

No-one likes to feel misled and a potential employer is going to be every bit as disappointed as a potential date to find out that you’ve lied to them. The subsequent rejection is your fault, not theirs. In future, you need to focus on being the great person that you are, and not trying to pretend to be someone else.

Let’s assume you’ve got to that meeting and it seems like everything went swimmingly. The body language was there, the personal chemistry was right. It feels like you’re both exactly what the other person was looking for. But then the communication stops – no more friendly messages, no more wooing. It seems that you’ve been dropped like a hot potato.

It could be that the other person hasn’t made up their mind yet, or needs to meet other people first, so if you’ve not heard anything for perhaps a week it is entirely fair for you to make contact. No news is not always bad news. You don’t want to seem like a stalker of course, but you do want to express your interest.

Don’t be Disheartened

And this is a good point to remind you that when you are the one holding the balance of power, as a potential employer or a potential date, the right way to deal with people is to be nice. If you’re going to reject someone, be polite, be clear, and don’t waste their time. Karma will reward you.

Sometimes you’re going to do everything right and it’s still not going to work. Unfortunately that’s just life. You can be the perfect person in every way but it may turn out that your prospective date simply clicks that little bit better with someone else.

It’s the same when you’re job hunting. You may completely fit the bill but if a prospective employer meets someone who brings an additional skill which the employer hadn’t even thought that they needed…well, there’s nothing you can do about that.

Sometimes when they say, “it’s not you, it’s me”, that’s true – you couldn’t have done anything differently. So when that happens, brush yourself down, remind yourself that you’re fabulous, and get back out there.

Good luck!

How to Introduce a Sustainable Procurement Strategy

Although the theory is well regarded, the practical aspects of introducing a sustainable procurement strategy are often overlooked.

Sustainable Procurement Strategy

This article is by Gerard Chick, Chief Knowledge Officer, Optimum Procurement Group.

About 10 years ago the UK government started taking the pursuit of sustainable procurement seriously. They established a task force of industry experts to try to define ‘sustainable procurement’, and develop appropriate standards for general deployment.

The Government’s goal was position the UK at the forefront of sustainable procurement in Europe by 2009. Their framework and recommendations have been instrumental in guiding sustainable procurement strategy, theory and practice across the globe.

What is Sustainable Procurement?

So what is this thing we call sustainable procurement? Sir Neville Simms, chair of the UK Procurement Task Force, described it as the use of procurement “…to support wider social, economic and environmental objectives, in ways that offer real long-term benefits” to organisations and the communities in which they exist.

These long-term benefits include:

  • The achievement of significant savings by focusing on a “whole life costing” methodology for procurement.
  • The incorporation of the “three Rs” (Reduce, Reuse, Recycle), to cut waste and improve the efficiency of resources.
  • The enhancement of businesses public image, by demonstrating a sustainable approach to business, and championing related environmental and social benefits.
  • The development of new markets for innovative products and services through technological advancements.
  • The improvement of management information, a focus on business and supply chain risk, and better supplier relationships.
  • Competitive advantage as a consequence of the early adoption of practices, focusing on increasingly environmentally-focussed legislation.

Developing Sustainable Procurement Practice

The UK Task Force devised a National Action Plan to inform interested organisations to adopt a sustainable procurement strategy. In 2006, Procuring the Future was published to support public and sector organisations in taking their first steps in this burgeoning area of interest.

To help you, here are the central planks of the report established as recommendations for those who wanted to develop sound, achievable, sustainable procurement practice:

  • Be a beacon: Provide clear direction for both procurement and your supply base providing consistent leadership and policy-making on sustainable procurement issues.
  • Set the standard: Fully implement existing procurement policy and standards. and ensure these are extended across all procurement activity. This will improve performance and underline expectations, including the establishment of well understood minimum standards for your suppliers.
  • Prioritise: Rationalise existing procurement standards into a single integrated procurement framework, which covers both policy relevance and appropriateness.
  • Test: Filter and select new procurement policies to ensure they are enforceable, before considering implementation.
  • Develop capability: Ensure you and your team have the requisite professional skills to support the efficient deployment of sustainable procurement.
  • Tool up: Provide the appropriate tools, training and information resources to execute these standards.
  • Be ready: Ensure you already have the appropriate budgetary mechanisms in place, and that your spending and budgeting policies facilitate your sustainable procurement strategy.
  • Be proactive: Encourage openness to innovation and look proactively for opportunities to drive social benefits through your engagement with suppliers and the wider marketplace.

There is no doubt that the UK’s lead is now being adopted elsewhere, and that the global procurement community seeks to embrace a sustainable approach with an eye on good practice coupled with other significant business rewards.

Procurement Software – Weighed Down by Unnecessary Ice?

Is the procurement software created to make jobs and lives easier actually doing the opposite? Is it all weighed down with a glut of unnecessary features?

Procurement Software - Unnecessary Ice

Paul Blake leads the technology product marketing team at GEP, a leading global provider of procurement technology solutions.

Have you ever wondered how many power stations are needed to make all the ice that no one uses? Or how about this: what does the internet weigh?

These are the sort of questions that I have found coming to mind on long journeys. I know, it’s sad, isn’t it?

Another one was, what is the quickest way to transfer a really huge amount of data from one place to another?

Answering the Abstract

You’d be forgiven if such questions fall into the category of “things I never think about,” but increasingly the answers to seemingly abstract questions might indicate the kind of thinking we’ll have to do to solve more complex problems that really matter.

The journey that brought our opening question to mind was one homeward bound after a procurement conference, one where I had engaged in a fascinating conversation with some specialists in procuring energy. We all know that one firm’s indirect can be another’s direct category, and energy is a perfect example.

The power appetite of some businesses is simply staggering and the strategising and planning effort that go into managing what, for us, is such a trivial everyday concern is equally impressive.  More on energy in a moment but…

How DO you transfer a vast amount of data in the quickest way possible? The answer may surprise you. FedEx. (Other global courier firms are available.)

100 terabytes of data is a large, but not unimaginable, amount. Given that you can buy a card today for your camera that can store 960GB, then you’re pushing a terabyte (more or less) into something the size of a thumbnail. Stick a hundred of those in a padded envelope and you can have it anywhere within a 25 mile radius within the hour or anywhere on the planet within 24.

A 500-megabit broadband connection would take you the best part of three weeks to send that much data to your neighbour, let alone to your colleagues 7 time zones away.

As the complexity of business information increases and subsequent data volumes explode will we begin to see a hybrid solution to data transfer? SneakerNet 2.0?

Combatting Waste

Equally, as energy becomes more of a limiting factor, businesses may look for novel methods to combine traditional and emerging technologies into a solution that works for a new era. Some years ago I was surprised to find, in my local DIY store, a display of low energy compact fluorescent light bulbs on sale for, if I recall correctly 30p (50¢) each.

As I puzzled at how they could be sold so cheaply, a fellow shopper pointed out that they were branded with the logo of a major utility and his comment was, “which is cheaper, give these away at 30p each or build another power station?”

When you do a bit of scratch mathematics on the back of an envelope, and realise how much energy is spent putting ice in places where it doesn’t need to be (a couple of kilos, for example in every hotel room in the place I’ve just stayed as part of their “turn down” service), then you start to think about a whole host of other seemingly trivial things, which add up to huge profligate waste.

Cocktail umbrellas? Sachets of salt and pepper served with in-flight meals that nobody ever opens but which all get discarded? The printing of the words “allergy advice: contains mustard” on jars of mustard (it’s true).

Makes you think doesn’t it?  All that energy adds up to a vast amount of fuel burned for no really compelling reason whatsoever. In solving one small apparent problem (like the inability to get through a night without some ice nearby), we can create another that is much trickier to solve, and they require us to be creative and develop different, perhaps non-obvious solutions.

Perhaps nobody would immediately think of using a traditional parcel service to move data about, or giving away energy saving devices instead of producing more energy.

The Foibles of Features

When it comes to developing procurement software the obvious path is to develop features and functions. Capabilities if you like.  The tools to let you do stuff.  This is natural for developers, it’s what they do.

What they may actually be doing is attempting to solve small problems that aren’t necessarily real in any significant sense (the operational equivalent of running out of ice while you sleep), and at the same time creating a much bigger, more intractable issue.

In trying to deliver every bell and whistle in order to reach feature parity with a competitor, technologists end up building monstrously complex systems that actually hinder the very process they were intended to facilitate.

But perhaps there is a different approach. How about, instead of developing an ever more elaborate set of features in some kind of arms race, we look at developing processes; processes and the means to shape them to suit a business?

What would that mean in real terms? Perhaps the future of business and procurement software is about making connections between people and groups work better, instead of creating more and more levels of complexity in the tools they use.

Shifting Thinking

My contention is that one way to dramatically improve productivity in the modern work place would be to outlaw email. Heretical, perhaps, and probably impossible to implement. But I bet most of you reading this are both shuddering in horror at the thought and, at the same time, recognising the truth of the situation – that email is the static that swamps our day, the noise that is disrupting the signal, so to speak.

Technology has the capability to drive improvements in business but it has also the capability to tie us down in thrall to evermore complex tasks and activities. When looking to what we might develop next, we should not lose sight of the human aspect that is central to what procurement is all about – establishing and managing relationships across an entire supply chain for mutual benefit.

Whilst not proposing a sudden panacea to cure all ills, this approach might start to move us towards better, more natural productivity, and away from being weighed down by increasing complexities.

But that new idea would require a shift in thinking in the customer too. The process of procurement software selection has for too long been dominated by an almost obsessive compulsion to assess suitability by ticking boxes against features and functions, instead of an examination of how a company’s problems might be solved.

Enlightened procurement pros are starting to “get” this idea. They are looking to their own operations to see what the really big problems are, and getting to grips with how to solve them using procurement software as an enabler, rather than as an end in itself.

Time to Lighten the Load

So how much does the internet weigh? Not the server farms or storage devices, or drives or memory chips involved, but the data itself? It might seem like an utterly meaningless question. Surely an acre-sized data centre weighs the same whether it is full, or as empty as the day it came on-line? Well, apparently not. Data requires energy to exist. And every megabyte of data you add to your cloud corpus, adds just a little more energy.

The world’s most famous equation tells us E=mc2. Therefore, every unit of energy you require to store a unit of data, equates to a corresponding unit of mass. A full data centre really does weigh more than an empty one, but of course only by a tiny, tiny amount.

Correspondingly, every email we receive, and every feature we add to our already complex systems, adds just a little bit more mass, literally. We’ll never notice it, of course, but every time we feel weighed down by an information overload, or stymied by ridiculously complex procurement software, at least we can comfort ourselves in the knowledge that we’re not imagining ALL of it. And one day we might work together to lighten the load.

For more high-energy thinking on procurement software, visit the Smart by GEP website.

4 Ways Procurement Should Be Using Big Data

While it might be a difficult term to define, there are a number of practical applications for using Big Data.

Using big data effectively

In our previous article, we looked at defining (or rather, not defining) the term ‘Big Data’. Now we are going to explore the potential big data analytics and computing may hold for the procurement function.

There are a number of high-profile ways in which organisations are using Big Data. For example, hospitals and public health organisations are using Google’s search trends and history to predict future outbreaks of the flu and colds. You can read the details here and see the counter argument here.

The application of Big Data in the procurement space is a little less apparent, or at least, less well publicised. With that in mind, we’ve put together four ways that procurement could be using Big Data to its advantage.

1. Understanding supplier risk

By leveraging the vast amounts of unstructured data now available to organisations, procurement teams can get a far better understanding of their key suppliers.

Previously supplier information could be found through the media, suppliers’ websites and personal relationships with the people being bought from. Data mining allows procurement to go much deeper than this and provides an unbiased, opinionated view of their suppliers’ standings.

2. Uncovering new savings

In the same way that harnessing data allows us to understand more about our current suppliers, correctly utilised, it can also help procurement understand more about its supply markets and where it sits within them.

By understanding the global supply market at a more granular level, a whole new set of opportunities to uncover savings is opened up. These savings can come about either through direct pricing improvements or through new innovative solutions.

3. Predicting negative external factors

In the past, Big Data has been used to predict unforeseen weather events with varying degrees of success. However, many organisations and governments are investing heavily in this technology.

These insights and predictions would, understandably, garner strong commercial interest, particularly from procurement teams looking to understand just how exposed their supply chains are to both natural, and man-made, disasters.

4. Opening up collaborative supplier projects

Understanding and using Big Data means understanding a category more clearly. Organisations that are able to get this level of understanding are in a position to open up conversations around innovative solutions.

The critical part of this is that transparent relationships with suppliers must exist first. The companies can then work together to solve problems and benefit from opportunities, even if some of these opportunities are not even visible yet.

In our next article, we’ll be be looking for some real life procurement examples where Big Data has been leveraged successfully. If you know of any great examples, please get in touch.

Big Data will be one of the themes discussed at the Big Ideas Summit on April 21 in London. Tell us your Big Data story and pose questions for our experts on this subject by registering today.

Creating a Strategic Procurement Function

Procurement’s Change Makers – The challenges of creating a strategic procurement function in a diverse investment company in the Middle East.

Dubai - Strategic Procurement

This article is part of the Future Purchasing ‘Change Makers’ series.

Cory Thwaites - Strategic ProcurementIn the second in our series of articles profiling procurement’s ‘Change Makers’, we spoke to Cory Thwaites, Executive Director of Procurement for Tecom Group, the leading  developer and operator of free zone business parks providing a home in Dubai for over 4,600 businesses & representing a total workforce of 74,000.

Cory shares his experience in the changes needed to create a strategic procurement function within this diverse, capital intensive and services orientated organisation.

Lack of Strategic Procurement

I joined Tecom Group, which is part of Dubai Holdings in April 2015. The procurement team size had dropped by 30 per cent with no clear procurement procedures or process in place. In fact, only one person had any formal procurement experience. Each individual handled purchasing, negotiation and order placement, so there was no specialisation or delegation of duties.

Lack of procurement strategy was creating problems with suppliers and stakeholders. It was also holding up the entire business. For example, the tenders committee (which approves projects over AED 1 million) could take more than a week to convene. Add this to lots of other red tape, and it was clear that Procurement was stifling, rather than supporting, the business.

Initially, I sought advice and feedback from the other senior executives. Next, I structured the procurement department into strategic sourcing and operations teams. Then I presented my plan for a sourcing and operations focus to the board. Getting sign-off on this new strategy from the CEO in June was the turning point.

Bridging Knowledge Gaps

I transformed the existing team by bridging their knowledge gaps. A six-week bespoke training programme featured a day of group training and another for one-to-one coaching. This really helped my team understand aspects like opportunity analysis and even basic spending analysis.

The big challenge came with evaluating suppliers. There had been no financial checking or reference calls and stakeholders simply worked on their own instincts. We implemented a scientific evaluation process with key metrics including pair’s analysis.

I’m proud to have kept the team together. Two colleagues were offered jobs elsewhere but chose to stay because they recognise how much procurement is transforming from a tactical to a strategic function.

Future Aims

Two of my ongoing aims are to improve CSR and to develop a supplier relationship programme, particularly within the thriving construction market.

There are a number of organisations in Dubai who are at least five years behind European procurement culture and best practice. My advice to succeed in the UAE is to be patient and recognise the potential skills shortage.

You need senior leaders to follow your vision, too – so promoting the benefits of procurement is vital. Also, be prepared to roll up your sleeves because talking a good game isn’t enough.”  

Working with Cory, we have seen how he has embraced this new role with vigour and relish. His practical attitude, ability to listen to people and willingness to roll his sleeves up to solve the little problems for his team and the big problems for his customers is key to the progress that he is making in this difficult environment.

Future-Purchasing-Change-MakersDo you have experience of creating a strategic procurement function in a diverse organisation? What works and what doesn’t work? Let us know in the comments below.. 

If you would like to appear in our Change Makers series then contact Anna Del Mar for details here .

World Sleep Day – Why Sleep is Important in Business

Today is World Sleep Day, a good excuse to grab some extra Zs. Research has found that poor sleep is impacting over 5 million UK businesses.

 World Sleep Day

  • The Average UK employee misses 8.5 days of work a year due to poor sleep
  • 1 in 3 people in the UK currently suffering from sleep problems

World Sleep Day is today and recent research has shown that one in three people in the UK currently suffering from sleep problems. It’s time for people to wake up to the impact poor sleep is having on the UK’s 5.4 million businesses.

Not only has poor sleep been linked with mental health conditions such as anxiety and depression, but also decreased productivity and concentration in the workplace.

The Cost of Poor Sleep

Information from the World Sleep Survey by Big Health, creators of the clinically-proven sleep improvement app Sleepio, reveal that the average UK employee loses 8.5 days of work a year due to poor sleep. Sickness absence and working-age ill-health, including poor sleep, currently costs the UK economy £100 billion a yearwhile sleeping pills alone cost the NHS nearly £50 million a year.

‘Poor sleepers’ (those who rated their sleep quality as below average) missed 14.6 days of work per year. Alarmingly, 60 per cent of these poor sleepers don’t seek to fix the problem and did not consult their doctors about their bad sleep.

Sleepio help some of the world’s leading companies, such as LinkedIn and Ford, to improve employee wellbeing and boost productivity in the workplace. The app creates personalised sleep improvement plans featuring Cognitive Behavioural Therapy (CBT) techniques to help sufferers overcome poor sleep without pills.

The 2,500 British participants in the World Sleep Survey stated that the top three personal impacts of poor sleep are a decline in energy levels (60 per cent), mood (48 per cent) and relationships with others (35 per cent). These repercussions affecting their work with a reduction in: concentration levels (46 per cent), ability to complete work (38 per cent) and ability to stay awake during the day (27 per cent).  

Addressing the Sleep Issue

“Poor sleep is the unspoken productivity killer in the workplace and it has been ignored for too long”, said Peter Hames, CEO and co-founder of Big Health. “Now is the time for employers to wake up to the problem of sleep – improving employee’s sleep positively impacts workplace effectiveness and general wellbeing.

“Big Health are working with some of the world’s leading companies to help them improve the sleep of their workforces with Sleepio, and seeing huge improvements in productivity and overall health as a result.”

Colin Espie, co-founder of Big Health and professor of sleep medicine at the University of Oxford, added, “World Sleep Day is the perfect time to acknowledge the widespread effect poor sleep has on our lives.

“Sleep is not an optional extra in life, it is a fundamental requirement. The consequences of a bad night’s rest affect us not only physically but also mentally and emotionally, seriously impacting our performance at work. Physically we will feel lethargic, mentally we become slowed down with poorer concentration and memory, and emotionally we may become irritable and rather down, with bursts of hyperactivity. In terms of daily life, no aspect of daily functioning is unaffected by sleep – least of all our jobs.”

Sweet Dreams

So, what better time than World Sleep Day to start thinking about your own sleeping patterns, and what you can do to improve this. Why not check out some gadgets that might help you sleep better, or get some tips from the sleep and productivity experts?

Whatever you do, make sure you sleep well this weekend!