Become The Translator for Your Procurement Network

You may have thousands of contacts in your professional network, but how many of them are you actually influencing?  

By Lemon Tree Images / Shutterstock

In the age of big data, “vanity metrics” are a plague that affect every profession. Anyone who has a website, for example, will know that page views and “likes” may make you feel good, but are very difficult to link with key business drivers.

Vanity metrics to watch out for in procurement might include measuring team activity, counting your total POs, your number of suppliers, or number of projects without actually measuring the value that they’re delivering. A team member who brags that they’ve had 100 meetings with key suppliers in the past six months is talking about a vanity metric, but if that same person provides numbers around the savings and other value flowing from those meetings, then we’re talking about real value. 

Online networking is another area rife with vanity metrics. No matter whether you have 500, 5000 or 10,000 connections across LinkedIn, Procurious and other platforms, your network risks being nothing more than a dormant asset unless you contribute. By “contribute”, I don’t mean that you “like” something they wrote or share photos of your holiday – I mean that you share your mastery, your insights and your experience. For the majority of us, it’s rare that we contribute meaningfully to our networks.    

Remove the collection addiction

I believe we have a collection addiction in the business world. In previous years we collected piles of business cards wrapped in rubber bands – which often (if you’re anything like me) ended up gathering dust on a forgotten corner of the desk. These days it’s about racking up the number of connections either online or within our databases.

Both these situations have the same outcome – a massive potential network and no influence. I would rather you have 50 people who are highly engaged in everything that you do – commenting, joining the conversation and sharing your insights among their own networks – than 5000 people on a list that have never been touched.

In other words, popularity is the wrong metric – focus instead on influence. Focus on having people engaged enough with what you’re doing – so much so that they would happily share your ideas, insights and achievements with everybody that they know. In other words influence is the ability to say ‘look over there’ and have people engaged enough to look. Your responsibility then becomes making sure that what you point them towards, what you contribute, is and valuable as possible.

Engage rather than collect

While collecting contacts is a vanity metric, engaging with contacts is a value-driving activity. The best way I know how to engage with others online is to become the ‘primary translator’ of your space.

A translator is someone who goes out into the areas where others don’t have the time, nor the bandwidth, nor the experience to go, and bring relevant information back for their network in a language they understand. If you want to stand out and build your influence, you need to become the translator of valuable information for your target audience. What does that look like? The best place to start is to make a list of the top questions the people you are wanting to influence are asking in relation to your area of expertise. If you’re not sure – ask! Then systematically go through that list and find the best way to contribute the answers. It might be in the form of articles, videos, internal presentations, checklists, how to guides, insight reports or even preparing in advance in order to contribute more actively in meetings.

Another good exercise is to take a moment to think about the translators that you follow. Whose work do you consistently follow or read? Now think about what they translate for you; the value they bring, and how they go about it – do they present the information in essay-length blog articles, or bite-sized posts? If you consistently give them your valuable attention – I guarantee you they effectively translate something important to your world.

Speak the language of the business

You’ll notice I mentioned that the first step in becoming the translator – is getting to know what questions are important to the people you’re trying to reach. For procurement professionals this means understanding what questions your business stakeholders are asking. What are their challenges? What are their opportunities? That they may or may not have seen? Then it’s up to you to access your own expertise and bring that information back to them – not in procurement technical language, but in their language – in the language they already speak.

Translators know that they need to be able to speak the language of the business, and also understand that a multitude of languages exist within every organisation. This is often referred to as ‘charismatic language’. Every group and community of people has one. Your finance function, for example, will speak a very different language – use very different and specific words – than your stakeholders in marketing. What they do have in common, however, is that neither group of stakeholders will want to hear you talk about RFPs, RFXs, or tenders.

Become the trusted authority

Take time to revisit your network of stakeholder (both online and in the office) and think about what subjects you can translate for them – within your area of expertise. Doing so will capture their attention and help build their perception of you as an influential subject matter expert. However – much larger than that. They will know that you care about – and have real value to share in relation to – the issues that are important to them.

It’s this decision – to become your organisations primary translator and contribute your mastery in a format that resonates – that will quickly accelerate you to the role of trusted authority.

Now that’s the metric of real influence.

7 Negotiation Tricks Procurement Professionals Must Know

Every procurement professional has a special bag of tricks when negotiating– let’s see if you recognise these seven tips from experts in the field…

By Lia Koltyrina/ Shutterstock

The benefits of countless hours of negotiation experiences is that you know what you should be doing more of and what to stop doing. We discover the key traits and tools that make us perform better and are better armed for our next negotiation.

Giuseppe Conti, Founder and Managing Partner of Conti Advanced Business Learning interviewed seven procurement leaders to find out their favourite negotiation trick that played a key part in their business success.

1. Making the first proposal right away

I like to come to the negotiation table well prepared and well-aware of the market alternatives. Making the first proposal allows me to anchor conditions to a level close to the bottom of the market offer, immediately reducing the amplitude of the BATNA of my counterpart. Then I try to improve the conditions that are more valuable for me by making and requesting mutual concessions.

Francesco Lucchetta, Director Strategic Supply – Pentair

2. Preparation, Target, Value

I make sure I follow these three steps at the starting point in any negotiation where I am leading. The first is undoubtedly being well prepared. Secondly, to have a clear understanding of the desired outcome with a predefined “target range”, and thirdly, to fully understand the “value” of the business in the context of the potential suppliers being considered.

Les Ball, Chief Procurement Officer, ABB Motors and Generators

3. Profile your counterpart

Understand whom you face before negotiating! I use initial negotiation meetings to pique the interest the person I’m negotiating with – letting them discover all the potential benefits of working with my company. Then I encourage the speaker to talk as much as possible whilst showing genuine interest in their activities. I try to understand the way they work, their objectives and challenges. Having key objectives clearly in mind, I can better understand where our common interests are and how to shape the deal accordingly. From this moment onwards, I consider it the precise point where the negotiation starts.

Olivier Cachat Chief Procurement Officer, IWG

4. Asking yourself the right questions

It depends on the scenario but for mepersonally, negotiation always starts from knowing your position versus the market. You need to ask yourself ‘what you need to achieve’ and ‘what is the nature of the parties and the cultures you are engaging with’. Nothing beats preparation and being able to explain ‘what you need, why you need it and what is in it for the other party’. My go-to-guide for knowing the best methods in discussions are those from ‘Getting to Yes’ and its methods of principle negotiation. Be firm on your expectations, be open how to get there.

Jon Hatfield, Director Global Supply Management, PPG

5. Do your homework!

Preparation is the essence of a successful negotiation. Knowing your targets, your limits, and your BATNA is extremely important however it is useless if you fail to understand the other party. Put yourself in their shoes to know what they are looking for and how they would conduct research about your company. Do they really need your business? Are they looking for volume, for margin, for market share or for a combination of these? With these insights you will be able to drive and steer the negotiation to your preferences.

Christophe Schmitt, Head of Strategic Supplies, Omya

6. Make them love your vision and strategy

My preferred technique is to make the strategy attractive to the supplier and develop a common vision. Once the supplier is onboard, you can design an agreement in a very favourable direction.

Fabrice Hurel, Director Global Indirect Sourcing, Emerson

7. Questions, Questions, Questions

Asking questions, particularly the ones carefully prepared for in advance. I recall a negotiation with a professional services provider where the negotiation lasted for 3.5 hours. They started the negotiation feeling very confident about winning the business. After two hours of thought-provoking questions, they decided to substantially reduce their prices and ambitions. At the end, we reached a satisfactory agreement for both parties (good for them, great for us!)

Giuseppe Conti, Founder and Managing Partner, Conti Advanced Business Learning

The following answers were collected by Giuseppe Conti, Founder and Managing Partner of Conti Advanced Business Learning (www.cabl.ch), a consulting firm that specialises in negotiation & influencing. This article is part of a series aimed at collecting real-life negotiation experiences from Procurement executives.

Check out Part One of this series: Seven Negotiation Fails We’ve All Experienced

AI and Procurement: Boldly Going Where No Team Has Gone Before?

The battle of “human vs. machine” is raging in Hollywood and, increasingly, in the workplace. What does the future hold for AI?

By Willrow Hood / Shutterstock

2001: a space odyssey… Terminator… The Matrix…

If you were to believe some of the sci-fi blockbusters, you’d think our future as humans is pretty bleak. They all offer a dystopian view of the future where, if the machines don’t kill us, they enslave us.

The battle of “human vs. machine” also seems to be raging outside of Hollywood, and we humans seems to be losing more and more ground to machines each year. Some of this ground has been lost in the world of gaming. Over the past decade, machines have been beating us at increasingly complex games more and more often. Looking back at these “wins” for the machines, we can see some key stages in the evolution of Artificial Intelligence (AI):

•    Deep Blue won against Kasparov at chess in 1997. It was rather dumb but powerful. With brute-force & human-created logic, Deep Blue was able to test and evaluate every possible sequence of moves at every turn and choose the best one.

•    Watson defeated Jeopardy champion, Ken Jennings, in 2011 and was smarter than Deep Blue. It had to understand natural language and find the relevant knowledge from various sources like encyclopedias, dictionaries, thesauri, newswire articles and literary works.

•    Google’s Alpha Go won against Go’s world champion Less Sedol in 2016. To achieve this result, it had to learn from humans from thousands of past games. This is because, unlike chess, which has a limited number of moves, Go is one of the most complex board games in the world, with more possible moves than the number of atoms in the universe. The second generation of Alpha Go learned by itself by playing against itself millions of times to discover what works and what does not.

•    Libratus beat four expert players of Texas Hold ‘Em poker. It also learned by itself and was able to understand behavior because poker is a game of luck, deception, and bluffing!

While very impressive, these victories also show that machines are still dumb when compared to everything that people can do. Machines excel at one thing and have the intelligence of a two-year-old or less for everything else.

What we can learn from sci-fi movies and the battles being waged on the gaming front, is that AI has many faces:

Today, despite all the hype and buzz, computers are still only at the narrow intelligence level. But even at this level, the potential applications of AI are endless.

As far as Procurement is concerned, the same applies: machines are far from being able to replace Procurement teams. Instead, new technologies have another purpose: augment people to achieve better outcomes.  This is a definite shift from the last waves of technologies, which were mostly focused on automation and staff reduction.

Machines in procurement get a promotion: from admins to colleagues and consultants

AI, in short, is all about learning from data to develop new insights and using this new knowledge to make better decisions. It is also about continuous learning and improvement. AI is a master of the “Kaizen” philosophy! This makes it a precious ally for Procurement and AI should therefore be considered as a team member within the broader Procurement ecosystem. Experience shows that “people + machines” get better results than people alone or machines alone.

Of course, in Procurement and in general, it is undeniable and unavoidable that AI will impact the future of work and the future of jobs. Work will continue to exist, despite potentially significant job displacements. While some jobs may disappear, new ones will come to take their place, and most will be transformed by the imperative of cooperation with smarter machines. Procurement jobs will also be impacted and future procurement professionals will require a new set of skills. For example, data analysis and modeling will become a core competency next to more traditional business and relationship management skills. This is because the “data analyst” component in activities will grow due to the collaboration with AI in order to:

•    Train AI and ensure that data is relevant, complete, and unbiased

•    Monitor outputs (recommendations, actions, insights, etc.) of the AI system to ensure relevance, quality, take more contextual / soft aspects into account, and safeguard against AI shortcomings.

Space: the final frontier. These are the voyages of the starship Enterprise. Its five-year mission: to explore strange new worlds, to seek out new life and new civilizations, to boldly go where no man has gone before.

To conclude on a more positive and optimistic note than where this article started, I have taken inspiration from another sci-fi classic.  I believe that the future lies in a new type of cooperation between humans and machine.

The duo Dr. Spock and Captain Kirk illustrates, to some extent, how such cooperation is possible and can offer the best of both worlds. By combining Captain Kirk’s instinct and emotional intelligence with Spock’s logic and reasoning skills, they were able to successfully tackle any challenge they encountered.

New developments like explainable AI (XAI) and “caring AI” will make machines of the future even more human and will allow them to take an even more active role in our personal and professional lives. AI will continue to augment us, not replace (or kill or enslave) us.

So, Procurement people, live long and prosper!

Procurement Outsourcing – What To Watch Out For

The advantages of procurement outsourcing have been well-documented, the disadvantages – less so. In this article Elaine Porteous outlines how the trend has evolved and minimising the risks associated.

By Raggedstone/ Shutterstock

The outsourcing of procurement tasks started off a couple of decades ago when companies found ways to process orders and invoices more efficiently. It grew and got labelled as procure-to-pay (P2P) and is still a popular solution for managing volumes of repetitive transactions. Tactical procurement, where low-cost/high volume commodities are being sourced is the next favourite area for outsourcing. Lately, procurement outsourcing has expanded into a wider range of activities, even moving into areas such as strategic category management, supplier selection and contract negotiation. Non-core services are the most likely candidates for outsourcing:  HR services, I.T. support, facilities management and logistics. 

According to CIPS’ definition of procurement outsourcing, it can also include “the provision of procurement services and processes within an operation which may involve the transfer of people and/or assets to another company.  Procurement service providers (PSPs) may have a full-service offering taking over the entire procurement function of an organisation.  Other smaller PSPs may manage only one element of a procurement function such as spend analysis or contract management.

According to McKinsey, to make strategic procurement outsourcing a success, companies need to take a highly systematic approach with three basic steps:

  1. They outsource strategic buying only in categories where doing so offers clear value.
  2. They have a precise understanding of the sources of that value and how to unlock it.  
  3. They choose outsourcing partners that have the capabilities to address those sources of value, then define and implement agreements that maximise the chance of capturing potential savings

The choice of a PSP depends on its capabilities, the size and complexity of the supply market and the buying organisation’s relative influence in that market; the expertise and availability of resources will affect the decision.   Outsourcing works best when the ability to manage a strategic category in-house is low.

Trends in outsourcing

There is a growing interest within procurement about outsourcing data-heavy activities such as spend analysis, supplier performance management and tender evaluations.  Tracking of realised savings has always been a headache and a topic of disagreement due to varying methods of calculation – by outsourcing this to specialists there is less room for debate. 

Governance, regulation and compliance is an area that is increasingly becoming onerous for companies, especially in the banking and healthcare sectors and is, therefore, a candidate for outsourcing.  

The outsourcing agreement 

When a decision has been made on what can be successfully outsourced a PSP must be selected in line with in-house procurement policy. This should include normal supplier due diligence to establish the company’s capabilities, including reviewing the supplier’s financial statements to ensure that the business is profitable and the supplier is not at risk of failure.  Next, the basis on which the partnership will work must be negotiated and confirmed.  The relationship needs to be formalised in a comprehensive contract with an enforceable service level agreement (SLA) that defines the rules of the game. Key performance indicators (KPIs) need to be clearly defined. These are the metrics used to measure performance and the calculation of bonuses.   

In the SLA, risks can be minimised by defining:  

  • Minimum acceptable service levels with penalties/incentives  
  • What happens when the PSP fails to deliver? Contingency plans
  • Who owns the data?
  • The PSPs responsibility for data security and confidentiality
  • Who owns the work developed during the contract?
  • What happens when there is a change in ownership of the PSP?

Managing the outsource partner

You have a contract in place and an SLA, what next?   The PSP is like all other key suppliers, it needs to be managed through the entire contract period.  Implementation is often the stage at which the outsourcing project fails. Stakeholders, if not consulted, can be obstructive and delay the process.  The manager’s role is to deliver the service to users, monitor the PSP’s performance, ensuring delivery against the pre-set KPIs.

Advantages and disadvantages of outsourcing

The advantages have been well-documented by the PSPs themselves, the disadvantages, less so.  Among the leading full-service PSPs are Accenture, Capgemini, Infosys and IBM.  The advantages are

  • Lower costs due to PSPs’ economies of scale by aggregating customers’ requirements  
  • Outsourcing low value/high volume purchases frees up internal expensive resources
  • Access to global expertise and market knowledge in categories where there is little in-house capacity or experience
  • Time-consuming negotiations and contracting are managed by specialists

Because outsourcing involves handing over direct control to a third-party it comes with challenges.  These may be service delivery issues, a lack of flexibility and unforeseen management crises at the PSP.  Open lines of communication at all levels are vital to the success of the contract.  Whatever the function being outsourced, the aim is to create a long term partnership that is designed to achieve more than just cost-cutting.  

Answering Your Burning Procurement Questions

We put some of procurement’s top thought leaders on the spot to find out the answers to your burning procurement questions.

By Kzenon/ Shutterstock

What’s the one word you’d like to ban in procurement?

What’s the most important soft skill?

If you had to choose between experienced hire and upskilling talent, which would you choose?

What’s the least important skill for procurement pros?

How do you successfully negotiate a payrise?

We put some of procurement’s top thought leaders on the spot to find out the answers to these questions. Check out the video interviews below.

Justin Sadler Smith Head of UK and Ireland, Procurement and Supply Chain – SAP Ariba Speaking at Big Ideas London 2019

Quick-fire questions with Justin Sadler Smith

What’s the one word you’d like to ban in procurement? : Procurement!

What’s the most important soft skill? : Stakeholder management and being able to communicate effectively.

Julie Brignac,Corporate Senior Vice President Client Services and Delivery, WNS Denali
Speaking at Big Ideas London 2019 

Quick-fire questions with Julie Brignac

What’s the one word you’d like to ban in procurement? : Transformation

If you had to choose between experienced hire and upskilling talent, which would you choose? : It’s dependant on the talent market. we are currently in a market when the talent is extraordinary, lots of access to procurement and supply chain professionals. Because of that it’s important to hire for experience as opposed to raw talent.

Vishal Patel, Vice President of Product Marketing – Ivalua
Speaking at Big Ideas London 2019

Quick-fire questions with Vishal Patel

What’s the best way to negotiate a payrise? : Going beyond talking about cost savings and show the value of all the things that have been done with suppliers, with innovation and with risk.

What’s the least important skill for procurement professionals? : Tactical operational skills – basic things like approving purchase requisitions. Procurement should focus on other things

Carl Tomaszek, Sales Director – Icertis
Speaking at Big Ideas London 2019

Quick-fire questions with Carl Tomaszek

What’s the one word you’d like to ban in procurement? : Transformation

What’s the best way to negotiate a payrise? : Demonstrate success in terms of what you’ve done to benefit the organisation’s bottom line

Check out more content from Big Ideas London 2019 here.

3 KPIs for Digitally Transforming Your Business Spend: How Do You Measure Up?

If CEO predictions are any indicator of what’s to come in the business world, buckle up, because we may be in for a bumpy ride. Here are three of the most influential KPIs for purchasing, invoicing, and expenses. 

By Aaron Amat/ Shutterstock

If CEO predictions are any indicator of what’s to come in the business world, buckle up, because we may be in for a bumpy ride. According to PwC’s annual CEO Survey, there’s been a 436 per cent increase in the number of CEOs saying they expect global economic growth to decline this year. Just 35 per cent said they are “very confident” about revenue prospects for the next year.

So, what’s a business leader to do? The most popular answer seems to be “look inside-out for profitability and growth.” Faced with economic uncertainty, finance and procurement executives are increasingly challenged to not only uncover and deliver savings opportunities, but also to reduce risk, support innovation agendas, and create levers for growth.

3 Digitisation KPIs to Measure Your Procurement and Expense Process Maturity

It’s important to set measurable goals to assess the maturity of your procurement and expenses processes. By analysing the largest accessible source of business spend data (the nearly US$1 trillion that flows through the Coupa platform), Coupa Business Spend Management (BSM) experts have identified 12 Key Performance Indicators to help you gain insight into and advance your organisation’s maturity across the spectrum of BSM processes, from sourcing to procurement to payments.

Here are three of the most influential KPIs for Purchasing, Invoicing, and Expenses and how companies with digitally mature processes are performing in these areas:

1. Purchasing KPI: Percentage of Electronic PO Processing: 89.7 per cent

What it is: The percentage of POs processed digitally measures the success of eProcurement initiatives designed to reduce PO processing time and employee and supplier frustration.

Why it matters: A high rate of digital POs often means that procurement teams have time to focus on strategic initiatives, like lowering risk and optimising productivity, instead of chasing lost orders.

2. Invoicing KPI: Invoice Approval Cycle Time: 30.7 hours

What it is: The average time, in hours, from the time of invoice submission to the time of final approval measures the efficiency of the entire approvals process.

Why it matters: A short invoice approval cycle time assures that there are no unnecessary project delays due to payment delays. It also enables early payment discounts and fewer status inquiries while decreasing the risk of late payment penalties.

3. Expenses KPI: Percentage of Manual Expense Audit: 6 per cent

What it is: The percentage of expense reports that go through human audit reflects the precision and accuracy of existing controls and compliance throughout the expenses management processes.

Why it matters: A low percentage of manual auditing implies that expense policies and automated audits are effectively ensuring compliance. Large numbers of manual audits place a costly administrative burden on AP teams.

Learn More About How to Use Benchmarking Data to Drive Success

Want to find out what the other nine KPIs are and find out how your organisation measures up? Read Coupa’s 2019 Benchmark Report to learn more about how focusing on improving these critical KPIs can help you improve profitability, streamline operations, and achieve efficient growth.

For extra credit, join us at Coupa’s next webinar! We’d love to see you at our discussion about Building A Strategic Procurement & Finance Alliance to Enable Growth with Levvel Research and Coupa CFO Todd Ford to explore how business leaders can use KPIs and benchmark data to reduce silos in the back office. We’ll also take a look at:

  • New data on the state of procurement and finance collaboration
  • Procurement and finance efficiency benchmarks of high-performing organisations
  • Strategies for reducing departmental silos and creating spend management visibility

Reserve your spot today. We can’t wait to see you!

Voicemails Are Dead So Why Do We Use Them?

Why do we all have a voicemail system and why do people continue to leave them? Abby Vige discusses instant gratification

By Aniwhite/ Shutterstock 

When we’re stuck in the work grind and we see our phone light up with news from beyond our present moment, our spirits buoy a little! Yay! Then we drop when we realise it’s just a voicemail. It’s almost as bad as when you think have a text but it’s just spam from your telecommunications provider. Sigh.

Confession

I have to admit that I never clear voicemails, some people even state in their voicemail greeting that they do not clear them, so why do we all have a voicemail system and why do people continue to leave them?

Voicemails date back to the late seventies when a chap patented his unique “Voice Message Exchange” and sold the electronic message system to 3M. Since this master stroke of genius, we have never looked back. When voicemails were invented they made sense, there were no emails and faxes were yet to reach their peak. But do they make sense as a business or connection tool in this modern era?

A message from beyond

The reason I don’t tend to clear my voicemails, is because as soon as someone leaves one the news instantly old. Or, there is very little information that warrants the effort of clearing them all and then phoning each individual back “hey, Susan from accounts here, phone me back” why should I?

Enter the experiment phase…

After having this question kick around my head for awhile, I decided to scratch the itch of my curiosity and prove what I thought to be true. I listened to every voicemail across 2-3 days and phoned each person back, the top results were:

  • They had already emailed me the query and was surprised I was phoning them
  • The issue at hand had substantively evolved
  • They had found out the answer themselves

The motivation for them to leave the voicemail had initial merit, but in some instances, just minutes later the situation had changed. My stark conclusion was that most of the conversations were in effect, a waste of time.

Now, I don’t want to be seen as a VM hater, Procurement is a customer centric, customer service industry. But this is not the way I add value to my customers or to my organisation. Voicemails fall in to a “reactive” space for me and I’m much more of a pro-active gal. I love to be accessible to my customers, but you’ll often find me at their desks in person because face to face conversations are worth it.

What’s driving Susan?

The experiment was interesting and somewhat validating but the question remains, why do we feel the need to leave the dreaded VM in the first place? Most people assume that it’s because email as a written form, takes longer to write out verses simply phoning the person and requesting that they phone you back. It’s also generally accepted that voicemails enable us to convey emotions and urgency.

But what is really driving us is more of a simpler basic human need, the need for instant gratification. The term itself is self-explanatory but it in this context what is driving us is our self-centric view of the world. Even though we know it makes sense to write an email and include more information and leave it for when the person is available to digest it, we forgo these long-term benefits in favour of short term benefits that resolve something in our world, we feel better.

This is subject that has piqued curiosity for many years and found its roots in pop culture through the 1960’s infamous “Marshmallow experiment”. This was a major psychological study conducted by Stanford Professor Walter Mischel where children between 4 and 5 years old were given the choice of having one marshmallow to eat right away or they could wait for the researcher to come back and they would get two. The results of watching the kids wait has been the subject of many a video and even adverts.

How this plays out at work

The desire for short term gratification is often exasperated by the pressures of a work environment where the sense of needing to get things done and done quickly rules supreme. What underpins the need for instant gratification? The need for the issue to be passed on, to be received – ultimately to be heard.

We eat the marshmallow over and over, we can’t wait, we can’t help ourselves. Those of us that don’t leave voicemails most likely transfer the gratification to other media or medium. Even your neat and pretty to do list or post it note system fits the short term satisfaction bill.

The biggest insight gained from the experiments was the link proven between delaying gratification and being successful in life. Those 4 and 5 year olds from the 1960’s that waited for the second marshmallow, had higher academic scores, lower levels of substance abuse, lower likelihood of obesity, better responses to stress, better social skills as reported by their parents, and generally better scores in a range of other life measures.

What we can learn

If we train ourselves to be less reactive and to delay those hard wired gratification urges, we can increase our productivity in focused and targeted areas. Ultimately raising our value to the organisations we work for, whether that is a company or working for yourself.

Take the challenge….

  1. Don’t leave voicemails
  2. Pay attention to your inner world, before you take action, think about what is driving that action
  3. Start small and repeat that small action each day
  4. Keep visual reminders about your top priorities
  5. Keep yourself accountable

Six Steps To Building A More Responsible, Resilient Supply Chain

The unfortunate truth, though, is that most organisations only have a limited amount of resources available to identify and monitor the kaleidoscope of risks that exist in their global supply chains.

By yuttana Contributor Studio /Shutterstock

This article was written by Sondra Scott, President – Verisk Maplecroft 

More often than not, creating a safe supply chain is thought of as being an expensive endeavor. But resilient supply chains and more sustainable procurement practices can help bolster the bottom line. Companies that really understand their supply chains will come out ahead in the long term. They incur fewer costs in reactive post-risk actions and they generate more revenue by optimising their procurement processes and enforcing positive perceptions of their brand with their consumers.

The unfortunate truth, though, is that most organisations only have a limited amount of resources available to identify and monitor the kaleidoscope of risks that exist in their global supply chains. This is where analytics becomes so important. By using quality risk analytics, we can quickly map and high-grade our operations and suppliers for risks, which enables us to focus spend on the areas that need the most attention. We can use analytics to not only identify where our risks sit today, but to anticipate where risks will emerge in the future.

So, how do you make the most of the range of analytics and tools available to you? Here’s my quick guide on the six steps to success.

Step 1: Think holistically

First and foremost, we advise our clients to think holistically. Look at risks as interconnected, not only along the supply chain but across your entire business. For instance, civil unrest doesn’t just happen; the drivers of such events can include anything from government corruption, to drought, to egregious breaches of human rights. Getting the full picture by tracking a wide spectrum of risks is imperative in understanding your potential vulnerabilities and identifying opportunities for your business.

Step 2: Create a common language of risk

You need to create a common language of risk and manage one central source of data rather than lots of disparate disconnected datasets. Using one source of data will enable you to draw on a consistent framework where everything is measured in the same way. This makes complex issues easily understandable across the whole business – up to the most senior level.

Step 3: Centralise your risk monitoring

This will save you time, resources and confusion. There are lots of specialised tools in the market which help you monitor your supply chain for different risk workflows. That’s great, but, put a wrapper around them and keep your data consistent within that framework. This means hosting your own facility data, your supplier data, plus all your third-party inherent risk data in one place.

Step 4: Remember the world doesn’t stand still

Life would be a lot simpler if risks were static. However, when your supply chain stretches across 50 different countries your suppliers are subject to a dynamic environment where the picture on the ground is always changing. Whether it’s erratic policy making, protests over labour rights, government instability or an upsurge in security risks, analytics can help you become nimble. By regularly monitoring these issues, you will know which of your suppliers are most exposed and you can adapt your strategy accordingly.

Step 5: Be targeted

Once you’ve identified the risks in your supply chain, it’s important to be both sensible and cutting edge in developing your mitigation strategies. ‘Sensible’ means implementing a strategy that is tailored to the specific risks in your supply chain. It should be a hammer-to-nail solution that is both appropriate and cost effective. ‘Cutting edge’ in that you should constantly be innovating both internally and jointly with your suppliers who are on the ground and likely have quality input into how to reduce these risks. Be wary of one-size-fits-all solutions.

Step 6: Communicate what you’re doing

Don’t overlook the fact that you can distinguish your brand by your risk avoidance actions. Consumers and investors alike want to know that companies are responsible to the environment and the communities in which they operate. Properly communicating what you are doing to tackle these risks head-on can be good for your brand and help create opportunities for top-line expansion. Analytics are a perfect tool for illustrating improvements in your performance.

Don’t get left behind

Using analytics to improve sourcing or mitigate risk in the supply chain is not new. But, advances in data science techniques mean the ground is moving fast and those who move quickest will be best positioned to take advantage of their benefits. Picking the right source of risk analytics is crucial though. It will make your life easier and ultimately change the way you do business.

This blog was originally published here

Procure with Purpose

Procurious have partnered with SAP Ariba to create a global online group – Procure with Purpose.

Through Procure with Purpose, we’re shining a light on the biggest issues – from Modern Slavery; to Minority Owned Business; and from Social Enterprises; to Environmental Sustainability.

Click here to enroll and gain access to  all future Procure with Purpose events including exclusive content, online events and regular webinars. 

5 Critical Factors for Improving Employee Retention

It’s normal for businesses to experience some personnel loss each year. However, the goal of retention is to keep that loss at a minimum.

By Samo Trebizan / Shutterstock

Employee retention refers to an organisation’s ability to keep, or retain, its employees and reduce turnover. It’s usually measured as a percentage of the employees who were present from the beginning to the end of the year. It’s normal for businesses to experience some personnel loss each year. However, the goal of retention is to keep that loss at a minimum.

Why is employee retention important?

One of the first, and arguably most important, reasons to put effort into retention is to create happier employees who will work harder, produce better results and ultimately, earn more money for the company. Happier employees are also more likely to feel a sense of loyalty to their organisations and recommend it to others for employment.

Contented employees are vital to a successful business, but retention is also important because of turnover costs. According to a CAP study, the average cost of replacing an employee can be up to 230 per cent of their annual salary for high-level executives, and 16 to 20 per cent of annual salary for low- to mid-tier employees. An executive making $200,000 a year could cost up to $416,000 to replace.

However, this figure doesn’t even include the “soft costs” associated with losing an employee, which can encompass productivity, engagement, training and cultural impacts. Focusing efforts on retention can keep employees happier and save organisations up to hundreds of thousands of dollars per person.

1. Start with onboarding

It may seem counterintuitive to start working to keep employees on their first day or before they’re even hired. However, studies have shown companies lose 25 per cent of employees within their first year, and as much as 20 per cent of that turnover happens in the first 45 days of employment.

Employees get their first glimpse of a company in the onboarding phase. Standardised onboarding processes have proven to result in greater productivity from new employees and 18 per cent higher rates of goal achievement. According to tech leader Mark Hurd, companies must make it easy for new hires to assimilate, especially when it comes to the simplest tasks, like getting an ID card and tools for their jobs, or even knowing where the restrooms are. “All of this stuff sounds so rudimentary, but it was taking weeks for some of this stuff to get done,” Hurd noted, “And in the meantime, the employee is unmotivated and doesn’t understand where the resources are.”

2. Demonstrate opportunities for growth

It’s important for employees to see a clear path for growth within their job right from the get-go. This can start during the recruitment process by highlighting to potential employees some of their prospective colleagues who have already moved up in the organisation. This can show them some potential directions they can take with their own career paths.

A Glassdoor and Harvard Business Review survey found employees who remain in a job for a long period of time without promotion are significantly more likely to seek out other companies for the next step in their career. Conversely, employees who see a clear trajectory for upward mobility have a much higher likelihood of staying with an organisation to work toward their end goal.

3, Offer flexible work arrangements

Flexible work arrangements are one of the most important perks job seekers look for right now. However, providing this benefit can do more than bring a company plenty of applications. It can also result in more satisfied, higher performing employees in the long run.

Offering flex time or a work-from-home policy shows employees their employer is cognizant of their time and is dedicated to creating a positive work-life balance. It also demonstrates a level of trust in each worker’s ability to do their job correctly without in-person supervision.

4. Provide consistent learning opportunities

A Consumer Technology Association (CTA) survey found special skills trainings or professional development programs to be one of the most important factors for retaining employees. Kevin Griffin, an IT advisor at Falco Enterprises, noted, “a commitment to training is seen by employees as an investment in their worth and a powerful incentive to stay at the company.”

By providing ample learning opportunities, companies allow employees to feel like they’re always making progress in their careers. Giving employees the opportunity to attend conferences, or providing regular in-office trainings, can act as major motivators for employees to remain with their employer. However, these activities should be counted as part of the workday rather than something undertaken on the employees’ own time, to prove the business is dedicated to educating their workers.

5. Implement open lines of communication

More employees leave their employers because of poor managerial relationships than for any other reason. Management should pay close attention to how they communicate with subordinates. Managers and supervisors should remain open to feedback and keep open lines of communication at all times.

Workers should feel comfortable and encouraged to speak up during meetings to offer their opinions without fear of backlash. Open channels of communication make employees feel valued, safe, and heard.

Companies that put effort into employee retention will have happier and more motivated employees, which will in turn save money over the long run.

Dynamic Purchasing Systems – The New Normal?

The framework is dead – long live the framework? As the public sector moves to make collaborative procurement easier, the Dynamic Purchasing System may be the key to long-term planning.

By Andrey Yurlov/ Shutterstock

So you know all about collaborative procurement frameworks in the public sector? Are you planning on using them in the short-term to kick start your year? You might want to hold on a second as there’s something that you might want to try out.

We have touched on collaborative frameworks that are available to public sector organisations in a previous article. Continuing the theme of the difficulties of collaboration, we come to a relatively new beast in the procurement jungle. This is the Dynamic Purchasing System (DPS).

Speaking from experience, it’s one of the hardest exercises I’ve done in my procurement career to date. Not only do you need to have all your stakeholders and requirements lined up before you even start (more on that shortly), but the complexity of the set-up has the ability to leave you scratching your head in utter confusion.

As hard a beast as it is to tame, once it’s in place it has the potential to solve a number of woes commonly associated with frameworks.

Let’s Get Dynamic

There are an increasing number of public sector organisations beginning to use a DPS as an alternative that still bears more than a passing resemblance to traditional frameworks. Buyers still have a list of pre-qualified suppliers who can compete in subsequent tenders, while suppliers can widen their chances by applying for as many Lots as they feel are relevant to their operations.

The key difference is that at the conclusion of the first stage, any suppliers who have been unsuccessful in their application for one or more Lots may reapply. They’ll then be re-evaluated and informed if they have been successful. A kind of ‘wash, rinse, repeat’ situation.

There are standard timelines involved both the first and second stages (see more here) and, unfortunately, it’s not a fast process. If you have never used a DPS, then you might wonder what actually makes it different from your standard frameworks. We’ll cover some Pros and Cons shortly, but in essence there are two key differences.

  1. The length of the DPS – Where a framework may be limited to 3-4 years, there is no upper time limit on a DPS. The buyer would make a decision on an appropriate length, taking into consideration the goods or services being procured, the market and any anticipated changes in scope or market conditions.
  • The ‘open’ application – The DPS is more dynamic than a framework (it’s in the name really!). Suppliers can apply to join at any time during the life of the DPS and are then on it for its duration. This is particularly good if there are new suppliers in the market, but also that unsuccessful suppliers don’t miss out on the chance of business for a number of years.

The Pros – Buyers and Suppliers

Beyond the longer length of the DPS and the fact that suppliers can be added at any time, there are a number of other benefits on both sides of the fence.

  • Reduced Timescales – see, I said we’d get back here! The length of time tenders are out in the market for can be as little as 10 days. This is a major reduction based on the minimum of 25 days for most Restricted procedures. And there’s more…
  • One Notice, No Standstill – Once the first Contract Notice has been sent out, there’s no requirement to do an individual one for each tender. And Award Notices can be grouped over a longer period to be issued in one go. AND there’s no requirement for a 10 day Standstill period on awards. All this means less time and valuable resources being spent on administration.
  • Access for SMEs – the DPS naturally sets up a greater number of smaller Lots and work packages, meaning that it’s much more attractive for SMEs to get involved. It maximises their involvement and means that they are competing on a level playing field with larger organisations.
  • Fully Electronic – further to this, all documentation has to be available in electronic format within the DPS, for its full duration. This means a level playing field again for any suppliers joining later in the process.

The Cons – Is it really for you?

Before we get carried away thinking a DPS is the panacea we’ve all been waiting for, there are a couple of caveats. Some are obvious, others come only with the painful experience of setting one up.

  • No Direct Awards, No Call Offs – unlike a traditional framework, there’s no scope of Direct Award or Call Offs from a DPS. Any procurement projects put through it need to have a full set of tender documents.
  • Set Up Isn’t Easy – as you might expect for something this size, scale and value, the early stages need some hard graft and infinite patience. You’re going to need to have outline specifications, tender documents and T&Cs, as well as a firm idea of what is going through each Lot. Set up alone could take a number of months.
  • No Guarantees – as we found, much to our chagrin, there are no guarantees that the suppliers you want will join. You can lead a horse (or supplier) to water with the notices, emails and follow ups, but they may choose not to drink. After all, from their point of view, they still have significant competition to go through to get any business.
  • It’s not for everything – there are categories and commodities for which a DPS will be brilliant. Markets where there is a fast pace of change or large number of new entrants are good. Commodities with a high volume of transactions, or less complex scope, can greatly benefit. But if you have a highly complex good or service and low number of contracts in your category or commodity, it may not be for you.

The New Normal?

It’s unlikely that Dynamic Purchasing Systems will completely replace traditional frameworks in the future. However, it does provide a powerful and useful tool for buyers both in getting tenders to market and ensuring a good level of on-going competition. Suppliers will benefit from reduced administration too, as they only need to pre-qualify once, but may be put off by the sheer size and scale of the DPS if you have a large number of Lots.

It’s definitely worth looking in more detail at the available information to see if a DPS is for you, and how you would set it up. Make sure you communicate with the market to see if it’s applicable (also good as a heads up that it’s coming) and how the Lots might be split down. Internally, gear everyone up and get everything in place. Once you explain the benefits, people are likely to get on board quickly!

Ultimately, don’t be put off by it. Yes, it’s something completely different that you may never have done before. But then, when’s that ever stopped procurement before?!

I’d love to hear your thoughts on this article and the series of articles on the challenges facing public sector procurement in 2019. Leave your comments below, or get in touch directly, I’m always happy to chat!