Take the Nuclear Option at UPMG2018

Not many procurement conferences include a guided tour of a nuclear facility! Be sure to check out UPMG2018, the premier conference for utility purchasing managers.

Go nuclear

Remember the Fukushima Daiichi nuclear plant disaster in 2011? As part of the international review that took place after the event, the United States instituted the “SAFER” program. National SAFER Response Centres (NSRCs) house emergency backup equipment for all commercial nuclear plants in the U.S., ensuring the ability to move emergency equipment to affected nuclear plants within 24 hours by truck, plane and helicopter.

At ISM’s UPMG2018 conference (9th to 11th September, Scottsdale AZ), attendees will have the opportunity to tour a SAFER Response Centre under the guidance of the Southern Nuclear Operating Company.

Speaking of disasters, Michael Menges of Edison Electric Institute will be presenting a review of the mutual-assistance effort coordinated by electric trade associations, where multiple utilities aided in Puerto Rico’s restoration following Hurricane Maria. A panel of industry subject matter experts will discuss the supply chain impact around logistics of fleet mobilisation in Puerto Rico, the work management process necessary to coordinate the restoration effort, and material needs and challenges. 

Get to grip with a rapidly changing environment

Utilities Purchasing is a category that never stands still, as the landscape keeps shifting with breakthrough technologies and disruptive forces including climate change. UMPG2018’s agenda includes sessions to ensure attendees are kept up-to-date, such as:

  • Shifting Business Models in the Power Industry (featuring David Jacoby, BSI Energy Finance)
  • Innovation in the utility space
  • Supply chain disruptors
  • Actionable information to better understand economic conditions (insights from ISM’s Report on Business)
  • Blockchain application for utility industry.

Tap into the talent pipeline

This year, UPMG2018 has a strong focus on up-and-coming talent, with sessions including:

  • Attracting Millennials to Supply Chain (featuring a panel of young talent from Intel, Black Hills Corporation and Exelon)
  • How to Build a Successful Career in Supply Chain
  • University Student Presentations.

The Utility Purchasing Management Group (UPMG) exists to exchange information and provide a forum for divergent views, all directed toward increasing the knowledge of purchasing as it applies to and affects both utility purchasing management and their suppliers. Officers, managers, and employees of gas, electric, and telecommunications utilities – either investor-owned or government-owned, as well as consumer-owned, not-for-profit electric cooperatives, public power districts, and public utility districts – who are directly involved in purchasing or materials management make up the membership of the UPMG. Register for UPMG2018 now at http://upmg.org/.

 

In other news this week:

Reshoring in Reverse Again

A.T. Kearney’s most recent Reshoring Index has revealed that despite the Trump administration’s “Made in America” focus, imports from traditional offshoring countries are at a record high. Some compelling findings include:

  • The largest one-year increase in imports from Asia to the US, a staggering $55 billion dollars (up 8% from 2016), since the economic recovery in 2011.
  • The Reshoring Index has dropped 27 basis points since rising to a 5 year high in 2016.

Download the report: http://bit.ly/2ubCZ3a

Procurement Professionals: Get Your Blinkers Off!

Reluctant or unsure about driving greater diversity and inclusion in your procurement teams and the organisation at large? You need to take your blinkers off!

Simon Burt/ Shutterstock

When it comes to implementing diversity and inclusion initiatives in the workplace it can be difficult to know where to begin.

And perhaps you’re equally skeptical that your actions could even have a significant impact?

But when we were joined last month by Timo Worrall, Senior Category Manager, Facilities Management – Johnson & Johnson; Julie Gerdeman, General Manager, SAP Ariba and Darren Swift (Swifty), Inspirational Speaker, The Drive Project & Blesma Ambassador for our latest Procure-with-Purpose webinar all three speakers quickly put these doubts to rest…

The Facts

People with learning differences

“Just 6  per cent of young people with a learning difficulty are actually in employment which is a burden on society and for individual and their family,” explained Timo.

“These people are often willing but unable to work because we don’t give them the chance to get a foot in the door. They can’t find work because they can’t find work experience. We are often unwilling as big corporations to accept their differences. But they can do the work and they can also be very loyal. The barrier to entry isn’t them, it’s us.”

Veterans:

The Drive Project’s Veterans Work report found that three in ten businesses admit they have not even considered employing veterans. While the majority claim to be more open minded, 60 per cent of businesses rule out recruiting someone if they have no industry specific experience.

There are roughly 700,000 veterans currently in employment, over half find themselves in routine, low-skilled or low-paid jobs.

Neurodiversities 

“Individuals who are neurodiverse or on the autistic spectrum are underused source of talent with great skillsets that our leaders are seeking on their teams,” argues Julie. “There is a constant need for great talent and a unique point of view.”

Starting small is ok

“I have always been a huge advocate and proponent for diversity of thought,” explained Julie. “I’m one of nine children and so growing up I lived with lots of different opinions and personalities and thoughts and I saw the amazing environment that that created. And so I brought that with me to the workplace.

“I wanted to contribute to change. I volunteered to become the global exec sponsor for D and I at SAP Ariba. I started with a gender focus but it has evolved to become something much bigger and much broader.

“At SAP Ariba we think it’s ok to start small. It’s really ok. We started D and I [initiatives] with employees’ passions. [People who said] ‘this is what we’re passionate about.’ Welcoming and embracing personal passions into the professional workplace in a small way  blossomed into bigger, more formalised programs and from there we built a D and I framework to drive a more inclusive workplace”

As Timo explains, measuring success isn’t just about measuring numbers. “It’s easy to get bogged down in numbers and spend reports.” explained Timo. “[At Johnson & Johnson we are] trying to use story-telling and build business cases around the work we are doing. Talking about meaningful impact is a lot more powerful than just numbers.”

Take your blinkers off and crack on!

When it comes to getting started procurement teams simply need to “crack on and do it! I can promise you that you’ll find it hugely rewarding and enjoyable” asserted Timo. “I’m a firm advocate that [diversity and inclusion initiatives] change how procurement is viewed in the business and how we’re perceived.

“A social innovation agenda drives a completely different conversation with our business partners beyond that age-old savings conversation that we all get a bit bored of.

I really believe there is a massive untapped potential out there of many different groups that we don’t support as well as we should do. They can bring tremendous value and insights and different ways of doing things, often better than we can into our supply base. Get involved.”

Whilst serving in the Army in 1991, Swifty was seriously injured by a bomb. He lost both his legs, a number of his fingers and damaged his arms along with various other injuries.

Many years on and Swifty continues to live by this motto, championing individuality, pushing the boundaries of life as a double amputee and creating his own path.

“From my perspective I was lucky. I was surrounded by the right people. They were what I call “blinkers-off” people. They don’t wear blinkers. Or they’re prepared to take them off. They gave me the opp and had the right attitude to see some of the attrubutes that could be nurtured and untilised.

Broden your thinking. Take a punt on difference and diversity. Instead of always thinking you can’t ask why not, why wouldn’t we why shouldn’t, we let’s give it a go.

Unicorns are a mythical creature but they’re also a type of horse. Horses wear blinkers and they wear blinkers because it makes them go down a particular route, stops them from deviating stops them from thinking elsewhere and I quite like the idea of taking those off and having a wider vision.”

“What are the essential traits of future leader in procurement?” asked Julie.

“Is it this unicorn that ticks all the boxes. We intentionally seek a diversity of thought and a diversity of experience; different skill-sets. Because that drives innovation and that leads to great advancements.”

Procure with Purpose – Join the movement

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.

Enrol here to join the Procure with Purpose group and gain instant access to our exclusive online events, including the Don’t Go Chasing Unicorns webinar. 

The Private Company Paradox

Procurement is going to have to do some extra work when it comes to evaluating private companies.  Kelly Barner outlines the common pitfalls to be ready for…

Benoit Daoust / Shutterstock

Many procurement teams have been tasked with diversifying the supply base. This often means partnering with small, diverse, or locally-sourced suppliers.

One challenge that arises is that many of the companies that qualify for such programs are privately owned. The lack of information that usually accompanies private ownership is at odds with procurement’s transparent supplier evaluation frameworks. Add to this the fact that participating in an RFP process just to be ‘diversity fodder’ is onerous and potentially even harmful to small businesses, and we’re left with a paradox:

How can procurement stay true to our mandate while also finding mutually beneficial opportunities for small and diverse businesses?

Procurement will have to do some extra work when evaluating private companies. Here are some common pitfalls to be ready for:

1. Limited or no access to current financials

This begins in the opening section of an RFx: ‘Please attach your company’s most recent corporate financials here.’ To which the supplier responds, ‘N/A: we are a privately held company and as such do not publish our financial statements’. That may be true, but it does not eliminate the need for the supplier to demonstrate that they are financially sound enough to justify an award.

2. Inability to determine risk levels

Procurement has to determine if there are concerns about the supplier’s ability to stay in business. What does their revenue pipeline look like? What are their customer retention rates? Keep in mind that this is a challenge with all companies, not just privately held ones. Procurement has to ensure that private companies are not hiding behind their ‘privateness’.

3. Few customers able to serve as relevant references

While private companies are not always new or small, it is a common combination of characteristics. The customers of small, privately held companies may be as tight lipped as the company they buy from. In fact, some may view their relationship with the private supplier as a competitive advantage or not want to accept the risk associated with speaking for or against such a company in the customer reference checking process.

4. Missing rigor from the expectations of shareholders

Being privately held means drawing capital from angel investors, venture capitalists, and sometimes employees or ‘friends and family’ investors. Who can procurement look to when trying to ensure that the leadership team faces appropriate challenges to their decisions?

Part of this dynamic needs to come from the relationships between leadership team members. Hopefully they (if not their private investors) are willing to fight to ensure the company stays on track.

5. Looming prospect of acquisition

Most private companies are on a journey towards either IPO or acquisition. While both can be disruptive for customers, having a privately held supplier acquired by a larger company is perhaps the greater concern. What changes will be made to contracts or terms of service?

Will the relationship be valued in the same way? Not having the answers to these questions (in large part because the private company’s leadership team doesn’t have them either) can make it hard to commit to a long enough term contract that both parties realise the desired level of value from the arrangement.

Being a private company shouldn’t be the only reason not to consider an otherwise qualified supplier for a contract. The problem is a circular one: if procurement doesn’t have access to the same level of information we do with publicly traded suppliers, how can we determine if they are qualified or not? The answer is likely to be a combination of pushing for additional information and accepting that some of what we are looking for isn’t available. As with all strategic decisions, we can never be 100 per cent certain that our choice is the right one. All procurement can do is maximise the availability of facts to ensure that the decision to contract a private supplier – like all other procurement informed decisions – is based on analysis, not assumptions.

The 4 Most Common Blockchain Criticisms – Busted

Blockchain technology is often criticised for its perceived limitations. But how much truth is there behind the accusations? 

We’re told that Blockchain is overhyped, it’s no big deal, it has some serious limitations and, whilst it might be a pretty cool piece of technology, it’s certainly not the procurement disruptor that it’s hailed to be…

But Jack Shaw, Co-Founder and Executive Director of the American Blockchain Council disagrees…

“Blockchain technology is currently criticised for several different limitations:

1. Security 

One of the questions I most commonly get is ‘If blockchain is un-hackable, how is it that there are all these stories of people having their bitcoin stolen?’

The reason for this is that bitcoin and many other digital currencies are typically still stored online and not on blockchain itself. In nine years  there has never been a successful hack of the oldest blockchain implementation, which is the bitcoin blockchain.

But people have lost money because they have stored there currencies on a more traditional centralised database.

2. Sustainability

A lot of criticism is aimed at the bitcoin blockchain and it’s important that people understand there are many different blockchains out there and there are many different ways of implementing these blockchains technically.

The Bitcoin blockchain is not only the oldest; it is the largest but also the slowest and the most unsustainable of the blockchains from an energy perspective. Figures indicate that supporting bitcoin blockchain requires approximately as much energy as the country of Peru. That is not something that is going to be scalable to many thousands of use cases across millions of organisations around the world.

It is becoming increasingly difficult for the bitcoin blockchain to keep up with the processing of transactions. Currently it processes 7 per second. by comparison visa processes something in excess of 50,000 per second. Clearly new approaches will be needed.

3. Transparency 

The same transparency that makes it easy to share information among authorised participants in the blockchain could, if not properly implemented, make it easy for those who are not authorised to view transactions to do so.

For example, if you’re participating in a supply chain ecosystem , the suppliers are not going to want their competitors to see the prices that they have quoted to you if they are offering you a significant discount.

How do you prevent that? By leveraging encryption technology and using blockchain to manage exchange of private keys to access that data.

4. Interoperability

How do we have multiple, different blockchains and how can those blockchains talk with each other? IBM have taken a strong leadership role in this area through their support of the open source hyper ledger platform for implementing blockchain. This is commonly used for permission blockchains, where only a limited and defined set of people and organisations can participate in the blockchain.

One of things that hyper ledger and a number of other blockchain inititiatves are actively working on is the issue of interoperability.

Procurement and Blockchain

This all seems very scary.  And there is a tendency for procurement pros to think ‘Oh my gosh. We still have to work out all kinds of technical problems surrounding blockchain, maybe we should put this on the back burner for a while’

But that would be a serious mistake.

I had a fellow come up me after a presentation I did about 20 years ago on the World Wide Web and e-commerce. He explained to me  ‘we don’t have the processing power, we don’t have the bandwidth and we certainly won’t ever have the security. This crazy notion you’re having of people being able to do electronic banking –  it will never happen it just can’t be done.’

At that particular point in time, he was right –  it couldn’t be done. But within 18 -24 months every major bank was rolling out online banking because the technical problems had been solved.

None of these problems are going to require us to violate the fundamental laws of physics in order to solve them.

They can all be solved as long as there is an economic incentive to do so.

A major IT services company identified that the three most common hurdles to blockchain adoption are

  • Understanding blockhain in use cases
  • Communicating blockchain to key decision makers
  • Evaluating cost benefits of use cases

None of these have to do with technical constraints. they are to do building awareness and understanding.

The purpose of the American Blockchain Council is to help senior level executives understand the strategic business implications of blockchain.   

Jack Shaw will be speaking on our latest webinar Blockchain: The Technology, the Myth, the… Legend? which goes live on 7th August at 11am EDT/ 4pm BST. Sign up here.   

Digital Transformation: The Bigger Picture

The Hackett Group’s research shows that addressing the impact of digital transformation on business has become the most critical imperative for enterprises in every industry.

Montenegro / Shutterstock

What exactly is digital transformation?

 The Hackett Group defines enterprise digital transformation as: “the creation of business value by improving customer experiences, operational efficiency and agility by fundamentally changing the way organisations innovate, operate, deliver products and services, engage with stakeholders and execute work, using digital technologies as the enabler of holistic transformation.”

While implementing technology has always been a part of business strategy, adoption of emerging technologies in procurement is critical in a rapidly changing business environment marked by intensifying competition and disruptive innovation.

As the world of big data, robots, automation, and artificial intelligence takes shape, procurement is expected to provide more profound insights into supply relationships, including conventional cost structures, supply availability, lead times, and quality. Moreover, in this new digital landscape, business technology users are demanding consumer-like e-commerce interfaces from e-procurement systems to find the products or services they need quickly. Procurement in the digital age requires operational agility to prioritise customer service delivery while anticipating or even predicting new supply opportunities despite volatile market conditions.

How can we use digital transformation to drive new value in procurement?

Historically, The Hackett Group viewed valued creation in terms of the two “E”s: Efficiency and Effectiveness. However, with the changing technology landscape and increased importance of stakeholder satisfaction, it is time to expand how we define value. And that means the addition of a third “E”: Experience. This broader view of procurement-enabled value allows procurement organisations to capture their minimization of cost (Efficiency), maximisation of business value (Effectiveness), and now, optimisation of relationship and engagement value (Experience)

Procurement-enabled value

Measuring value in procurement is not just changing the way we define value, but also how we measure it. Metrics should be reinvented to focus on predictive qualities and customer-centricity. For example, instead of successful risk mitigation, true value comes from risk prevention. Or in terms of efficiency, procurement should be measuring time to serve customers, instead of total cycle time (Fig. 3). Successful value measurement in procurement is no longer solely focused on cost savings. Now, the key is in understanding the mindset of stakeholders and using complex data to measure value created for businesses and customers.

Defining and measuring procurement value in the digital age

In this complex landscape, where should I start in thinking about digital value?

While we consider procurement’s digital evolution, and which steps to take next, it is important to understand more broadly which standards procurement will be measured by. Here, we evaluate how the most common strategic value drivers for digital transformation currently align with the digital technologies that can address them.

Strategic value driver #1: Improve procurement’s business value contribution

Increasing procurement’s value contribution is the top-ranked strategic value driver among procurement organisations. Although procurement organisations successfully increased the amount of spend under management through first-generation e-sourcing and e-procurement technology, reduced resources and exponential growth in data make it difficult to achieve (or even measure) savings and efficiency targets. While emerging technologies promise unprecedented levels of automation to help with this challenge, many organisations want to consolidate their procurement solutions in cloud-based suites as a first phase of digital transformation before diving into new technologies that are not yet widely deployed. Adoption and accelerated rollout of cloud-based solutions has become a critical part of the digital transformation agenda. In fact, 88 per cent of respondents to The Hackett Group’s 2018 Key Issues Study expect to adopt one or more cloud-based/SaaS applications within the next two to three years.

Strategic value driver #2: Improve policy compliance and alignment with sourcing strategy

Organisations are using digital transformation to improve compliance and alignment with sourcing strategies. For example, procurement might leverage machine learning to refine methods for contract and compliance management. Given the amount of data held in unstructured contract documents that are often stored in disparate locations, managing against contracts may hold high degrees of risk and exposure associated with non-compliance. Many organisations have already established a contract repository, but today cannot link policy and compliance with broader sourcing, spend and supplier risk management efforts.

Strategic value driver #3: Improving speed and quality of procurement business decisions

Making the best choices depends on having suitable data and information on supplier, item and product masters. However, data availability and quality remain significant challenges for many organisations that want to improve the speed and reliability of decisions. Therefore, it is necessary to develop fit-for-purpose information architectures that adhere to data standards and align with enterprise needs. Master data management (MDM) is emerging as the solution for improving governance of structured data, but as part of digital transformation efforts, MDM should also be applied to unstructured data. While 73 per cent of respondents in the Digital Transformation Performance Study already have an MDM initiative underway, advances in MDM are driving renewed interest in the technology.

With digital technologies comes endless opportunities to improve how procurement operates, but it also brings a new level of complexity. The most successful organisations will start by looking at the big picture, developing a strategy, and then using digital technologies to support those objectives.

For more information on digital transformation, check out our 
upcoming webinar about unlocking digital value in procurement.

Supply Chain Cyber Attacks On The Up

Software supply chain cyber attacks look set to be one of the biggest cyber threats facing organisations in the coming years. This week, the US intelligence community issued a new warning regarding future attacks…

Varlamova Lydmila / Shutterstock

The US intelligence community has issued a new warning on cyber attack risks.

The Foreign Economic Espionage Report, which was published by the US’s National Counterintelligence and Security Center (NCSC), warns that China, Russia and Iran are most likely to be behind future attacks.

“Software supply chain infiltration is one of the key threats that corporations need to pay attention to, particularly how software vulnerabilities are exploited,” William Evanina, the NCSC’s director and the US’s top counter-intelligence official, told the BBC.

“To get around increasingly hardened corporate perimeters, cyber-actors are targeting supply chains.

“The impacts to proprietary data, trade secrets, and national security are profound.”

The report details that despite the opportunities that technologies including AI and the IoT offer, they will also introduce vulnerabilities to U.S. networks – for which the cybersecurity community is not prepared.

The severe impact of cyber attacks was in evidence in June last year following the NotPetya attacks, ,  which cost nearly a billion dollars in collective damages. The White House called out Russia following these attacks issuing the following statement – “In June 2017, the Russian military launched the most destructive and costly cyberattack in history. This was also a reckless and indiscriminate cyberattack that will be met with international consequences.”

Experts believed that Russian hackers launched 2,000 “NotPetya” attacks in the early hours of June 27.  NotPetya was designed to masquerade as ransomware, but was soon revealed to be wiper malware with the purpose of destroying computer systems, erasing data and disrupting business operations.

Cyber attacks on the rise

One of the consequences and subsequent risks of living in a hyper-connected world is an increased vulnerability to indiscriminate cyberattacks.

According to Chain Store Age, “nearly 80 per cent of IT security professionals across the United States, Canada, UK, Mexico, Australia, Germany, Japan, and Singapore believe software supply chain attacks have the potential to become one of the biggest cyber threats over the next three years. Yet, few organisations are prepared to mitigate the risks.”

Whilst many organisations have response strategies in place to deal with cyber attacks, they are not necessarly holding external suppliers to the same security standards.

Tesla Asks Suppliers for Cash Back

  • Tesla sent a memo to some of its suppliers, asking to return cash to the automaker, The Wall Street Journal reported. Tesla did not respond to Supply Chain Dive’s request to confirm the memo
  • The automaker told the Journal it is looking for price reductions from some of its suppliers to improve competitive advantage.
  • Since the beginning of the year, “we’ve seen a huge run up” in the amount of money due to suppliers, Bill Danner, president of CreditRiskMonitor, a financial risk analysis and news service, told Supply Chain Dive. The figure, however, isn’t unexpected as Tesla ramps up production of the Model 3
  • At the end of the first quarter of 2018, Elon Musk assured Tesla shareholders he’s feeling “quite confident” the auto company will have positive cash flow in the third and fourth quarters of the year

Read more on Supply Chain Dive

‘Change public procurement rules in response to heatwaves’

  • In a report on heatwaves, the Environmental Audit Committee (EAC) said “extreme temperature events” in Europe were now 10 times more likely than in the early 2000s
  • “The government should make businesses aware of the developing threat of heatwaves and the economic consequences,” said the report
  • “Procurement rules should be updated so that schools and the NHS do not spend public money on infrastructure which is not resilient to heatwaves
  • “Research on the economic consequences of heatwaves concluded that there was a more significant cost to the economy than benefit,” said the report

Read more on Supply Management 

Record-breaking Prime Day’s aftermath

  • Now in its fourth year, Amazon Prime Day has grown into a major shopping event that not only drives online sales but creates ripple effects throughout the entire retail industry
  • But suppliers and retailers must prepare for a surge in consumers returning goods — or risk products turning in to “dead money”
  • Amazon recently announced it had sold more than 100 million products on Prime Day 2018, making it the biggest on record since it started the event in 2015
  • But now in the middle of its 30-day return period from Prime Day, Amazon and several retailers are likely fielding the return of hundreds of thousands or even millions of products

Read more on Supply Chain Dive

6 Ways To Prevent A Negotiation Blow Up

There’s no denying that negotiations can be tough. And the best thing you can do to lessen the tension and prevent a negotiation blow up is to be prepared…

Palms are sweaty, knees weak, arms are heavy…

No, it’s not the start of an Eminem song… (well, it is, but that’s not what we’re getting at!)

You’re preparing for a big negotiation with a group of key suppliers and you’re already anticipating a disastrous outcome.

Perhaps you already know the people you’re dealing with are difficult to work with, or you’ve heard about their reputation.

Or maybe you know your own negotiation skills leave a lot to be desired when it comes to crisis management.

Whatever the reason, there’s no denying that negotiations can be tough. And the best thing you can do to lessen the tension and prevent a negotiation blow up is to be prepared.

We joined a recent Negotiation Roundtable organized by CABL (Conti Advanced Business Learning), a firm that specialises in Negotiation & Influencing, on the topic of Emotions and Negotiation. We wanted to hear advice from a number of procurement and sales leaders on how to keep your negotiations sweet.

Giuseppe Conti, the founder of CABL, led the conversation by discussing how emotions can influence decision making during negotiations and the ways to increase effectiveness when this factor is taken into account.

  1. Practice mindfulness

If you enter into your negotiation like a coiled spring, chances are the spring won’t stay coiled for long. The calmer you are the calmer you’re likely to remain for the duration of the meeting.

Olga Guerous, VP Commercial – Mars,  recalled a confrontation she experienced early on in her career. A particularly difficult supplier, who’s emotions were “all over the place” became so angry that he was forced to “leave the room midway through a negotiation and remained in the corridor for fifteen minutes in order to calm down.

“He came back and apologised but the situation wasn’t redeemable and he didn’t get what he wanted. Losing his temper made him lose any power and control he had in the negotiation. Having full control of your emotions is a key benefit in negotiations.”

Paul André, Director Reduced Risk Commercial Supply – JTI agreed, recommending, low breathing and mindfulness to help create a barrier to your emotions.

  1. Practice what you’re going to say

If you’re nervous or apprehensive about an impending negotiation, there’s nothing wrong with rehearsing in advance, to ensure you come across as intended.

Regina Roos, VP &  Sales Segment Leader Mineral and Mining – Schneider Electric,  said: “In the morning in front of the mirror I smile and practice some conversations, particularly ones that help you respond to people that are angry.

“When you are talking you can’t see yourself.  When you look in the mirror you can practice your facial expressions so it is not ironic or sarcastic. I call it ‘the mascara moment’.”

Francesco Lucchetta, Director EMEAI Supply – Pentair, agreed asserting the ” importance of making people aware of emotions without showing them, making an effort to keep the exchange respectful and controlled”

  1. Be physically prepared

Regina Roos recalled working with a procurement leader who took a very unique approach to managing his negotiations. At the beginning of every meeting and regularly throughout he would direct participants to the bathrooms.

“The need to take a break, to go to the toilet can create problems and impact on emotions during a negotiation. It’s good to take a minute, recharge your batteries and re-enter the discussion with a fresh perspective.”

Olga Guerous agreed in the importance of taking regular breaks throughout the negotiation process, even if it’s simply a break in the current conversation.  “It’s a powerful technique, when emotions are running high, to completely deviate from that topic, particularly if you believe you are going to have minimal success. Switch to a less contentious discussion and return to the difficult point later, whether it’s in a few minutes or a few hours.”

  1. Prepare to be confident

Preparation before a negotiation is crucial to help regulate emotions because it gives you the confidence to calmly assert your position and communicate your key points.

Ifti Ahmed, Managing Partner – Titanium Partners, argued that the most important way to control emotions is through self-confidence. “Confidence comes from preparation. If you’re prepared – you’re confident. If you think you’re going to win – you’re confident. If you think you’re going to lose – that’s when the emotions come into it.

If it helps you, don’t be ashamed of preparing everything you have to say in writing and sticking to that script.

  1. Plan your stand-up routine

There’s nothing like a touch of light humour to diffuse an escalating argument. Alessandra Silvano, Global Category Director CAPEX & MRO – Carlsberg, explained that his favourite way to blow out tension during negotiations is to crack a joke.

“Of course it has to be tactful, considered and culturally appropriate but it can be a useful and powerful way to break the tension.  Be sure you are not offending anyone and perhaps keep it exclusively to jokes about yourself!”

  1. Pick your venue wisely

Location-choice can make or break the success of your negotiation. If you want to ensure all participants remain civil, calm and professional there’s nothing like a neutral or public space to guarantee best behaviour.

“I’m a very emotional person and I find it difficult to process,” said Alessandra. “The venue of the negotiation has a big impact for me. I try to pick a relaxing, informal setting, such as a dinner. In an office environment it’s easy to get angry. In a nice restaurant I’m more relaxed and it’s easier to joke around and control emotions.”

Is Procurement Full Of Psychopaths?

If one in five procurement managers are psychopaths, how should you manage them?

A recent study of senior managers found that one in five procurement managers are psychopaths.  No, this doesn’t mean they are likely to wear clown makeup and brandish a chain-saw.  But it does the organisations which employ them need to exercise caution if they value their reputation.

The study, published in 2016, was conducted by Simon Croom, a professor of supply chain management at the University of San Diego in collaboration with two researchers from Bond University on the Gold Coast. It consisted of a global survey of 261 supply chain managers working in industries with an average price negotiation budget in the range of US$50 million.

The survey was based on a questionnaire widely used to identify psychopathic personalities.  If found that 55 (about 21%) of the procurement managers surveyed had clinically significant ratings in traits which would classify them as psychopaths.  That’s about the same levels as similar surveys produce in prison populations.

Largely thanks to Hollywood, most of us think of a psychopath as a violent serial killer. And while some of them probably are, there is a much more dangerous version that we are more likely to encounter every day in the workplace. You might call them bullies, or micromanagers, or narcissists, or sociopaths.  I don’t feel particularly charitable towards them, so I go with psychopath.

They all share a common set of personality characteristics.  They can be among the most charming people you’ll ever meet.  They are also fearless and focused.  So far so good, but then it gets tricky.  They take big risks on impulse, feel absolutely no remorse, are callous, lazy, have a very high opinion of themselves, will always take credit for good outcomes and blame others for bad outcomes.

Psychopaths are drawn to careers that give them power over others, so jobs towards the top of an organization are inherently attractive to them.  And they will find those jobs easier to get because they are extrabodily good at telling employers exactly what they want to hear and will happily lie about everything including their experience and education.

If you want a go-getter procurement manager who could charm a dog off a meat wagon, then you might be wondering what the downside is.  A psychopath will shoot first and won’t even bother to ask questions later.  They are completely amoral, will lie and cheat compulsively and will leave nothing on the table. They are deal-makers. You might even be thinking these characteristics make psychopaths fantastic assets in the cut and thrust world of supply chain management.  Given that, the surprising thing about this study is not that 20 per cent of procurement managers are psychopaths, it’s that 80 per cent aren’t.

A psychopath may well be fearless but they will only look after themselves. Yes, they will face down a mugger but they will not protect you against that danger unless there is something in it for them. Yes, they will charge into battle but military units depend on every soldier being able to trust the man beside them. You cannot trust a psychopath to act in your best interests, only their own. They won’t be taking a bullet for anyone, no matter how fearless they are.

And this applies just as strongly to your corporate reputation.  A psychopath does not care how your company is perceived in the market unless it directly affects the deal he has on the table today.  They will not plan strategically and they are motivated by nothing but self-interest.  If he behaves dishonestly and trashes your reputation then that is your problem, not his.  If you are in an industry where you will only ever do one deal with any other counter-party and none of them ever speak to each other, then I guess you could get away with employing psychopathic procurement managers.

But reputation matters.  Yes, you could be the fisherman that takes every fish out of the sea, but if you want to be able to do that next year, you’d better leave a few behind.  There is always short term gain to be had from counter-parties in a weaker position, but if you let a psychopath exploit that party because they can, your reputation will be mud and you will miss out on the longer term gains that fair dealing and honesty can deliver.

If your procurement manager is in the 20%, then for the sake of your own long-term welfare, make sure you have strong systems in place to ensure they act fairly and honestly or you will ultimately be paying the price.

Blockchain: The Technology, the Myth, the… Legend?

We’re told Blockchain is a huge game changer, that it’s the biggest innovation since the internet. But we’re also told it’s overhyped, it’s no big deal and that it has some serious limitations. So…what’s the truth? “Depending on who you ask, blockchains are either the most important technological innovation since the internet or a solution looking for a problem.” These are the opening words to a recent Wired article, entitled: The Guide to Blockchain.

And they certainly resonate with procurement professionals across the globe.

We’re told Blockchain is a huge game changer, that it’s the biggest innovation since the internet; it’s unhackable, it’s pervasive, it’s unparalleled and ultimately…it’s coming to the mainstream imminently.

But on the other hand, we’re told that Blockchain is overhyped, it’s no big deal, it has some serious limitations and, whilst it might be a pretty cool piece of technology, it’s certainly not the procurement disruptor that it’s hailed to be…

It’s no surprise that when it comes to Blockchain procurement pros don’t know who to believe when to expect its takeover or how to prepare.

So we’ve enlisted the help of some blockchain experts to give you the truth, the whole truth and nothing but the truth.

On 7th August,  Procurious presents: Blockchain: The Technology, the Myth, the… Legend?

Blockchain: The Technology, the Myth, the… Legend?

We’ll be discussing: 

  • How will Blockchain impact procurement?
  • What are some of the most common misconceptions about Blockchain?
  • How is Blockchain commonly being used in businesses today?
  • How can blockchain help procurement pros to manage their organisation’s contingent labour force?
  • What are the flaws at the heart of blockchain? Is it over-hyped?

Webinar Speakers

Vishnu P Tadepalli, Global Program Manager – Procurement Blockchain Lead – IBM Procurement Services
Vishnu is a highly motivated design thinker and is a digital procurement / supply chain enthusiast. In his current role Vishnu Tadepalli is the Global Program Manager / Lead for procurement blockchain solutions at IBM Procurement Services (IPS) , program managing the blockchain procurement transformation for both IBM global procurement and its procurement services clients. In his earlier role at IBM , Vishnu product managed Procurement Cognitive solutions and earlier worked as a sourcing consultant for multiple Fortune 200 companies. In addition to IBM, Vishnu worked with Unilever , AGCO and Suzuki Motor corporation in supply chain transformation and category manager roles.  His experience spans end to end global supply chain, including both direct and indirect procurement.
Vishnu has an MBA in Strategy & Supply chain from Uni of Wisconsin, Madison and is currently pursuing second Master’s in  Artificial Intelligence. He is a member of Government Blockchain Association(GBA) and Council of Supply Chain Management Professionals (CSCMP).  An active Linkedlner, Vishnu likes to spend his free time social volunteering and mentoring.
Linkedln : linkedin.com/in/vishnutadepalli
Twitter Handle : @vishnu65886588 

Paul Sidhu, Blockchain Practice Lead – IBM

Paul is a senior leader with over 25 years experience delivering business transformation in large and complex business environments. A natural strategy and innovation practitioner, Paul works with business leaders to articulate the benefits of process optimisation, digital transformation and new operating models that impact upon their business and to present them with options and strategic recommendations in a way they both understand and feel passionately about.

Paul leads the IBM Global Business Services Blockchain Practice in Australia. His cross-industry background and working with clients in multi-discipline business functions enables a deep understanding for the needs of diverse stakeholders and the ability to solve business challenges by incorporating new solution offerings built with Blockchain.

Jack Shaw,  Co-Founder and Executive Director of the American Blockchain Council

Jack  is a leading expert on the strategic business implications of Blockchain technology who has spoken and consulted on Blockchain around the world.

He is a world renowned Keynote Speaker. He was recently voted one of the World’s Top 25 Professional Speakers by over 27,000 meetings planners, executives and conference attendees – the only Technology speaker to be accorded this recognition.

Jack has been a Technology Futurist for over 30 years – helping others to understand the impact of emerging technologies. In addition to Blockchain, he is widely recognised for his expertise in such breakthrough business technologies as:

  •   Artificial Intelligence,
  •   Internet of Things, and
  •   3D PrintingHe has advised such Fortune 500 Companies GE, Coca Cola, Johnson & Johnson, IBM, Oracle, and SAP as well as hundreds of small to mid-sized businesses.A charismatic speaker, he’s delivered more than 1000 keynote speeches and executive presentations in 23 countries and every U.S. state. Jack graduated from Yale with a degree in Business Administration and has an MBA from Kellogg in Finance and Marketing.

AmericanBlockchainCouncil.org 

How do I register for the webinar?

Registering for our webinar couldn’t be easier (and, of course, it’s FREE!)

Click here to enter your details and confirm your attendance. We’ll send you a confirmation email with a link to the webinar platform and a handy reminder one hour before we go live!

I’m already a member of Procurious, do I still need to register?

Yes! If you are already a member of Procurious you must still register to access the webinar via this platform. We’ll send you a confirmation email with a link to the webinar platform and a handy reminder one hour before we go live!

When is it taking place?

The webinar will take place at 9am EDT/ 2PM BST on 7th August 2018

Help! I can’t make it to the live-stream

No problem! If you can’t make the live-stream you can catch up whenever it suits you. We’ll be making it available on Procurious soon after the event (and will be sure to send you a link) so you can listen at your leisure!

Can I ask a question?

If you’re listening live, our speakers would love to hear your questions and we’d love for you to pick their brains . Questions can be submitted throughout the live stream via the webinar platform.

If you think of a brilliant question after the event, feel free to submit your question via the Discussion Board on Procurious and we’ll do our very best to ensure it gets answered for you.

Blockchain: The Technology, the Myth, the… Legend? goes live on 7th August at 9am EDT/ 2pm BST. Sign up here.  

Delivery Failure Notification: Your Spend Analysis Tools Could Not Deliver On Their Promise Of Good Data

When spend analysis solutions have failed to solve the problem they were designed to fix, they leave their users wanting more. But there are always ways to salvage your investment….

At a high level, companies utilising spend analysis solutions are leveraging spend data for the purpose of gaining visibility into cost reduction, performance improvement, supply risk, compliance, and other value generation opportunities. Simply put, spend analysis, and the resulting spend visibility, are considered “table stakes” for any procurement organisation. No procurement function can make a claim to world-class status or even average performance if it lacks this entry-level capability. It should be the first and last step of the strategic sourcing process that both identifies the opportunity and measures the organisation’s achievement thereof.

While these solutions have existed for decades, many companies that utilise them continue to suffer from poor procurement data, if not downright unusable data. They are undone by noncompliance, data entry errors, fragmentation of data across multiple systems and general poor data discipline.

Many of these solutions encompass complex organisational schemas such as UNSPSC, which was designed for other purposes and applies a categorisation structure that reflects the way supply markets are organised. Furthermore, general ledger (GL) codes are simply not a trustworthy substitute for a true procurement and sourcing taxonomy, and were designed for people who write the checks.

Certainly some companies must have great procurement data, because so much money has been spent on these systems specially intended to solve this challenge. But in cases where those technologies fail to deliver on the promise of good data, they are typically suffering from a host of data issues due to:

  1. Accounting-oriented data not aligned with procurement categorisation
  1. Maverick and unmanaged spend not captured in the solution
  1. Poor input discipline, or procurement-related data being entered by non-procurement resources

When these solutions have failed to solve the problem they were designed to fix, they leave their users wanting more. User adoption is low and many find that additional data manipulation is required, with many organisations dedicating internal resources to spend analytics, despite paying at third party to perform this for them. These tools are often clunky and difficult to use and fail to deliver the key insights procurement professionals need to drive value and impact the bottom line.

The market is calling for an end to this systemic problem impacting most procurement functions. After all, having access to quality data will always ensure procurement a seat at the table. Organisations should be able to rely on solution providers to provide them at a minimum with:

  • Highly accurate categorisation
  • Actionable, data-driven, procurement-focused insights
  • Fingertip access to ‘good” or even “great” data through a simple, easy to use interface

If you find you are not experiencing this with your solution provider, there are still ways to salvage your investment. Identify the desired changes and develop strategies with your vendor to overcome the visibility challenges. They should be ready and willing to restructure the underlying data/taxonomy to ensure you reap the benefits of the solution you implemented. Today, procurement professionals should be focusing on the strategic aspect of their roles and elevate beyond the frustrating and tactical world of data manipulation.

Continue reading Delivery Failure Notification: Your Spend Analysis Tools Could Not Deliver On Their Promise Of Good Data