Tag Archives: Basware

Blockchain: Are You Bothered?

There are so many misconceptions around blockchain and its potential impact. Will the fundamental concept of blockchain really have a significant impact on procurement, finance and supply chain?

Last month’s Procurious London Roundtable was sponsored by Basware

Blockchain is the coolest technology of the moment and the hype surrounding it only appears to be growing year upon year. Whilst the concept was first used for Bitcoin, the digital currency, its potential is far wider, and many industries are actively investigating the possibilities of using blockchain-based solutions.

But despite organisations around the world jumping on the Blockchain bandwagon and advocating for its enormous potential, do the majority of professionals understand precisely what it is, what it can do and the extent to which it will impact our businesses?

At last month’s Procurious roundtable, Paul Clayton, Head of New Service Development, Basware put us through our paces with an overview of blockchain technology and his insights as to why procurement pros need to be cautious not to overestimate it’s bearing on the function.

What is blockchain?

A blockchain is simply a digitised, decentralised and cryptographically secured ledger of transactions.

“The biggest misconception” Paul begins, “is that there is only one blockchain. There are actually many blockchains in use today throughout many different industries.”

“Blockchain is actually only a concept, whose origins go back to academic work in the early 90s, rather than a thing. The concept was first publicly used to allow the crypto-currency Bitcoin to be traded virtually, anonymously, and without the need for a centralised bank.”

“Blockchain technology says where something has been transferred to and retains a trace of the transfer. Conceptually a blockchain acts like is a single ledger, a source of the truth if you like. In reality, it is physically distributed where there are actually multiple ledgers, known as nodes, that all work together to come to consensus on where something has been transferred to, which is then shared between them.”

An obvious advantage of this technology, is that it’s very difficult for you to break the integrity of the ledger. “There are multiple copies of the same ledger and so if someone hacks one it becomes immediately obvious that it is different.”

The flaws at the heart of blockchains

Whilst a blockchain itself is safe, an application using it remains hackable – Security researchers and hackers have proved it’s possible to hack someone’s Bitcoin wallet and empty it of crypto-cash. Mt. Gox infamously lost 7 per cent of all Bitcoins in circulation in 2014, which were worth, at the time, approximately $473 million. It also appears to be an uphill battle trying to prosecute someone for taking a Bitcoin

It’s can be too transparent – With public blockchains, once a transaction and its associated data have been placed onto a blockchain, anyone and everyone who has access to it can view everything, whether you like it or not

It’s not the most elegant solution – The very nature of the deliberately distributed ledger with multiple copies (nodes), means that you have multiple nodes undertaking exactly the same piece of work ie working out where something has been transferred to. From a pure computing power point of view, for certain applications, this is a highly inefficient way of doing things.

The blockchain for Bitcoin for example, has already had to be re-designed to increase its scalability as the number of Bitcoins in circulation and the growth in the associated transactions meant that the ledger became too unwieldy and it was taking too long for it to update.

You can still lose things!

Even if you know where something went, you can still then lose it. Who could forget the unfortunate James Howells, who mistakenly threw out a hard drive containing 7,500 Bitcoins, now estimated to be worth $7.5 million

 

Blockchain for business

There are some who would argue that these problems have been addressed and eliminated for blockchain for business. Paul is not one of them!

“The distributed nature of ledgers means blockchain is good at maintaining the integrity of who owns something but what it cannot do is determine whether the person who put something into a system owned it in the first place.”

This means, when making a transaction via a blockchain, the recipient needs to be able to trust the supposed owner of the thing that is being exchanged. “You are, essentially, reliant on the veracity of the source of what goes in to the blockchain.”

For example:

Does the “owner” actually own the rights to the house they are trying to sell you?

If you’re exchanging metals, does the “owner” have documents to prove they have the rights to the gold?

It might be good at preventing a fraudulent transfer of an asset but blockchain is “next to useless at establishing if a person owned something in the first place”

“As a ledger system it is extremely inefficient, almost clumsy in the way it works. In certain circumstances, where there are a high volume of transactions it uses so much computing power it’s almost not worth it.”

“And it’s for these reasons that, whilst it will have applications in many areas from supply chain through to electronic voting, blockchain won’t change the world!”

Where is the value for procurement?

“Is there value in blockchain tech? Yes. Does the value match the hype right now? Not even close!”

“From a procurement point of view the biggest area of impact right now is most likely to be in supply chain applications. There are obvious applications for the transfer of title and bill of lading. Of particular interest in this space right now are supply chains that can be subject to fraud such as pharmaceuticals and food

Going beyond that the application of so called “smart contracts” to a blockchain can help automate certain business processes. Smart contracts, are pieces of computer code attached to a blockchain that automatically execute an action once a set of agreed criteria have been met. For, example, a smart contract could be used to automatically pay a supplier once the buyer has received their goods without the need for invoice processing and payment.

” In 2017, blockchain is word of the year, it’s absolutely everywhere. But it’s not earth shattering, it’s not the third generation of the Internet its just an interesting concept with some obvious benefits and flaws.”

Last month’s Procurious London Roundtable was sponsored by Basware

Data Is The Alpha And Omega Of The Future

Do you feel like your procurement team is in good shape when it comes to your existing e-procurement solutions? Sure you won’t get  “stuck” with an obsolete system? Eric Wilson talks on the importance of data. The event might be over, but you can still  register for The Big Ideas Summit Chicago to access footage  from the event. 

It’s not an exaggeration to say 90 per cent of today’s procurement technologies will be obsolete in the coming years. While much of today’s tech has some great functionality, when you put it up against the backdrop of a world where the big value is in the data more than the tactical functionality, it’s clear that they’ll simply be left behind!

Don’t believe me? Think this is “out there”? Let me elaborate…

Why can’t Alexa answer my questions?

Nowadays, many of us use Amazon’s intelligent personal assistant, Alexa, or similar AI applications. If you have, you’ll know that they’re not always adept at answering the questions we ask of them. Why? It’s simply because they don’t have enough data…yet!

Imagine machines that could:

  • Manage all your discrepancies for you
  • Detect fraudulent procurement
  • Code your non-PO invoices

This is the point at which technology gets a lot more exciting, and we’re not far from reaching these dizzying heights. The question procurement teams must ask is whether their organisation has the volume, quality and completeness of data to allow these machines to learn, provide accurate predictions and take accurate actions on the organisation’s behalf.  And to be sure of that, we need to look ahead…

The here and now won’t help you tomorrow!

I’ve spoken before on the downfall of Siebel as an example of what happens when organisations only live in the here and now, solving the problems of today without looking ahead to tomorrow.

In 2017, the situation hasn’t changed. But this time, it’s not just about Software-as-a-Service (SaaS). Procurement technologies, and technologies in general, have fully embraced SaaS and the big tech shift that’s coming next is data.

If the system you’re looking to install is not capable of actually capturing all your transactional data – and doing so in a centrally architected manner such that you can get more value from data beyond just the data that your organisation itself generates – then all those snazzy pieces of functionality, all that beautiful user interface, all those pretty little graphs aren’t worth a dime!

Not only will your existing business case completely fail.

Not only will you not receive the ROI you planned on today.

Tomorrow the system will be obsolete, and you might as well have selected Siebel!

When it comes to selecting SaaS procure-to-pay systems, business cases are built on the ability to:

  • Eliminate maverick spend
  • Identify opportunities for strategic sourcing
  • Consolidate the supply base
  • Automate approval processes
  • Automate matching
  • Eliminate paper
  • Take advantage of terms discounts.

Indeed, organisations build up very detailed business cases based on these factors. But the basic assumptions and prerequisites for those components of the business case to actually generate real ROI are based on three things:

  1. You get 100 per cent of your suppliers connected to the system
  2. You get 100 per cent of your end users actually using the system – all the time (not just some of the time)
  3. You run all your invoices through the system – 100 per cent of them – not just the indirect invoices, but also direct, facilities, vertical specific invoices, non-PO invoices, the whole gamut!

In procure to pay, if you don’t have those three things, not only does today’s business case fall apart, but more critically for this conversation, you can’t leverage the power of all that data in the future.

There’s no two ways about it: You can’t use artificial intelligence if you don’t have the centralised data for those machines to learn from. It is data that feeds AI and other emerging technologies – you need data more than anything else for success in the future.

And so, my key takeaway now and always is: when you are putting together your RFPs for systems, data better be first and foremost on your mind.

Want to see more from The Big Ideas Summit Chicago.  Register now  (It’s FREE!) to gain access to all of the day’s action including video interviews with our speakers and attendees. 

 

8 Reasons You Won’t Want To Miss Basware Connect

Basware Connect is just around the corner, and is shaping up to be one of the highlights of the 2017 procurement event calendar. Procurious has the inside word from our knowledge partner Basware on the top eight things to watch out for on Wednesday 18th October.

  1. The very latest on Industry 4.0

Whether you’re from the procurement or finance function, it’s almost certain your role is already being impacted by the many facets of the 4th industrial revolution. From ‘business as usual’ technologies such as PDF e-invoicing to large-scale futuristic disruptors including blockchain, robotics, machine learning and predictive analytics, it’s up to you to keep up with the latest news on how the revolution is progressing and Basware Connect will help you to do just that!

  1. Engage with a blockchain guru

Blockchain has well and truly arrived, and organisations are scrambling to understand how they can incorporate this technology to reap the security benefits, keep ahead of the competition and avoid getting left behind. It’s a hot topic: Procurious’ own articles on Blockchain have attracted a lot of attention, demonstrating that procurement professionals are increasingly eager to get to grips with what this technology can actually deliver. Simon Taylor, one of the most recognised thought leaders on Blockchain and DLT, previously established Barclays bank as one of the leaders in blockchain thought and action. He is set to deliver one of the most anticipated sessions at the conference.

  1. Learn how to fail forward

We’ve come a long way from the days when failure was seen as career damaging and shameful. Today, businesses are embracing failure as an exciting, enlightening step towards success. Black Box Thinking author and Times Columnist Matthew Syed will demonstrate how to redefine failure in your organisation, taking attendees through his thought-provoking approach to high performance in the context of ever-increasing complexity and rate of change.

  1. Get to grip with megatrends

Don’t miss out on seeing Eric Wilson, Basware’s VP Purchase to Pay, speak about megatrends. We’re biased when it comes to Eric because he’s already proven himself to be a thought-leader in his profession via his excellent contributions to the Procurious Blog. Check them out:

  1. Will my job be lost to automation?

Automation has been impacting human roles for at least two centuries. In the US, over 50 per cent of the population was employed in agriculture in 1900, down to around 2 per cent today. Chair, Non-Executive Director and Business Advisor Natalie Ceeney will examine the coming impacts of AI and machine learning. Natalie has operated at Board level for fifteen years, holding three significant CEO roles. She is currently Chair of Innovate Finance, the members’ body for FinTech, and a non-executive Director on the Board of Countrywide PLC. She’ll be providing attendees with some examples of why some of the biggest brands have failed to stay ahead while others succeed.

  1. Get your questions ready for Basware’s executive team

Eric Wilson isn’t the only senior exec that Basware is putting on the stage. A line-up of Basware’s thought-leaders and top consultants will be presenting, and (importantly) will be available to answer your questions about the platform itself. Highlights include Ilari Nurmi, Basware’s SVP Purchase to Pay, who’ll be talking about “what’s hot right now” in the company’s solution roadmap, Andrew Dos Santos, Principal Business Consultant will be on hand to offer advice and Senior Product Manager Theresa Lacey will be demonstrating new functionalities and future plans.

  1. Immersive workshops

Nobody wants to sit back and listen for an entire day, which is why Basware has included some immersive workshops for audience members to roll up their sleeves and participate in. A highlight is the “demo area”, where attendees can see demos from across Basware’s product portfolio and speak to their experts. You can get hands-on with Marketplace, and even go as far as ordering a pair of wireless headphones to take home with you! Now that’s a valuable takeaway to bring back to the office.

  1. Network, network, network

Sessions aside, this event is an important opportunity to grow your professional network. Take along plenty of business cards, seize every opportunity to meet new people, and follow up by connecting with them on Procurious. To get the most out of the day, be sure to introduce yourself to the speakers post-event. Basware will provide the free beer, wine and pizza, you take the opportunity to network, network, network!

Basware Connect will take place on 18th October 2017 at CodeNode, 10 South Pl, London. Learn more about Basware Connect and register for free today.

On The Spot! 60 Seconds With Basware…

Are you a progressive thinker? Do you possess humility and a thick skin? Find out why this is important as we put Basware’s Eric Wilson on the spot with a round of quick-fire questions.

Register now  as a digital delegate for The Big Ideas Summit Chicago!

With less than a week to go until we launch The Big Ideas Summit in Chicago, we thought we’d have a quick catch up with some of our keynote speakers to discover what makes them tick, where they see the procurement function heading in the near future and how they would reflect on their successful careers.

Today we catch up with Eric Wilson, Vice President Purchase-to-Pay, Basware. At the Summit he’ll be asserting the criticality of tech systems being able to capture data.

But today, we want to know what he believes are the key issues facing the procurement industry and the biggest mistakes procurement pros make.

What do you think is the biggest mistake procurement pros make?

A mistake procurement professionals often make is that, while they have a strong desire and ability to become strategic in the organisation, they trap themselves in the world of the tactical.

This manifests itself in various ways, including in the approach to technology.  If procurement pros don’t take the time to understand overall technology trends, they may make technology decisions that are focused too much on meeting tactical functional requirements of today while missing the big picture of getting to true strategic value for the organisation tomorrow.

What skills and talents contribute to an all-round, great team?

Great teams in work, like teams in sports, must be comprised of complimentary actors with a unified goal.  That sounds obvious, but many organisations seem to fail to remember these basic tenants of great teams:

1. Complimentary

2. Unified goal

When organisations truly align goals across sales, field ops, back office functions, etc, and then rally the entire company around those big picture goals, they can accomplish amazing things.

When instead, goals are not quite aligned, or, even worse actually, contradictory, we see things like empire-building, in-fighting and politics. In the end, both the company and their customers suffer as a result.

What 3 attributes make a great leader?

    • Humility
    • Understanding that the leader serves the team, not the other way around.
    • Transparency

What are the three biggest issues facing the procurement industry?

    • Attracting and retaining high quality talent to the procurement profession
    • Breaking the perception of procurement as tactical “savings-getters”
    • Bridging the traditional silos existing in the full financial supply chain – getting out of the procurement box

What should procurement pros be looking for in high potential recruits?

    • Tech-savvy, not just with procurement technologies, but across the spectrum of technology trends in both the business and consumer worlds.
    • Progressive thinker
    • Relationship orientation, but with very thick skin

Want to hear more from Eric Wilson? On 28th September, Procurious is bringing The Big Ideas Summit to Chicago.  Register now  (It’s FREE!) as a digital delegate to gain access to all of the day’s action and LIVE video from our speakers and attendees. 

Strategic Procurement: A CFO’s Guide To Getting There!

Ever felt like a different perspective on that age-old plea: “Help! I need to be more strategic!” would do your procurement team the world of good? Here’s what a CFO has to say on the matter…

Register now  as a digital delegate for The Big Ideas Summit Chicago!

What do we hear from procurement professionals all the time in the industry of Procure to Pay? “Help me be more strategic” or “I want to demonstrate the value of procurement” or “Give me the tools to practice strategic procurement” or “How can I influence the big decisions being made?”

The good news is, there is a way to make these things happen – but you must be keenly focused on two things: data and analytics.

Get Perfect Vision with Complete Data

To even think about being strategic, there’s no way around it – you must tap into your company financial data and that data has to be comprehensive and clean. To build the complete data set, you must get 100 per cent visibility over enterprise-wide spending with:

  • 100 per cent of your e-procurement users funneling all indirect spending through the e-procurement solution
  • 100 per cent of invoices, both direct and indirect,  being processed through the AP automation solution
  • 100 per cent supplier on-boarding to ensure all invoices are being converted to e-invoices, regardless of supplier sophistication.

Layer this data with the power of analytics to quickly glean actionable insights and you’re ready to build your strategic procurement team, enabling everyone to see clearly to make informed decisions.

Keep Your Eyes on the Prize

As a CFO, I firmly believe that for both Finance and Procurement to be successful in achieving organizational goals, there must be strong collaboration between the CPO and CFO. The unique talent that exists in these functions needs to be leveraged to build and analyze the full financial profile of the company and see the possibilities for the future. From my perspective, CPOs can foster this collaboration and create a strategic procurement team that has their eyes on the prize by doing these 3 things:

1. Support Working Capital Strategy

53 per cent of organisations use payment terms as a strategic lever to manage cash flow.1 As the owner of supplier relationships, Procurement is in a unique position to support Treasury in the management of working capital by negotiating advantageous payment terms with suppliers. Procurement can help the company keep cash on-hand longer by:

    • Working with large suppliers to extend payment terms and pay later
    • Managing the long tail of the supply chain through a virtual card payment program that enables suppliers to get paid quickly, while the company pays later.

By working directly with suppliers to arrange the right payment terms for the company while benefiting the suppliers, Procurement ensures that Treasury can accurately forecast cash flow, properly invest in growth areas and optimize working capital overall. Supplier relationships also improve as financial volatility is minimized for suppliers, reducing risk in the supply chain. Additionally, a strategic procurement organization can generate a new revenue stream through virtual card payment programs that offer cash back. Read more on strategic payment programs.

2. Use Innovative Technology to Control Costs

Generating cost savings has always been a part of traditional Procurement, but now more than ever CPOs have access to innovative technology and advanced analytics to support these efforts. For example, artificial intelligence built into e-procurement solutions can continually scan procurement data to alert Procurement to savings opportunities like consolidating orders for bulk purchasing, better rates offered by different suppliers, reducing off-contract and rogue buying, optimizing inventory carrying costs and reducing other areas of wasteful or unnecessary spending. CPOs can also give approvers the ability to see how orders affect their budgets in real-time and educate other departments on ways they can make the most of those budgets – spreading the procurement talent across the company to help everyone. Suddenly, Procurement goes from being seen as the spend police to a helpful, collaborative arm of the business. Procurement professionals can also use automation tools to run strategic sourcing events to quickly identify and collaborate with the most cost-effective partners. With the right source-to-pay solution, Procurement is better positioned to quickly save costs and free-up time for more strategic initiatives.

3. Develop the Right Talent:

To achieve a strategic procurement organization, CPOs need to ensure they are developing and acquiring the right skills within the procurement department to focus on data analysis. Strategic procurement organizations steer away from a focus on squeezing cost savings out of suppliers and are moving to data-based decision-making that pivots the business one way or another to get ahead. According to Gartner, “the emergence of machine learning and AI is introducing the need for analytical skills and an understanding of data science and technology.” With rule-based and tactical activities becoming increasingly automated, the skill set needed in Procurement will involve working within that complete data set every day to derive the right insights for strategic initiatives like, right-sizing the supply base, spending smarter, reducing risk in the supply chain, improving supplier relationships and properly maintaining supplier data. Read more about the future talent needed for Procurement in Gartner’s article, Start Preparing Now for the Impact of AI on Procurement.

If CPOs stay focused on these areas, they will be able to realize their goals for strategic procurement and the perception of Procurement across the organization will change. If there’s one thing to take away from this article and my perspective on strategic procurement, it’s that you must set your sights on the data flowing through your organization in order to be effective.

See the Light

At Basware, our customers and their suppliers transact over the world’s largest open business network. That means we’re aggregating data across millions of financial transactions, creating an unmatched data set and layering that information with a powerful out-of-the-box analytics suite. If you’re ready to see how this data can make you more strategic, reach out – we’re ready to help.

On 28th September, Procurious is bringing The Big Ideas Summit to Chicago.  Register now  (It’s FREE!) as a digital delegate to gain access to all of the day’s action and LIVE video from our speakers and attendees. 

The New Age Of Procurement Technology

Procurement technology went full sail and you eagerly jumped on board. But now 90 per cent of all technology is about to become obsolete. Are you prepared for the new age? 

As the vice president of Basware’s Purchase-to-pay solution it goes without saying that I’m involved in a lot of procurement technology selection decisions. And over the years, I’ve noticed a recurring pattern in the process, across numerous organisations. It tends to play out a little bit like this:

A CPO of a large organisation is at the end of their tether thanks to a messy purchase-to pay process. It’s the age-old story with AP and procurement operating independently, maverick spend with unapproved suppliers, late payments and paper absolutely everywhere.

The easiest, and seemingly smartest, solution to the problem is the implementation of a new purchase-to-pay system, which said CPO requires, being extra savvy, to be a Software-as-a-Service solution. The CPO knows they can get a decent ROI on whichever supplier they choose.

So what’s the problem?

Unfortunately, our CPO is only looking 5 inches in front of their face! It’s no exaggeration to say 90 per cent of today’s procurement technologies will be obsolete in the coming years. And so procurement needs to start looking much further ahead!

Remember Siebel? We can’t either…

You’d be pretty hard pushed to find an organisation that uses Siebel nowadays. You might even struggle to find someone who knows what it is!

Siebel was the cream of the Customer Relationship Management (CRM) crop in the late 90’s and early 2000’s. It was the absolute best at its time.  Hundreds of millions of dollars were spent on licensing and implementing Siebel, with the promise of visibility, efficiency, and improved customer satisfaction.

Fast forward a mere ten years and…nobody uses it.  It turned on a dime thanks to Software-as-a-Service and, more specifically, Salesforce. An enormous technology shift took place, and suddenly Siebel and everything like it was utterly obsolete. More than a few CMO’s were fired as a result.

What can we expect from the next tech shift?

What can we expect from the next technology shift? We hear about  AI, machine learning and cognitive computing all the time and there’s a lot of concern amongst procurement professionals that it’s going to displace our workforce.

But it’s coming to procurement whether we like it or not. There’s a glaringly obvious application of AI for procurement professionals.

One word: data.

When today’s CPOs try to objectively evaluate the functionality of potential new solutions, they’re often bypassing  a crucial aspect (opting to solely measure tactical functionality); the game-changing competitive advantage their organisation can achieve through the power of the data.  There are two major considerations to be made here.

  1. Is the system architected for centralised data capture?

    The system should be able to capture your data, the data of all organisations using the solution  and, ideally, be able to connect with other solutions.  The more the system is designed for centralised data capture, the better chance you have of being able to take advantage of the latest  data-driven tech changes.

    My advice is that you eliminate anything that focuses solely on you and your data.  If it’s not central, you can be sure you’ll get stuck behind and end up like one of the organisations using Siebel.   But, of course, design alone is not enough.

  2. Does the system actually capture that data?

To capture all of this data, there are three parties that matter: suppliers, requisitioners, and AP. This is where tons of business cases fall apart.

  • Suppliers: To capture data you have to get all your suppliers on the system. Not just your big sophisticated suppliers, every single one! You have to get them connected, or you will fail, if not today then most definitely in the imminent future
  • Requisitioners: Who are the worst employees when it comes to using a procurement system? It’s fair to say that it’s often the sales and exec teams;  the people driving revenue for the company. These groups are only going to use a new procurement system if it’s the easiest and fastest way for them to get their jobs done, which means it has to fit in seamlessly with how they work.   If you don’t give them a system that they want to use, you won’t have them, and again you won’t be capturing the data from their transactions.
  • AP:  This is probably the most important part but so often an afterthought when looked at from a Procurement perspective. Consider how many hundreds of thousands or millions of invoice transactions are processed within your company. Now multiply that by the thousands of other companies out there and you’ll get a sense of how quickly that data can scale. Most P2P systems can’t process all of those different kinds of invoices. And that’s where we end up in Siebel world, yet again!

By committing to finding and using a system that captures all of this data, and does so not just for your organisation, but in a truly centralised platform, procurement will soon be able to achieve the following:

  • Fraud detection
  • Machines that know when you need something. Doesn’t it seem miraculous when Amazon knows what you need and presents it to you when you login?  Let me tell you that it’s not. It’s data
  • Dynamic discounting marketplaces
  • Exceptions handled without any human intervention, based on patterns of prior behavior in the data. This might not be behavior that humans can readily identify, but machines can with ease by crunching all of that data

Procurement would do well to remember that, In today’s world, the big value is in the data, not in tactical functionality.

Eric Wilson is the head of Basware’s Purchase-to-Pay business for the Americas and APAC.