Tag Archives: big ideas 2019

4 Terms We Should Ban In Procurement

We asked a number of procurement leaders to reveal the procurement term they would most like to ban, for good!

Every procurement professional has a different opinion on the terms that should and shouldn’t be used in their day-to-day working lives. Some terms are loathed because they undervalue the huge contributions procurement make to the organisation. Others are just downright confusing to anyone unfamiliar with procurement lingo.

Because we quite like a healthy debate, we asked a number of procurement leaders to reveal the procurement term they would most like to ban, for good!

1. Cost-cutters

“This is something I really feel is doing a discredit to the profession – it’s very important we are being seen as value-adding procurement people.”

Amelle Mestari, Head of Procurement – Bouygues Energies & Services

“We’ve been spending a lot of time reeducating the business around the extra value we bring so it’s not simply about getting a better unit price it’s about the wider value we can bring to the organisation.”

Gemma Bell, Head of Purchasing – L’Oreal

2. Savings Targets

“Sure, Procurement has to reduce costs and be financially motivated but you don’t see many organisations mission statements being to save money. Nowadays it’s crucial that procurement is measured on its contribution to delivering organisational goals and not just on savings.”

Chris Cliffe, Director – CJC Procurement



3. RFP

“I think there is still a lot of confusion around RFP as silly as it sounds. It’s something we band about and we know exactly what it means but when you speak to stakeholders it’s always the first thing they ask ‘what is an RFP and what does it mean’ and it actually means different things to different people. So I would there must be a different term we could use or a different way we could articulate what that particular process is.”

Chris Emberton, CPO – Clifford Chance

“If I’m going to speak to one of my stakeholders, if they don’t understand the language I’m speaking, how on earth is that going to help me in the business.”

Lucy Bunting, Head of Procurement

4. Negotiation

“It’s what everyone assumes we do and I think it comes to a point where you always get the hospital pass at the end of the day when someone says ‘I need you to negotiate this’ – so it means you’ve done something wrong.

Matt Beddoe, Head of Procurement – Nestle

These responses were obtained from attendees at Big Ideas Summit London earlier this year. If you’re a procurement leader and you’d like to get involved with similar discussions and networking at Big Ideas Chicago on 18th September, we’d love to have you there!

Big Ideas Summit Chicago 2019

It’s never too late to take control of your procurement career. And what better way to do so than spending a day with the profession’s best and brightest minds. 

At Big Ideas Summit Chicago 2019 we’ll be joined by 50 thought leaders to discuss how to set yourself apart from the pack, the neuroscience of decision-making, the evolving relationship between human and machine and procurement with purpose. 

By enrolling as a digital delegate, no matter where you are in the word, you’ll be able to…

  • Follow the day’s action from the comfort of your sofa
  • Submit questions to our speakers and the 50 CPOs who will be in attendance on the day
  • Gain an insight into the future of procurement
  • Watch video footage from the event including exclusive interviews with our speakers and live-streams of the day in action!

Big Ideas Summit – A Review

“The overall standard of the speakers and content was very strong, and here are four points that stood out for me as positives.”

By Rawpixel.com / Shutterstock

Yes, I was looking forward to the Procurious Big Ideas Summit last Thursday. But when I got up to see pouring rain and realised that the opening session was all about Brexit, my heart sank more than a little. Perhaps South Western Railways would come through with a handy 45-minute points failure? But no, all went well, and I was at the rather lovely Soho Hotel in good time for Professor Anand Menon, Kings College London and Director of think tank “UK in a Changing Europe”.  I sank back into the very comfy seat and prepared to be bored. 

And he was great. Probably the clearest description of where we are with Brexit that I’ve heard, and convincing ideas of where we go next. Why isn’t this man on the BBC more often, I wondered?  And guess what? When I got home that night, there he was, reviewing the papers at 10.30pm on the BBC News Channel!

So, what else was good about the Summit? The overall standard of the speakers and content was very strong, and here are four points that stood out for me as positives. 

1. Whether it was planned or not, almost all the speakers left plenty of time for questions and discussion. With the size of the group – around 50 – that meant we got into some genuinely interesting and engaging debates. For instance, Julie Brignac (from WNS Denali) gave an interesting viewpoint on why CPOs don’t make it to CEO very often. But because she only used half of her 35-minute slot for her formal presentation, we then had a really good interactive session with loads of comments and ideas flying around. A good lesson here for speakers and event organisers generally, I think. 

2. Although there were “sponsor speakers” from Ivalua, SAP Ariba, Barclaycard, and Icertis (plus WNS Denali), none of them simply promoted their product. Indeed, in the case of Justin Sadler-Smith of Ariba, someone asked him why he hadn’t focused more strongly on technology as an enabler for procurement transformation during his session! That showed admirable restraint from him in my book.  Vishal Patel from Ivalua was similar, talking about the hype and reality of AI, including the vital need for robust and accurate underpinning data, without pushing his own solutions too strongly. 

3. That size of audience – around 50 people – does help with networking.   You generally see and interact with people several times during the day, so particularly if you go along to the post-event drinks, you can make real personal connections through the event. That’s harder to do when there are 200 people at an event. 

4. The non-procurement “inspirational” speakers were very well chosen. Darren Swift lost both his legs when serving in the Army in Belfast, and has since become a champion sky-diver, a snowboarder, actor and motivational speaker. Just amazing and testament to the power of positive thinking. And David Gillespie is an actor and writer who told us about the power of stories, and how we can project our “status” and image in a way that will make us more respected and effective when working with others. It’s the sort of thing that initially sounds a bit fluffy and new age, but he was actually very down to earth and totally convincing in his messages. And perhaps he gave us some clues in terms of answering those questions I mentioned above about CPOs getting to CEO!


So, I assume the sessions will be available online at some point, and they are pretty much all worth checking out (there was only one during which I may have dozed off…!)  

If you’d like to attend Big Ideas Summit London 2020 on 12th March please contact Holly Nicholson [email protected]

New Goals for Procurement – Driving Revenue Growth Through Supplier Collaboration

Procurement professionals need to think in more innovative ways about how we can drive competitive advantage and shareholder value for our organisations.

By Greg Epperson / Shutterstock

In my recent article, I talked about “the Art of Procurement”, and suggested that the time is right for procurement to move beyond our traditional focus on transactional improvement and basic cost reduction. Whilst remembering those are still important aspects of the role, we need to think in more innovative ways about how we can drive competitive advantage and shareholder value for our organisations.

Revenue growth is one key factor that determines shareholder value and organisational health generally. While profit is of course important, and the procurement goal of cost reduction plays a key role here, “you cannot cut your way to growth” (or ultimate success), as the saying goes. Growth is vital, and stock markets arguably value growth more than absolute profit levels or even margins.

So, firms can grow revenue through a variety of activities, for instance;

  • Finding new customers for existing products
  • Improving existing products (so the firm sells more)
  • Introducing new products – either totally “new”, or line / range extensions and additions
  • Improving the efficiency and effectiveness of sales and marketing activity

In every case here, it’s clear that procurement has a potential role to play. Even in terms of the “improved sales / marketing” route, there are possibilities – maybe procurement can work with the marketing team to find innovative suppliers in areas such as digital marketing? 

For one European bank, the capability of their internal procurement team has become a customer benefit that is winning new revenue.  Potential business customers – particularly small and medium sized firms who may not have much internal capability – are offered access to a set of procurement tools, templates and good practice guidance developed by the bank’s procurement team, who are also available for telephone consultation if the clients want that too. In a market where the core banking service on offer from every competitor is very similar, this has proved to be a differentiator that has won new business for the firm.

When it comes to improving existing products (or services), suppliers are often better placed than the business itself to identify opportunities. Procurement can really come into its own by supporting that supplier-driven innovation and improvement. But in many cases, it is not simply about identifying the innovation or improvement – it may well be that the firm gains revenue and advantage through the speed to market compared to the competition.  

That was highlighted in a recent webinar I enjoyed, which featured my old friend and ex-colleague Jason Busch of Spend Matters as well as KPMG and Ivalua. But the highlight was hearing from Mark Gursky, Director of the Procurement Center of Excellence at Meritor (a $4 billion global manufacturer of automotive components). He explained how procurement in that business was contributing towards ambitious targets for growth via new product launches.

The key was (and is) enabling more effective working between Meritor and key suppliers, who are supporting the drive for growth. That change in the whole working relationship between buyer and suppliers, needed to support Meritor’s goals, has itself been supported by technology (that’s where procurement technology firm Ivalua comes into the picture).

It struck me that the technology achieves two goals. First of all, to really make the most of what your suppliers can offer, you need to manage the basics of supplier management well. That means supplier master data management; spend and contract analytics; risk management and so on. Putting it simply, if you don’t have a grip on who your suppliers are, what they’re doing with you, where in your organisation they are already working, and how they are performing, then impressive sounding “supplier innovation programmes” will be built on sand.

Then, having got the foundations in place, technology can support the actual collaborative development work. Gursky talked about using the Ivalua platform to manage all the work between the firm and key suppliers. Information is captured in one place rather than emails flying around between lots of different people. Complex requirements can be quickly translated into bills of material, then suppliers can respond rapidly to requests and questions. Projects can be tracked, data and information exchanged securely between the parties, and outputs tracked and monitored via the platform. Information is easily shared, but proper controls are managed too, important when we’re talking about potentially innovative new products.

You can still access the webinar here to find out more about the Meritor story; it’s a great example of procurement looking beyond the norm, and really contributing to those wider goals such as revenue growth.  And at the Ivalua Now “Art of Procurement” conference next month, I’m expecting to hear more examples like that of procurement moving beyond our traditional heartland of cost control and transactional management.

You can book for that here, and join the firm, key clients such as Total, Suez and Deutsche Telekom (and me) in Paris for what should be a stimulating couple of days – maybe see you there!   

Ivalua are sponsoring today’s Big Ideas Summit in London. Sign up now as a digital delegate to follow all the action wherever you are in the world.  

Make 2019 The Year Your Stakeholders #loveprocurement!

If procurement stays in its traditional role within the organisation, I believe will not achieve its potential growth.

By gpointstudio/ Shutterstock

Last year we asked a group of our customers why they ‘#loveprocurement’, and the answers were really a great testament to the evolving role of procurement. Ivalua is a company that was founded to serve the needs of procurement departments. We are very passionate about what we do, but even we were astonished at the wave of procurement love which came our way when we asked the question “Why do you #loveprocurement?” Here are some of the highlights:

A business function in the midst of a huge evolution, moving from optimising costs to becoming the creator of value and growth

Most procurement leaders have focused on some element of cost reduction and this remains an important area of focus. However, we are now at a point where procurement needs to, and can, look beyond cost savings and move to planning for a seismic change. No-one wins the race by just being good enough. In business being as good as your competitors will not ensure your future success. If you do not innovate you will fade away. We asked professionals why they love their jobs so much, and many called out procurement as being a highly innovative and dynamic department, full of creative people adding huge value to their organisations. Does this sound like you?

Last year we worked extensively with The Hackett Group and they published two excellent reports,

State of Procurement Digital Transformation, Part 1: Value Drivers and Expectations and L​essons Learned by Early Adopters, Part 2.​ In these reports they talk about getting the basics right and procurement getting its house in order ie building a data centre of excellence, getting stakeholders onboard, The latest report from The Hackett Group, ​Procurement Key Issues 2019,​ shows how things are moving on this year. Procurement organisations can move beyond best in class, and clearly the will of procurement teams is there to do this. However there needs to be better alignment between procurement and its business goals. If there is a focus on analytical capabilities (which there is), there must also be teams and individuals brought in with the skills to make this happen, that is when procurement will move to the stage of offering competitive advantage, rather than just as good as the competition.

The future of our profession is not written in stone. It is because of this that it is a passionate adventure for creative people

In a recent blog, Ivalua CMO Alex Saric talks recruitment as being one of the top issues for CPOs and their Senior Directors. What is clear from the comment above, is that the procurement industry is attracting top talent. The comment was repeated by many professionals, and what comes across is that people working in procurement are going above and beyond what might have traditionally expected from this sector. Wolfgang Groening, Head of Procurement Sourcing & Vendor Management at Deutsche Telekom talks in this ​short video​ about the fact that he loves to innovate. Wolfgang in particular calls out digital innovation and how this is allowing organisations like Deutsche Telekom to proactively look for ways to bring more innovation, rather than sticking with the transactional elements of procurement alone.

Fannie Mae, like many other organisations, are recruiting procurement experts that can bring industry knowledge and market insight. These experts are addressing their organisations’ needs to know what are the key trends in the marketplace, who are the movers and shakers in the market and where is innovation coming into play. This is so far from the traditional role of procurement as we could get. Sylvie Noel, CPO of French insurance giant Covéa speaks plainly when she says that has modernised her organisation’s procurement function and that now internal stakeholders or customers now have all the information they need from procurement and they either go for it or they don’t (her words). In Covéa, people can no longer moan about the ‘procurement black tunnel’, because Sylvie has brought in a tool which enables highly skilled procurement professionals to interact seamlessly with their customers, cutting out precious time which can be spend on new product innovations.

A function which has a significant impact on the bottom line AND on the TOP line of an organisation. It is a window of innovation from the outside

If procurement stays in its traditional role, the organisation, I believe will not achieve its potential growth. If procurement is just there to be the police and control cost, then that’s not good enough. Each department in any organisation of a reasonable size is making decisions every day which cost the company money. I’ve worked in marketing for 20 years, and some of the decisions I’ve seen made, and no doubt have made myself, have not always been 100 per cent well thought out! Marketing people are creative, last minute merchants, and this can mean that you do not always dot the Ts and cross the Rs. ​Procurement’s stakeholders, like marketing, need help as they too are going through a massive digital growth curve. I should know – I am a procurement stakeholder. As my department, marketing, steps into the great digital unknown, in a market that is constantly evolving we need skilled procurement professionals to help us make decisions which will be strategic to the company, and we are looking for that expertise and partnership. We need help to look at the innovations in our sector, and strong leadership in both marketing and procurement to make sure we are embracing new technologies, spending the company’s money wisely and driving growth. In addition, marketing and procurement departments need to be recruiting the sorts of individuals who collaborate by nature, who see the bigger picture, who are able to dream big, and also keep the end goal in mind.

What is clear from our #loveprocurement campaign and the answers that you gave us is that many of you love your jobs and are really passionate about the direction in which procurement is going. You are also clear that procurement can make a huge contribution to the bottomline and growth of your organisations. Now you need to make sure that your stakeholders feel this passion and begin to feel your influence on the direction your organisations are going.

Ivalua are sponsoring Big Ideas Summit London on March 14th. Sign up now as a digital delegate to follow the day’s action wherever you are in the world.  

Procurement Pros: You’ve Got A Friend In ROI

How does an organisation know that the procurement initiatives, projects, efforts really result in a quantifiable benefit to the business?

By Mercury Green / Shutterstock

As both a former CPO and consultant, I’m often asked about the strategies I have employed to grow, reach and deliver results. Yes, I can tell you stories from past lives of wooing reluctant stakeholders and setting savings records year over year. Actually, the secret to my success in procurement is much less glamorous, and I’d like to share that with you: 

Effectively planning and prioritising initiatives and meticulously tracking ROI through a rigorous project benefit validation process and governance framework are the best ways to increase your organisation’s credibility, dependability, and recognition.

Procurement plays a critical role in the cost management of an organisation.  This is why many organisations are quick to tout the cost savings and bottom line benefits generated by procurement’s efforts. Procurement’s maturity journey, when done right, can last months to years, and often requires significant investments – consultants, technology infrastructure, headcount, and support services. How does an organisation know that the procurement initiatives, projects, efforts really result in a quantifiable benefit to the business? Furthermore, how can the organisation fully appreciate procurement’s value? When the results are not tracked, reported, and kept as the focal point, procurement’s full impact can be overlooked, or underappreciated at best.

ROI is your friend

Procurement intersects across the business’ most strategic functions: operations, finance, legal, while managing critical external supplier and partner relationships. This broad exposure is combined with well-honed skills in cost control, analytics, process, research, contracting, and negotiation, as well as a deep knowledge of the business and company culture. Yet, we are often not given the respect we deserve as a key trusted business partner. Why is that?  Procurement teams tend to sell themselves short by not forecasting ROI and tracking quantifiable benefits for all value-add initiatives.

Identifying project benefits and estimating an accurate return on investment (ROI) can be very challenging for organisations. There are several possible reasons why ROI often goes unmeasured:

Being satisfied too early

Some organisations are satisfied with the general improvement in their financial statements after formalising a procurement strategy, because now a methodology in which to quantify “savings” or “value” has been defined.  When this journey begins, controls are strengthened, initiatives are defined, “low hanging fruit” is addressed, resources are deployed, and as a result, the organisation performs better as a whole. 

Focusing on tactics

Some companies focus intensely on training resources and executing projects in the early stages of a procurement journey, and place secondary emphasis on measuring ROI, believing that the benefits will come.

Can’t find the right formula

Some companies attempt to measure ROI, yet they are unsure how to quantify project benefits generated from procurement, especially if there are multiple ways to measure a successful procurement effort. It is evident that, even considering how well-known or understood the procurement function is to the world, there is still a significant knowledge gap. How can procurement quantify project benefits and truly link them to a company’s financial performance?

The well-reported results of industry pioneers that are more mature in their procurement function, as well as the pressing need to reduce costs and improve productivity, have encouraged company leaders to push their teams to undertake even more procurement initiatives. Sometimes, after an initial burst of enthusiasm, these efforts languish over time, or procurement becomes less engaged than they once were. This can often be because benefits have not been accurately estimated or verified as impacting the bottom line. In some cases, benefits can be reconciled as tangible contributions to the income statement; but in others, benefits may not be so evident during a reconciliation process.  A critical key to success is to ensure that procurement does not miss an opportunity to bring true credibility to their efforts is to implement a process that directly reconciles project benefits to the company’s accounting and reporting systems.

The tools you need: project selection, benefit validation and governance

A strong project governance process is key to the successful project execution and results. A comprehensive project governance process encompasses how projects are identified, selected, executed and reported. However, in most project governance processes, a key element is often forgotten: benefit estimation and validation.

While most organisations recognise the value of properly vetting project ideas and opportunities prior to launching a project, many fail to follow the process religiously for every initiative. Some may launch projects before a proper prioritisation effort has taken place, or others may spend too much time in the idea generation phase. Often, organisations fail to estimate potential benefit prior to project chartering or prioritisation of projects.

Experience has shown that the pressure to get started, or to drive quick results, pushes teams to launch projects without taking the time to adequately plan or determine probable benefits. This ineffective approach to project selection and prioritisation means that projects are often executed without being fully linked to the organisation’s overall strategic goals, and as a result, too many projects are chartered, and few are completed to the company’s expectations.

Not only does a project benefit validation process help with initial benefit estimation during project selection, it adds rigor during project execution by defining project benefits with more accuracy and clarity. This facilitates credible benefit reporting, and establishes a foundation for post-project benefit reconciliation, where benefits can be reconciled to the organisation’s financial statements. Simply stated, the benefits driven by the procurement effort can now be fully understood as to their impact to the business.

A strong project benefit validation infrastructure can support the procurement function as it matures an evolves to take on more challenging value-add activities for the business. It provides not only the basis for identifying and approving projects, but also serves to maintain the momentum and retain ongoing management and stakeholder support to build the brand, extend your reach, and deliver better results year over year.

WNS is sponsoring Big Ideas Summit London on March 14th. Sign up now as a digital delegate to follow the day’s action wherever you are in the world.  

Accelerating Procurement With Contract-Centric Sourcing

Today’s procurement organisations are being asked to move faster than ever to source the materials needed by their companies. How can contract-centric sourcing help?

By Alexyz3d  / Shutterstock

Today’s procurement organisations are being asked to move faster than ever to source the materials needed by their companies.

It’s a difficult position to be in. Under the current sourcing paradigm, the multi-step process of securing the vendor is time-consuming, and even then can expose a company to risk and leakage.

But the good news is that there is another way. In this blog, I will introduce readers to what we call “contract-centric sourcing,” a new paradigm for sourcing organisations that can save millions in leakage and accelerate the buying process.

The current paradigm

The current paradigm looks something like this: first, the buyer issues an RFx, and then evaluates vendors who respond on two criteria: technical and commercial capabilities. The vendor’s technical capabilities relate to whether they will be able to truly fulfill the buyer’s needs. Commercial capabilities relate to whether the vendor’s price for its products or materials fit into the buyer’s profit models.

Choosing a vendor is a business-critical decision, as the wrong vendor can disrupt the entire supply chain, so sourcing professionals want to exercise reasonable caution when making their choice, slowing down the process.

Contract negotiations slow sourcing

Even after a Letter of Intent (LOI) is issued by a buyer, the actual contract still needs to be negotiated. At this point other departments will get involved, including legal and finance. Legal, for example, may recognise that the jurisdiction the vendor operates in requires extra anti-child-labor documentation, and insert a clause requiring that documentation.

Since it is a contract, these clauses will have to be negotiated with the vendor, who may respond by changing the commercial terms of the contract. For example, the vendor could come back and say that the extra documentation will force them to charge more for their product. This back and forth can dramatically slow or even derail the sourcing process.

Non-optimised contracts

After all this time-consuming effort to choose a vendor and then execute a contract, the contracts often return less-than-ideal results. McKinsey and Company estimates that about 3.5 per cent of spend is leaked in the source-to-settle business process. More than half of that leakage is due to noncompliance either with government regulation or internal company standards, both of which come down to a disconnected contract management process.

Using contracts to transform your sourcing process

While this way of doing business has long been accepted as the norm, the paradigm is becoming a major liability as the pace of commerce accelerates. Here at Icertis, we are focused on using digital contracts and AI-infused contract management software to transform companies’ commercial foundation. This includes putting contracts at the center of sourcing.

Contract-centric sourcing is a new paradigm that allows procurement professionals to both accelerate their buying processes while also reducing leakage.

Contracts: a third pillar of vendor evaluation 

Here’s how it works. Contract-centric sourcing introduces contracts at the very beginning of the sourcing process and makes contract compliance a third pillar by which vendors are evaluated, next to technical and commercial capabilities.

Before an RFx is even issued, buyers evaluate past contract data to map out a category strategy that will deliver the most long-term benefits to the company. This helps the buyer craft the right RFx for their business needs.

Then, as part of the RFx, the buyer presents prospective vendors, via a digital contract management platform, with all the contract language they would like the vendor to agree to. The vendor redlines the contract based on its own needs and requirements. Once all vendor bids are in, buyers are able to evaluate how much contract negotiation would be required before choosing a preferred vendor and issuing an LOI. With the help of AI, the buyers can compare vendor redlines and determine which redlines represent acceptable changes and which are red flags.

(Note: A vendor redlining a contract does not disqualify them. It simply surfaces all redlines before a vendor is selected, so that those disagreements don’t rear their head unexpectedly later in the buying process. It’s all about visibility.)

Capturing Negotiations 

Since this process is administered on a single contract management platform, all discussion between the buyer and the vendor about contract language is captured in a single place (as opposed to several lawyers’ email inboxes) for later reference both during the lifecycle of the contract and after.

Sourcing organisations that link contract management and sourcing have a huge wealth of data about a vendor’s past negotiation strategy and behavior, as well as how well they perform against contract language. This is powerful data that hasn’t been fully leveraged in the current paradigm.

The Approach of Leading Enterprises 

Leading enterprises are already adopting contract-centric sourcing. Daimler is using the Icertis Contract Management (ICM) platform to completely rethink how it manages 500,000 suppliers. Daimler officials determined contracts were the natural place to start an overhaul of the procurement system, since it is the contract that underpins the entire buyer-supplier relationship.

“The deployment [of ICM] optimises the source-to-contract process by ensuring best-in-class supplier evaluation, selection, contracting, and collaboration,” said Dr. Stephen Stathel, head of Daimler’s New Procurement System.

The business world is changing. It’s no longer enough for procurement organisations to balance risk with accelerating business; they need to find ways to reduce risk and accelerate the pace of business.

Icertis is sponsoring Big Ideas Summit London on March 14th. Sign up now as a digital delegate to follow the day’s action wherever you are in the world.  

The Science And The Art Of Procurement

As we move towards a new decade is the emphasis in the procurement world changing – are we going to see a new age, where the Art of Procurement comes to the fore?

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Much of our focus in the last twenty years or so within the procurement profession and within our specific procurement functions has been on what we might call the “Science of Procurement”.

The huge growth in the use of technology has been the most visible part of that developing picture. Over the years, we have moved from the first spend analysis initiatives, laboriously building Excel-based “spend cubes”, through to today’s automated, cloud-based, AI-driven, integrated, holistic (add your own buzz-word here…)  procurement platform. Technology has radically changed procurement activities and procurement roles across virtually all our spheres of activity.

Outside the technology field, we have also seen “science” come to the fore in terms of codifying processes such as Category Management. There may be different models in use, but there is a pretty well-accepted logical methodology behind how organisations approach their management of major spend areas. Professionalisation of the function, logic and analysis has also extended into other areas, with a growth in relevant qualifications, all the way through to procurement and supply chain MBAs and even Doctorates.

But, as we move towards a new decade, perhaps the wind is shifting, and we may see a different focus in the next ten years.  Is the emphasis in the procurement world changing – and are we going to see a new age, where the Art of Procurement comes to the fore, alongside the scientific approaches?  I first saw this term used a few years ago by Philip Ideson, as a title for his website and excellent series of podcasts, and it feels like this may be an idea whose time has come.  

However, we would stress that doesn’t mean forgetting the science and (of course) the technology. After all, we’re only just beginning to see what AI and machine learning might do to revolutionise procurement and supply chain management; the possibilities are endless and hard to predict.

But we are also seeing increasing focus on issues such as;

  • how procurement can successfully influence, engage and collaborate with internal stakeholders to drive value;
  • procurement being asked to support development of unconventional business models that move beyond traditional buyer / seller (partnerships, JVs, large firms running start-up incubators, etc); and  
  • capturing and exploiting innovation from supply markets and individual suppliers becoming a top priority for organisations and therefore procurement functions.

When we look at that sort of activity, we can see that it is very different to the standard procurement processes – spend analysis, competitive sourcing, purchase to pay management. Now those core tasks and issues are not going to go away, and we would not want to suggest procurement leaders take their eyes off those particular balls or stop trying to execute this work as effectively as possible! But adoption of technology, automation, and best practice process is not the ultimate objective; it is a means to an end. 

The emerging strategic priorities for our organisations require different approaches from procurement, different skills sets amongst staff, and critical success factors such as creativity, flexibility, adaptability and even imagination really start to come into play. In addition, our expectations and requirements of technology must evolve as well, to support not just rapid deployment of standard best practices, but the ability to bring our best ideas to life and promote agility.

So, this talk of creativity, agility and innovation all starts sounding and feeling much more like “Art” rather than pure “Science”, and it is interesting to see that technology firm Ivalua has titled the Ivalua Now 2019 conferences this spring (in Chicago and Paris) the “Art of Procurement”.  To support that, the firm hopes to challenge the speakers to go beyond the usual “journey to best in class” descriptions and include their reflections on how procurement is embracing change in their organisations. How will procurement leaders contribute to generating real competitive advantage, to growing business revenues through innovation – supporting the top-line as well as the bottom line, as it were.

I’ve argued elsewhere that actually, if procurement doesn’t change and widen its scope, we in the profession may face existential issues of survival, as technology advances further. So, in our next two articles in this series, we’ll look at case studies that demonstrate the sort of innovative approaches procurement organisations are taking and how considering the Art of Procurement might secure our future. And finally, you can register for the Ivalua Paris event here if you want to participate in what should be a stimulating couple of days, from April 10th-12th.

Ivalua are sponsoring Big Ideas Summit London on March 14th. Sign up now as a digital delegate to follow the day’s action wherever you are in the world. 

4 Factors To Consider When Upgrading your Procurement OS

An upgraded operating system (OS) takes the procurement function out of the traditional back-office role, and into that of a valued strategic business partner.  

By Preechar Bowonkitwanchai /Shutterstock

That little flag in the corner of your laptop screen, the red exclamation mark on your phone, the middle-of-night system message. You know what it means- it’s time to upgrade your operating system.

Yes, it’s painful to exit your programs, save your work, and sadly close all 35 of your vacation-planning web browser tabs.  You sit, you wait, then you reboot and possibly even get reacquainted with your digital systems again. No one wants to do it, but in the end, we all are all thankful to those glowing, pulsing indicators for pushing us and guiding us through the process for that much-needed refresh.

Things run so smoothly now, don’t they?

What if we received the same upgrade reminders in real life?  What would your red exclamation mark tell you about your procurement operating system? Is it time for an upgrade?  Almost definitely! An upgraded operating system takes the procurement function out of the traditional back-office role, and into that of a valued strategic business partner.  

The transformation, however, can neither happen overnight nor without setting the right goals and planning.  You’ll need to close some browser windows and maybe lose a few saved files in the process. In our decade-long process of co-creating this operating model with leading global companies, we have identified four key enablers required to help you upgrade. Read on and trust me, it will all run so much more smoothly in the end.

Structure of Upgraded Procurement OS

1. Strategic Category Management

At the heart of the transformation is the shift that procurement has to make from being reactive problem solvers to proactive solution providers. This is not possible without category managers or business-aligned spend managers aligning with the business, understanding strategic priorities and building relationships with stakeholders. When category managers proactively reach out to the business, they begin to demonstrate value and finding a place at the table will become easier.

Building a centralised Center of Excellence (CoE) can help category managers develop the required skills. The CoE can provide the necessary support such as tools, methodologies, templates, market intelligence and coaching.

2. Centralised Procurement Help Desk

On any given day, procurement functions are inundated with queries and work requests. As procurement transitions to operate more strategically, it is critical to find an effective way to service internal and external stakeholders.

Setting up a centralised procurement desk can help channelise the requests to various specialist teams such as:

  • Strategic support team that can be responsible for services such as market research, category strategy development, stakeholder workshops and portfolio development
  • Source to manage execution team thatcan manage the execution of activities such as creation of request for proposals, supplier management and contract authoring
  • Transactional execution team thatcan manage back-office operations such as purchase order management and invoice-to-pay processing

3. Technology Accelerators

The digitisation of transactional and repetitive procurement activities is a low-hanging fruit for organizations as it will release the bandwidth of resources for more proactive, strategic planning. Further, digitisation can help identify patterns, norms and trends leading to a procurement playbook.

Supply chain management is experiencing a quantum shift because of emerging technologies such as internet of things, artificial intelligence and advanced analytics. Adoption of these technologies, is critical to upgrading procurement’s operating model, but it should be planned well. It is necessary to define the overarching vision and strategy, and to then evaluate how technology fits into the roadmap.

4. Implementation Approach

The final piece of the puzzle is the actual re-organization of the procurement function into the new operating model. It is a myth that technology by itself will be enough to integrate all processes. Putting together the right team, getting executive sponsorship, ensuring alignment with the vision and finding collaborative external partners are all critical success factors in upgrading to the optimal OS for your organisation.

This is where the smart phone operating system analogy falls a bit short- unfortunately, we, as the procurement team, can’t expect to wake up to a fully-restored bug-free system- good results take time. It is necessary to plan for adequate time required for the new model to mature and assimilate into the organisation’s new way of working.  If this is done correctly, your stakeholders will certainly experience the thrill of a significantly improved experience. 

Now is the time to upgrade your framework and develop the future infrastructure for procurement operations.

Are you ready to push the upgrade button? Learn more by reading WNS’ Next Generation Procurement Model Whitepaper.   

WNS are sponsoring Big Ideas Summit London on March 14th. Sign up now as a digital delegate to follow the day’s action wherever you are in the world.  

Taking Control Of Your Supply Chain With Blockchain

Organisations are increasingly striving to develop a supply chain that adheres to their brand’s sustainability and ethical standards. Here’s how blockchain can enable this…

By Demkat / Shutterstock

As our global supply chains become more and more complex, ensuring that contractual commitments around sustainability and ethical practices are met at each stage of the supply chain has become extremely challenging.

Along with this increased complexity, the economic and reputational cost of a lapse in compliance is increasing as well. Organisations want to be part of the solution, not generating bad headlines and being seen as part of the problem.

As such, organisations are increasingly striving to develop a supply chain that adheres to their brand’s sustainability and ethical standards. Starbucks, to name one example, has set a 2020 goal of ensuring all tea and cocoa is ethically sourced. Johnson & Johnson has publicly stated its commitment to determining the use, country of origin and source of 3TG minerals (Tin, Tungsten, Tantalum and Gold) used in its global product portfolio. Such commitments require extreme and committed due diligence in supply chain management.

One way that forward-looking businesses are achieving such diligence is with enterprise contract management. For the first time in the history of commerce, contracts are being completely digitised. This enables procurement organisations to identify, assess and automatically mitigate risk through advanced capabilities like automated supplier checks and region-based regulatory compliance. And emerging technologies like blockchain and artificial intelligence (AI) are poised to dramatically increase the benefits of an enterprise contract management platform.

Today, we at Icertis are working with customers on solutions that will allow them to utilise smart contracts that use a consortium blockchain to create an immutable ledger of transactions. Under such a system, a customer and its suppliers will place their contracts on the blockchain, thus ensuring that the required terms are present in all the related contracts. Once on the blockchain, AI will verify that all necessary contractual obligations are present in the documents. This will ensure the tracking of commitments across a consortium of suppliers, enabling a new level of commercial collaboration, visibility and accountability.  And to ensure sensitive information is not exposed, visibility of contracts in the chain will be restricted based on privileges that allow only contracting parties to see their contract, preserving the sanctity of the supply chain.

This technology turns contracts into living business assets to achieve once-divergent goals.

Manufacturers can ensure their suppliers comply to standards and contractual commitments around privacy, sustainability and labour laws. Suppliers, meanwhile, can prove that they comply, while not exposing the details of their subcontracts within the supply chain.

And it’s not just about tea, cocoa or conflict minerals. This technology can also enforce compliance requirements like data privacy (including GDPR), information security, ITAR (International Trade in Arms Regulation) and other regulations.

We are entering a new era of commerce, when contracts stop being static documents forgotten about after execution and actively start reducing risk and creating value for enterprises throughout their lifecycle. Smart contracts powered by AI and blockchain can protect and optimize businesses in ways never before possible, including in their supply chain.

Icertis is sponsoring Big Ideas Summit London on March 14th. Sign up now as a digital delegate to follow the day’s action wherever you are in the world.