Tag Archives: c-suite

Procurement’s Time To Lead Is Now. Here’s How to Take Advantage.

A new survey of 500+ professionals reveals where procurement must focus to establish leadership and earn executive trust.


Procurement: it’s your time to lead. New research from Procurious and Coupa, released today, reveals that nearly two thirds of professionals have seen trust increase with the c-suite over the past three months. Similarly, more procurement leaders report having a seat at the executive table today compared to May, when we asked the same question as part of our Supply Chain Confidence Index.

“Procurement leaders continue to step up and executives are taking notice,” said Tania Seary, Founding Chairman of Procurious. “Procurement plays a critical role in navigating the uncertainty we face today. The function’s stellar performance opens the door for more – more recognition, trust, and opportunities to lead. It’s time to take advantage.”

Procurious and Coupa surveyed over 500 procurement and supply chain professionals in July to assess the state of the function and what’s on tap for the second half of 2020. Reflecting on procurement’s strategic position within the organisation, just one-fifth (21%) report that they are still being viewed tactically internally. While that number is still higher than we’d like, most would agree that for a function that’s historically struggled to stand out and get the recognition it deserves, we’re moving in the right direction – in a big way. Consider that over the past three months, only 7% said they did not see trust increase between procurement and the c-suite.

“Procurement today has a clear opportunity to capture our seat at the table. The findings of this survey highlight how important it is for us to think strategically and ensure our objectives are aligned to the board and our peers in the c-suite,” said Michael Van-Keulen, CPO, Coupa. “We must step up to help our organizations not only control costs, but also mitigate risk, maximize value, and increase the agility needed in today’s business environment.”

These results build off Procurious’ research findings from earlier this year. “In June, we uncovered clear indicators that the c-suite was paying more attention to procurement and supply chain. This trend is accelerating as executives recognise procurement’s unique and essential position in the ongoing recovery,” said Seary.

Procurement leaders looking to capitalise on this newfound opportunity should focus on delivering results that increase resiliency and continuity, and improve the bottom line. According to our research, the top three areas the c-suite wants procurement to contribute to are mitigating supply risk (70%), containing costs (69%) and driving business continuity (64%).

“At first glance, we’re seeing a back-to-the-basics approach for procurement teams, with a laser focus on savings, spend visibility, resilience and risk mitigation. However, when you step back you quickly realise this approach is anything but traditional. The desired outcomes may be similar, but companies are investing more strategically, aggressively and intentionally,” commented Seary.

Second Half Procurement Priorities: Controlling Costs and Risk 

Procurement’s top three priorities for the second half of 2020 are similar to what we referenced above: containing costs, mitigating supply chain risk, and supplying the products and services needed to maintain operations.

Naturally, managing supply chain risk remains front and center for organisations across the world. But risk takes on many different forms. What are executive teams most concerned about right now? The top five areas, in order of concern, are:

·       Operational risk

·       Supplier Risk

·       Business environment risk

·       Reputational risk

·       Cyber risk

Interestingly, the most prominent risk differs geographically. In North America and Asia Pacific, executives are most concerned about cyber. In Europe, the primary concern is operational risk. Either way, stronger investments in supply chain risk management will undoubtedly become one of the lasting marks of COVID-19. Mature procurement teams will never take supplier health, collaboration and risk lightly again.

When it comes to business risk, there’s often more than meets the eye. The survey also found that more than 80% of organisations have significant gaps in spend visibility, which is its own risk. This finding poses an important question: How can procurement teams lead and control supplier risk if they lack full visibility into where money is being spent?

Equipping Procurement to Lead and Thrive

Looking at the next 6 – 12 months, economic uncertainty was the number one concern for survey respondents, followed by cash and risk. Given the stakes – and procurement’s proven ability to add value in business-critical areas, including risk, resiliency, and cost containment – the majority of organisations (93%) are investing big to propel procurement forward. The top three investments organisations are making in procurement leadership are:

·       Data and analytics

·       Talent development

·       Technology

“COVID-19 continues to act as an accelerant for procurement transformation. The business case is right in front of us, and organisations are investing accordingly.” said Seary. 

While organisations are finally stepping up to fund procurement initiatives, the function still has an important role to play to shape the future. 

“We need to ensure the investments are strategic, and not tactical. We need to set the agenda, and ensure the c-suite’s vision for procurement is aligned with what we know is possible. It’s our time to lead, and we need to do it right,” said Seary.For more insights – including details on procurement priorities, operational gaps, investment strategy, supply chain risk and more, join Procurious and get the full report: Procurement’s Time to Lead.

A Letter To The Board

Sorry to bother you, I know you’re all so much busier than me. It’s me, the chief procurement officer; the one who buys the custard creams.

By mpaniti/ Shutterstock

Dear C-suite,

Sorry to bother you, I know you’re all so much busier than me. It’s me, the chief procurement officer; the one who buys the custard creams.

Just wanted a word about this procurement lark that I’m beavering away at, while you all do much more important stuff like tweeting the latest thought leadership thought. It’s just that I’m feeling a bit, well, ignored by you all.

No, finance director, I haven’t come over all touchy-feely, though it would be good if you did; don’t you know empathy is one of the key skills of the future, even in the finance function? I have more hard facts than you can shake a stick at, if you’ll bear with me. Yes, that means you too, CEO.

I know procurement is hardly the bad boy of the C-suite, but let me tell you, that’s about to change. Think Olivia Newton-John at the end of Grease; that’s how much procurement is about to change. No less a person than Kai Nowosel, Accenture’s procurement chief, agrees with me. “I want to break the mould of traditional procurement,” he says. “Procurement is the tinder of innovation. I want to get into that model of being sexy instead of being a back-office function.”

See? But I’m not feeling the love. I know some of you are a bit vague about what I do; let’s face it, less than 10 per cent of global corporations have a board-level procurement director. So here’s your starter for ten: how much of the value of a company’s products or services is derived from its suppliers? Anyone? No? Almost two thirds, that’s how much. Write it down in your notebooks; 65 per cent, according to CAPS Research for the Institute for Supply Management.

And here’s another fun fact: world-class procurement organisations have 22 per cent lower labour costs, according to the Hackett Group. I heard that, marketing! Yes, of course I’m running a world-class procurement organisation. This company’s costs would be a darn sight higher without me.

That means you’ll miss me when I’m gone. No, public relations, it’s a figure of speech, I’m not actually going. Here’s an example of why procurement is important. The government has plans to name and shame anyone breaching the slavery law. So I’m the one standing between you and those headlines about our products being made by vulnerable illegal immigrants living in sheds, because you used some dodgy temp agency. Do you want to finesse that kind of PR disaster? Thought not.

But I could do so, so much more if only you’d put a bit of welly behind me; everyone seems to be getting a piece of our digital transformation except me. Fewer than 10 per cent of companies have deployed procurement solutions based on key technologies such as big data, the internet of things, serverless architecture or blockchain technology, according to Procurement Leaders (that’s an intelligence and networking company just for people like me).

It’s just not fair, especially when I could save up to $86 billion a year with a fully automated procurement function. Well, when I say “I”, I mean the Global 5000, but that’s 5,000 of my closest friends.

The thing is, digital is going to mean a bit of an upgrade in the old skills front. I’ll be honest, chairman, it’s going to be tough for that uncle of yours who works with me. But he did join the procurement department in 1973, didn’t he? I bet he’d rather work on his golf handicap than learn about embedding data science and analytics expertise.

So there might be some work to do for you, HR. Egeman Tumturk, global sourcing director at Bugaboo, said digital “requires a huge change in talent and the way we do our day-to-day activities, our jobs”, when he was interviewed by Procurement Leaders for its CPO Insights. He called it “a revolution”.

See, that’s really what’s happening here. We’re not talking about a bit of an upgrade, a few new smartphones and fling in a bit of software while we think about it. This is properly transformational; it’s not just about efficiency.

My job is about to morph from tactical biscuit-buying to strategic business innovation; that’s what management consultants Bain & Company says, anyway. “Artificial intelligence and robotic process automation are automating manual tasks and freeing up time for more strategic activities,” wrote Coleman Radell and David Schannon last autumn. “Digital technologies also provide a competitive edge by improving the speed and quality of procurement, reducing risk and enhancing innovation.”

Let’s face it, you need me to do this stuff, otherwise we’ll be overtaken by our competitors, who are already using advanced analytics to get value out of their historical data. It’s not really an option to leave me with an Excel spreadsheet and a glitter pen any longer.

Like me, Accenture’s Mr Nowosel sees the procurement role moving away from simply control and compliance, and into a core business function. It’s now about finding the right partners in the ecosystem, mitigating risk, protecting the brand and staying competitive. He says: “Getting competitive is more than having a great negotiated price. It is having the right solution for your customers at the right point.”

Couldn’t have put it better myself. We have a hyperconnected and increasingly transparent world out there and I’m the one with the bird’s eye view of it. If you invest in me and provide me with the right tools and people, I can develop an agile ecosystem that learns from its mistakes, protects our corporate reputation, cultivates a sustainable supply chain, delivers real-time data insights and predictive analytics, and saves you money – worth more than a few chocolate Hobnobs I expect…

Best wishes,

Chief procurement officer

This article, edited by Peter Archer, was taken from the Raconteur Future of Procurement report, as featured in The Times.  


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Three Technical Terms Procurement Pros Should Stop Using Now

Do these technical procurement terms have a place in today’s organisation?


By pathdoc/ Shutterstock

Technical procurement terms. Whether you love ’em or loathe ’em you’ll probably have experienced definition disagreements and C-suite confusions. And that begs the question, do they have a place in today’s organisation?

For Nick Dobney, Former Global Head of Procurement – Puma Energy, procurement terms is the one thing that really gets under is skin. “There are terms that my C-suite won’t understand, my stakeholders won’t understand and, frankly, in procurement we spend a lot of time debating them as well.”

Nick believes that all the time and effort spent defining and redefining technical procurement terms is distracting procurement professionals away from delivering on behalf of the business. At Big Ideas Zurich last year, he outlined three of the terms causing him the most grief.

1. Tender

“My team know full well to never come to me and talk about tenders,” Nick jokes. He argues that “tender” is such a broad word, open to so much interpretation, that it has actually become meaningless.

“What do you want to do?” he asks. “Are you selecting a supplier? Are you exploring the market? Are you benchmarking your costs? If those are the things you’re doing, let’s say them. Let’s not wrap them up or hide it into the word “tender.”

2. Direct/Indirect

In procurement we constantly talk about direct and indirect spend.

“I’ve been in procurement for 25 years and I’ve never worked in a manufacturing company.” In a manufacturing company it might make total sense to use these terms and easy to understand the difference between direct and indirect spend. But the same can not be said for service companies.

Nick worked for an airline, where the distinction is unclear. “We bought aircraft, we bought fuel, we bought engineering services, we bought food and drink, we bought ticketing systems, we bought call centre operations. What’s direct and indirect?”

“In my world when I talk to the C-suite I need to talk about impacting operating expenditure, capital expenditure or the cost of goods sold.” Whilst it might be ok to reference indirect and direct spend amongst procurement professionals Nick advises not to waste energies trying to explain the terms to the wider business.

3. SRM

Some call it Strategic Relationship Management. Others say Supplier Relationship Management. “I don’t think [a room full of procurement professionals] could come together with a single definition,” says Nick.

“I know I’ve never used the words SRM in conversations with the CEO. The fundament of SRM means getting the best performance I can out of the suppliers I choose. So let’s talk about it as performance. Let’s talk about it as a means by which I get the performance I require in my business from my supply base and from my suppliers.”

Speaking in these accessible terms makes the procurement function accessible to business leaders and that’s what procurement professionals should be striving for. “We want to break those doors down. There’s lots of talk about getting procurement a seat at the top table and the first thing we have to do is make sure these terms we’re talking about – we only use amongst ourselves!”

Impacting the business

“The terms we use with our business leaders has got to be the terms that they understand,” Nick explains. “Can you explain simply and straightforwardly the impact you are having on the business?”

Leaders in your business want to know:

  • Are you taking assets of our balance sheet so we can free up resources to invest in product development?
  • Are you improving our margins?
  • Are you getting a better return on our investments?
  • Are you reducing our net debt?

And as Nick says, “the language we use is fundamental to how we can move away from being seen as a very technical function into being a function that really does contribute to the business.”

Nick Dobney speaking at Big Ideas Zurich 2018


How To Get Supply Chain A Seat At The Table

If supply chain pros can secure a seat at the table, it becomes easier to to share insights, challenge processes, support the business and be part of strategy creation – ultimately delivering value.

Laura Faulkner, CPO and Director Supply Chain Management for Nationwide Building Society, is truly passionate about developing the profession in order to raise its value and reputation within the business.

“As a fellow of CIPS I really am very keen to take on an active role in working across all industries; sharing best-practice and learning from the best of who’s out there.”

Laura is a firm believer that  Supply Chain functions act as an extension of the organisation as a whole and in her role at Nationwide Building Society she has led by example, “leading a team that supports the delivery of our business strategy but doing so in a really collaborative way with stakeholders and suppliers. Our suppliers and partners are simply an extension of our own firm . We have the ultimate responsibility and the actions of our suppliers reflect on us.”

Recent events have truly tested this mentality.  The collapse of Carillion, one of Nationwide’s biggest suppliers, in January 2018 hit particularly hard.

“When [Carillion] collapsed on 15th January we really did have only two areas of focus. One was to secure the services which was everything from security, reception, data centers and maintenance.

“But we also had to do the right thing by all of the Carillion staff that had served Nationwide for a number of years. Within six days of the collapse we in-sourced all 300 members of staff and directly contracted with the 160 sub contractors.

“To me sharing this kind of story shows how we can add value not only to our own organisation but also in sharing it across other industries. We’ve all got things we can learn from each other and it’s very key that we play a pivotal role within our organisation. We are that link to the supply chain, we do not outsource the risk that the supply chain brings and we have to take full responsibility.”

Getting (and keeping!) supply chain’s seat at the table

We were really interested to hear Laura’s thoughts on how supply chain professionals can secure a seat at the table.

“Well it’s easier said than done ,” she admits, “and at all the firms I’ve worked with it’s been something we’ve pushed for. We really do need a seat at every relevant table whether that be the investment boards or the strategy committees – you need to be part of the discussion not someone brought in and brought up to speed outside of the meeting.

“It’s easier when you’re sitting round the table to give your insights, to challenge, to support and really be part of either the decision making or the strategy creation.”

But, as Laura points out,  it’s always easier to get that first invite to a meeting.  It’s keeping the seat at the table that’s really challenging. “If you want to be kept at the table,” she suggests “you need to be able to add something and bring some unique, different types of thinking. [Supply chain management teams] are one of the strongest links to the outside world. Use it and you can bring insights and innovation.”

“We’ve just announced at nationwide that we’ll be investing a further £1.3 billion of investment into our new strategy and we are fully engaged in making that happen.

“I’ve been working with the CTO  – we’ve been holding meetings and strategy sessions with all of our key partners and investigating new possible supply chain partners and it’s that engagement and listening to what our suppliers have to say that will really help us develop the strategy further and ultimately deliver it.”

Laura Faulkner is speaking on Day Three of Career Boot Camp 2018. Sign up here (it’s free) to listen to his podcast now.

How To Upgrade Your Procurement Mindset

In a world where cost-savings are no longer king in procurement, how can the function demonstrate its business value and earn a seat at the table? Jaime Mora talks upgrading your procurement mindset!

In recent years, our organisations have gotten a better understanding of the valuable contribution Procurement can deliver to the business.

And yet, there remains a feeling that the function has not yet reached its full potential. Procurement is certainly a relevant and appreciated corporate function. But we’re not yet sitting in the C-Suite…

As procurement professionals, we unanimously agree that the function should be elevated within the business, but convincing those at the top is easier said that done.  Whilst all organisations consider implementing cost-savings to be a crucial part of business success, it’s no longer regarded as a strategic process or a competitive advantage. Leaders are becoming increasingly aware that savings alone will not distinguish them against  their competitors. As such, procurement can be dismissed within the business as a less important function.

The bottom-up approach

If traditional procurement contributions are not at the top of an organisation’s agenda, how can procurement earn its place in the C-Suite?

It’s difficult to find a “one size fits all” recipe but we could start by upgrading our procurement mindset. I propose that we rebrand  ourselves as: “External Competitive Advantage Strategists.”

But what on earth does that mean?

As it stands, we’re  pressured into taking a bottom-up approach to our work. We know we have to bring savings to the table, we achieve this, and only then do we start thinking about the other nice things we can do with our time; innovation, sustainability, supplier development etc. And we deliver on those things too.

It makes sense that the more value-adding contributions we make, the more arguments we have to justify a spot, and a voice, at the highest levels of the organisation.

But in reality,  we end up doing bits and pieces here and there, following trends and simply trusting our gut.

Taking this approach is one of the reasons that procurement objectives and output may deviate from actual business goals.

Taking a top-to-bottom approach

If we truly want to step up our contributions, we should be taking a top-to-bottom approach. Our organisations operate in highly competitive environments, where sustainable advantages are required in order for us to outperform our competitors.

Procurement is uniquely positioned in the business given our access to so much information from our supply networks and an awareness of the opportunities here. We’re in the perfect position to source more than just products and services – we can actually source competitive advantage.

Procurement is capable of seeing things strategically. We can analyse where our organisation stands in a competitive environment and we are capable of both meeting our business targets and identifying where and how our organisation could compete better.  To take a holistic approach, this should be complemented with strategic analyses of our suppliers.

As I mentioned at the beginning of this piece,  cost-savings will always be appreciated. But procurement’s work should never be limited to that. The new approach to procurement is about sourcing the external competitive advantages on offer to give our organisation unique advantages in a competitive environment.

Imagine the following scenario: one of my organisation’s strategies is to develop its people. From my knowledge of the supply market I know a particular supplier that is uniquely skilled in people management and development and this makes them the most competitive supplier. We have the power to bring this supplier to the table; to initiate the discussion to build a partnership and leverage the supplier’s competitive advantage, or even a vertical integration.  Boom! Now Procurement is sitting at the M&A table.

As saving becomes a commodity and not a priority, it is time to reinvent procurement. Leave the Procurement Manager title behind and become a External Competitive Advantage Strategist!