Tag Archives: CPO Forum 2016

Have you met the Chief Procurement Officer of the Year?

It’s taken less than two years for Johanne Rossi to implement and lead a major transformation at fuel and oil giant Caltex Australia.

Johanne Rossi

Her goal is to transform the company to become the customer of choice for suppliers. What this means is Caltex gets higher quality, a lower total cost of doing business, priority supplier support and access to the latest innovations.

“I came on board to kick off this journey for Caltex procurement at a time when Caltex was transitioning to stay current and create a bright future for itself. We realised that the fuel industry is being challenged with new trends and new competition is entering the market. The entire procurement function and what we stood for as a company needed a complete rethink,” Rossi says.

The process required long-standing internal silos to be broken down so that company teams could integrate and work closer together through the change, challenging the status-quo and doing things smarter.

The confidence and determination she displays in her role with Caltex are some of the key reasons Rossi has been named Chief Procurement Officer of the Year at the 9th Asia-Pacific CPO Forum in Melbourne.

Upon winning the award, Rossi praised the work done by The Faculty’s Founding Chairman, Tania Seary, adding that the innovation and collaboration she’s fostering within the procurement community is vital to ensure the function evolves.

At Caltex, Rossi is responsible for a $1.8 billion spend. She’s led a transformation program of the entire procurement function, leading to a saving of more than $100 million through improved agreements, cost avoidance, process improvement in both Opex and Capex and revenue generation. She is credited with delivering on company-wide strategy, and creating value in key supplier partnerships.

Rossi, meanwhile, came to Caltex after being headhunted for the role. She has a background in FMCG, management consulting, mining, airline industry and also construction with blue-chip companies like Nestle, Qantas and Accenture.

A determined approach to CPO leadership

“I recall during the interview process for Caltex I was asked about whether I was aggressive in my approach and how determined I was. It was a strong indication of what sort of leader they were looking for in the role.”

Rossi has had to rely on these skills to implement far-reaching cost reductions, as well as a major review of what the procurement function encompassed within the company. This has involved re-structuring and organising internal teams in new ways to better partner with stakeholders and supply partners. A global sourcing team has also been set up in Singapore. A procurement innovation manager has been hired to achieve benefits for the company in the longer term, such as finding new, mutual value with supply partners through innovation and implementing efficiencies. The focus of the team is on reducing the total cost of ownership of external goods and services for the company, bringing innovation from supply partners, reducing wastage in dealings with partners, as opposed to just being price focused, says Rossi.

“I believe that a lot of people know how manage and evaluate tenders, but that’s not where we want to spend most of our time – that’s not where the sustainable value lies. As the role of procurement within Caltex evolves, we want to be spending more time in building internal and external relationships, and developing stronger business and commercial skills.”

A supplier relationship program called Catalyst has been developed and is currently being rolled out. It focuses on building mutually beneficial relationships with supply partners, and goes beyond supplier performance management, Rossi says.

“The entire focus for us is to become the customer of choice for our suppliers. To do this, we’ve segmented our supplier base, which consists of about 3,500 suppliers. It’s very difficult to treat each of our suppliers in a special manner, but that’s what we’re working to achieve,” Rossi says.

“We’ve also worked to get closer with internal stakeholders to better understand their growth targets and how we fit into those and bring solutions from our external spend networks. We’ve transformed relationships with our suppliers. We want to have a far more frictionless relationship with them by integrating systems, simplifying the transactional activities, and benchmarking our actions so that our achievements are visible.”

While the transformation process has been under way for more than 18 months, there are still a number of improvement efficiency opportunities that Rossi wants to implement. Conscious of the evolving workforce, she is interested in looking at ways to better organise the procurement function and create new skills to find greater efficiencies, continuously bring new value and anticipate the future, she says.

“My focus is on creating a strong team that will be nimble and adapt to the changing conditions of the market and the company. A team that will develop new capabilities to create its own future, focused on continuously bringing new value.”

“The experiences I’ve had in my career have made me a stronger person. It’s been a tough journey, even though I’m fully aware I have sometimes created my own obstacles. I now want to give back and make the journey more enjoyable for others if I can.”

“Thinking about how you can better support those around you is paramount”, says Rossi. “The world is completely different to what it was a decade ago. It’s incredible to realise how much impact you can have on others’ lives.”

The  2016 CPO of the Year Award is sponsored by Avetta Global.

Unlocking the Hearts and Minds of Millennials

A Millennial warned a room full of procurement leaders that they need to rethink their mindset if they’re ever going to win the hearts and minds of Millennials.

Hearts and Minds MIllennials

Too many Australian leaders overlook the fact that 50 per cent of the world’s population is aged under 30, and have no idea how to effectively communicate with them.

Holly Ransom is the CEO of Emergent Solutions, which works with leaders, organisations, and governments, globally to set the benchmark, and be frontiers of change and innovation.

It helps challenge their thinking, evolve their strategy and build their capability to engage with market disruptions head-on, unlocking new opportunities, outcomes and value.

Trusted Sources

The room full of procurement leaders collectively leaned in while Ransom spoke, captivated by her high energy talk despite it being the last session of the 9th Asia-Pacific CPO Forum, held in Melbourne last week.

Ransom outlined some research around purchasing decisions among Millennials that found that 1 per cent of Millennials trust advertising, 30 per cent trust blogs, while the majority are looking for some sort of online reference before making a purchase. And 65 per cent of Millennials are judging companies and businesses based entirely on their digital presence.

“Sometimes we seem to forget that half of the world’s population is under 30; probably because we spend so much time talking about the other end of the spectrum – the elderly.”

She urged the room to bear in mind that the average American male has spent 10,000 hours gaming by the time they reach of the age 18, which is exactly the same amount of time they’ve spent in school.

“It’s about thinking about how you can leverage that to your benefit,” she says.

Feel Connected

The procurement sector needs to understand that trust is manifesting in new ways, citing the fact that people are prepared to jump into a car with an Uber driver they’ve never met, and appear to feel safe.

“This younger generation wants to see, connect and feel. They want authenticity from our brands and businesses, and they want to see that footprint extending to something far more than just shareholder returns.”

Ransom also touched on the changing face of the workforce, explaining that Millennials with a laptop and a few clients much prefer to work from anywhere.

“Freelancing is a reality and it unlocks the global human capital pipeline, which presents huge opportunities for businesses. You can hire someone to handle a project for you, rather than having to hire a new employee.”

The benefits of being able to outsource to a freelancer includes allowing leaders to think more laterally, and spend more time on their leadership approach, she says.

“Through leadership when dealing with consumers and suppliers, we need to make sure that Millennials can see, touch and feel what we’re trying to get across to them. They want to come on the journey with you.”

The ‘Why’ in Communications

Ransom also spoke about her initial cynicism toward Rotary International when invited along to a meeting, but the statistics prompted her to get involved to bring about change.

“When I thought about Rotary, I thought of pale, stale and male. I couldn’t believe it when I was told that there were 1.2 million members, and yet only 12 per cent of that were women, and 2 per cent of that were under 30. Hearing that was enough for me to want to get involved.”

Ransom has helped Rotary lead with the ‘why’ in their communications to help build engagement, and better explain what they’re about.

“We realised that Rotary focused too much on the youth message. It’s a classic example of how easy it is to assume that our why, is someone else’s why. And that wasn’t the case here.”

Ransom ended by giving an example of innovation that involved a young girl who was given $10. She used the cash to hire two DVDs, which she played them in two halls, and charged everyone a few dollars to come and watch the movie. She turned that $10 into more than $300, in a clear demonstration that innovation doesn’t have to be expensive.

“I challenge you to think about what that $10 could do to build engagement in your business in the next two weeks. We need leaders to stop thinking that innovation needs to be hugely expensive, and that you need entire teams to drive innovation. That’s just simply not the case.”

Using Community Collaboration to Create a Change Narrative

Finding a way to create a narrative for change can be the difference between an organisation being able to successfully adapt, or not.

Wheeler Centre - Change

One speaker at the 9th Asia-Pacific CPO Forum opened the collective eyes of the audience to the possibility of change, and what that might look like.

Michael Williams, CEO of The Wheeler Centre, a public institution devoted to engaging conversation and Melbourne’s literary advocates, supporting the nation’s literacy activity.

Sharing Ideas and Conversations

Founded, and funded by a State Government injection, in 2009, it supports the health and vitality of the writing and ideas ecosystem. The centre also contributes to a deeper thinking society, and enables the storytelling and story-making that builds communities around the sharing of ideas and conversations.

“I’m very concerned that words used by companies in Australia today are losing their meaning. We seem to be forgetting how we use them, and how they can help customers and run businesses,” the head of the new cultural institution says.

Words such as agility, innovation and disruption, for example, he told the audience.

“We say these words as a sort of shorthand. I’d suggest that we need to stop and think about the words we say, and how we refer to them to do business. We say these words and repeat them to each other, and they’ve ended up being very much like those messages they play about piracy at the start of a DVD. They just almost cease to exist.”

Williams says he hopes that the Wheeler Centre gets to the bottom of some of these words, unravel what they actually mean, and change the conversations and business practices.

Challenging Perceptions

More than 200 events held across Melbourne each year challenge these perceptions, and work to extend the literary culture in the southern city. Speakers discuss everything and anything including pop culture, politics, history, literature, art and ethics. These discussions happen in Melbourne three times per week, and an average of 180 attend to the three weekly events.

Business custodians need to understand that people used to identify themselves as being readers of one of the local newspapers, but as the media landscape shifts, that’s no longer the case.

“We don’t identify ourselves as being a reader of The Age, or Herald Sun anymore. The internet is the biggest disrupter we’ve ever seen. It’s a challenge that we all need to get our heads around.”

Businesses need to understand that instead, consumers are looking to identify with authentic stories from brands.

Williams finished by pressing on the audience of procurement professionals in the room to consider that inviting people to be part of your own conversations, can be a hugely powerful way to engender broader engagement.

“True conversation starts with a question, so you need to consider how that might play out in your organisation, and find a way to make it authentic, rather than just hollow words.”

Digital Economy, Disruption and the Future of the Payments Industry

Faster payments and customer demand is disrupting the payments industry, but PayPal say that the future is bright.

Digital Payments Industry

It may have been a boring space 20 years ago, but now the payments industry is undergoing major disruption and innovation, Libby Roy, Managing Director of PayPal, told the 9th Asia-Pacific CPO Forum in Melbourne.

The payments industry covers everything in to the end-to-end process that powers commerce, and is involved in all aspects of our lives. PayPay is involved primarily in the B2C space, which moves incredibly fast due to the proliferation of new players, and the integration of new technology powering our payments.

The innovations unfolding in the payments space is being driven by increasingly demanding consumers wanting the ability to make quicker payments.

Please the Consumer

Roy used an analogy to explain that everyone in the room was the consumer that PayPal was working to please.

“Think about it. Do you wait for your favourite television show to be scheduled and aired on television, or do you download the entire series, or live stream, because you can’t bear to wait? That desire to have access to thing immediately is higher than ever before, and we are leading the way in beautiful, frictionless payments,” Roy says.

Australia is fast becoming a cashless society in the consumer space, with the vast majority of payments using cards or contactless technology.

PayPal is continuously working toward new innovations to solve the pain points of consumers in a more seamless way, with new payment gateways and partnerships being constantly explored. This will result in a number of flow-on effects that will impact upon various industries, including procurement.

Social Payments

“Payments in the near future will become social, which lets you buy something at the moment of discovery. Consumers will be able to decide whether the good or service will work for them, and then be able to transact that very moment. Payments will be attached to any device, which will add billions if not trillions into the economy.”

For example, payment options will be attached to the household fridge, and connected to the local supermarket for re-orders.

“These innovations are being driven by the tremendous amount of investment occurring in the fintech space, though not all of the startups in this space are successful. It’s not surprising, it’s a complex space.

“Meanwhile, we’re seeing a number of new payment players aside from the banks and financial services companies entering the payments space, including Apple, Facebook, Amazon, Google and Microsoft,” Roy says.

Roy also told the audience that PayPal has started lending limited funds to small businesses to help them grow.

Why the Entire Procurement Profession Needs to Get Social

Tania Seary tells delegates at the Asia-Pacific CPO Forum that procurement needs to get social to drive the profession forward. 

Tania Seary - Get Social

Procurement professionals need to claim their rightful place on the Internet, and get social, by actively participating in social media and blogs for the benefit of the broader industry, the founder of Procurious told a conference in Melbourne yesterday.

Tania Seary, who founded Procurious to connect, promote and support procurement professionals across the globe, told the 9th Asia-Pacific CPO Forum that online visibility has several benefits, but that it’s everyone’s responsibility.

Large portions of the procurement profession are working in isolation, unaware that there is a whole universe of knowledge available to help them do their jobs better and learn, Seary told the audience.

In fact, there are more than 2.5 million procurement professionals in the world, but probably less than 500,000 that the industry can readily connect with, she says.

Share, Share, Share

Procurious was launched two years ago as the world’s first online business community dedicated to procurement and supply chain professionals.

“The procurement profession must share, share and share online to build our collective muscle, amplify attention to our impact, and tackle our thorniest issues together,” Seary says.

This can start by simply sharing your social media profile, your business photo, and by broadcasting your everyday successes.

“Think about what it would mean if a newly-minted company CEO who wants to understand what we do, takes the time to Google ‘procurement’ and sees overwhelmingly positive language in their search results. That CEO can’t help but be inspired and energised by the hype and positivity around procurement,” Seary says.

She also urged all procurement professionals to ask questions and share what they don’t know, saying that without sharing the things you’re concerned about, no action can be built, and there can be no moving forward. Giving back to enrich the wider community, by understanding that everyone has something valuable to share is important too, she says.

Big Ideas 2016

The highlights of Procurious’ Big Ideas Summit, held last month in London, were also shared to the 50-strong audience of procurement leaders. Keynote speakers included IBM, Coupa, ISM, Facebook and The Economist.

“What happened in the conference in London was only a small part of the story. What makes Big Ideas truly unique is that it is a digital conference that is amplified to procurement professionals around the globe.”

For example, the #BigIdeas2016 hashtag was tweeted 1,500 times, reaching a potential audience of 4.3 million individuals, all around the world, in just over 24 hours.

“Let me tell you that the message in the room was clear. Procurement needs to think the unthinkable and certainly rethink the possible,” she told the audience.

The UK is now auditing Supply Chain Purity in the fight against slavery, while Social Procurement is on the agenda in Australia.

Get Social Enterprises on Board

Social Enterprise UK CEO, Peter Holbrook, announced at the Big Ideas Summit the ‘Buy Social Corporate Challenge‘, which will see a group of high profile businesses aim to spent £1 billion with social enterprises by 2020.

The founding partners include heavy hitters like Johnson & Johnson, PwC and Zurich.

J&J are taking action and supporting people often termed ‘furthest from employment’, with the ‘Social Impact through Procurement‘ initiative aiming to create at least 150 jobs for these people by 2020.

“Here in Australia, Social Procurement has been a concept we have been talking about, trialling, but the big ideas summit confirmed that this is now firmly on all major corporation’s agenda.

“Not only is this the right thing to do, but this is the sort of thing that the C-level, annual reports and what Procurement could be famous for. So where are we with Social Procurement in Australia? I will be interested to hear.”

Leading Australian Political Journalist Unravels Political Landscape

Australia’s political landscape is a complex beast. We ask senior Fairfax political editor Laura Tingle to unravel these complexities for procurement professionals.

Political Landscape - Laura Tingle

No matter which political party you back, there’s no doubt that the political landscape can have major ramifications on the procurement function within your business.

So, we asked Fairfax Media‘s Political Editor, Laura Tingle, to unravel the elements of politics, as Australia wades through this longest of all election campaigns, and try to understand what sort of government it faces after July 2.

“It’s Complicated”

Laura explains that Australia heads into the upcoming election with Labor currently holding a ‘notional’ 57 seats and the Coalition – after Tony Abbott’s big victory – holding a ‘notional’ 89 seats.

“The national polls currently suggest – on a swing of about 2.5 per cent against the Coalition since the last election – that we have started the election campaign in the realms of an outcome where the government would just get back into office, or where there might be a hung parliament.

“That is, there are 13 Coalition seats held with a margin of less than 2.5 per cent, just one seat less than would need to change hands for the Coalition to lose its absolute majority,” Tingle says.

But, as the saying goes, ‘it’s always complicated’, and in fact, at this election it is particularly complicated, she says.

“And I can’t think of an election where there are so many unknown factors at play, which could create some quite wild outcomes.”

Election Zeitgeist

Speaking at the 2016 9th Asia-Pacific CPO Forum in Melbourne to an audience of about 50 leading procurement professionals, Tingle spoke swiftly, explaining how she saw things.

Another complication, on both sides of the political fence, is the unprecedented number of retirements of sitting members (21), meaning the loss of personal margins of longstanding MPs.

Laura explains, “My apologies for bombarding you with numbers. But they all play in to the zeitgeist of the current election campaign, and the unprecedented uncertainty around the likely outcome.

“When you say ‘uncertainty’ in politics, people think that that is, by definition, a very bad thing – that the country is heading in to some unknown period of terrible instability in the political landscape.

“When I say uncertainty, I mean it in the sense that, more than is usually the case, we really don’t know what the election outcome will be if we judge it purely by the numbers. If we judge it by gut instinct – do voters think one leader has nicer teeth – and other less scientific outcomes, there actually seems a little bit more certainty.”

“The questions comes down to whether the electorate really wants yet another change in prime minister? And whether Bill Shorten created – or can create in the next two months – a sense of momentum for change, as well as a strong relationship with voters who, until very recently, utterly dismissed him?

“And has the electorate’s view of the Coalition become so firmly entrenched in the negative that it just wants to get rid of the government?” she says.

“Think about the election result in those terms and your gut says – well at least my gut says – ‘no’ to all three questions.”

Policy Towards Business

Bill Shorten deserves full credit for leading a team that has gone on the front foot on policy and who has managed to bury the perceptions of disunity within the Labor Caucus, Tingle told the audience.

He’s a good campaigner and has started the formal campaign well. The more voters have seen of him in the past couple of weeks, in particular, the more they have liked him, she says.

Tingle told the audience that the Coalition has been thrown off course in the past couple of years, first by its utter political incompetence and lack of policy savvy. The 2014 budget has become the byword for this, but there was much that proceeded it in terms of policy towards business even before the budget was brought down.

“Having made such a mess of things, and then under intense political pressure, the government – still under Tony Abbott – tried to clean up, for which you could use the 2015 budget as the guide.

“But there was still a lot of mess, a lot of conflicting signals, and a lot of policy that is still on the books which is bad or politically untenable,” she says.

“Issues like health funding, schools funding, universities funding are massively complicated now for both sides of politics. They involve the goodwill and assistance of the states in all cases.

“And I have to say that, while I perhaps have more reason to be cynical than a lot of you, having spent 30 years to close to the political action, I actually think we have got a better bunch of competent people – professional politicians who are actually interested in policy as much as just winning – than we have had for a very long time.”

Tingle finished by warning that a number of things could go pear shaped in the world’s political landscape in the next three years.

“I would like to leave you today with the optimistic message that I believe both candidates for the prime ministership are capable people, with capable teams, not driven by ideology but by pragmatism,” she says.