Tag Archives: crowd sourcing

The Root Cause Of Maverick Spend

The issue of maverick spend continues to dominate the Procurious Discussion Board. Does the solution lie in systems? People? Or something else entirely?  Let’s examine some of the approaches to tackling mavericks that came up when this question was crowd-sourced to the global Procurious community.

 

We keep an eye on the most popular discussion questions here on Procurious. One topic that always generates a buzz is the issue of how to deal with maverick spend. The fact that this question keeps rearing its head proves that the problem is perennial; there’s no easy fix and it’s unlikely to be 100% solved any time soon. It’s also an area of common ground shared across our hugely varied procurement community. No matter what sector or geography you may be based in, everyone gets frustrated with maverick spend.

The value in the Discussion Board lies in the authenticity of the advice. Real procurement practitioners share real experiences, war-stories and recommendations, which is so refreshing compared to the “advice” given by agencies trying to push a product or service. There’s also an inherent acknowledgement that there’s no one correct answer – instead of being told by a systems provider that there’s a single, guaranteed fix to your problem, you might get 15 different crowd-sourced responses that you can use to cobble together your own tailored solution.

Systems or people?

Suggested approaches to tackling maverick spend tend to fall into two camps – systems vs people. A discussion started by Louise Cairns shows a great cross-section of suggestions across both these categories.

Procurious member George Thompson, for example, had this advice: “Having a good e-Procurement Portal in place, which is mandated to be used for seeking competitive quotes from suppliers, would be a great help. Simple to use, robust and efficient and very inexpensive SaaS e-Procurement Portals are available … by all means set guidelines, but ensure that there is a user-friendly e-Procurement system in place to support your policies.”

Justin Plokhooy takes the people view: “Relationships, Relationships, Relationships! … Growing your relationships with those perpetrators of maverick spend is vital to ensuring their understanding of the value Procurement can bring. The reason they are behaving like they are is because they probably either don’t fully understand what Procurement brings to the table or had a bad experience that has tainted their view of Procurement.”

Plokhooy advocates the “good cop” approach to engagement: “This is a situation where you will catch more flies with honey rather than vinegar. Heavy handed tactics won’t work.”

Scott Seymour writes that it’s about “Communication and building relationships. You also have to prove your worth to the stakeholders, which can be a daunting task, but stick with it and let them see the value sourcing can bring. Follow this up with data to show the results you are bringing.”

Getting to the root cause of maverick spend

James Ferguson writes: “I would say that maverick purchasing is normally a sign that something is wrong with the current process; people are unaware of the agreements in place, they don’t like the chosen suppliers, the system sucks, the procurement process takes too long, they can’t get the exact goods/services they need or some other issue that is stopping them. Either way, it is Procurement’s job to find out what the root cause is and solve the customers’ issue.”

Iain Wicking, a frequent commenter on the Discussion Board, agrees: “Root cause analysis is a good place to start … [companies] try to solve the problem not realising the … causes are ‘up-stream’ in terms of poor processes, hard to use systems and/or poor leadership that fails to mandate systems (providing they are easy to use) and project the value of good procurement practices (could be a combination of all of these).”

After a tongue-in-cheek suggestion that the best way to address maverick spend is by using a taser, Daniel Warnock writes that “Maverick purchasing is a symptom of a problem, not the problem itself. People buy outside the procedure for various reasons (lack of awareness of the procedure, the existing contract does not suit their requirements etc). Identify the underlying problem and maverick purchasing should be minimised.”

“Maverick purchasing is a symptom of a problem, not the problem itself.”

Cristian Martin has a similar message: “Address why there is maverick spend. Do you have the right policies in place? Has training been given to staff? Do you have the support from your senior management team? Have you given poor customer service in the past?”

And finally, this gem from Piyush Shah gives us some valuable insight into the mind of a maverick: “At a place I worked, there was a feeling [of] us (the people at the plant) versus them (the people at head office). Maverick buying was a way to assert our independence and dominance over them. It was clearly brinkmanship from both sides.”

Keith Bird, Managing Director of The Faculty, comments that the popularity of this topic demonstrates that compliance is a long-term challenge. “Maverick spend and contract leakage hamper effective benefits realisation, but a focus on compliance, effective business partnering and an understanding of the business pressure points will help CPOs make savings stick.” 

You’ve crowd-sourced your peers’ solutions, now it’s time to read the report! Download The Faculty’s “Making It Stick” research on tackling maverick spend and driving savings all the way to the bottom line.

Negotiations Milking you Dry? Why Not Unleash the Power of the Herd!

On Day 8, the true love bestowed that famously lusted after gift of eight milking maids…

eight maids a milking

The traditional 12 days of Christmas might not start until the 26th of December. But this festive season, we’ll be bringing you the 12 days of procurement Christmas in the run up to the big day. Catch up with the story so far on the Procurious Blog.

“On the eighth day of Christmas, my true love gave to me…eight maids-a-milking.”

As the gifts become more and more extravagant, we have to question the logistics of it all – we wouldn’t be procurement professionals if we didn’t!

It’s unclear how the true love bequeathed the eight milking maids. Were eight cows also included in the purchase or was it simply a milking service that was required? Were the maids employed by an hourly rate or at a fixed cost, and how were they delivered to the lucky recipient?

Whatever happened, it would have taken some great negotiation skills to strike up a fair deal that ensured neither party was milked dry.

Perhaps the true love harnessed the knowledge of a crowd of friends to get ideas on how to orchestrate the whole thing – using the power of the herd as it were!

Negotiating Your Best Deal 

The festive season calls for a lot of meticulous planning but when it comes to negotiating deals, you need to be prepared all year round. What’s your pre-match strategy when it comes to negotiating with suppliers, clients and stakeholders?

In order to achieve the right outcome, you ought to have considered your objectives well in advance. This will help you determine what sort of negotiation you’ll need to have and assess any additional support you might need such as legal advice.

It’s also important to ensure you know the other party. What are their aspirations, weaknesses and objectives?

This Procurious e-learning video has it all covered: 

Here are some key things to bear in mind:

  • Will your agreement stand the test of time? Both parties want to feel that they’ve achieved a good deal and a satisfactory outcome.
  • Is the outcome efficient? Make sure no value has been left at the table.
  • Are you off to a good start? Negotiating a deal sets the foundation for your supplier partnerships and a precedent for the relationship you want to build.
  • Have you mastered your verbal, written and non-verbal communications? When it comes to negotiating, you need to be assertive but not aggressive!

Milking The Power of the Herd 

Sometimes, no amount of self-determination and commitment can get you across the finish line alone. We all need a little help from our friends for ideas, innovation and support.

We’ve certainly noticed that collaborative innovation has been on the rise in 2016 with more organisations embracing the power of the Hackathon.

In November, Spotless Group and Startupbootcamp hosted an epic two-day event at the MCG in Melbourne, Australia, focusing on the Internet of Things (IoT) and DataTech. Events such as these help to generate new ideas and turn innovation into reality.

Lisa Malone spoke about the value of the Hackathon at this year’s Big Ideas Summit.

Lisa explained why it’s key to foster creative cultures in the workplace, giving employees the chance to dare to think about the unthinkable. It can be hard to think big and innovate when you’re stuck in the routine of day-to-day office life.

Hackathons can be a great way to harvest creativity and allow teams to deliver the big ideas CEOs are demanding.

If hosting a hackathon seems a bit out of your reach, remember there are other ways to drive change and innovation within your organisation.

Internal collaboration also has a huge part to play. Procurious recently addressed why it’s so critical to engage Millennials with new tech implementations. They’re tech savvy and accustomed to participating in digital communities.

Their contributions, for example, could be invaluable when it comes to the adoption of e-procurement.

It’s very nearly Christmas, and many of you will be dancing out the door to your Christmas party. But what happens if there’s a crisis that arises, demanding your attention? Don’t worry, help is at hand!

Big Ideas Summit 2016: Big Idea #22 – Revolutionising Financial Services

Crowdsourcing and mobile technology will change the face of Financial Services and how new businesses source funding.

At the Big Ideas Summit 2016, we challenged our thought leaders to share their Big Ideas for the future of procurement.

From ideas that have the potential to change the very nature of the procurement profession, to ones that got the assembled minds thinking about the profession’s impact outside of the organisation, the response we received was amazing.

Winds of Change in Financial Services

Chris Hancock, CEO at Crowd2Fund, says that there is a revolution coming in the global Financial Services sector, thanks to the power of community and new mobile technology.

Chris draws on his own experience to explain how this revolution will change how money is lent to businesses. This in turn will help to increase the number of small, agile, innovative businesses getting started.

Catch up with all the delegates’ Big Ideas from the 2016 Summit at the Procurious Learning Hub.

Want to find out more about Big Ideas 2016? And maybe what we have planned for 2017? You can visit our dedicated website!

If you like this (and you haven’t done so already) join Procurious for free today. Get connected with over 18,500 like-minded procurement professionals from across the world.

Big Ideas Summit 2016: Big Idea #17 – Harness the Crowd

Stuck for innovation ideas? Need help with your next project? Maybe it’s time for you to harness the power of the crowd.

At the Big Ideas Summit 2016, we challenged our thought leaders to share their Big Ideas for the future of procurement.

From ideas that have the potential to change the very nature of the procurement profession, to ones that got the assembled minds thinking about the profession’s impact outside of the organisation, the response we received was amazing.

Harness the Crowd

Lisa Malone, GM – Europe at Procurious, talks about how procurement can lead organisations in harnessing the power of the crowd, and the concept of ‘hackathons’ in order to drive innovation.

‘Hackathons’ provide an opportunity to work on the business, rather that in the business, and give employees the change to take time out and come up with new ideas, and communicate and collaborate with people they would not have the opportunity to do this with otherwise.

Catch up with all the delegates’ Big Ideas from the 2016 Summit at the Procurious Learning Hub.

Want to find out more about Big Ideas 2016? And maybe what we have planned for 2017? You can visit our dedicated website!

Get Your Career in Harness

If you enjoyed Lisa’s Big Idea and you want to hear more from her, then you’re in luck! Lisa was one of the career coaches for the Procurious Career Boot Camp.

You can hear Lisa’s podcast on using social media as your secret weapon in your career, and how social media platforms are fast becoming an indispensable tool for procurement professionals.

Also, if you’ve missed the other podcasts, then all is not lost. Enlist here, and you can catch up on topics from becoming a CPO, to taking your conscience to work.

If you like this (and you haven’t done so already) join Procurious for free today. Get connected with over 17,000 like-minded procurement professionals from across the world.