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

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

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

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

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

Get Perfect Vision with Complete Data

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

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

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

Keep Your Eyes on the Prize

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

1. Support Working Capital Strategy

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

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

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

2. Use Innovative Technology to Control Costs

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

3. Develop the Right Talent:

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

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

See the Light

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

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

Procurement Shines Brightest On A Burning Platform

Economic woes, political uncertainty and digital disruption might trouble your CEO, but it should delight the CPO. After all procurement can perform best on a burning platform.
There has never been a better time for procurement.  A combination of the economic cycle, global politics, and digital disruption has brought ambiguity to the marketplace.  If, as a CEO, you are uncertain about your top line, wrapping your arms around the things you can control – costs – is the pragmatic approach to profitability. Costs incurred with suppliers represent the majority of for the average large corporate, overshadowing even labor expenses. How will uncertainty impact each shift.

Economic Cycles

We have been experiencing slow economic growth for a while now. Financial crashes are typically succeeded by over ten years of slow growth, which means a new downward cycle may be imminent.  In the context of record Dow Jones levels and the FTSE not far off its high, it might seem strange to be pessimistic. But when Warren Buffett holds over $100bn of cash, it seems to be an anecdotal indicator that we are nearing the top of a cycle. Being agile with your supply chain is now more important than ever, as you don’t want to get caught with high priced goods and services, or the wrong inventory altogether as your market evolves.

Global politics

Politics shape and reshape the global economy. More so now than ever, economic policies of the Democrats and Republicans, and Labour and Conservative represent a vast divide.  Whether it is Trump or Brexit, coalition politics and political decisions are having a big impact on both the polity and the economic prospects.  Questions about trade, tariff barriers, regulation and corporate tax are now subject to divergent positions and disagreement.  The answers could go in multiple directions, and so politics and electoral results are back to having a bearing on business certainties.  Resolutions to these questions can take many different shapes and will bring some turbulent swings in the stock market and broader business marketplace.  Since these issues are central to the way business is conducted, long-term cost discipline strategies aimed to give cover for the political uncertainty are warranted.

Digital disruption

While not everything is going to be digitized or robotized (I hope a robot isn’t my next barber), the digital age has descended upon us.  Some industries are further down the maturity curve than others – both retail and finance, for example, have substantial legacy infrastructures which impact the incumbent ability to compete cost-effectively, and with agility.  All industries, however, need to optimize digitally; managing processes, metrics, and data to inform short-term and long-term strategies to stay competitive and manage costs. With the emergence of cutting-edge technologies and the disruption of traditional business models, every company will require a hard look at their strategy to ensure they are embracing both the challenges and opportunities that come with advancing supplier provided technologies and their effect on procurement. Companies need to consider how the rapid rate of innovation will disrupt how their organizations work and line up their suppliers to respond. What a moment in time! Add a dash of currency devaluation leading to imported inflation, sprinkle in digital technology, and we could not ask for more ambiguity from the circumstances around us.  Setting clear, agile strategy to control costs is the shrewd response to deal with the uncertainty of our times.  Go procurement.

 

Real Relationships Really Matter

It doesn’t matter what technology your organisation adopts, or what digital transformation you endure; procurement relationships will always be essential for success. 

At the Big Ideas Summit 2017, we once again challenged our thought leaders to share their Big Ideas for the future of procurement. Chris Cliffe discussed why relationships really matter.

The world around us is changing. You can’t turn anywhere these days without hearing the phrase ‘Digital Transformation’. Everyone’s writing about technology and the race to automate and use augmented intelligence in business.  IBM’s ‘Watson’ is soon expected to be in regular use within procurement teams across the globe. But, the reality is that the vast majority of organisations, be they Private, Public or Not-for-Profit Sectors, are only at the start of this adventure.

Of course, it is crucial that our organisations do focus on adopting technology. The role of the CIO, for example, is at least equally important to that of the CPO. Yet the technology focus cannot be at the expense of the human focus.

Relationships really matter.

In fact, in the next decade or so, relationships will increasingly be the differentiator as ‘process’ and ‘transactions’ become automated and ‘value adding’ activities become the sole human focus.

Buyer Supplier Relationships

It might seem an obvious place to start but buyer supplier relationships are so often overlooked.  I think we can, in the main, agree that a ‘tender’ process in itself delivers zero value. Value for Money can only be obtained from good performance of the resulting contract. If we put ‘procurement’ theory to one side for a moment and look at ITIL Service Management, it clearly states that “good people can make a bad contract work, equally, bad people can make a great contract fail”.

Having the right relationships, between the right people, on both sides of a contract is how you get best value. Investing time and effort into building, nurturing and maintaining good relationships between buyer and supplier teams will facilitate far more value from contracts. It doesn’t pay to   let and forget!

Let’s assume a big problem happened last week.

Scenario 1: You call your account manager to complain, having not spoken to them in months, because ‘someone’ messed up.

Scenario 2: You call your account manager that you spoke to recently. You know they’ve just returned from their first family holiday in five years. They’ve had an awful couple of years for various personal reasons and, in fact, they’d even booked a restaurant you recommended. Whilst they were away, a junior member of their team was covering and they may have dropped the ball.

In both scenarios, the same issue has arisen and it needs fixing.  But I suspect the majority of us will approach those two calls differently and outcomes from these calls may also be different. Think about whether you could start both calls with the phrase, “How can I help you fix this problem?”

Stakeholders

Stakeholders: An increasingly over used, catch-all term to dehumanise people who we go to work with day in, day out. Investing time and effort into establishing relationships with the key individuals within our businesses will pay you back in spades. Ask questions. Be interested. Get under the skin of the challenges your colleagues face. Don’t be constrained by the perception of silo’s.

We must always remember why we do what we do. The purpose of Procurement is not to further the cause of procurement. Of course, a very happy side effect of an effective, modern, highly engaged and enabling procurement team is that the reputation of the profession will increase to everyone’s benefit, but that cannot be the motivation. The role of Procurement is simple. It exists to facilitate and enable the organisation(s) it supports in achieving its vision, mission and goals.

In human terms, we are there to help our colleagues enjoy work through enabling their success and in achieving their objectives. This is a differentiator between good and bad procurement in my mind. Establishing relationships with stakeholders based on a genuine interest in understanding their challenges and seeking to support them overcome obstacles proactively, will lead to game-changing relationships rather than relationships based on reactively promoting procurement process, policy and procedures.

Career Development and Credibility

Relationships really matter for professional development, career development and credibility. Take a look at the Deloitte CPO Survey 2017, or any recent recruitment agency survey. There will always be analysis pointing out how the procurement profession is dogged by a lack of soft skills and how there’s a real talent shortage with regards to interpersonal capabilities. I believe we all need to take  responsibility for learning and development; it is up to individuals to own the preparation for longer term career aspirations.

Relationships really matter with those in your network. The aim isn’t to collect as many LinkedIn connections as you can, but it is to connect to as many people as you can. Connect in this sense means to talk, ask, listen, learn, impart knowledge and most importantly follow up on conversations. Being market aware and having your finger on the pulse is an incredibly important part of being a credible professional in terms of managing contracts and suppliers and with developing productive relationships with colleagues.

Investing time and effort into building, nurturing and maintaining productive relationships really matters.

Intrapreneurs: How Do You Know When Your Idea’s Got Legs

Creating an encouraging environment for intrapreneurs in the biggest organisations can be tough. Rio Tinto CFO, Chris Lynch, offers advice on fostering innovation and some top tips on how to assess when an idea has legs!

Chris Lynch spoke with Philip Ideson as part of Procurious’ Even Bigger Ideas, a 5-part podcast series sponsored by State of Flux. You can access the series exclusively on Procurious.

What exactly constitutes a big idea? Rio Tinto CFO, Chris Lynch, believes that a big idea is defined as something that challenges the status quo. It’s got to be an idea that forces people within your organisation to think differently. Of course, this will only come about if the organisation and its employees are thinking differently in the first place and in a work environment that encourages it. The right big ideas can lead to enormous differences in company output.

But how do you know when it’s worth investing time, and money, into someone’s idea and what can the biggest companies do to encourage and motivate their employees to think big.

Organisations must foster an intrapreneurial environment

Chris believes that “good businesses, good leaders, good organisations, good companies and good departments all want to get better.  They want to ensure they’re making progress and delivering better returns. When their employees lose the desire to improve it’s a sign that they’ve lost all their energy. Everyday, people should come to work motivated to try to make a difference and that’s why big ideas are important.”

It’s crucial that people have opportunities to make a difference, feel confident that they are indeed making a difference and are acknowledged for this. It’s unlikely that any intrapreneurs will continue to flourish within huge organisations if they aren’t rewarded and supported in their efforts and contributions.

Chris was keen to remind us that big companies have got to be very very careful in this area. It’s easy to deter enthusiastic intrapreneurs before they’ve even started innovating.

“There must be a culture that’s open, honest and diverse. But, it’s pointless being diverse unless it’s inclusive.  People must feel confident to speak up and take risks without the fear of having their idea criticised.”

How do you when a big idea has legs?

Organisations need the foresight to be able to recognise a brilliant idea and the confidence to roll with it.  Chris reminded us of an old business saying:  “‘You don’t get fired for hiring McKinsey and taking McKinsey’s advice.’ But it’s a bit of a cop-out to have that sort of attitude.”

“A lot of large corporate organisations are risk-averse. They’ll  have 27 ways to say no and 1 or 2 ways to say yes. We need to get companies to recognise their own people’s contributions, ideas and their energy and enthusiasm. This to me is the key factor about intrepreneurship. Companies must be able to recognise the best ideas and follow through on them.

How do you know when an employee’s idea has legs?  It’s going to be something that makes you stop in your tracks and say ‘hey this is something that could really make a difference.’ It might spark reactions with other team members who can think ways to expand the idea.

How to make your big idea a reality

Chris had some final nuggets of advice for any budding intrapreneurs out there:

  • Commit yourself. Once you’ve decided that it’s worth putting in the effort; give it everything and don’t give up
  • Find someone with whom you’re comfortable sharing and testing your idea. Have a conversation about where your idea could lead and what it could do for your organisation
  • Do your homework. If there’s data that you need, get the data. If there’s things that you can do to prove a point, do them. Take it as far as you can on your own
  • If you need a sponsor, pick your mark carefully. Think about who would be the best sponsor for this idea
  • Have the courage to take a risk– It’s important to have the confidence behind your idea to say  I’m prepared to put my credibility on the line behind this idea and stand up for it at all costs

Even Bigger Ideas is a 5-part podcast series available exclusively to Big Ideas Digital Delegates. Sponsored by State of Flux, this series features interviews with five of the most intriguing power players at this year’s Big Ideas Summit in London.

Big Ideas Summit 2017: Pay Your Bills

It’s not about the money, money, money… except that it kinda is. Barclays Chairman, John McFarlane, reminds us that we need to pay our supplier bills on time!

At the Big Ideas Summit 2017, we once again challenged our thought leaders to share their Big Ideas for the future of procurement.

Our attendees spoke about everything from creativity to politics, from cognitive technology to workplace agility, current affairs, economics and the future. Whatever your industry and wherever you are in the world, there are some top tips to takeaway!

If You’ve Got Bills You Gotta Pay – Pay Them!

Barclays Chairman, John McFarlane, has a simple but utterly  fundamental Big Idea to share for 2017:  Procurement pros must pay their bills on time!

John acknowledges that  it’s a  great time for people working within procurement. There are now global marketplaces, the online arena continues to grow exponentially and power has transferred into the hands of consumers. This is a truly unparalleled period for the function.

But despite all the changes  that are occurring, John was keen to remind procurement professionals that suppliers really matter and the importance of paying bills on time should never be underestimated. If you don’t pay  when you should,  you’re accountable for endangering a perfectly good customer.

Looking after your  long-term interests and nurturing your relationships is more valuable than always thinking in the short-term.

Want to find out more about Big Ideas 2017? Join the group on Procurious.

You’ll find all of the Big Ideas Summit 2017 videos in the learning section on Procurious. If you enjoyed this Big Idea  join Procurious for free today ( if you haven’t done so already).  Get connected with over 20,000 like-minded procurement professionals from across the world. 

Big Ideas Summit 2017: Understand Your World

Every procurement pro needs somebody to tell them the world weather forecast so they can figure out when they’re going to need an umbrella! 

At the Big Ideas Summit 2017, we once again challenged our thought leaders to share their Big Ideas for the future of procurement.

Our attendees spoke about everything from creativity to politics, from cognitive technology to workplace agility, current affairs, economics and the future. Whatever your industry and wherever you are in the world, there are some top tips to takeaway!

Be Sure To Understand Your World Weather Forecast

Justin Crump, CEO at Sibylline thinks that procurement organisations need to become more worldly wise in order to better manage future risk.

At present, larger organisations might be competent at managing risk but often this is very much in silos. This makes it very hard to fully understand what they are facing as a result of global events.

Given the rate at which technology is evolving and how global events are impacting the world, it is increasingly difficult for companies to keep up without considering risk in real-time.

Intelligence about the world we live in drives business operations and the better informed we are the easier it is to drive progress.

Justin urges us to gain a clear view of the world to measure against so the we can focus  our resources on what world means to us.

Want to find out more about Big Ideas 2017? Join the group on Procurious.

You’ll find all of the Big Ideas Summit 2017 videos in the learning section on Procurious. If you enjoy this Big Idea  join Procurious for free today( if you haven’t done so already).  Get connected with over 20,000 like-minded procurement professionals from across the world. 

Hiring And Retention In The Digital Workplace

Hiring top talent in the age of the digital workplace is going to be a little different. How can procurement prepare for workplace 4.0?

Join The Big Ideas Summit 2017 group to access all of last week’s discussions and exclusive video content.

Workplace 4.0, or the new digital workplace, is not all about data-driven processes, smart devices and the internet of things; it’s about hiring and retaining talented employees to extract the best results from the implementation of new and advanced technologies.

Simple, repetitive work in both manufacturing and administrative industries can be automated, but we will always need human brains for hire.

The Digital Opportunity

Companies are changing what they buy. We need new suppliers from different markets; end users are putting revised requirements on the table all the time. It’s a bonus for procurement to be able to participate directly in the sourcing process and show where they can add value in this field.

For example, the traditional I.T. category has expanded to include telecommunications and packaged systems solutions and has become a high value category with multiple and complex commodities. Software, communication devices and electronic components which require a greater level of skill to manage will be sourced more frequently.

Job descriptions need to be re-written and a different approach is needed to hire and retain these skilled employees. People are increasingly being hired for fixed-term contracts and project work in these types of procurement roles rather than being offered full-time permanent jobs. Much of the work is not location-specific and does not require adherence to strict office hours. To understand how to manage these workers, we have to know what drives them at work.

What Do 4.0 Workers Want?

The job seeker wants to work for an organisation that, in no particular order:

  • Provides opportunities for ongoing learning, growth and creative challenge
  • Has an equitable reward system that recognises success
  • Allows time and location flexibility in working practices
  • Employs far-sighted leaders that support collaboration and innovation
  • Supports a team-oriented work culture based on open communication and feedback
  • Has a pro-active approach to ethics and transparency
  • Promotes sustainability and recognises the “triple bottom line” — financial, social and environmental measures of success
  • Knows how to have fun (within limits)

Attracting and Retaining a Mobile Workforce

Are employers ready to provide everything on the wish list? According to  a recent Deloitte study, today’s millennials place less value on visible, well-networked and technically-skilled leaders. Instead, they define true leaders as strategic thinkers, inspirational, personable and visionary.

Organisations that want to keep pace will not only have to upgrade technically, but work on their organisational structures, flatten hierarchies and adjust their corporate culture, even soften some maybe outdated workplace rules.

The key to success in retaining talented employees is for organisations to have the structure and policies that support the new flexible working conditions. Human Resources managers are still scratching their heads about how to devise suitable reward systems, manage worker performance and provide training, especially for part-time employees and freelancers.

Training and Up-Skilling

Traditional methods of upgrading skills such as classroom training and on-the-job coaching may not be suitable in the Workplace 4.0. Continuous lifetime learning will have to be provided as roles evolve and advances in technology demand changes in job content. There will be a greater need to provide on-line facilities for e-learning so that everyone, including remote workers, can keep pace with the developments in the profession.

Work Is Life

There is already a blurring of the boundaries between work time and leisure time. Some conflict areas are arising such as actual or perceived electronic surveillance and having to be available or on standby every waking hour.

Companies must develop strategies for a healthy balance between security, privacy and trust in their workers, applying the same level of management and administrative support to those that check into the office every day and those who work remotely.

Want to catch up on all of last week’s Big Ideas Summit activity? Join the group here

Hope For the Best And Plan For The Worst: Dr Linda Yueh Talks Trump and Trade

Dr Linda Yueh, a renowned economist, broadcaster and Adjunct Professor of Economics for London Business School, discusses how supply managers can react to the major shifts in globalisation, trade and protectionism under Trump.

Yueh spoke with Philip Ideson as part of Procurious Even Bigger Ideas, a 5-part podcast series sponsored by State of Flux. You can access the series exclusively on Procurious. 

As the world watches President Trump’s next move to discover which of his campaign promises he is likely to deliver on, Dr Linda Yueh hopes that the potential impacts on globalisation are being overexaggerated.

“It’s hard to see how any one country could turn back globalisation, because globalisation isn’t just about trade agreements. National borders have less meaning now than they did in the past. That being said, protectionist sentiment is certainly on the rise.”

Protectionism is costly to trade 

Donald Trump successfully tapped into the feeling that globalisation hasn’t benefited lower-income, lower-skilled people as much as those of higher income and higher skills.

“Can this be rectified? If we’re starting a new phase of globalisation, there could be a reluctance to proceed at the pace we’ve had over the past couple of decades. If globalisation is going to work, we all have a responsibility to ensure policies around trade are more equitable so it doesn’t impact on any particular group.”

According to Yueh, the increase in protectionist sentiment around the world is likely to impact the cost of doing global trade. “Business need to be wary around protectionist sentiment being translated into additional customs checks, higher tariffs on exports and imports, or taxes on where a company locates its production.

Practically, protectionism can lead to enormous supply chain disruption. Goods or farm products can get held up at the border – for fresh fruit such as tomatoes, a few days’ delay can be devastating. Protectionism would only lead to higher costs, and ultimately that’s bad for the consumer because the cost will affect them”.

What about China?

Withdrawing from the Trans-Pacific Partnership is consistent with President Trump’s focus on American jobs, American wages, and his Made in America campaign. “Trump made it clear that America First is the overriding economic principle,” says Yueh.

The TPP was going to link America with Pacific Rim countries and was part of the previous administration’s “Asia Pivot”, designed to increase their influence in Asia. The TPP didn’t include China so it was a way of asserting America’s role in the region. The big question is whether putting America first means withdrawing from international supply chains, leading to an economic impact that may not actually be so good for multi-national American companies.”

Yueh comments that there’s an indication from China that they may be willing to step into a stronger leadership position in the global economy as America withdraws.

“We’ve heard China’s views of globalisation from President Xi Jinping at the World Economic Forum in Davos. I’ve also heard from other Chinese policy-makers at various meetings around the world that China has always been reluctant to take a strong leadership position in the global economy. Their main focus has always been on domestic development.”

“If there’s a void, power will fill it. I think that’s essentially what we’re seeing. I would stress that the Chinese position is to support globalisation, because globalisation has helped its economy. It’s contributed to its remarkable growth, but they’re reluctant leaders – they’re not leaping into this space.”

In Yueh’s opinion, we’re unlikely to see a trade war despite Trump’s posturing on the topic. “I think there’s too much to lose for all counties. In reality, businesses will continue to sell to consumers all around the world. They produce overseas because that gives them a supply chain advantage. Political rhetoric won’t change this”.

How should supply managers react to uncertainty?

Yueh advises that procurement and supply management professionals should:

  • Plan ahead for supply chain and market access disruption
  • Follow closely the policies as they appear
  • Look ahead to how you would reorganise your supply chain and the location of where you would deliver your services, depending on the industry that you’re in.
  • Plan out scenarios that anticipate increases in cost and work out ways to grow the business taking into account potential disruptions.

“When we see big structural shifts in policy, it can take some time before we understand the impact on businesses. All you can do is to look at your strategy for the years ahead and be alert to policy changes, whether it’s around TPP, NAFTA or the timeline for Brexit, and plan scenarios accordingly. To quote a former British Prime Minister, “You hope for the best and plan for the worst.”

Procurious Even Bigger Ideas is a 5-part podcast series available exclusively to Big Ideas Digital Delegates. Sponsored by State of Flux, this series features interviews with five of the most intriguing power players at this year’s Big Ideas Summit in London.

How To Convince Hostile Stakeholders To Adopt New Technology

Simona Pop’s Big Idea provides a recipe for convincing even the most unwilling departmental heads to embrace new technology.

Register as an online delegate for the London Big Ideas Summit 2017 here.

Deciding to adopt a new technology has historically been a pain in the ass. An expensive, dull, prolonged pain nobody wants to deal with. The problem I have is that those adjectives belong to OLD tech. Putting nimble new technology in the same pile with 90s software is like mixing vodka with milk. It may have worked for the Mad Men of the 50s but it is an unnatural association. (I watched Mad Men until the 5th series then lost interest, by the way.)

Here’s the gist of it: people need to be comfortable with the cost and potential risk of adopting new technology. How do you make them comfortable? By providing “proof of concept” and calculating these costs and potential risks. One simple guideline is the 10X rule: if you can expect a return of 10 times your investment, then it’s worth it.

However, with technology – especially if it spans across different departments – you must take into account that your gains will come from any of several improvements, or a combination of improvements:

  • Cost reduction
  • Efficiency improvement
  • Fraud prevention
  • Admin processing speed
  • Mobilising the workforce
  • Product/service enhancement
  • Competitive environment

Your gains will be the sum total of all factors. If adopting a new technology provides an improvement in one factor but it’s at the expense of another factor, it may not be worth adopting. This tends to limit everything to a financial view though. A far better formula includes non-financial factors, some of which will outweigh the financial ones. You need to also remember that some investments in new technology can require at least a year to show their true value.

Managing risk should also be incorporated into your analysis, but remember that you take a risk whether you adopt a new technology or not. The advantages a new technology provides may not be obvious – until a competitor adopts that technology and makes your competitive disadvantage clear. In that case, adopting a new technology reactively will put you on the back foot. Playing catch-up is never a good business move!

Risk Reduction Recipe

Let’s call it – new tech is the unknown. The unknown is typically scary to humans. And since I am all about the H2H in business, working to remove that fear is key to successful tech adoption.

One sure way to reduce the risk is to go for a taster: a proof-of-concept implementation. Starting small & early allows you to identify problems early when they are far easier and less expensive to correct. It also makes it easy to start over if the proverbial hits the fan.

When rolling out new technology across multiple departments, you’re guaranteed to encounter a mixed bag of responses. From enthusiastic stakeholders who “get it” straight away, to nervous – and sometimes downright hostile – departmental heads who are terrified of change, you’re going to have to manage them all.

Here’s the secret – rather than trying to beat hostile stakeholders into submission with the force of your arguments, ask the willing departments to do the job for you. Carry out a proof of concept with your supporters so you have the evidence required to overcome any objection, and go back to the risk-averse stakeholders with your advocates at your side.

Also keep in mind that both organisational and process changes will be needed when bringing in tech. Procedural changes are very common. The reason why you are looking at that tech is typically to improve current processes you have found lacking. You must be aware that tech is here to improve NOT replicate. Trying to fit clunky processes on efficient technology is not only frustrating but a complete waste of time and resource. Changes to previous processes will need to happen and you will have to expect some resistance to those changes. Again, human nature.

The mark of good technology for me is its accessibility and great user experience across the board (from top to bottom, from left to right). Because you are effecting change (and that’s difficult enough), the very last thing you need is that change to come in the form of clunky, pain in the ass – MS-DOS looking software.

In my quest to empower people through tech, one problem I come across a lot is: “How much resource do I need from our side because we really cannot spare anyone?” This question is proof of a bad reflex left over from dealing with old tech. The type of tech that takes a year just to implement, another year to train for and another to realise it’s not right for you anyway even though it is costing you serious cash. The type of tech that is SO unlike what you know and love in your personal life, it might as well be alien. A vintage alien at that.

Clear communication will help overcome the organisational and process challenges. When people get that you are in fact trying to empower them to work better and easier, they will want to be part of that higher drive.

As Richard Branson says: “Screw it, let’s do it!” Move quickly, find out what works and what doesn’t. Stalling, procrastinating of burying your head in the sand are NOT ways to avoid a pain in the ass.

This article was first published on InstaSupply.

Stay tuned for more Big Ideas from Simona Pop as we lead up to the Big Ideas Summit 2017!

Join the conversation and register as a digital delegate for Big Ideas 2017 now!

The Big Ideas Summit 2017: The After-Party

No one likes to reach the end of a great procurement  party. Luckily there’s still a whole lot more Big Ideas Summit content to come…

Join The Big Ideas Summit 2017 group to access all of yesterday’s discussions and exclusive video content.

Yesterday Procurious gathered 50 of procurement’s top thought leaders in London for the Big Ideas Summit 2017.

We heard from a number of  inspiring speakers, sparked exciting discussion and shared our Big Ideas for procurement in 2017. Conversation topics ranged from economics to futurism, from cognitive technology to  releasing creativity and everything in-between.

It was wonderful to see some familiar faces at this year’s event and lots of new ones too.

Big Ideas By Numbers

But the fun didn’t stop in London. Our digital delegates from all around the globe followed the day’s events via social media.

3,400 people visited Procurious to access Big Ideas content discussions and videos.

On twitter, the #BigIdeas2017 hashtag  was tweeted 1,850 times and had over 6.4 million impressions.

The Big Ideas Summit After-party

Don’t worry- The Big Ideas party isn’t over just yet!

Throughout the next week, we’ll be uploading all the video content into the learning section on Procurious. You’ll hear from each of our attendees on their Big Ideas  for procurement.

Whether it’s scaring yourself daily, paying your bills or turning statements into questions there’s a whole range of thought provoking advice to take on board.

Here’s a little taster of what’s to come:

If you’re feeling inspired by these videos, there’s still time for you to submit a Big Idea’s video. You’ll find a reminder of how to do so here.

Turning Statements Into Questions

Our first Big Ideas video comes from Creative Change Agent, James Bannerman. James wants procurement pros to start turning statements into questions in order to unleash their creative genius.  Check out the video to find out more.

You can hear more from James in our podcast series, Even Bigger Ideas. 

Even Bigger Ideas Podcast Series 

Want to hear more from some of our speakers? The final Even Bigger Ideas podcast was released today. Futurist Anders Sorman-Nilsson talks about how we can seamlessly transition between ordinary, analogue world to the extraordinary, digital world and who will thrive in this era of cyber disruption. You can listen to the Even Bigger Ideas Podcast Series here.

Want to catch up on all of yesterday’s Big Ideas Summit activity? Join the group here