Tag Archives: digital strategy

For Procurement to Fly, You Need The Right Team Onboard

Digital Transformation is critical to the future performance of any procurement department… But you need the right team on board to truly fly!

In case you hadn’t noticed, the old approach to Procurement no longer works. Following a strict sourcing process, beating suppliers for extra margin and imposing strict controls on employees is simply not a viable strategy to meeting Procurement’s new objectives. Procurement today is expected to still manage costs, but also manage risk, drive innovation and revenue, improve cash flow and increasingly consumerise the experience for employees. That much is broadly acknowledged. But how?

A new model for Procurement

To meet the growing risk of objectives and enable companies to thrive in today’s highly uncertain market, Procurement leaders are actively evolving their organisations. They are becoming smarter, freeing capacity for more strategic work, leveraging information better to make more informed and timely decisions, and better measuring Procurement’s performance and value contribution. They are becoming more agile, driving digital transformation initiatives and ensuring they can adjust to a rapidly evolving market. And they are becoming more collaborative, working with diverse groups of internal and external stakeholders in very different yet scalable ways. A tall order indeed. Even the best admit a long way to go.

It’s still about the people

Digital Transformation is critical to the future performance of any Procurement department. Technology plays a key and growing role, as innovations leveraging AI and other advanced technologies come to market to empower such transformation. Procurement leaders must stay abreast of the innovations that are truly creating value, but the people are the real heroes. As Ivalua CMO, Alex Saric puts it, “let’s not become so enamoured by technology that we discount the human contribution (and effort) involved.” Innovation won’t start until the right people are in place, with the right teams. That is when technology can truly empower these teams so that they can start to bring about change, often starting at getting the basics right.

Swissport takes off with help from Procurement

An example of this is the work Ivalua’s customer Swissport is doing. You can read about this in Supply Chain World Magazine. As the world’s largest provider of ground and cargo handling services in the aviation industry, Swissport provides services on behalf of some 835 client-companies, handles around 230 million passengers and 4.1 million flights (movements) per year.

When Marianna Zangrillo, SVP and Group CPO at Swissport, took over, she had to build everything from scratch. Under her leadership her team has grown and, as she says “we need talents to improve every one of those business areas and therefore work closely with our HR departments to get the right people onboard, (…) Recent studies show that 70 percent of the current procurement resources won’t be able to do what procurement will need to do as the world moves forward.”

Renier Orth has led the team that has centralised all Procurement for nearly everything the company buys – including cargo-handling equipment, food and drinks for airport lounges and office supplies. We are proud to also say that Swissport brought in Ivalua to digitise the source-to-pay process and optimise performance. Ivalua has brought efficiency to the different stages of the source-to-pay workflow in a single tool, which is a new, but very welcome change to Swissport.

Swissport’s Procurement team has built a Procurement organisation from scratch and earned a seat at the board level to be part of the future conversation of the business direction of Swissport. “We think of procurement as integrated into the business organisation,” Zangrillo says. “We are going to support many important decisions using the talents of a still too often underestimated department.”

Continue your Journey with Ivalua

If you’d like to hear directly from Reiner Orth, CPO at Swissport, and other leaders transforming Procurement, join us at Ivalua’s first conference in London, Ivalua NOW LondonThe event will take place on the 13th March, at Kings Place, near King’s Cross. The theme is “the Voice of Procurement” as we intend to look at innovation through the lens of the leaders truly driving change. How are they upskilling their teams to lead a digital transformation? What unique factors must leaders in manufacturing, retail, logistics and other industries consider? What technological innovations in areas such as AI are empowering them today and what is coming to accelerate their transformations? What basics must be addressed to ensure your company can benefit from the latest innovations? The event will look at the Future of Procurement, focusing on what can and should be done today. Other keynote speakers will include Peter Smith, Managing Director – Spend Matters UK/Europe, Francesco Cortini, Group Director of Strategic Sourcing at Smiths Group and Hemant Gupta, CFO at Blackberrys Menswear. We hope to see you there.

2017 Rewind – Do You Have The Right Skills To Deliver On Tomorrow’s Procurement Strategy

As part of our 2017 Procurious rewind, we’re taking a look at the top blogs of the year. This piece looks at why are our procurement teams are falling so short when it comes to delivering on strategy? 

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Shockingly, 60 per cent of CPOs believe their teams do not have the skills to deliver their procurement strategy, according to Deloitte’s “Global Chief Procurement Officer Survey 2017.”

Why are procurement teams falling so short?

Originally, procurement was heavily based on process management, negotiation and basic spend analysis. But the procurement function is evolving, and professionals have to adapt to a new environment . There are new and growing expectations that require alternate skills for a more advanced job profile.

Procurement professionals are expected to be much more analytical, with the ability to perform data mining. They also must learn to manipulate and understand financial data and indicators, such as P&L and balance sheets. That’s not to mention that they should be proficient with the latest technologies.

Yet, one of the most important skills to develop is customer centricity. In today’s customer-centric world, this becomes crucial.

In my opinion, understanding internal customers,  being able to communicate in their language, knowing what they want or helping them to understand what they need, is the most difficult skill to learn and develop because it often goes against the conventional and traditional training that many procurement professionals have received.

It’s time to stop hiding behind the processes and get to know the internal customers! Given the back-office environment we are coming from, there is still a lot to do to change the mind-set and the behaviour of those involved. Procurement professionals need to develop their consultative skills and become less process focused, since excessive process significantly impedes speed and agility.

Keeping It Fresh

Another challenge for procurement involves attracting and retaining fresh talent in our industry. This situation needs to be addressed now to prevent a significant skills gap within the next couple of years. While we still have to continue to build traditional procurement skills. We also need to recognise that these skills must evolve as analytic and cognitive solutions provide more refined data and insight. The challenge is less about finding someone who is an expert negotiator and more about recruiting someone who understands data and logic.

At IBM, we are currently hiring maths and statistics majors because they can understand trends and probabilities. Although many procurement skills can be taught,  it’s hard to train someone to find trends in complex data.

Taking IBM’s example, our strategy to recruit and retain talent is reflected in how we communicate our procurement roles. “Our Procurement strategy is about collaborating with customers to ensure they have best in-class solutions, with access to the most advanced technology available on mobile devices. We partner with our suppliers to be as innovative and creative as possible.”

Presented like this, a job in procurement sounds pretty exciting!

The party ain’t over yet!

And the party isn’t over once we’ve found the right skills and talent, we also need to keep that skilled staff within the procurement function! If we help employees build on their competencies as well as add new ones, and if they can see that their contribution to the company’s mission clearly makes a difference, it will help us to keep those employees in procurement.

Ultimately, modernising the procurement profession and making procurement a “cool” place to work will help retain a talented, skilled and motivated workforce.

IT Procurement Without a Tech Strategy Is A Recipe For Disaster

If you’re struggling to effectively run your IT procurement processes, it might be time to evaluate your strategy!

This article was written by Harry Wilson, an IT Consultant. Read more via Leap Consulting.

If procurement is the series of activities and processes required during the acquisition of any IT infrastructure, software and systems, IT procurement and the purchasing of updated systems are essential to any business which uses information systems and digital technology equipment to drive projects, management and processes.

The running of the IT procurement process should be carefully managed and examined to ensure that  purchases provide both a good foundation and high-quality equipment for the future process, in line with the businesses goals.

This requires a dedicated employee in charge (usually the CIO) and an IT strategy to allow a business organisation to reach best practices of IT procurement.

Digital transformation and disruption

Digital transformation and disruption have changed the IT buying process. Traditionally, the CIO had the final say in IT purchasing decisions following consideration of the IT strategy and alignment with business goals.

However, recently it has been found that nearly a third of purchasing power has moved outside of the executive suite into the hands of departmental managers.

Business departments making technology decisions without the CIO can lead to CIOs losing control of the IT then having to deal with issues such as;

  • Lots of different systems running in silos
  • Information sprawl
  • Incompatible systems
  • Gaps in internal information technologies
  • Hindered business growth
  • Loss of competitive advantage

This emphasises the need for an IT strategy as one of the biggest mistakes a business can make is committing to a system or contract without due diligence or consulting the overarching IT strategy to understand how the implementation of the considered technology will impact the operations and systems within the business.

What should an IT strategy include?

An IT strategy can benefit both CIOs and department managers as it encourages collaboration that results in alignment with existing and new investments. A strategy should include up-to-date versions of:

  • A systems architecture rundown of the whole business
  • An inventory containing end-of-life dates, and usage
  • A list of emerging problems recorded by staff and IT team

The rapid speed that these technologies are being innovated is phenomenal, and businesses are being exposed to more technologically advanced IT systems which creates the need to update and adapt to these IT systems regularly.

The benefits of an IT strategy

Despite significant investments in new technologies over the past decade, many organisations are actually watching their operations slow down due to underutilisation of technology and poor user engagement related to technology usage is part of the problem.

Poorly designed applications and a general lack of training causes many employees not to leverage the innovation and drive productivity.

Encouraging effective adoption of new technology requires an IT strategy for organisational change management.

There’s no easier way to manage IT than to work with an IT specialist who can help you manage these IT services and create a more efficiently run business. Many companies are seeking It managed services for a source of competitive advantage, so there isn’t a lack of responsibility or confusion within the company.

By following an IT strategy and understanding the reasons behind process bottlenecks and other errors, enterprises can more efficiently allocate IT and human resources. By partnering with a managed services provider who can create and implement an IT strategy, businesses can focus on their core competencies to cut costs and increase productivity.

This article was written by Harry Wilson, an IT Consultant. Read more via Leap Consulting.

Whose Services Are You Really Procuring?

The workforce is fundamentally changing and it’s increasingly important that you can access the skills you need when, where and how you need them. But with the increase in corporate usage of external workers comes additional challenges and risks.

Driven by the digital age, we’re seeing a shift in the way work gets done. Globalisation and new ways of working are rapidly changing how talent interacts with companies, making it increasingly likely that the top talent needed by a business might not be – and might not want to be – on their payroll.

As a result, organisations increasingly rely on the external workforce – including contingent worker, Statement of Work (SOW)-based consultants, freelancers, specialized talent pools and more. In fact, these resources now account for nearly 40 percent of the average company’s workforce.

Why is this happening?

There are four factors impacting the way work gets done:

  1. Data: Data is the currency of the digital economy and we hear a lot about it these days. Big data is powering new insights and enabling better business decisions and outcomes.
  2. Digital technologies: Advancements such as artificial intelligence and machine learning are speeding processes and increasing efficiency. Looking forward, technologies such as blockchain will disrupt industries by facilitating the exchange of goods and services.
  3. Design-thinking or user-centered design: This is driving better experiences by putting people at the center of technology, not the process or the product.
  4. People: Perhaps the most profound change we are seeing in how work gets done is with people. Many of today’s workers – millennials, in particular – are looking for different experiences rather than spending decades with one company. As technology has enabled people to be untethered, the external workforce has boomed.

The result is that a significant portion of the external workforce is now comprised of service providers. To stay ahead of the competition, you need to be able to easily access this specialised and you need to be able to manage it effectively.

Challenges in services procurement

With more and more companies using external resources to fill vacancies, compensating for skills gaps and staffing ad-hoc projects, how do you know you’re getting the best talent at the best price?

With products, it’s relatively straightforward – prices are fixed and margins are small for suppliers. When it comes to services procurement, the situation is very different. Margins vary hugely and tend to be relatively high for the supplier.

For example: you’re looking for a plumber to work onsite at your facility for a specific time. Rates will vary depending on their experience and grade. When engaging your suppliers, how can you ensure that the person they send isn’t someone with little work experience who is charging a premium rate? Without insight into who is actually working for you at any given time and confirming that they are providing the level of service you expect, how can you ensure you’re not overpaying?

Organisations need a single place to go to source, engage and manage service providers. But many are managing this key labor segment with fragmented systems and processes which puts them at risk for excess spend, compliance issues and decreased quality.

A lifecycle approach

A solution lies in an external workforce management model. This model should include:

  • Visibility across multiple service providers and headcount tracking so you know who is working for you across your entire enterprise.
  • True demand management to enable the correct buying channels for each category of service.
  • Financial control, operational efficiency and collaboration, both internally and with suppliers.
  • Risk mitigation and compliance to rates and budgeting against contracts, along with the ability to discover how much a service cost last time to better forecast.

Enabling a services procurement solution to drive better operational control and rigor around services engagements not only enables cost savings opportunities, but enables key value levers including compliance, cost, visibility, efficiency and quality.

Procurement plays a strategic role in helping their organisation gain workforce visibility, be more agile and derive more value from their services procurement management. But executing the service only gets you halfway there – full potential is reached with management of the entire lifecycle.

Interesting in learning about more about the SAP Fieldglass External Workforce Management Model? Click here.

How Technology Can Drive Supplier Collaboration Goals

Supplier collaboration basically means that your goal is to communicate better, and work more closely, with suppliers for the best possible project execution.

According to Deloitte’s 2016 Global CPO Survey, one of the main goals for CPOs is to increase supplier collaboration. What is interesting, and slightly uncomfortable, is that the study also found that 60 per cent of CPOs do not have a clear digital strategy. To me, it seems that when you talk about communication and collaboration, technology is the the clear answer.

Collaborating involves many ideas that ultimately result in a partnership that works better together:

  • Communicate better, faster and more effectively.
  • Create a simpler procurement process between partners.
  • Define clear expectations from the beginning.
  • Share performance data for improvement.

Tactical solutions for these are seemingly very easy. But you can tackle these goals one by one, or face them all by considering the digital options you have. Many people believe increasing supplier collaboration can be accomplished by being more available, or just simply sharing more information. It isn’t just what you do, but how you do it.

Connectivity is Everything

There is a very real opportunity with procurement technology to solve your collaboration problems. Technology connects people in a way that was impossible in the past. Continuing to use old methods to communicate will hold you back on your collaboration goals.

Look at it this way. It’s already difficult to communicate internationally, so improve the way you communicate by eliminating the polluted email accounts. New procurement technologies are developing collaborative features such as live chatting.

What will really allow you to collaborate better is being easily accessible to suppliers and being able to connect to quickly. In turn, all your project communication is redirected onto your system rather than being spread thin in between emails, phone calls, and post mail.

Define a Simpler Procurement Process

Rather than saying “work better together”, you should be working towards making your entire procurement process simpler in order to collaborate better.

The complexity of working in procurement is extremely challenging, and even more so as CPOs try to implement new strategies to optimise operations. Organisational skills are very important for procurement professionals, so leveraging technology to help manage the complex processes can be incredibly valuable. You ultimately become a low maintenance customer to your supplier.

Even the smallest tasks, like simplifying document sharing can eliminate frustration. Create a hub for project related documents which can be updated, rather than engaging in the email document attachment dance.

You should think of the idea as redefining the way you do things to eliminate lengthy tasks and replacing them with short ones. Your team and suppliers would appreciate simpler processes, allowing you to both finish routine tasks quickly and reduce lead times.

Establish Clearer Expectations

With many options coming out into the procurement technology market, it is less valuable to try and tackle your challenges one by one. So if your goal is supplier collaboration, you should consider ones that allow you to invite suppliers to be a user.

A workflow management system that gives access to your suppliers can really close the gap. With access, suppliers can see your workflow, their role in the project, and keep track of progress.

Sometimes it is difficult to communicate compliance issues and other important information regarding the partnership and the roles suppliers play in the projects. Using technology to document clear expectations optimizes clarity on both ends. Suppliers understand what is expected of them and you can feel more comfortable knowing that. It opens the door for trust.

Data is Your Friend

Performance data is very simple to gather when automated. Giving constructive criticism should be an important component to your supplier collaboration strategy. Suppliers need to know key areas for improvement so that they are aware of your expectations and given a chance to better their service.

The most accurate and effective way to show performance is to provide data. Collecting scorecards regularly can keep track of trends that can tell you if your SRM is working. Awareness is only going to help your partnership so you need to collaborate to make sure you both are working towards improvement.

There are many options for procurement organisations, but essentially, the type of system you choose to deploy depends on your main goals. It’s time we stop looking for quick fixes and look for opportunities in technology to meet our goals.

If you’re looking to improve your supplier collaboration, Winddle is a collaborative solution for sourcing and procurement that can absolutely help make your goals a reality.