Tag Archives: digitisation

It Only Works If You Believe It Works…

As organisations embark on digital transformations, they must also be prepared to trust in ‘new-ness’, adapt to the speed of change and take note of the 3D’s… 

Last week the Procurious team hopped on a plane to Munich to attend Jaggaer’s REVInternational 2018 for two days of inspiring discussion on eProcurement innovations, digitisation, and the future of procurement.

One of the stand out sessions came from futurist Stefan Hyttfors who lectures on how innovation, disruptive technologies and behavioural change affects the worlds of business and social issues.

His mission? To inspire as many people as possible to embrace digital change.

Trust in “new-ness”

“I have a lot of friends working in tech and they often approach me to ask ‘What advice should I give to my peers?’

“And my frequent reply is ‘How come you believe you have any advice to give to your peers?’

“Because if we believe in the concept of disruptive tech then we must also be humble about the fact that experience and knowledge are a problem.”

The reality of the extreme pace of change hit Hyttfors hard last summer when his 20 year old son returned home from university for summer break.

As the family sat down for dinner one evening, Stefan took the opportunity to  interrogate his son about his summer plans; would he be spending the break getting some work experience?

‘No I’m not going to work” he replied.  “I value my time and I don’t want to sell it to anyone”

Instead of work he had conjured a number grand plans including a road trip around Norway and various other escapades.

Stefan’s line of questioning instantly transferred from ‘What are you going to do?’ to ‘How on earth are you going to afford it?!’

His answer, ‘Don’t worry dad, I have some bitcoin’

“This is the millennial perspective today,” Hyttfors asserts. “And money is a particularly interesting discussion, particularly across generations.  Where I was sightly skeptical about how far cryptocurrency should be trusted, my son was offended at the mere suggestion and far more wary of our banking systems.”

“Strange things are happening in the world; things that we don’t understand, thing that we ridicule and laugh at. We are guilty of assuming that our kids need to know what we know”

But in actual fact, it’s a trust in ‘new-ness’ that is going to become one of the most crucial factors for organisations in tomorrow’s world. Money is a great technology and a great innovation; it makes transactions smooth and solves a whole world of problems.

But, as with all technology,  it only works if you believe it works…

Pay attention to the speed of change

Disruptive technology is nothing new but the speed of change is ever-increasing. In the past, organisations had the luxury of time permitting them to be skeptical about and distrusting of new innovations, which took 50 years or more to catch on.

Nowadays we hear a buzzword for the first time and within a matter months it’s everywhere; “a unicorn company appears and usurps all the other companies in that space.”

“We talk about organisations like Kodak and Blockbuster as if they were stupid. But the problem isn’t that they were stupid. They were simply the best at doing something no one needs anymore.

“When you are very good at what you do you will not be the one to disrupt your own industry.”

There are examples of this happening in every industry. And it’s never because the old companies were poor. Someone simply found a new way to solve old problems

“The speed of change puts so much pressure on leaders.  But if you focus on making current processes more efficient you cannnot disrupt at the same time.”

The 3D’s of Digitalisation

As your organisation prepares for, and embarks upon,  digital transformation, take note of Stefan’s predictions for the future of digitalisation. It all comes down to the 3D’s…

  1. Dematerialisation

As technology advances it figures that we will simply need less ‘stuff’.

As Stefan points out, “If you can solve a problem digitally you don’t need material things.

“Don’t tell your kid that an iphone is expensive – think of all the junk you used to have to buy in the past to do the same job [a single iPhone can do].  It solves so many problems. Nowadays everyone in the world can take pictures for free.”

Dematerialisation means that more people can afford to do what used to be expensive and exclusive.

2. Deflation

Deflation, as Stefan sees it, means having “millions of micro transactions rather than thousands of  major transactions.”

Take cars as an example. They are absolutely not efficient; often parked for 23 hours of the day and contributing to congestion and pollution in our cities.

Along came Uber, which offers ‘mobility as a service’ and suddenly transportation is transformed globally.  Selling £50,000 cars is not an ideal model – mobility as a service is the future.

“We are a big world on a small planet and because of this sustainability will be the main leading strategy of the future.

“We need to make much more with much less.”

3. Decentralisation

We all like to believe that we are part of the last uninformed generation; that we have all of the answers and all of the information. But, in Stefan’s opinion, that’s simply not the case.

We will continue to face big problems and these problems can only be solved with global collaboration and global crowd-sourcing.

“We see a big decline in trust because people don’t believe in old institutions anymore” whether it’s governments,  law enforcement systems or our banks.

“Why should my son trust in a banking app when he can trust in a bitcoin app?”

“He believes in decentralisation, a world in which where there is no boss.” Because, at the end of the day,  it’s your boss that makes a system inefficient and corrupt.


Learn more about Jaggaer and  REVInternational 2018 

Bridging the Talent Gap in Procurement: Attracting New Hires in a Digital World

Want procurement teams to attract the best talent? Show us your stuff!

Ronnie Chua/Shutterstock.com

According to The Deloitte Global Chief Procurement Officer Survey 2017, 87 per cent of the respondents agree that talent is the single greatest factor in driving procurement performance. But the rates of new hires and recent graduates pursuing a career in procurement is decreasing.

That translates into a problem for the future of this function – a talent gap in procurement. But why?

Procurement is More than Cost Savings and Compliance

There are several reasons we can speculate as to why the workforce is pursuing careers outside of procurement, but in my opinion the overarching problem is that procurement is not seen as a ‘sexy’ career path. In the world of tech startups, innovative products, self-made social media sensations, and more, the idea of focusing on corporate cost-savings and spend compliance just doesn’t appeal – especially to the up-and-coming millennial workforce.

But the truth is, procurement is more than policing the organisation and saving company money. It’s about building relationships with internal stakeholders and external suppliers, drawing strategic insights from data to help others and using unique talent to solve problems.

Confession time: I’m also a millennial, and I think we have an opportunity here to fill the talent gap with eager new hires by showing what the new world of procurement is all about.

Show Us Your Stuff, Procurement

As employers and providers in the world of procurement, it’s up to us to make procurement a strategic and desirable field to enter. Hiding in the back office has made many of us modest, but it’s time for us to show off a bit to demonstrate the true strategic value procurement brings to the party. In reading The Deloitte Global Chief Procurement Officer Survey 2017, there were clear trends on how CPOs feel about the state of procurement, which led me to think about how we can apply those insights to address the talent gap.

Here are 5 ways to bring procurement careers into the modern world…

1.Create a digital culture

I’ll admit, I stole this one right from Deloitte’s recommendations because it’s spot on. 75 per cent of the survey respondents agreed – “procurement’s role in delivering digital strategy will increase in the future and are also clear that technology will impact all procurement processes to some degree.” And you know who grew up with technology from day 1 and is perfect for navigating a digital procurement world? You guessed it – millennials. Demonstrate to this up-and-coming workforce that your procurement department is committed to leveraging technology to automate and outsource the repetitive tasks, expedite the pace of business and enable them to focus on strategic initiatives. Invest in digital procurement today and think about how emerging technologies like AI, machine learning and robotics influence the procurement world. And best yet – involve your entry level procurement team members in these discussions. Give them the opportunity to shape and influence the path of technology at your organisation and make recommendations on your digital future.

2. Invest in employee development

According to the survey, 60 per cent of CPOs do not believe their teams have the skills to deliver their procurement strategy, yet investment in on-going training and employee development remains low. Demonstrate to your current staff and those entering the workforce that you recognise that people are key to procurement success and invest in their future with procurement and non-procurement training programs.

3. Dial-in on data

Data is the alpha and omega of the future and 60 per cent of the Deloitte survey respondents regard analytics as the most impactful technology for the function over the coming two years. So, this is a two-part recommendation: 1) Make sure to capture 100 per cent  of your financial data, and 2) Properly train current and future procurement professionals on data analysis. Analytics and technologies like AI and machine learning are only as good as the data that feeds them, so it’s imperative to build a complete data set for your employees to leverage. Gartner also says that data science and analytical skills are required in procurement to leverage a future with AI. Many professionals enter procurement to be hands-on in solving problems across the business – this could be saving money; negotiating better contracts; optimising the supplier base; helping other departments create and track budgets; reducing risk; finding funds to support new product innovation or growth, etc. Give these professionals reliable data and training to properly analyse it to extract actionable insights so they can act quickly and effectively on strategic initiatives.

4. Provide opportunities to influence innovation

Long gone are the days when procurement meant squeezing every penny out of suppliers and business partners. Now it’s about building strategic partnerships that can take your business to the next level and procurement is at the forefront of that effort. Young procurement professionals are going to be excited and eager to make their mark on something – let them help lead the charge in sourcing and nurturing relationships with key suppliers. Product innovation comes not only from finding the money to explore and test but also from finding the right partners that bring you the elements you need to build that innovation. Create collaboration between your procurement and product departments, as well as other departments for that matter, so that procurement becomes a true business partner and is actively involved in core business functions.

5. Build rapport with internal stakeholders

Another reason that procurement might not be seen as ‘sexy’ is the simple fact that people in other functions just don’t know what exactly it is that they do. If you’re a procurement leader, be a champion for your team. Help others understand what procurement truly is and communicate and celebrate your wins. Also look for opportunities for collaboration between your team and other business functions. Become an advisor during critical times like budget planning and showcase the talent you have in your team. When budgets remain flat, offer up procurement expertise to help other departments produce cost savings and new money from their existing spending habits. As the Deloitte survey eloquently says, “Procurement professionals should challenge themselves to understand functional stakeholders in the same way they do their suppliers.”

At the end of the day, many people are motivated by the idea of being a hero at work. What profession enables employees to swoop in and save the day better than procurement? There are not many. With the required people skills, analytical approach and desire to focus energy internally and externally, the procurement profession is a truly unique career path that doesn’t receive the credit it deserves. Look on to the future of procurement at your organisation and build the culture that attracts your next generation of hires.

To learn more about Basware’s approach to collaborative procurement, download the eBook: WeProcurementTM: Putting the “We” in e-Procurement and contact us to learn more about rolling out a digital procurement solution.

Procurement Agility in the Age of Digitalisation

How can your procurement team embrace the age of digitalisation  and develop an effective roadmap that ultimately puts you in the driver’s seat?

The digital enablement field is wide open, with no single right answer on how to proceed.

However, there are ways that can help organisations plot a way forward. CPOs must define a roadmap for change and align it with enterprise-level digital transformation initiatives.

Procurement think tank 2018

This year marks the fifth year that we have held our Procurement Think Tank. Throughout our work in the procurement field, we have strived to create an environment of real learning and interaction with business peers over topics that can be investigated in a deep way in an environment of open exchange through spaced-out gatherings to discuss a singular topic.

This blog is the summary of this year’s series and an excerpt of the article published in Procurement Leaders magazine. While many of the insights, and perspectives come from a small group of practitioners and may vary from company to company; nonetheless, the insights obtained can be applied across many organisations and industries. The complete article and related graphs can be read on Medium here.

2017 Focus On Driving Efficiency And Increasing Agility

As we wrapped up last year’s discussion, the group pressed us into looking at the area of procurement efficiency in context of the coming digital revolution. Most members conceded that their ability to learn about and master digital tools was inadequate, and they needed time to prepare.

The need to improve procurement efficiency (doing more with less) and at the same time master changes in technology (specifically the impact of digitalisation) are two very different objectives. They demand different resources, different thinking and different leadership, leaving procurement teams in an untenable bind; needing to contribute more but without the capability to assimilate new technology that might be a remedy for that problem.

The 2017 EU Think Tank Series theme was “Growing Digital And Agility Capabilities To Drive Efficiency In Procurement” to investigate the following issues:

  • What is the burning platform for Procurement Agility?
  • What are the major dimensions of growing agility?
  • Does growing a digital capability answer the issue of procurement agility?
  • Deep dive on key topics in the digital sphere:

1. How will Big Data and IoT technologies impact procurement activities?

2. What is AI and how can Procurement leverage the opportunity?

3. What is RPA and will it replace most procurement operational tasks?

  • Where is procurement now on the journey to a digitally enabled future?
  • Who are the leaders in procurement digital enablement?
  • How to assemble a digital roadmap?
  • What talent is needed to drive digital forward?

Agility – Making flexibility look like the plan

We probed the issue of Agility and the key elements must procurement teams master. The deep reflection on agility reveals that it is not just about flexibility, but rather a never-ending cycle of thinking-planning-action all in a devolved approval matrix (see my blog Agility – Making flexibility look like the plan).

The group recognised that while digitalisation might be a foundation, in and of itself, digitalisation is only an enabling tool of agility. When viewed in this context, the rush to become ‘digital’ is less of a frenetic all out race to do something ‘digital’ and more of a ‘pick-and-choose’ from a menu of enabling technologies that will most help achieve a business strategy.

However, while procurement is tasked with dealing with a broad range of new technologies, it also must deal with its traditional mandate. Bertrand Maltaverne, JAGGAER’s ‘Procurement Digitalist’, challenged the group with his perfect storm analogy. As procurement continues evolving toward digital mastery it still must manage increasingly complex supply chains, reduce risk, become more efficient, expand its influence and become a trusted business advisor. The enormity of these tasks has created a conundrum for procurement teams regarding which priority to tackle first.

Depressingly, procurement teams have not taken a leadership position with respect to digital technologies, opting instead for being a receiver of whatever mandates are forthcoming from broader implementation efforts. The data shows that most procurement organisations are either unprepared or have taken a ‘wait and see’ approach to digital technologies, often adopting them in a haphazard or uncoordinated way. The sheer number of available technologies that must be evaluated for their usefulness has stymied procurement organisations from building an effective path and being able to move forward.

The issue, of course, is two-fold. First, there must exist specific knowledge within the procurement teams about the technologies that are available, and secondly, leadership awareness of those technologies and how they fit together in the strategic landscape. Then and only then can a framework be developed that prioritises how and when to implement the chosen solutions. Today, most procurement organisations are not rising to the challenge in either of these areas.

While many new digital technologies are fast becoming standard, often, the solutions that promise the quickest way of making transactional processes more efficient are no longer within the purview of procurement. These activities have been subsumed into other, often larger, Business Services functions. While we have long been advocates of moving transactional activities to other functions, one can see the writing on the wall. The continued erosion of the procurement remit combined with automating technology, could easily foretell the doom of the function as we know it. The logical outflow of this, is that procurement is evolving towards a two-tier function; one where an enhanced set of operative activities is managed largely through digital technologies and another that is much more strategic, managing issues such as supply continuity, risk management, collaborative value creation and sourcing innovation.

How does a procurement team who is embracing the digital revolution develop an effective roadmap that ultimately puts (and keeps) them in the driver’s seat as to what technologies to adopt and at what rate to adopt them?  Our membership vigorously challenged us build a real-world model of how organisations must construct a digital path forward. A particularly useful insight was that no organisation can progress purely through a technological journey without fully understanding how that technology contributes to better strategy and insights. This relationship between new technology and better insights progresses through the entire digital journey. Thus, procurement teams must be in the decision chair as to which technologies get purchased.

So What Skills Are Required To Drive Digital?

Very few Procurement organisations have a digital strategy and roadmap, partially due to the broad range of technologies available. Simply put “there are too many digital options to know which to tackle first”. Even fewer organisations have talent and leadership to run their digital transformation. It is imperative that Procurement build its own digital roadmap that addresses specific technologies in a sequential format that is aligned with the company’s over digital strategy. We need to understand, recruit and develop specific digital skills at all levels recognising that the senior leadership is often most lacking. We grew fond of The Hackett Group’s conclusions in this area, pointing to four key attributes required to adequately embrace and drive the digital transformation:

· Intellectual curiosity: To deliver faster insight and build sophisticated models for business decisions.

· Technology savvy: Professionals don’t need to become data scientists or programmers, but they do need to be familiar with new technologies so they can have intelligent conversations with their IT peers and quickly adopt new tools.

·  Business Acumen: Staff needs to have a thorough understanding of the company, its operations, its value drivers and competitive environment. The imperative for the Business Partnering capability was amply covered in the output from last year’s Think Tank in this article.

·  Storytelling skills: Data is the mechanism that makes digital business possible, but the delivery mechanism is a “story.”

The Way Forward

1)  Define a digital roadmap and vision

Strategy needs to support organization’s overall approach to leveraging digital technologies to transform its business model and ensure that each investment in a digital capability must have beneficial business outcome. Favourable business benefits will help drive a new cycle of technological investments that in turn create greater benefit.

2)    Align with organisational strategy

On their own, big data, predictive analytics, or any of the other so-called ‘digital’ enablers are not valuable as stand-alone technologies. Outcomes need to help the business make decisions and drive actions that are consistent with the overall company objectives and digital plan. Any discrepancies between the two can create “technology islands” and put procurement at odds with corporate objectives.

3)    Build a Digital competency within procurement…

…to understand, master and lead the prioritised acquisition and implementation of digital tools.

We closed out this year’s series acknowledging that most organisations are at the very beginning of their digital journey, and it also left us with a strong impression that procurement teams have an intense desire to lead this effort in collaboration within the organisation’s overall digital strategy and not be a victim of it. Ceasing the leadership of this effort is the challenge.

Stay tuned for Think Tank 2018; we will drill down from the strategic level to one where we can examine how individuals and teams build knowledge and capability to bring digital insights to their organization and wider ecosystem.

This article was orginally published on LinkedIn.

The Digitisation Of Procurement Is The Gift That Keeps On Giving!

Want to enhance the customer experience but struggling to find the time? IBM’s, Lucas Manganaro, explains why the digitisation of procurement is the gift that keeps on giving!

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

If the job of a procurement department is to provide a service to the enterprise, then shouldn’t procurement folks be investing the majority of our time focusing on the experience of our business stakeholders and our supplier partners?

I think we should, but all too often what I see is the majority of procurement work hours being dedicated to spreadsheets focused on little more than unit prices, discount levels, rate cards and blocked invoices.

C’mon folks. We can do better than that!

Who has the time to be “customer-focussed”?

I’m not suggesting we ‘go nuts’ and forget about delivering bottom line savings to the corporation. I do, however, think that we will get more frequent opportunities to save, and more partnership on ways to save while driving mutual benefit, if we focus a bit more of our attention on our customers and suppliers and the experience they have when they choose to partner with us.

But who has the time?!

Certainly very few of us find ourselves burdened with surplus free time. We can’t add hours to the day but we can subtract time draining tasks that crowd out the good stuff.

Procurement practitioners require access to vast amounts of information to effectively manage spend. The data is often spread across a myriad disparate sources and often times the process of gathering and reviewing that information leaves little time for focusing on the experience of suppliers and stakeholders.

These include supply contracts, purchase order data, PCard and T&E card spend, invoice data, supplier performance data, supplier financial solvency data, catalogs, supplier mergers / divestitures / bankruptcies / name changes, internal part numbers, supplier part numbers, volume discounts, insurance certificate renewals etc. etc.

If you’re like me, you were probably some combination of bored, frustrated, and defeated by the end of that list and that list could have easily filled the rest of a page.

Why is digitisation so important?

There’s a lot of ‘stuff’ to consider. This is why digitisation is so very important for procurement. Getting the data off paper and into formats where it is visible and reachable is extremely important. This makes it much easier to collect, validate, coordinate, enrich and connect that data so that ‘whole pictures’ of the procurement process can start to come into focus. There is an abundance of amazing tools available to help streamline and automate procurement processes and the capabilities are growing by leaps.

Digitising the data and process is one of the most important keys to unlocking the value that these capabilities will deliver, and procurement organisations that get this foundational element right will have a substantial head start on delivering real value to their organisations.

Ask yourself a few basic questions on supplier information, sourcing process, or supply market dynamics. If you find that the answers to the questions require multiple system searches or spreadsheets it’s probably time to start a conversation about taking your procurement function fully digital. The investments you make in getting this right will pay you back with (among many other things) more time to spend building lasting relationships and great experiences for your stakeholders and suppliers. And those experiences will keep them coming back.

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.