Tag Archives: future of procurement

Procurement Will: My Takeaways from the Big Ideas Summit

The best insights in the world are no good if nobody acts on them. Time for procurement to follow through with some great, Big Ideas.

Photo by “My Life Through A Lens” on Unsplash

Last week, I had the pleasure of hosting a room full of some of the top procurement professionals in the country. This wasn’t just any old networking event though, it was the Chicago Big Ideas Summit. Not only were we inundated with interesting speakers and lively discussions that inspired us to keep pushing the boundaries of what procurement can do, but we were able to make new connections and let our hair down with our peers.

While we expected to be challenged and excited by the ideas shared, nothing could have prepared us for how much fun the day turned out to be.

As procurement professionals, we have an important role in driving change in the world around us – both locally and globally – and these changes are about so much more than saving money.

While I have enough notes from the day to fill a book, here are three of my biggest takeaways from the Chicago Big Ideas Summit:

Procurement must become the knowledge centre of an organisation

With the reach of procurement growing every year, defining where it sits within an organisation can be a challenge. Strong cases can be made for both operations and finance, but as risk management rises as a crucial pillar for the profession, procurement is increasingly becoming known as the knowledge centre of an organisation. As Justin Crump, CEO of Sibylline said, “The best insight in the world is no good, if nobody acts on it.”

With unique insight into potential and emerging threats including environmental, political and social issues, it’s the procurement professional’s responsibility to not only understand how to navigate these risks, but to share them with the rest of their organisation to ensure swift action can be taken.

Pat McCarthy, SVP & GM for SAP Ariba and SAP Fieldglass, agreed that harnessing this information network is crucial to the future of procurement. “Information and insights light the way for procurement to add value.”

With oversight of risk, slavery and cost to data and solutions, we need to be able to share and integrate this knowledge into our organisations to truly demonstrate the value of effective procurement.

How do we invest in the future of procurement?

The war for talent is underway and with many coming to the profession through alternative channels, we need to be constantly thinking about how we can attract and retain the right type of talent. As Professor Moran Cerf told us, “We might be the last versions of humans that will train the brain to think differently due to technology.”

That means that not only do we need to ensure we’re hiring people who understand and can develop alongside the evolving technologies, but we need to be conscious of emerging soft skills and emotional intelligence to help the next generation of procurement professionals succeed.

We have top talent in the United States, but we need to help unleash them from “inside the box” thinking to ensure we’re working together to innovate and solve emerging issues of the future.

Our panel discussion lead by Dawn Tiura, President and CEO, Sourcing Industry Group, discussed how the procurement professionals who prefer the ‘beat up and buy’ sourcing mentality have become irrelevant, and we’re now more interested in talent who can demonstrate their Adaptability Quotient (AQ). The ability to demonstrate agility, be naturally curious and respond to change will all be crucial going forward.

Supplier and Stakeholder Partnerships are Key

This might not be the most mind-blowing concept in procurement, given that maintaining relationships with stakeholders is at the core of what we do, but how we work with our suppliers in the future is going to be the key to success.

Diego de la Garza, Director of Source One, said, “We need to know the problem we are trying to solve, then facilitate the process between stakeholders and suppliers to create ideas that will solve that problem.” That means that we must let go of the idea that contract negotiations and supplier relationships are about beating down the price and embrace the partnership style of working.

“Reliable supply chains give you control over the unknown,” said Bradley Paster, VP North American Sales, riskmethods during his presentation. The most effective way you can ensure you have a reliable supply chain is by working with your suppliers and stakeholders to add value, solve problems and innovate to find a better way forward.

Value will always drive buying decisions, but the true value of procurement can be measured beyond cost and working with our stakeholders can ensure we’re adding value not just to our bottom line, but to the improvement of our global community.

As Jamila Gordon reminded us in her closing speech of the day, there is hope. The future is bright and procurement is the key for driving great changes in our world.

Feel like you’re late to the party? Or did you just get swamped and weren’t able to tune in on the day? Well, fear not, you can still access all the great content, videos, keynotes, presentations and all the discussion in the Big Ideas Summit Chicago 2019 Group! By clicking here, you can join the group and catch up when it suits you.

One Small Step for People, 5 BIG Ideas for Procurement

Change all starts with one small step. But Big Ideas are great in helping us get our feet moving!

Photo by Joshua Earle on Unsplash

What happens when Australia’s biggest CPOs and procurement leaders gather in one room?

You get a flood of ground-breaking ideas that are bound to push our profession into an exciting new era.

The Big Ideas Summit Melbourne 2019 has wrapped after a day of thought-provoking speeches, lively discussions and the unforgettable sight of 120 procurement professionals hopping on one foot before their morning coffee. You probably had to be there to believe it, but it’s true.

A recurring theme throughout the day – both from our presenters and from the attendees themselves – was fun. Whether they were creating unusual networking opportunities, encouraging us to gamify our processes to make the mundane tasks more enjoyable, or reminding us that positivity was the secret to longevity, fun permeated this procurement event.

Our line-up of inspiring speakers spent the day continually challenging existing ideas and shifting the goalposts as we took a glimpse into the future. Here are five of the biggest ideas to come out of the Melbourne Big Ideas Summit this year:

1. Co-design is the essential skill needed to succeed in Industry X.0

Ben Tulloch, Managing Director at Accenture, lead us on a journey through the history of procurement. We’re standing on the cusp of Industry X.0. Soon we’ll be utilising the full force of advanced technology and challenging the ways we do business to become faster, smarter and better.

But what do procurement professionals need to focus on now to best utilise emerging technologies in the future? Co-design is the ability to actively involve all stakeholders in the problem-solving process, focusing on the user and pulling apart the problem to find the best answer.

2. Think with your head, but lead with your heart

We all know the three C’s of procurement: cost, control and compliance. But Henrik Smedberg from SAP Ariba believes we need to be aware of three new C’s: convenience, connectivity and conscience.

It’s time to move beyond just checking the boxes of legal compliance, and start using our hearts to think about the humans affected by problems like modern slavery.

But if administrative processes to monitor our supply chains are too difficult, they simply won’t happen. We need to utilise tech solutions to manage and automate our supplier risk administration. Only then can we have a more holistic view of our suppliers and be proactive about driving change.

3. Psychological safety is the number one factor in high performing teams

We’re at record high levels of anxiety in the workplace. When we’re under extreme stress our brains can only focus on getting the task in front of us done, making us lose our ability to think creatively, innovate and problem solve.

To counteract this and create high performing teams within our businesses, John Dare of Emotous believes we need to create a positive environment and foster a level of trust that will lead to psychological safety.

This is the common thread of high performance – the confidence to innovate, share ideas and take risks with the support of your team.

4. We need to give new starters support to agitate change

During their panel discussion, Billie Gorman of Accenture, CPO of the Year, Lisa Williams, and Future Leader in Procurement, Sapphire Loebler, tackled the issue of encouraging the next generation to drive change.

Ultimately, we need to give them room to operate, an opportunity to speak and the space to try new things. Whether they make mistakes or have success, there will be important learnings that will benefit the business going forward.

5. Agile procurement is a competitive advantage

Agility and flexibility are big news at the moment. It’s a trend that has crept in from software development into all facets of the business world and is increasingly becoming important in procurement.

Andrew Shaw, Enterprise Sales Manager at Felix, shared how agile frameworks can help to increase efficiency, simplify processes and shorten delivery times. Moving away from rigid plans make you more able to adapt to change – an increasingly important skill as the entire profession evolves exponentially.

The Big Ideas Fun isn’t Over Yet…

As an added bonus, our high-energy MC, Dean Gale from Phuel, reminded us of an important lesson for all procurement professionals: learning and growth comes from incremental changes and regular challenges. If we’re going to drive change within our company – and the wider world – it all starts with one small step.

Thank you to everyone who joined us in Melbourne and online – we can’t wait to see what ideas await us in Chicago on September 18th.

Did you miss out on Melbourne? Or can you just not get enough of the Big Ideas vibe? If you want to get more, more, more, there’s still time to register as a Digital Delegate for the Big Ideas Summit Chicago 2019. Even if you can’t be there in person, you can still be in the room. Find out more and sign up today here!

The 4 Fundamental C’s of Success – Part 1: Clarity

How do you thrive in the new world where we need to be in control of our mind and embrace technology as it becomes more powerful. In a new article series we explore the four fundamental C’s of success.

By Sander van der Werf/ Shutterstock

How do you thrive in the new world where we need to be in control of our mind and embrace technology as it becomes more powerful. In a new article series we explore the four fundamental C’s of success. In this first article, Charlotte de Brabandt explores the importance of clarity.

To have clarity is to have the ability to be coherent and intelligible. It means to be able to have a clear mind, with thoughts focused on that which you intend them to be focused on. Gaining clarity comes when you think straight using intelligence and power , becoming aware of what is really important to you and to letting go of all other thoughts. Those without clarity never accomplish much of anything because their minds are full of unnecessary thoughts. As such, they can’t see clearly where they are going in life, making it difficult to make decisions and move forward. With clarity you can focus on the correct direction to lead you to the results you aim for. You are able to focus on your goals, and making decisions to attain those goals becomes simpler saving you time and energy and increasing your success. If you are unclear about what your goals are, then your results will be unclear too. Clarity is all about what you really want to achieve, so to start attaining clarity, ask yourself, “what do I want?”

This might be financial, physical, emotional or literally anything you desire. You absolutely must know what you truly want so you can work effectively to achieve it. From this point you will start to think straight without the endless confusion in your mind you perhaps once had. Once you know what your set of goals are, you can start making a clear plan of action in order to start attaining those goals. There will be many steps in your plan of action and at this stage you won’t know what they all are. If you do, then your aim is not set high enough! Write down the steps you know you will have to take to achieve your goal, but be aware of the unknown steps ahead and be flexible as you progress towards your goal. You may encounter different paths or opportunities on your journey towards your goal that will change your plan, be open to them. The important thing is to keep clear what the main objective is and stay focused along the way. As you progress along your journey towards your goal, every next step will be presented to you and your job is to take action on the presented step in order to move forward and receive the next.

As you continually visualise the attainment of your goal with focus and emotion, simpler ways to achieve your goal will be presented to you and you will continue to build your belief in the achievement of that goal, no matter how big it might have seemed at the beginning. Often making decisions is difficult. Even when you know your goals and aims, decision making is like a muscle, which has to be worked. In the beginning of your decision making process it will help to write down all of your options and eliminate them one by one, taking time to meditate on it until you can see with clarity the best decision for you to make . Lay your options out clearly and accurately so you are able to think with clarity about taking the correct next step. Then once that step is decided upon, do not look back, do not look to the side. Stay focused and bring your goal to your physical reality. As you continue to make decisions, meditating on what is best, your intuition will grow stronger and you will be able to make your decisions with more speed and accuracy. Remember making fast decisions is an important step and with clarity and a strong intuition, your ability to make fast, accurate decisions will become very simple.

“The clearer you are, the simpler things become”

What Can Yoda Teach Us About The Kraljic Matrix?

The Kraljic Matrix revolutionised Procurement in 1983. Now the world looks very different. Is it time for an upgrade?

By Yuri Turkov/ Shutterstock

The year was 1983. This was the year that the Internet was created. Bill Gates unleashed Microsoft World on the market. Star Wars Return of the Jedi was playing in the cinema. I was nine. And a director at McKinsey in Dusseldorf wrote an article that would change Procurement forever. The author was Dr. Peter Kraljic. The article, published in the Harvard Business Review, stated: “Purchasing Must Become Supply Management“.

A Procurement Transformation

Kraljic recognized that the world was changing fast. He saw that if Procurement continued business as usual, it would expose itself to competitive pressure. If it was to survive, it would have to move into strategic supply management. This was the dawn of the Kraljic matrix. It would have a transformative effect on Procurement. The philosophy (that remains valid today) is that not all spend, all suppliers, all customers & are the same. So, Procurement needs to build tailored and differentiated strategies, notably taking into account profit impact and supply risk.

Fast forward to 2019. A lot has changed. The Cold War is history, and the Internet dominates the globe. The iPhone in my pocket has way more computing power than my first computer, a Commodore 64, also from 1983. Since Kraljic published his famous article, world trade has quadrupled and globalization has exploded. Procurement is operating in a much faster, bolder world than it was in 1983. It faces new challenges like Corporate Social Responsibility and ethical supply chains. In short, our current environment today is more “VUCA” (Volatile, Uncertain, Complex, and Ambiguous) than it ever was.

The Next Evolution Of The Kraljic Matrix

“Since the early 1980s, pioneering individuals and companies such as Peter Kraljic, Michael Porter, and A.T. Kearney have pushed procurement professionals to think more strategically about the art and science of strategic sourcing. […] But times have changed. Today’s environment is more dynamic and is filled with greater uncertainty. The tried and true tools and tactics adopted over the last 30 years as the “gold standard” are not as effective as they once were.” Strategic Sourcing in the New Economy: Harnessing the Potential of Sourcing Business Models for Modern Procurement by Bonnie Keith, Kate Vitasek, Karl Manrodt, and Jeanne Kling

In some ways, the Kraljic matrix still works well. The segmentation at the heart of it remains valid. But the world is so complicated now, the matrix becomes more like a Kraljic Rubik’s cube. There are many more dimensions and parameters to take into account than there were back then.

Procurement now needs to win the Holy Grail of strategic supply management: value. Take Total Value of Ownership (TVO), for instance. Before, sustainability and risk were considered as nice-to-have, but not necessary. The TVO model places non-price information firmly within calculation of cost. This is a concept of sourcing in which the buyer has all the cards in their hand. But more than that, TVO enables the buyer to create bonus-penalty systems. In effect, it is a calculation of value that enables Procurement to identify how they can increase value after the award has been made.

Evolve Or Stay In The 80s

“My colleagues developed [the matrix] further and experimented with a nine-box version that allowed more flexibility. But always it must be adapted to the characteristics of the company where it is being used.” Dr. Peter Kraljic

The evolution of strategic supply management is challenging. Seeing the Kraljic Matrix as a Rubik’s cube is one thing. Solving the cube is something else entirely. Collecting the enormous amount of information and data that you need for this is almost impossible on your own. However, the change that makes the world so complicated also gives us the tools we need to keep pace: technology. Procurement must have a digital transformation strategy.

Also, and beyond tools like Purchasing Portfolio Analysis matrixes (that needs to evolve to be subtler), it is critical for Procurement organizations to look beyond the technical aspects of the profession. Procurement activities encompass more “soft” activities that require interpersonal skills. It is all about relationships and, even if tools help in defining the right type of relationship to build in a specific context, they fall short in delivering the “human” dimension. Also, that same dimension should be integrated in the tools and models we use.

The “experience” of working with procurement (for suppliers and for stakeholders) is as essential. Procurement delivers a service in a human-to-human context and becoming the supplier/customer of choice requires more than just tools. Digital transformation is not just about tools!

Therefore, just like Yoda “burns” the Jedi Books in “The Last Jedi” to teach Luke a last lesson by symbolizing the need to be able to move forward while being mindful and even respectful of the past, it may be the time for Procurement professional to “burn” the matrix.


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Is Artificial Intelligence Destroying Your Job?

Just because a machine can learn from mistakes doesn’t mean it is self-aware and about to deploy robots to destroy humanity throughout time and space.  But it does mean that increasingly, machines can take on more and more human work.

By Leremy / Shutterstock

On 11 February this year, President Trump signed an executive order directing US government agencies to prioritise investments in Artificial Intelligence (AI) research and development. There isn’t any detail on how the AI Leadership executive order will be paid for, but as a statement of intent right from the top, it’s pretty powerful.  So, is this something you need to worry about?  Will robots be taking your job next Tuesday?  Probably not, but the answer is not as reassuring as it sounds.

When we think of AI, we probably think of Skynet (the evil computer that hunts humans in the Terminator films) or the similar tricked-up calculator that is the meanie in the Matrix films.  But real AI is a little more mundane.  It is more likely to be making sure your car headlights are on when you need them (and not on when you don’t), sending a nuisance spam call to your voice-mail or suggesting the next thing to watch on Netflix.  AI is the catchall term for software that can solve problems based on rules rather than a linear set of fixed instructions.  Really advanced AI can modify the rules based on how things turned out the last time or patterns that it detects in the environment.

Just because a machine can learn from mistakes doesn’t mean it is self-aware and about to deploy robots to destroy humanity throughout time and space.  But it does mean that increasingly, machines can take on more and more human work.  In recent decades we have seen this kind of automation steadily eat away at assembly line jobs as increasingly AI driven robots replace workers performing limited and repetitive functions.  A robot can sort big apples from small oranges more efficiently than a human and it never needs to take a break (or be paid). 

As the technology advances, it’s starting to creep into areas we might have thought of as immune from automation.  Medical diagnosis is increasingly the target for deep learning AI, the kind that recognises patterns and makes predictions based on those patterns.  During their career a doctor might see a few thousand x-rays or MRI images and get better at noticing patterns.  But AI software can review every x-ray ever made before the doctor has finished her morning coffee. 

A recent study, for example, compared the diagnostic precision of AI software with that of teams of specialist doctors from all over China.  The AI software was 87 per cent accurate in diagnosing brain tumours in 15 minutes.  The doctors could only diagnose 67 per cent and needed twice as much time to do it.  The AI increased precision and saved time because it was able to learn from a much larger base of experience than any individual doctor or team of doctors ever could. It uses like this that are why AI is predicted to add $15 trillion to the global economy by 2030.

President Trump joined the 18 other countries that have announced AI strategies since March 2017, because he wants the US to be a leader in AI rather than a follower.  And it is why investment in AI based startups jumped 72 per cent to almost $10 billion in 2018 alone.  

And even though some analysts are predicting 1.8 million jobs will be lost to AI in 2019 alone, those same analysts are predicting that the AI industry will create 2.3 million jobs in the same timeframe.  You can’t buy buggy whips now because the industry that created them was destroyed by Henry Ford, but there are many more jobs in the automobile industry he created than there ever were in the one he killed.

When analysts from McKinsey looked at the employment impact of AI in five sectors last year, they concluded that jobs which use basic cognitive skills, such as data input, manipulation and processing will likely decline, while demand for higher cognitive, social and emotional, and advanced technological skills should grow, as will the number of jobs that require customer and staff interaction and management.

If your job could be classified as administrative support then the future does not look bright.  And even if it requires you to do years of training so you can manipulate or recognise patterns in data, like those Chinese doctors, a financial analyst or a military strategist then AI will be coming to a workstation near you within the foreseeable future.  Humans are still a little too messy and unpredictable for the average AI bot.  So, if your job needs you to interact with humans and please them, such as in direct sales, management or counselling, then you are probably safe, for now.  And of course, if you are writing the programs that drive the AI then your career is assured.

AI is rapidly changing the face of the modern workplace.  And while nothing much will change by the end of the year, by the end of the decade, most jobs will be unrecognisable.  You’ve been warned. It’s time to transform yourself from a data geek to a people-person, before your computer takes your job.

5 Steps To Providing Procurement As A Service 

The core activity of Procurement 4.0 will be to deliver <<as a service>> in the same way that cloud technology has evolved…

By Black Salmon/ Shutterstock

At Ivalua Now The Art of Procurement earlier this month, Emmanuel Erba, Group Chief Procurement Officer – Executive Vice President -Capgemini discussed what the journey leading us to Procurement 4.0 could look like.

In an unprecedented period of technological disruptions, we simply cannot escape them. Emanuel advised that procurement professionals choose to see this as a realm of opportunity and question how to deliver all the promises of digital transformation to our clients.

The procurement environment is changing and this must be embraced or the profession will sink like a stone, he warned.

Unpredendented disruptions

  1. Cloud : Cloud is now the primary way of delivering and consuming IT – it’s the new normal. No one can imagine running a business without cloud computing
  2. Cybersecurity:  Last year, 689 million people globally were victims of cybercrime. By 2020 60 per cent of businesses will suffer major service failures. In today’s world, no CEO goes to bed certain that tomorrow their company will not to be impacted by a cyber threat. Cybersecurity needs to be integrated within our systems
  3. Business Platforms: These are a core feature of our current landscape. Business platforms have enabled getting the client closer to the supplier
  4. Industry 4.0
  5. AI and automation: This will strongly disrupt data gathering and processing. Repetitive and mundane tasks will be automated

What would your CEO say if you asked them what their priorities are? It’s likely that the way you manage costs is not high in the agenda. It’s important to understand what top management wants and what your clients expect and then work out how your procurement team can address these needs.

Emmanuel believes that the core activity of procurement 4.0 will be to deliver <<as a service>> in the same way that cloud technology has evolved.

Five forces driving the market towards <<as a service>>

  1. Time to scale – The speed at which the biggest brands are growing is ever-increasing. For organisations including Youtube, Amazon and Android the time taken to go from 0-80 per cent WW market share is only five years
  2. Disintermediate– Direct access to the resource to capture value – for example Uber, AirBnB and Apple
  3. Go to market – GTM via most powerful marketplaces powered by AI, automation, analytics. For example, digital ads sold Teslas with $70 million in advertising investments
  4. Revenue share – All of these factor are funded by 20-30 per cent revenue share model and leverage of client assets
  5. Investment power – Free cash flow generated enables immense CAPEX ability and acquisitions

5 steps to providing procurement <<as a service>>

For procurement, the 4.0 wave should

  1. Integrate disruptions – let’s not ignore disruptions, Emmanuel argues, they are much more powerful than us!
  2. Gear its people to embrace – Globalise!
  3. Position its role as aggregator of services, either internal or external, and map them to the business outcomes of the organisation
  4. Adopt the platforms that will increase the speed of execution, the automation and the data insights
  5. Think not only bottom line impact but being a Growth Enabler

In the <<as a service>> world, you don’t need to integrate everything vertically, but rather focus on your key differentiators and aggregate other services in the most effective way thinking in terms of meaningful outcomes.

Procurement as a service can address sizable needs both in direct and indirect spend. As Emmanuel revealed Procurement cloud addresses a $5 trillion scope.

Procurious attended Ivalua Now The Art of Procurement earlier this month. Find out more here.

AI and Procurement: Boldly Going Where No Team Has Gone Before?

The battle of “human vs. machine” is raging in Hollywood and, increasingly, in the workplace. What does the future hold for AI?

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2001: a space odyssey… Terminator… The Matrix…

If you were to believe some of the sci-fi blockbusters, you’d think our future as humans is pretty bleak. They all offer a dystopian view of the future where, if the machines don’t kill us, they enslave us.

The battle of “human vs. machine” also seems to be raging outside of Hollywood, and we humans seems to be losing more and more ground to machines each year. Some of this ground has been lost in the world of gaming. Over the past decade, machines have been beating us at increasingly complex games more and more often. Looking back at these “wins” for the machines, we can see some key stages in the evolution of Artificial Intelligence (AI):

•    Deep Blue won against Kasparov at chess in 1997. It was rather dumb but powerful. With brute-force & human-created logic, Deep Blue was able to test and evaluate every possible sequence of moves at every turn and choose the best one.

•    Watson defeated Jeopardy champion, Ken Jennings, in 2011 and was smarter than Deep Blue. It had to understand natural language and find the relevant knowledge from various sources like encyclopedias, dictionaries, thesauri, newswire articles and literary works.

•    Google’s Alpha Go won against Go’s world champion Less Sedol in 2016. To achieve this result, it had to learn from humans from thousands of past games. This is because, unlike chess, which has a limited number of moves, Go is one of the most complex board games in the world, with more possible moves than the number of atoms in the universe. The second generation of Alpha Go learned by itself by playing against itself millions of times to discover what works and what does not.

•    Libratus beat four expert players of Texas Hold ‘Em poker. It also learned by itself and was able to understand behavior because poker is a game of luck, deception, and bluffing!

While very impressive, these victories also show that machines are still dumb when compared to everything that people can do. Machines excel at one thing and have the intelligence of a two-year-old or less for everything else.

What we can learn from sci-fi movies and the battles being waged on the gaming front, is that AI has many faces:

Today, despite all the hype and buzz, computers are still only at the narrow intelligence level. But even at this level, the potential applications of AI are endless.

As far as Procurement is concerned, the same applies: machines are far from being able to replace Procurement teams. Instead, new technologies have another purpose: augment people to achieve better outcomes.  This is a definite shift from the last waves of technologies, which were mostly focused on automation and staff reduction.

Machines in procurement get a promotion: from admins to colleagues and consultants

AI, in short, is all about learning from data to develop new insights and using this new knowledge to make better decisions. It is also about continuous learning and improvement. AI is a master of the “Kaizen” philosophy! This makes it a precious ally for Procurement and AI should therefore be considered as a team member within the broader Procurement ecosystem. Experience shows that “people + machines” get better results than people alone or machines alone.

Of course, in Procurement and in general, it is undeniable and unavoidable that AI will impact the future of work and the future of jobs. Work will continue to exist, despite potentially significant job displacements. While some jobs may disappear, new ones will come to take their place, and most will be transformed by the imperative of cooperation with smarter machines. Procurement jobs will also be impacted and future procurement professionals will require a new set of skills. For example, data analysis and modeling will become a core competency next to more traditional business and relationship management skills. This is because the “data analyst” component in activities will grow due to the collaboration with AI in order to:

•    Train AI and ensure that data is relevant, complete, and unbiased

•    Monitor outputs (recommendations, actions, insights, etc.) of the AI system to ensure relevance, quality, take more contextual / soft aspects into account, and safeguard against AI shortcomings.

Space: the final frontier. These are the voyages of the starship Enterprise. Its five-year mission: to explore strange new worlds, to seek out new life and new civilizations, to boldly go where no man has gone before.

To conclude on a more positive and optimistic note than where this article started, I have taken inspiration from another sci-fi classic.  I believe that the future lies in a new type of cooperation between humans and machine.

The duo Dr. Spock and Captain Kirk illustrates, to some extent, how such cooperation is possible and can offer the best of both worlds. By combining Captain Kirk’s instinct and emotional intelligence with Spock’s logic and reasoning skills, they were able to successfully tackle any challenge they encountered.

New developments like explainable AI (XAI) and “caring AI” will make machines of the future even more human and will allow them to take an even more active role in our personal and professional lives. AI will continue to augment us, not replace (or kill or enslave) us.

So, Procurement people, live long and prosper!

3 KPIs for Digitally Transforming Your Business Spend: How Do You Measure Up?

If CEO predictions are any indicator of what’s to come in the business world, buckle up, because we may be in for a bumpy ride. Here are three of the most influential KPIs for purchasing, invoicing, and expenses. 

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If CEO predictions are any indicator of what’s to come in the business world, buckle up, because we may be in for a bumpy ride. According to PwC’s annual CEO Survey, there’s been a 436 per cent increase in the number of CEOs saying they expect global economic growth to decline this year. Just 35 per cent said they are “very confident” about revenue prospects for the next year.

So, what’s a business leader to do? The most popular answer seems to be “look inside-out for profitability and growth.” Faced with economic uncertainty, finance and procurement executives are increasingly challenged to not only uncover and deliver savings opportunities, but also to reduce risk, support innovation agendas, and create levers for growth.

3 Digitisation KPIs to Measure Your Procurement and Expense Process Maturity

It’s important to set measurable goals to assess the maturity of your procurement and expenses processes. By analysing the largest accessible source of business spend data (the nearly US$1 trillion that flows through the Coupa platform), Coupa Business Spend Management (BSM) experts have identified 12 Key Performance Indicators to help you gain insight into and advance your organisation’s maturity across the spectrum of BSM processes, from sourcing to procurement to payments.

Here are three of the most influential KPIs for Purchasing, Invoicing, and Expenses and how companies with digitally mature processes are performing in these areas:

1. Purchasing KPI: Percentage of Electronic PO Processing: 89.7 per cent

What it is: The percentage of POs processed digitally measures the success of eProcurement initiatives designed to reduce PO processing time and employee and supplier frustration.

Why it matters: A high rate of digital POs often means that procurement teams have time to focus on strategic initiatives, like lowering risk and optimising productivity, instead of chasing lost orders.

2. Invoicing KPI: Invoice Approval Cycle Time: 30.7 hours

What it is: The average time, in hours, from the time of invoice submission to the time of final approval measures the efficiency of the entire approvals process.

Why it matters: A short invoice approval cycle time assures that there are no unnecessary project delays due to payment delays. It also enables early payment discounts and fewer status inquiries while decreasing the risk of late payment penalties.

3. Expenses KPI: Percentage of Manual Expense Audit: 6 per cent

What it is: The percentage of expense reports that go through human audit reflects the precision and accuracy of existing controls and compliance throughout the expenses management processes.

Why it matters: A low percentage of manual auditing implies that expense policies and automated audits are effectively ensuring compliance. Large numbers of manual audits place a costly administrative burden on AP teams.

Learn More About How to Use Benchmarking Data to Drive Success

Want to find out what the other nine KPIs are and find out how your organisation measures up? Read Coupa’s 2019 Benchmark Report to learn more about how focusing on improving these critical KPIs can help you improve profitability, streamline operations, and achieve efficient growth.

For extra credit, join us at Coupa’s next webinar! We’d love to see you at our discussion about Building A Strategic Procurement & Finance Alliance to Enable Growth with Levvel Research and Coupa CFO Todd Ford to explore how business leaders can use KPIs and benchmark data to reduce silos in the back office. We’ll also take a look at:

  • New data on the state of procurement and finance collaboration
  • Procurement and finance efficiency benchmarks of high-performing organisations
  • Strategies for reducing departmental silos and creating spend management visibility

Reserve your spot today. We can’t wait to see you!

Voicemails Are Dead So Why Do We Use Them?

Why do we all have a voicemail system and why do people continue to leave them? Abby Vige discusses instant gratification

By Aniwhite/ Shutterstock 

When we’re stuck in the work grind and we see our phone light up with news from beyond our present moment, our spirits buoy a little! Yay! Then we drop when we realise it’s just a voicemail. It’s almost as bad as when you think have a text but it’s just spam from your telecommunications provider. Sigh.

Confession

I have to admit that I never clear voicemails, some people even state in their voicemail greeting that they do not clear them, so why do we all have a voicemail system and why do people continue to leave them?

Voicemails date back to the late seventies when a chap patented his unique “Voice Message Exchange” and sold the electronic message system to 3M. Since this master stroke of genius, we have never looked back. When voicemails were invented they made sense, there were no emails and faxes were yet to reach their peak. But do they make sense as a business or connection tool in this modern era?

A message from beyond

The reason I don’t tend to clear my voicemails, is because as soon as someone leaves one the news instantly old. Or, there is very little information that warrants the effort of clearing them all and then phoning each individual back “hey, Susan from accounts here, phone me back” why should I?

Enter the experiment phase…

After having this question kick around my head for awhile, I decided to scratch the itch of my curiosity and prove what I thought to be true. I listened to every voicemail across 2-3 days and phoned each person back, the top results were:

  • They had already emailed me the query and was surprised I was phoning them
  • The issue at hand had substantively evolved
  • They had found out the answer themselves

The motivation for them to leave the voicemail had initial merit, but in some instances, just minutes later the situation had changed. My stark conclusion was that most of the conversations were in effect, a waste of time.

Now, I don’t want to be seen as a VM hater, Procurement is a customer centric, customer service industry. But this is not the way I add value to my customers or to my organisation. Voicemails fall in to a “reactive” space for me and I’m much more of a pro-active gal. I love to be accessible to my customers, but you’ll often find me at their desks in person because face to face conversations are worth it.

What’s driving Susan?

The experiment was interesting and somewhat validating but the question remains, why do we feel the need to leave the dreaded VM in the first place? Most people assume that it’s because email as a written form, takes longer to write out verses simply phoning the person and requesting that they phone you back. It’s also generally accepted that voicemails enable us to convey emotions and urgency.

But what is really driving us is more of a simpler basic human need, the need for instant gratification. The term itself is self-explanatory but it in this context what is driving us is our self-centric view of the world. Even though we know it makes sense to write an email and include more information and leave it for when the person is available to digest it, we forgo these long-term benefits in favour of short term benefits that resolve something in our world, we feel better.

This is subject that has piqued curiosity for many years and found its roots in pop culture through the 1960’s infamous “Marshmallow experiment”. This was a major psychological study conducted by Stanford Professor Walter Mischel where children between 4 and 5 years old were given the choice of having one marshmallow to eat right away or they could wait for the researcher to come back and they would get two. The results of watching the kids wait has been the subject of many a video and even adverts.

How this plays out at work

The desire for short term gratification is often exasperated by the pressures of a work environment where the sense of needing to get things done and done quickly rules supreme. What underpins the need for instant gratification? The need for the issue to be passed on, to be received – ultimately to be heard.

We eat the marshmallow over and over, we can’t wait, we can’t help ourselves. Those of us that don’t leave voicemails most likely transfer the gratification to other media or medium. Even your neat and pretty to do list or post it note system fits the short term satisfaction bill.

The biggest insight gained from the experiments was the link proven between delaying gratification and being successful in life. Those 4 and 5 year olds from the 1960’s that waited for the second marshmallow, had higher academic scores, lower levels of substance abuse, lower likelihood of obesity, better responses to stress, better social skills as reported by their parents, and generally better scores in a range of other life measures.

What we can learn

If we train ourselves to be less reactive and to delay those hard wired gratification urges, we can increase our productivity in focused and targeted areas. Ultimately raising our value to the organisations we work for, whether that is a company or working for yourself.

Take the challenge….

  1. Don’t leave voicemails
  2. Pay attention to your inner world, before you take action, think about what is driving that action
  3. Start small and repeat that small action each day
  4. Keep visual reminders about your top priorities
  5. Keep yourself accountable

Make 2019 The Year Your Stakeholders #loveprocurement!

If procurement stays in its traditional role within the organisation, I believe will not achieve its potential growth.

By gpointstudio/ Shutterstock

Last year we asked a group of our customers why they ‘#loveprocurement’, and the answers were really a great testament to the evolving role of procurement. Ivalua is a company that was founded to serve the needs of procurement departments. We are very passionate about what we do, but even we were astonished at the wave of procurement love which came our way when we asked the question “Why do you #loveprocurement?” Here are some of the highlights:

A business function in the midst of a huge evolution, moving from optimising costs to becoming the creator of value and growth

Most procurement leaders have focused on some element of cost reduction and this remains an important area of focus. However, we are now at a point where procurement needs to, and can, look beyond cost savings and move to planning for a seismic change. No-one wins the race by just being good enough. In business being as good as your competitors will not ensure your future success. If you do not innovate you will fade away. We asked professionals why they love their jobs so much, and many called out procurement as being a highly innovative and dynamic department, full of creative people adding huge value to their organisations. Does this sound like you?

Last year we worked extensively with The Hackett Group and they published two excellent reports,

State of Procurement Digital Transformation, Part 1: Value Drivers and Expectations and L​essons Learned by Early Adopters, Part 2.​ In these reports they talk about getting the basics right and procurement getting its house in order ie building a data centre of excellence, getting stakeholders onboard, The latest report from The Hackett Group, ​Procurement Key Issues 2019,​ shows how things are moving on this year. Procurement organisations can move beyond best in class, and clearly the will of procurement teams is there to do this. However there needs to be better alignment between procurement and its business goals. If there is a focus on analytical capabilities (which there is), there must also be teams and individuals brought in with the skills to make this happen, that is when procurement will move to the stage of offering competitive advantage, rather than just as good as the competition.

The future of our profession is not written in stone. It is because of this that it is a passionate adventure for creative people

In a recent blog, Ivalua CMO Alex Saric talks recruitment as being one of the top issues for CPOs and their Senior Directors. What is clear from the comment above, is that the procurement industry is attracting top talent. The comment was repeated by many professionals, and what comes across is that people working in procurement are going above and beyond what might have traditionally expected from this sector. Wolfgang Groening, Head of Procurement Sourcing & Vendor Management at Deutsche Telekom talks in this ​short video​ about the fact that he loves to innovate. Wolfgang in particular calls out digital innovation and how this is allowing organisations like Deutsche Telekom to proactively look for ways to bring more innovation, rather than sticking with the transactional elements of procurement alone.

Fannie Mae, like many other organisations, are recruiting procurement experts that can bring industry knowledge and market insight. These experts are addressing their organisations’ needs to know what are the key trends in the marketplace, who are the movers and shakers in the market and where is innovation coming into play. This is so far from the traditional role of procurement as we could get. Sylvie Noel, CPO of French insurance giant Covéa speaks plainly when she says that has modernised her organisation’s procurement function and that now internal stakeholders or customers now have all the information they need from procurement and they either go for it or they don’t (her words). In Covéa, people can no longer moan about the ‘procurement black tunnel’, because Sylvie has brought in a tool which enables highly skilled procurement professionals to interact seamlessly with their customers, cutting out precious time which can be spend on new product innovations.

A function which has a significant impact on the bottom line AND on the TOP line of an organisation. It is a window of innovation from the outside

If procurement stays in its traditional role, the organisation, I believe will not achieve its potential growth. If procurement is just there to be the police and control cost, then that’s not good enough. Each department in any organisation of a reasonable size is making decisions every day which cost the company money. I’ve worked in marketing for 20 years, and some of the decisions I’ve seen made, and no doubt have made myself, have not always been 100 per cent well thought out! Marketing people are creative, last minute merchants, and this can mean that you do not always dot the Ts and cross the Rs. ​Procurement’s stakeholders, like marketing, need help as they too are going through a massive digital growth curve. I should know – I am a procurement stakeholder. As my department, marketing, steps into the great digital unknown, in a market that is constantly evolving we need skilled procurement professionals to help us make decisions which will be strategic to the company, and we are looking for that expertise and partnership. We need help to look at the innovations in our sector, and strong leadership in both marketing and procurement to make sure we are embracing new technologies, spending the company’s money wisely and driving growth. In addition, marketing and procurement departments need to be recruiting the sorts of individuals who collaborate by nature, who see the bigger picture, who are able to dream big, and also keep the end goal in mind.

What is clear from our #loveprocurement campaign and the answers that you gave us is that many of you love your jobs and are really passionate about the direction in which procurement is going. You are also clear that procurement can make a huge contribution to the bottomline and growth of your organisations. Now you need to make sure that your stakeholders feel this passion and begin to feel your influence on the direction your organisations are going.

Ivalua are sponsoring Big Ideas Summit London on March 14th. Sign up now as a digital delegate to follow the day’s action wherever you are in the world.