Social media has opened up a global audience to procurement. Now the profession needs to leverage this to expand its role further.
At the Big Ideas Summit 2016, we challenged our thought leaders to share their Big Ideas for the future of procurement.
From ideas that have the potential to change the very nature of the procurement profession, to ones that got the assembled minds thinking about the profession’s impact outside of the organisation, the response we received was amazing.
Global Presence, Global Strategy
Siddharth Sharma, Strategic Sourcing Manager (SCM) at KPMG, believes that social media has given procurement the power to share ideas, thoughts and best practice. However, he also believes that this needs to be taken to the next level, to create global leaders and strategy.
Siddharth talks about the role of Governance and technology in procurement, and how all three of these aspects can be leveraged together, in order to advance the profession on a global scale.
Public sector procurement managers face a different set of challenges to their private sector peers. But which are the biggest challenges?
The procurement profession is increasingly becoming a core component of an organisation’s innovation and process-driven strategies to reduce costs, increase efficiencies and make advancements. As a result, procurement managers are feeling the pressure to remain agile and at the forefront of change.
When it comes to the public sector, however, there are numerous and unique roadblocks to successfully implementing these strategies, systems and processes into existing operations.
Procurement managers in the public sector often have a specific framework within which they are required to work. Generally these framework have an increased focus on probity, and lack the traditional supply chain model.
However, public sector procurement departments are responsible for some of the highest levels of spend in any given economy. In most countries, state and federal departments and agencies are responsible for purchasing for public services, including healthcare, infrastructure, and education.
In recent years, the spend by public sector agencies in both the UK and Australia has been measured as over 40 per cent of national GDP. With scrutiny over how money is spent, and any inefficiencies open to public criticism, public sector procurement professionals face a tricky balancing act.
As such, the public sector can both be a source of great knowledge and best practices for those in industry. Yet, they also face their own particular set of challenges.
Key Challenges for Procurement
In July, GovProcure launched a survey aimed at finding out, directly from government procurement managers, what their biggest challenges are for 2016 and beyond.
After analysing the results, the 5 main challenges have been identified so far as:
Realising true benefits from data and analytics in the procurement division
Ensuring the benefits of embedding sustainable procurement practices are fully realised
Balancing outsourcing with maintaining high quality internal capacity
Getting the most out of suppliers
Developing strategies to engage effectively with Indigenous suppliers
Do you have any challenges to add? There’s still time for you to get involved and have your say in the survey. You can complete the survey here.
The final results will be shared with the audience at the GovProcure 2016 conference later this year. The event will host a panel discussion specifically designed to address the challenges identified in the survey. The session will also give procurement managers tangible ideas for improvement in the areas that matter to them most.
Let’s stop just talking about the challenges we face, and work together to overcome them.
The GovProcure 2016 conference in Sydney brings together public sector procurement managers from all levels of government each year to focus on in on opportunities to improve, collaborate and ultimately deliver more value to their organisations.
To find out more, download a GovProcure brochure here.
Traditional supplier relationships are under scrutiny as organisations assess capabilities for the future. Could process automation help procurement teams stay ahead of the curve?
ProcureCon Europe 2016 is rapidly approaching! The ProcureCon team has been investigating some of the fast-moving issues which are affecting CPOs across Europe today.
Perhaps more than any other factor in the industry right now, process automation and advanced analytics are having a huge effect on the ability of Procurement teams to deliver improved cost performance.
This changing landscape calls into question traditional supplier relationships. Of the CPOs and Heads of Procurement we interviewed in advance of the event, 76 per cent told us that they are concerned about the ability of their existing supplier base to serve their business needs in future.
At the same time, more than half of our research participants think that implementing automated procurement is a high priority for their business. This raises questions about how best to manage your supplier network to make sure that you’re ahead of the curve when it comes to process automation.
We spoke to Kelly Babbit from jCatalog and the Opus Capita Group to find out more.
ProcureCon: How is digitisation and process automation affecting CPOs today?
Kelly Babbit: In the digitised, networked economy, companies find themselves in a changed competitive field. The game is no longer primarily based on unique business relationships.
The success of a corporation is premised on the performance of its network of supply chains – its entire business ecosystem. Corporations are looking to strengthen relationships, and create new forms of collaboration – and gain control and compliance over their extended business processes.
It is significant that more than half of respondents to this research gave high priority to the implementation of automated procurement processes. Furthermore, we expect a future adjustment to the demand drivers and criteria used for selecting P2P service providers.
This trend is due to a far-reaching shift in business priorities toward digitisation and automation.
What kind of processes are we talking about?
Progressive solutions cover the complete process from sourcing to payment – from managing the first request for quotations (RFQ) to optimised working capital management and supplier settlement.
This is where the traditional view of P2P processes needs to be expanded. Enterprises will no longer evaluate the quality of solutions with a sole focus on basic procurement functions. Solutions need to be part of a global strategy and based on pivotal interconnections between buyers and suppliers.
As a result, the responsibilities of the CPO and CFO functions will begin to converge. Cloud based SaaS solution providers will need to support this interconnection with a global perspective and inclusion of diverse company stakeholders.
Connecting and automating processes from sourcing through to payment will become the expectation of leading companies.
What features should CPOs / CFOs be looking out for in a source-to-pay solution?
Cloud-based business network solutions must support effective sourcing, procurement, invoice, and payment automation. This includes implementation and adoption across their global business. Some of the key features to look out for are:
Complete transparency, real time control and compliance with full audit trails across the entire source to pay process.
P2P automation and integration of the purchasing department with the accounts payables department. Plus full visibility to all purchasing and accounts payment data.
Visibility to company spend with total cost monitoring and supplier performance tracking as well as contract improved contract compliance.
Thanks very much for your time, Kelly.
To read the full results of our research amongst 100 CPOs and senior procurement executives, download the Procurement Challenges report here.
ProcureCon Europe, now in its 17th year, is Europe’s most strategic procurement conference for CPOs and senior procurement executives. See the full range of topic and speakers at the event here.
What does a traffic light have to do with the sourcing process? When you’re considering sharing information, it might be a good way to retain a balance.
RFX processes can be frustratingly opaque for suppliers, particularly in the private sector.
Submitting a bid can be like trying to play a game of darts in the dark. After the dart leaves your hand there’s simply no way of knowing if you’ve hit anywhere near your target. And frequently there’s no response until the buyer informs you that your bid hasn’t been successful.
Don’t Give Away Too Much
Why are buyers typically so hesitant to give feedback? It may be due to a perception that knowledge is power, and giving away too much information will cause you to lose your advantage. To a certain extent, this is true. Too much granularity might allow the supplier to determine the target price necessary to win.
Similarly, giving away too little will cause your supply base to become frustrated and disengaged with the sourcing process. What buyers need to achieve is a balanced response, giving just the right amount of feedback to stimulate the supplier into giving a further discount.
A little bit of ambiguity can go a long way towards stimulating aggressive bidding behaviour, especially for suppliers who are aware that they’re in second or third place.
In a thoughtful article on the pros and cons of supplier transparency, Charles Dominick explains that a high level of transparency (through feedback) will help suppliers focus on what your needs are, instead of having to guess.
Transparency fosters open communication, collaboration and continuous improvement, and will help build your reputation for fairness and impartiality.
Finding a Better Way
Speaking at SciQuest’s Next Level Conference in Nashville, solution consultant Jason Hochreiter explained his organisation’s “Expressive Feedback” feature, which is a part of the Advanced Sourcing Optimizer module.
“Buyers need to get into the mindset of suppliers during the RFX Process”, he says. “Greater visibility of how their bid compares may actually help stimulate competitive behaviour and potentially lower bid prices during a sourcing event.”
SciQuest’s Expressive Feedback is named as such because it’s highly configurable, meaning that the buyer can choose when, how and what feedback to give suppliers during the sourcing event.
For example, the buyer may choose to only give feedback after the second round of bids, either sending out specific comments or using a green, yellow and red traffic light system to show at a glance if the bid is competitive, non-completive or significantly non-competitive.
Using the Traffic Light For Fast Decisions
Colours are a powerful tool to show suppliers at a glance how competitive they are, and if used intelligently, can encourage suppliers to make an impulsive decision to lower their bid.
Green: Consider what you need for the traffic light to show “green” – what does this actually mean? It could signal that the supplier’s price is within 10 per cent (or whatever percentage the user configures) of the target price. Or it could mean that they’re within the top five bids, without giving away their actual ranking.
Keep in mind that you wouldn’t want to alert a supplier to the fact that they are the cheapest, as it would almost certainly stop them from putting in a lower bid.
Yellow: This is where the psychology of feedback comes in. Hochreiter explains that it’s human nature to care about the loss of something (such as moving the traffic light from “green” to “yellow” status). This may prompt a fast decision to attempt to regain that status.
A supplier, seeing that they’ve slipped from the green bracket into the yellow bracket, may quickly submit a cheaper bid without considering the longer term implications of this action.
Red: Hochreiter cautions against using “red” for a supplier that you are interested in retaining. “If they see red, it’s likely that they won’t update their bid but assume instead that they are out of the race. Adjust the range as needed, so they’ll see yellow and will be more likely to compete.”
Lack of visibility, time-consuming manual processes – it’s an all too familiar story in procurement contract management. One university shares their journey from contract chaos, to CMS utopia.
There are few procurement professionals in the world who haven’t dealt with paper contracts at some point. And very few, if any, who would look at this experience with any sort of fondness.
For the longest time, contract management has been a labour intensive process, with myriad issues caused by the use of paper contracts.
Every business suffers from the same issues, but not every business takes the steps to make a real change. We can all learn a thing or two from North Carolina A&T State University.
Drowning in Paper
North Carolina A&T starts as an all too familiar story, as you might imagine. NC A&T is one of the USA’s top historically black colleges and universities. It employs over 2,500 people, and educates over 11,000 students at any one time.
With an award-winning faculty, and programmes that focus on community engagement, it’s very much in demand.
However, it suffered from the same issues as many of its competitors. A manual contract management system (CMS), with little or no visibility on contracts, and an average of over 15 days to execute a contract.
At Next Level 2016, Nikki Williams, Director of Procurement Services at North Carolina A&T, talked candidly, and all too familiarly, about her experience of the process.
This included the process of scanning all the pages of a contract, walking (quite literally) to the third floor for signatures, and, of course, the inability to find a contract when it was needed.
On top of this, 99 per cent of the contracts were fully executed by a third party. Although the university would sign the contract, they would never get a signed agreement back from a supplier, and therefore never have a fully executed contract.
Contracts would rarely come back from the third party, and when they did, there was no repository to store, and find, existing contracts.
Chaos to CMS Utopia
Sharing their journey from contract chaos, to contract management utopia, Nikki explains their key goals were to:
Optimise the CMS process by:
Eliminating paper contracts – this was an enterprise business goal for the entire university
Reduce contract execution time from 15+ days to 5 days
Reach 100 per cent fully executed contracts, with signatures from both parties
Deliver insights into the CMS process with:
A mechanism which tracked each contract throughout its life
Creation of a centralised repository for all contracts
Nikki shared the before and after implementation workflow diagrams – and the differences were startling. Rather than a heady mix of workflow rectangles, decision points and dotted lines, today’s contract workflow is a blissfully simple diagram. There are 4 task boxes, one approve or reject decision point, and only forward motion.
Full Steam Ahead
Using these forms, the procurement team can see that the request template is all ticked green. The form ties all the required, and specific, approvers to the workflow. Best of all, it’s fully automated.
The request form confirms that the supplier is not a student nor an employee (who they are not permitted to contract with), then channels it through the various approvers. All requests are also tracked through TCM (Total Contract Manager) by form number.
Once the request form is turned into a contract, a contract number is created, and tied to the forms so that every stage can be linked together. Once the vendor has signed the contract, it returns to TCM, which acts as the central repository. The system even completes basic information such as vendor names, department names, and approvers automatically.
The university now has a fully complete request workflow. The purpose of contract, department, and other information is contained within the request document. The contract goes to the appropriate person to approve or reject, and on that basis, procurement creates a contract. DocuSign is used to get both parties to sign off on the completed contract.
Challenge of Change Management
Asked about the roll-out of the process, Nikki acknowledges it has been a long one. “We’re not just changing the workflow process, but we’re changing the contract policy at a Trustee level. Changing contract policy is driving the roll out, then we can rock & roll!”
Latest Enterprise Reagent Manager (ERM) system streamlines procurement processes and user interface, freeing up scientists’ valuable time.
In the pharmaceuticals and life sciences business, time is the most precious resource. The more time available to be spent on research, the more ability scientists have to innovate. To support this, procurement processes need to be accurate, swift and robust.
ERM is a chemical inventory management software module that gives researchers and scientists full control over research inventory, from sourcing and purchase, through tracking and disposal.
Differentiated by it’s offering as the first and only triple-federated search functionality, SciQuest’s ERM is used by 8 of the 10 top global pharmaceutical companies.
Dynamic & Responsive Interface
According to SciQuest, ERM allows users to check material availability from suppliers in real-time, and to search across all internal and external sources simultaneously.
“ERM 9 is up to 90 per cent faster than previous versions,” says Raj Aggarwal, SciQuest Product Marketing Manager. Aggarwal adds, “Users can only search chemicals not only by supplier, or text description but also by molecular structure.”
So what has customers excited about the new version? Raj explains it’s all about the new user interface, speed and the three-way search.
ERM’s speed comes via a more dynamic and responsive user interface. Raj explains, “One-click tiles speed up navigation to important tasks, while status icons display user actions, like items in a shopping cart, or requesting a container for use from inventory.”
Bruce Cherrin, Chief Procurement Officer at the University of New Mexico confirms this. He believes the new look and feel of the system will, “Drive higher adoption among users campus-wide and streamline our procurement processes.”
Fast, Real-Time Availability Checks
In addition to the search feature, the upgrade includes the following features:
Real-time material availability check from suppliers: Users can now search across all internal and external sources simultaneously.
Web service integration: External inventories and catalogues can now be incorporated into ERM’s search function.
To Do List: Researchers can checkout and manage items from labs or self-service areas, and conduct a transfer of ownership and update usage without a scanner.
Held Cart: Allows administrators to control purchases of high cost and/or hazardous materials from non-authorised personnel.
“Since ERM closely integrates with procurement, pharmaceutical manufacturers can control complex inventories with reduced general spend and disposal costs, optimised inventory use, and increased regulatory compliance while managing the risks associated with hazardous materials,” said Stephen Wiehe, President and CEO of SciQuest in their announcement.
Aligning ERM with Unlocking Value
It’s these sorts of enterprise wide business challenges that are driving SciQuest’s product strategy. We asked Raj how the new release of ERM aligns with this mission to unlock more value. Raj offered four reasons:
Expense Optimisation – The inventory system allows users to order from stock, rather than placing new orders for expensive reagents from scratch, and efficient, safe disposal.
Compliance – Scientists often deal with hazardous materials. Certification is required to purchase, store and use many of the reagents used. The system provides for more than just internal compliance. ERM also allows research institutes to ensure suppliers are meeting their certification and storage obligations
Safety – Maintaining safe labs is a paramount concern in the life sciences industry. With greater visibility, users can see what’s coming in before it arrives and make plans to safely store and manage their liability.
Compliance and Approvals – ERM has a robust permissions system which allows users to lock access to different levels by putting reagent requests into held carts. Approvals can then be granted based on spending limits that get put in workflow.
Regardless of the industry, leveraging information more effectively for the business is a clear mandate for the product team at SciQuest.
Raj concludes: “ERM will help get inventory information out where users can see it, create ad hoc reports, and use this to anticipate, plan and mitigate. And most of all, it puts time back in researchers’ hands to innovate.”
Chris Sawchuk reveals an alarming disconnect between the most pressing issues for Procurement, and our ability to address them.
The number one priority for Procurement leaders this year? “Reducing Costs,” says Chris Sawchuk, Principal and Global Procurement Advisory Practice Director of The Hackett Group.
Before you stifle a yawn and declare this a no-brainer, it’s actually the first time since the depths of the Global Financial Crisis that Cost Reduction has been back at top of the heap in The Hackett Group’s annual Key Issues Survey.
“For some years now procurement’s top priorities have been about growing the top line, increasing influence and becoming a trusted advisor to the business,” explains Chris. He notes a clear shift in 2016. “It’s back to basics and the enterprise needs help to remain cost competitive in an ever volatile world.”
Speaking at SciQuest Next Level 2016, Chris doesn’t find it surprising to see Cost Reduction back at the top of the list. Particularly when more than half (55 per cent) of companies have a major enterprise cost reduction initiative planned this year.
However, Chris is quick to note the second highest priority for procurement leaders is driving top line growth. This is also consistent with the fact that nearly half of all enterprises have a major sales and marketing strategy optimisation initiative planned for the coming year.
Within The Hackett Group’s top priorities, the big mover is tapping supplier innovation. This has taken a significant leap up the list of ‘must-dos’ for procurement leaders this year.
“Increasing spend influence is always fairly close to the top, but more and more innovation is being looked on as an enabler for driving top line growth – as well as cost competitiveness,” says Sawchuk.
The Big Disconnect
So far its been a compelling whirlwind of data points, but it’s Chris’ next slide that has me concerned. This is where the disconnect lies.
It shows those priorities Procurement leaders think are most important to address, mapped against those which we also think will be most difficult to do.
These are the priorities that alarmingly fall into Chris’ ‘Red Zone’ – that dangerous, “Important, but rather tricky to do” box:
Tap supplier innovation
Increase spend influence
Elevate role of procurement as trusted advisor
Undoubtedly these are tough issues to address, not only for their complexity, but because they require Procurement to look well beyond it’s traditional value lens. They demand more than the ‘bread and butter’ cost-analysis and sourcing skills for which procurement is renowned.
So with a deep breath and a can-do attitude, Chris walks us through how Procurement leaders can get a handle on these important ‘Red Zone’ priorities.
Enough buzz words! What does it take to be a Trusted Advisor?
First up, Chris addresses what it actually means to be a ‘trusted advisor’. According to The Hackett Group’s annual survey, the top criteria determining what makes a trusted advisor are:
Consistently deliver on the basics (77 per cent)
Hire and retain high caliber staff (64 per cent)
Increase agility (61 per cent)
The main point to note here is there has to be consistency to this. “Procurement needs to do what it says it’s going to do,” says Chris. “Building trust takes time.”
When it comes to identifying high calibre staff, Chris doesn’t so much see a problem with the depth of the talent pool, but more with how we engage and retain top talent.
Chris also linked back to a concept discussed during Sigi Osagie’s earlier SciQuest keynote. Putting people at the centre of your strategy, really engaging them and helping create an environment where people thrive, is the real challenge.
Next up, agility. This has been a key thought leadership theme for Chris and The Hackett team over the past 12 months. “Procurement can’t be a hammer going about looking for a nail, we need to listen to our customers. What do they need? And if what they need is outside our portfolio, find out what we can build to help them.”
Again, drawing on Sigi’s presentation, Chris reminds us it’s all about ‘delighting the customer’.
Undoubtedly future leaders must be able to deal with ambiguity, provide differentiating intelligence to the business, make and implement decisions quickly and forecast and plan continuously to mitigate future risks.
“We need to think about how we weave agility into every aspect of what we deliver back to the business,” challenges Chris.
Chris keeps this point brief. “As Procurement leaders, we cannot continue to fish in the same pond,” he explains. “We need to find new ways to source of value.”
A classic case of diminishing returns, if you will. To this he adds that we also need to improve the quality of our influence, not just the quantity.
Tap Supplier Innovation
As the biggest mover on the list of procurement priorities, Chris believes that the best way to encourage innovation is to make it part of the job and reward contributions.
Finding ways to support and encourage intrapreneurs – those people inside your business who can drive innovation and lead change – is how the most successful businesses of the future will steal a march on their competition.
Naturally Chris also advises that Procurement leaders need to be aware and up-to-date with innovations and trends occurring in the market place. “Get knowledgeable about big data, robotics, cognitive computing, mobility, cloud and social media, if you want to get ahead.”
Like anything that’s new, it’s going to require courageous leaders to address this gap between procurement priorities and preparedness. Chris suggests a good place to start, “Ask yourself, are these things we’re focused on? Should they be? And if not, why not?”
Addressing 800+ delegates at SciQuest Next Level 2016, Stephen Wiehe’s enthusiasm for design, disruption and innovation is infectious.
Stephen Wiehe, CEO at SciQuest, is clearly a man who likes to ‘make stuff’. A tinkerer, a designer, an ideas-man, maybe a little bit of a tech-head.
Opening Next Level 2016 with a take on ‘Procurement’s Future in the Era of Disruption’, Stephen starts with some alarming, if increasingly familiar, facts and stats:
We are experiencing the fastest technological change the world has seen
Interest rates are at their lowest since records began
Market volatility has doubled
We are seeing unprecedented, rising geo-political instability
40 per cent of companies will be extinct in 10 years
It’s not long, however, before he pivots towards his passion for design, innovation and customer connectivity.
Stephen points to GE’s First Build R&D facility as an example of how businesses are going straight to the customer for their next great innovation.
A darling of the corporate crowdsourcing movement, First Build aims to invent new home appliances by creating a community of home enthusiasts, designers, engineers, and makers who share ideas, try them out, and build real products.
“Once upon a time, R&D facilities were hidden and process driven,” says Stephen, “Today, GE have flung open their doors to anyone who has a good idea. Customers with an idea can quite literally walk-in, use the machines and GE will help you build it.”
No Industry is Immune to Disruption
As a London local and 4.8 star rated Uber user, it still comes as a surprise when I meet someone who has never used this global phenomenon before. For me, Uber has transformed the way I move about the city, track payments, and even the amount of cash I need for a night out.
So when Stephen flicked up a slide of yellow taxi cabs, I must admit my first thought was, “Ok, here we go, Uber. Heard this before.”
But Stephen takes the analogy much further: “Uber is not a technology story, it’s a procurement story.
“The whole process of getting an Uber is really a procurement process. First you request an Uber – not dissimilar to filling out a requisition form. Next, there’s a sourcing event – Uber drivers, armed with your passenger rating, your location and destination, bid to win the job.
“Then, the passenger accepts the job, confirming they are happy with the driver’s rating and location. A contract is formed – we accept the job and the mode of payment is agreed. And finally the AP process occurs seamlessly and conveniently with your stored credit card details.”
Uber in a Traditional Procurement Lens?
Uber even provides a handy Spend Management Tool allowing the user to see their complete driving, payment and ‘performance’ history. Particularly handy for parents of teenagers, as Stephen points out!
The penny drops. I’ve not thought of Uber in this way before – a fully automated Source-to-Settle process.
But Stephen pushes us to go one step further. “Imagine if Uber had approached their business from a traditional procurement lens. We’d have the lowest vehicles, more passengers per vehicle and cheaper drivers.”
True – Uber’s open network has flipped the transport industry on its head. Stephen explains that Uber looked at the cab industry from the customers’ perspective and wondered what total transparency, real time data, and an open and connected network could deliver.
And I for one am thankful they did.
The Disappearance of the Back-Office
Just like Uber, which has automated the entire administration process of booking and paying for cabs, Stephen predicts the concept of procurement administration will disappear in coming years.
The issue for most businesses is that they are trying to do the same things over and over, and (not surprisingly) seeing only incremental value delivery.
Stephen told delegates that businesses will only see a step change when they start to simultaneously use procurement automation, collaboration and insights to drive decision making.
When it comes to procurement, our customers want a simple, straight forward way to connect with suppliers, get what they need, and make a payment. Fairly or not, Procurement is all too often accused of being slow, cumbersome and hard to deal with. Not the ideal adjectives for a ‘Business Partner’.
Maybe Stephen is right. Maybe the key to unlocking innovation and value will come from the customer. Just like Uber and GE, is it time to put sourcing in the hands of the customers and people who need the products? It’s certainly time to think differently.
SciQuest Next Level takes place from August 21 – 24 2016. For more information on procurement and disruption please visit www.sciquest.com or Tweet SciQuest via @SciQuest.
Lisa Malone, General Manager Procurious, is reporting live from SciQuest Next Level 2016 this week.
Walking through the purpose behind the analysis, the panel will explore massaging the data to be more useful, how to find meaning, and what the end results can accomplish.
Reverse Auctions in Sourcing Director: The What, Why and How (Cheekwood GH, 1:30-2:20pm)
Reverse Auctions let buyers conduct fast-paced competitive bidding events where multiple suppliers place bids on one or more items.
During the auction phase, suppliers receive feedback on the competitiveness of their bids in relation to bids submitted by other participating suppliers.
This session will review when a reverse auction should be used, the configuration details critical to the construction and administration of the event, and how a buyer can track key bid data while conducting a Sourcing Director reverse auction event.
Putting it all Together in the Real World: A S2S Case Study (Tennessee B, 2:20-3:30pm)
Inspired by business process optimisation concepts used in the military, Mark Burch, Director of Materials, has applied them to procurement at the Fred Hutchinson Cancer Research Center, where they are waging a war on cancer.
In a nutshell, materials management is about getting everything that’s needed at the right place at the right time. Whether you’re fighting a disease or just the inefficiency gremlin, Mark’s ideas and processes can help.
Come see how the implementation of SciQuest’s full source-to-settle suite is helping to optimise processes, gain insights into the organisation’s spend and deliver a high return on investment.
People, Process and Technology: A Real-World Case Study (Tennessee B, 4:00-5:00pm)
Georgia Institute of Technology procurement team will discuss their approach to managing both spend and spend systems by following this mantra: people, process, technology. They’ll discuss challenges and processes around initial roll-out, expansion into new modules and growing users.
They’ll share key performance metrics used to determine ongoing system performance, as well as to measure overall return on investment.
Tuesday, August 23
NAEP Innovators Forum: Strategic Supplier Relationship Management (Tennessee A, 1:30-2:20pm)
Procurement and supply chain teams invest considerable time and energy negotiating exceptional contract terms with key suppliers. Many teams consider their work complete when contracts have been executed.
However, there is evidence that much of negotiated value will leak away unless it’s carefully managed over the contract life. This places a premium on the ability to manage supplier agreements. But who has this responsibility and what goals and objectives should be pursued?
Real World ASO War Stories (Cheekwood ABC, 2:30-3:30pm)
Illinois Tool Works (ITW) is a Chicago-headquartered diversified manufacturer with 49,000 employees and 90 divisions in 57 countries.
In this session, ITW’s Strategic Sourcing Center of Excellence team will discuss their journey from a single-person pilot to a powerhouse for sourcing events with more than 200 events and hundreds of millions of spend competitively bid through Advanced Sourcing Optimizer (ASO).
If you’ve ever wondered what makes or breaks a COE in global, multi-business unit organisations, this session is for you.
Analysing eProcurement Business Success – Building Your Business Case & ROI (Hermitage B, 2:30-3:30pm)
No-one recognises the need for a strong business case and ROI analysis when considering large dollar purchases more than procurement professionals.
Whether you’re considering the purchase of a full source-to settle or P2P solution, or simply want to demonstrate to your leadership the value of your existing solutions, you will find this session to be beneficial.
Pierre Mitchell, Chief Research Officer and Managing Partner at Spend Matters, will explore several facets for building successful business cases. This includes knowing your approval process and audience, key items for consideration in the business case, and methods for demonstrating success following implementation.
This all-star panel have implemented a procure-to-pay solution and are looking to go beyond eProcurement and accounts payable. The session will start at the beginning of their journey and discuss the individual drivers that ultimately led to implementing a P2P solution.
Topics will include panelists’ experiences before, during and after implementation, benefits achieved, ways to benchmark goals and tips for achieving post-implementation procure-to-pay excellence.
The second part will focus on the future roadmaps of these innovative organisations. Panelists will discuss what their organisations are planning in terms of strategic initiatives, including:
Roberta Patterson checked in with Sigi to get a preview of what he will be talking about during his presentation.
I love the name of your book, Procurement Mojo. Has Procurement lost its mojo?
From the perspective of Procurement’s positioning in the enterprise way back when a move into the “Purchasing Department” was, in effect, a relegation to the backwoods of organisational existence, you’d have to say Procurement has come a long way.
Today, some Procurement functions are doing a fantastic job supporting the profitability and strategic goals of their organisations.
But if I aggregate my experience with clients, discussions with Procurement people in different regions and insights from trade articles, online forums, blogs, etc., it’s clear that many Procurement functions are still struggling.
Quite often the difficulties that hinder their success are “soft” issues – organisational challenges like senior executives who just don’t “get it,” territorial stakeholders, or ineffectiveness within the Procurement function itself.
Such Procurement functions lack a credible “Procurement brand.” Unless they change their approach, their Procurement mojo will remain a mirage.
During your Next Level session, you are going to speak about change management. That seems like a tall order. Do you have any tips on how a Procurement department should start?
The most fundamental requirement is effectiveness; which is more important than efficiency. You can be very efficient at the wrong things. A bit like the guy who’s very fast at climbing up a ladder, only to get to the top and discover that the ladder is leaning against the wrong wall.
Focusing on Procurement effectiveness forces us to think about what the department wants to achieve and the requisite actions to attain those end-goals.
Getting from where you are today to where you want to be is where change management comes in. Many of us in Procurement are versed in the technical aspects of the job but often lack change management know-how.
Our ability to navigate our way through change, against a backdrop of the organisational dynamics I mentioned earlier, is crucial for Procurement’s success and reputation in the wider enterprise.
So Procurement functions must centre their efforts on effectiveness and leverage robust change management. It’s impossible to do this without sound leadership. A fish rots from the head down; so having an effective Procurement leader is key – leadership is the glue that binds everything else together.
How do you build a Procurement brand?
In Procurement Mojo I use real-life examples to explain the four foundational actions Procurement functions must take. The first is building an effective organisation. It’s paramount, because people are the fundamental creators or destroyers of performance success.
The other key actions are deploying enablers (processes, systems and tools) that are fit for purpose, managing the supply base robustly, and applying an appropriate performance management framework. Everything we get right in these four areas helps nurture our Procurement brand.
Additionally, it is imperative to foster positive perceptions of Procurement in stakeholders’ consciousness, through effective communications, good (internal) customer relationship management, and smart PR.
Combining the four foundational actions with these stakeholder management approaches is how we build and sustain a great Procurement brand.
What are your suggestions for making the case for technology investment and getting executive buy-in?
A solid business case is vital, but it’s not just about data and facts. It’s really about selling, and being organisationally savvy. You’ve got to read the organisational landscape and identify the right “hooks” that will resonate with executives.
Getting executive buy-in is part of good change management, thus getting your Procurement mojo back! I’m looking forward to sharing more about this at Next Level 2016.
Sigi Osagie is a featured speaker appearing on Monday, August 22 at Next Level. Follow him on Twitter!