Tag Archives: strategy

Procurement Process Technology: 3 Keys To Adding Clarity Post Covid-19

Here are three keys to conceiving, deploying and using technology to elevate the performance of your procurement process operations from IBM’s Chander Vashistha


Procurement organisations depend on technology to manage their source-to-pay (procurement) functions most efficiently and effectively. Technology also provides exceptional services experience to their requestors, buyers and suppliers. However, organisations often find the process of selecting, implementing and using technology platforms and applications challenging. While procurement technology provides many benefits, organisations that do not select the right technology, integrate the technology to create a connected ecosystem and create processes to use the technology often do not realise the full benefits.  

Clarity is the cornerstone of successful procurement practices, and procurement technology must support and enable clarity between both parties. When organisations do not receive full value from technology systems, the issue often comes down to clarity. However, it’s essential that clarity exist before adding in the technology. Technology doesn’t create clarity, but improves and enhances clarity already present in the process.

Organisations with good clarity in their procurement practice see significant competitive advantages, business continuity, resilience and digital transformation. While these aspects are essential for a successful business, the COVID-19 pandemic and resulting business disruption significantly increases their importance.

Here are three keys to conceiving, deploying and using technology to elevate the performance of your procurement process operations:

1) Align the purchasing strategy with operations and vision

When organisations lay technology on top of disconnected strategy and vision, the new platforms and systems often magnify the misalignments. Before focusing on technology, organisations should review their current strategies to ensure alignment. A well-connected procurement strategy and vision drives implementation of a frictionless technology ecosystem rather than a patchwork collection of discrete point solutions.

The purchasing process works within both your procurement process and overall company operations. On an even more granular level, the purchasing strategy tightly connects with procurement operations’ vision and procurement operations strategy. Before making changes, especially in processes and technology, practitioners must step back and consider strategic alignment.

After understanding your organisation’s purchasing strategy, procurement vision and procurement operating strategy, the next step is ensuring they all align with one another. After making any necessary changes, your organization will have the foundation to begin looking for technology that supports all three.

2) Understand the four types of procurement technology

Procurement professionals often assume — incorrectly — that all procurement platforms and systems fall into a single category. By understanding the different types, organisations can ensure they are researching and purchasing the best type of technology for their needs. Without clear understanding of the different types of procurement technology, organisations may purchase multiple technologies performing very similar functions, which creates waste and redundancies, not to mention wastes funds.

Procurement organisations use the following four types of technology:

  • ERP software and blockchain equivalents – SAP-MM, SAP-FICO, TYS blockchain, IBM Temp labor blockchain and RSBN blockchain
  • Commodity or process-neutral procurement technology – SAP Ariba Solutions, Coupa, Tradeshift, Sourcematrix and IBM SpendIQ
  • Commodity or process-specific procurement technology – IBM Oniqua, SAP Concur, SAP Fieldglass, Amazon Business, Alibaba 1688, Uber for Business, Service Now and JIRA
  • Cognitive e-procurement applications with intelligent workflow platforms – IBM Procurement Service Desk, IBM Watson Virtual Buying Assistant, IBM B2B Marketplace and IBM Direct Spend IQ

Organisations often invest in one or two types of procurement technology, which does not typically enable achieving their procurement strategy and vision. Often these organisations assume they fell short due to the technology implemented. By deploying relevant technology from each of the four types, organisations achieve the clarity needed to meet their goals.

3) Focus on cognitive e-procurement applications

Organisations find a wide range of choices in technologies, especially in cognitive e-procurement applications, which use artificial intelligence to open procurement transformation processes. This type of technology helps organizations transform the procurement process experience for buyers in direct, indirect, MRO and capital purchasing.

Because cognitive e-procurement applications are relatively new and come with a large amount of hype and innovation, organisations should fully understand what features they need as well as the features offered by each solution. By selecting the right application for your specific needs instead of the most feature-rich product, you’ll significantly increase your ROI and strategy improvements.

For example, Trust Your Supplier blockchain, which came to market in 2019, helps procurement professionals automate and digitize supplier information like a “digital passport.” The application also provides the immutability and trust that comes with processing transactions through blockchain. Because the application shifts the process out of procurement operations, the technology reduces cycle time, lowers transaction costs and improves reliability of supplier information management operations. Additionally, suppliers streamline their process by only submitting information to a customer once and can share the same information to other customers using a digital key for record access.

Making the move to integrate technology

As organisations continue to manage change and disruption due to the pandemic, creating clarity in your procurement cycle remains a high priority. Through using cognitive technology driven by intelligent workflow platforms, in conjunction with the three other types of technologies, organisations can create the most effective and efficient processes that drive business value. By aligning strategies, understanding the types of technology and implementing cognitive e-procurement applications inclusive of the technology ecosystem, organisations can improve performance, maturity and outcomes.

Chander Vashistha is the source-to-pay practice leader at IBM.

6 Elements Of A Robust Category Strategy

A robust Category Plan and a Strategy will guarantee significant impact for your organisation with these 6 elements.


In my last article The #1 Reason You Need a Well- Defined & Formally Documented Category Strategy!, I purposefully oversimplified what a category strategy is by stating that it answers the 5 W’s (Who, What, Where, When, Why) as well as the How of a particular group of spend. Ultimately, it will act as a guide to the Category Manager in his/her application of different procurement levers & tactics to generate value in the assigned spend area. I want to dive a little deeper on this topic by discussing 6 key elements that make up a robust category strategy:

1) Internal Needs Assessment: this should set a baseline for the category and provide a basic understanding of sub-categories, major suppliers, key requirements & stakeholders, internal controls/policies currently in place, and a brief category history and some of the challenges & successes it experienced. This section is particularly useful when reviewing your category strategy with someone who is unfamiliar with the category and it scope.

2) Spend Analysis: the foundation of any category strategy depends upon a solid understanding of the historical and (ideally) forecasted spend. Without accurate and granular detail, it’s hard to imagine how you can formulate any worthwhile strategy that you can feel confident in. If you didn’t do anything else in developing a category strategy, at least conduct a thorough spend analysis before making any type of recommendations to stakeholders or your leadership. There are a million different ways to slice and dice your data, however, at the bare minimum you should break your spend down by sub-category, supplier, location, and business group/facility. Data visualisation is worthwhile to mention here and a skill in itself: how do you take data and transform it into an eye-opening story that opens the door to powerful business insights? There are several data visualization tools out there like Tableau that can help with this, but you can never go wrong by simply utilising Excel or PowerPoint. One of my go-to formats to visualize spend data is the infamous Pareto!

3) Supply Market Analysis: understanding of the supply market is key to developing a robust strategy. You can begin by gathering market intelligence and benchmarking information via a myriad of places and sources, however, Beroe Live is a decent place to start and it’s free. Commonly used market analysis tools are the Porter’s 5 Forces model as well as the Structure, Conduct, Performance (SCP) model. Personally, I feel Porter’s 5 Forces model is more useful when entering a specific sourcing event or deal negotiation as it will help analyze the level of competition that exists at a specific point in time. Therefore, I tend to utilise the SCP framework as party of my category strategy development process.

4) Category Segmentation: segmentation modeling really sets you up to effectively apply the appropriate strategies for the goods/services you are sourcing and should help prioritize where you spend your time and with who. The Kraljic Matrix, developed by Peter Kraljic, is a segmentation model that evaluates two key factors:

1) the overall importance of the good/service (commonly based off total spend, profitability impact, or value-add to the company) and

2) market complexity or supply risk.

These factors are then evaluated on a Low to High scale across 2 x 2 matrix creating 4 quadrants or categories: 

Strategic Items(High Value + High Market Complexity/Supply Risk)

Leverage Items (High Value + Low Market Complexity/Supply Risk)

Bottleneck Items (Low Value + High Market Complexity/Supply Risk), and 

Non-Critical Items (Low Value + Low Market Complexity/Supply Risk).

Similarly, this tool can also be used to segment your suppliers. This is important to note because your counterpart on the other side of the table has most likely engaged in a similar segmentation process in helping them evaluate the strategies to deploy with their customers. Do you know where you fall in their model? Does your supplier/category segmentation align with how your supplier views you as customer?

5) Strategy: all the fact-based analysis that has been conducted up to this point should highlight and allow you to articulate 2-3 high level strategies that will guide all procurement activity that will occur (I highly recommend anyone engaged in Category Management to read The Purchasing Chessboard as it is a great tool to stimulate thinking around category strategy, procurement levers, and tactics that can be deployed). It should also include goals or KPIs to help measure the effectiveness of its implementation. Leveraging 1 of the 4 general strategies in the The Purchasing Chessboard, if my strategy is to “Leverage Competition Among Suppliers” one of my goals or KPIs could be “Achieve 15% year-over-year costs savings in x good/service for next three years”.

6) Category Plan: now that you have this amazing strategy with lofty goals to save millions, a list of initiatives, projects or tactics must be developed that will deliver the results. The Category Plan should call out the name of the project, description of the project or tactic to be used, strategy alignment, value, and timing. A Project Prioritisation Matrix is a useful tool here to help you through this process. Although you may not formally develop criteria to plot your project on the matrix, it’s important to think about the Business Value and Ease of Implementation of the initiatives you have listed.

In summary, a category strategy is much more than a document that answers the 5 W’s as it becomes the critical guide to the Category Manager in his/her application of different procurement strategies, levers & tactics to generate value for the company they represent. By including these 6 elements in your category strategy, you are sure to deliver significant impact for your organisation and see transformative results.

Let me know your thoughts and the tools you utilize to develop your category strategies (I’ve created a Category Strategy template for those who may be just getting started!)

Managing A New Tech Project? Steal This Company’s Playbook

Make your new tech project a success with these tried and tested tips.


If you’ve managed a new technology project before, then you know the tech is the easy part. 

People are the challenge (and I mean that in the nicest way possible!)

Luckily, people and projects follow predictable patterns – no matter the size of your company. 

So here’s the playbook you need to make your new project successful. It’s the same one I’ve used to help dozens of companies like Credit Suisse and Honeywell launch systems on time and on budget.

And it’s yours to steal.

Step 1: Get the right people in the room

The most successful organisations are those that get the right people in the room from day one and keep them engaged the whole time.  

Who are the right people? It’s likely a mix of people across your organisation. Obvious inclusions are senior level decision makers. You also need to get the best technical brains in the room who understand the legacy system better than anyone else.

You need people who really understand your business – warts and all. Why are things done in the way that they are? What is the history? What are the processes? Are they defined in flowcharts and documents?  

You might think your own processes are well-documented, but they need to be really specific for the design phase (i.e. do emails/reminders have to be sent at a particular stage and what happens after X number of days; who do we escalate to?)

Next, you need to spend significant time making sure everyone understands and agrees the objectives of the new system. You need the people who hold the purse strings to agree, so you can get resources in place.

And prepare for scepticism – especially from people who have been around a while. These long-time employees have seen it all, and they might carry hard feelings from previous projects that didn’t live up to the promises.

So don’t be quick to dismiss those who seem negative; sometimes they are the key to understanding why something was done in the past, and to identifying where complexity can be removed. 

You’ll find if you address stakeholder concerns early on and make sure everyone feels heard and understood, you can get them on board and keep them there. And who knows? They could become your biggest ambassadors for the project. 

Plan for pushback

No matter how great your new system is – or how much time and money it will save the company – you should expect pushback. Most humans hate change. 

So approach their concerns with sympathy; after all, it can be hard to learn a new system.

And don’t forget about potential pushback from your suppliers. I often have customers who struggled previously with getting suppliers on legacy procurement systems.

Avoid that chaos by bringing your key suppliers in early.

For example, Maxim Healthcare struggled for seven long years to get suppliers on their legacy system. The suppliers pushed back en masse against the terms they had to accept, and possible fees faced by the vendor’s supplier network approach. 

So when they asked us to help them launch a new system, we put suppliers at the centre. Their suppliers were thrilled with the friendlier terms and approach. The result? Maxim Healthcare launched a shiny new P2P system in eight weeks with more suppliers than they acquired in the previous seven years. 

Define requirements and objectives

Before you go shopping, do the important work of laying down requirements and objectives.

Think of it like painting a room. The actual painting goes quickly; it’s all the prep work that takes the time.

Now is the opportunity to review your old processes and see if they’re still serving your company.

Get into the detail at the design phase and understand that documenting your processes will help to work out what you are doing now and where you can find efficiencies, cost savings, and better user adoption.

Everyone in your stakeholder group should agree on what your company needs in a new system. That will save you from scope creep (and many headaches) later on – when changes will be infinitely more expensive.

Once you know what you’re looking for, scrutinise different technology providers. Make sure you understand what is possible now with current technology.

At this stage, your provider should act as a friendly interrogator, questioning any areas they find in your processes that could be simplified. However, the act of removing that complexity is up to you. Will you make the most of the new technology you are paying good money for?

Look at the whole puzzle

A system may seem perfect in isolation, but you need to understand how it fits with the rest of your company set-up.

After all, you’re looking for a seamless flow of information, a consistent user experience, and a unified data model that supports 360 degree visibility of suppliers and activity.

None of that is possible if your company systems aren’t compatible. 

Also understand how the new tech system you choose can grow and change as your company changes. 

Some systems are too rigid to support those changes, meaning you could have a redundant system on your hands after only a few months.

And you should also consider how other existing company systems could change in the future. Are any of them due for an upgrade soon? Stay close to your CIO so your company makes the most of tech investments.

Allow for flexibility

Successful projects allow for flexibility in timing. Things will change and bumps will come up over the course of your project – no matter how precise your planning.

That’s why we use a hybrid agile/ waterfall method on our own projects (and encourage customers to use the same).

What does that mean? The waterfall approach is to build the system and then show it. Agile means to build as you go. 

Instead of choosing one over the other, we use both methods. That brings a nice balance of predictability with a level of flexibility to address unforeseen or evolving requirements.

At the design phase we try to lock down 80% of requirements and in this way we still maintain 20% for a level of flexibility. Though as mentioned earlier, it’s wise to get as specific as possible.

You might be surprised how quickly a project can come together this way. Take the Los Angeles Department of Water and Power for example. They needed the ability to upload bid submittals electronically, and we helped them launch the feature in just one week. 

Nailing down exactly what you need will make the actual build phase go quicker. And building in contingency time means you won’t get caught off guard when you reach a hiccup. 

Send in the A-team

You need to take people off their day-to-day work and give them the time to focus on this project.  

Have dedicated project team members who solely work on launching the new system. They should be able to answer business and technical questions, and to report back on user issues and gripes. 

This is especially important during the early stages of the project, but no less important throughout the entire process.

The best way to mitigate issues is to plan for them by making sure that you have enough and the right resources.

Once the procurement system is rolled out, it’s key to keep the same team engaged so a knowledge exchange to the support team can take place. They should stay put for at least a few weeks after launch to ensure a smooth transition.

Finish strong

Successful project teams are always communicating. 

At the start of any new project, I set up monthly steering meetings at the executive level. There are weekly project status meetings with project leaders, Ivalua, partners and clients to share what has been done, the challenges and what’s planned for the next week. 

We put any roadblocks or risks on the table and take a realistic health check on the overall project status.

I also schedule “Work in Progress” reviews to keep everything on track and spot issues a long way off. 

These checkpoints allow us to confirm we are headed in the right direction, and we can take some feedback to adjust it when needed.

You can do this

To summarise, when you managing a new tech project of any size, there are the three keys to success:

1) Know what your goals are, and make sure these are communicated to your internal teams and to the companies you are working with. 

2) Have the right people in the room. 

3) Complete a robust, open and transparent design phase to get what you want and guarantee that your organisation gets what it needs.

Finally, make sure you report your after-launch success back to senior management. Ivalua did some research earlier this year that showed 67% of procurement professionals believe that their colleagues consider them to be a key business partner contributing significant strategic value.

They already know you are valuable. Your project is another opportunity to prove it.

Procurement’s Time To Lead Is Now. Here’s How to Take Advantage.

A new survey of 500+ professionals reveals where procurement must focus to establish leadership and earn executive trust.


Procurement: it’s your time to lead. New research from Procurious and Coupa, released today, reveals that nearly two thirds of professionals have seen trust increase with the c-suite over the past three months. Similarly, more procurement leaders report having a seat at the executive table today compared to May, when we asked the same question as part of our Supply Chain Confidence Index.

“Procurement leaders continue to step up and executives are taking notice,” said Tania Seary, Founding Chairman of Procurious. “Procurement plays a critical role in navigating the uncertainty we face today. The function’s stellar performance opens the door for more – more recognition, trust, and opportunities to lead. It’s time to take advantage.”

Procurious and Coupa surveyed over 500 procurement and supply chain professionals in July to assess the state of the function and what’s on tap for the second half of 2020. Reflecting on procurement’s strategic position within the organisation, just one-fifth (21%) report that they are still being viewed tactically internally. While that number is still higher than we’d like, most would agree that for a function that’s historically struggled to stand out and get the recognition it deserves, we’re moving in the right direction – in a big way. Consider that over the past three months, only 7% said they did not see trust increase between procurement and the c-suite.

“Procurement today has a clear opportunity to capture our seat at the table. The findings of this survey highlight how important it is for us to think strategically and ensure our objectives are aligned to the board and our peers in the c-suite,” said Michael Van-Keulen, CPO, Coupa. “We must step up to help our organizations not only control costs, but also mitigate risk, maximize value, and increase the agility needed in today’s business environment.”

These results build off Procurious’ research findings from earlier this year. “In June, we uncovered clear indicators that the c-suite was paying more attention to procurement and supply chain. This trend is accelerating as executives recognise procurement’s unique and essential position in the ongoing recovery,” said Seary.

Procurement leaders looking to capitalise on this newfound opportunity should focus on delivering results that increase resiliency and continuity, and improve the bottom line. According to our research, the top three areas the c-suite wants procurement to contribute to are mitigating supply risk (70%), containing costs (69%) and driving business continuity (64%).

“At first glance, we’re seeing a back-to-the-basics approach for procurement teams, with a laser focus on savings, spend visibility, resilience and risk mitigation. However, when you step back you quickly realise this approach is anything but traditional. The desired outcomes may be similar, but companies are investing more strategically, aggressively and intentionally,” commented Seary.

Second Half Procurement Priorities: Controlling Costs and Risk 

Procurement’s top three priorities for the second half of 2020 are similar to what we referenced above: containing costs, mitigating supply chain risk, and supplying the products and services needed to maintain operations.

Naturally, managing supply chain risk remains front and center for organisations across the world. But risk takes on many different forms. What are executive teams most concerned about right now? The top five areas, in order of concern, are:

·       Operational risk

·       Supplier Risk

·       Business environment risk

·       Reputational risk

·       Cyber risk

Interestingly, the most prominent risk differs geographically. In North America and Asia Pacific, executives are most concerned about cyber. In Europe, the primary concern is operational risk. Either way, stronger investments in supply chain risk management will undoubtedly become one of the lasting marks of COVID-19. Mature procurement teams will never take supplier health, collaboration and risk lightly again.

When it comes to business risk, there’s often more than meets the eye. The survey also found that more than 80% of organisations have significant gaps in spend visibility, which is its own risk. This finding poses an important question: How can procurement teams lead and control supplier risk if they lack full visibility into where money is being spent?

Equipping Procurement to Lead and Thrive

Looking at the next 6 – 12 months, economic uncertainty was the number one concern for survey respondents, followed by cash and risk. Given the stakes – and procurement’s proven ability to add value in business-critical areas, including risk, resiliency, and cost containment – the majority of organisations (93%) are investing big to propel procurement forward. The top three investments organisations are making in procurement leadership are:

·       Data and analytics

·       Talent development

·       Technology

“COVID-19 continues to act as an accelerant for procurement transformation. The business case is right in front of us, and organisations are investing accordingly.” said Seary. 

While organisations are finally stepping up to fund procurement initiatives, the function still has an important role to play to shape the future. 

“We need to ensure the investments are strategic, and not tactical. We need to set the agenda, and ensure the c-suite’s vision for procurement is aligned with what we know is possible. It’s our time to lead, and we need to do it right,” said Seary.For more insights – including details on procurement priorities, operational gaps, investment strategy, supply chain risk and more, join Procurious and get the full report: Procurement’s Time to Lead.