Three Data And Analytics Considerations Every Organisation Should Make In The Pursuit Of Digital Transformation

The tools exist – and are affordable – to utilise Procurement data throughout the organisation for actionable intelligence. So how do you make that transformation? IBM Procurement’s Laura Beth Hirt-Sharpe writes the definitive guide to clearing the myriad hurdles.


A Procurement organisation’s success relies on transformation from standard spend visualisation tools to a comprehensive strategy to monitor, maintain and utilise Procurement data throughout the organisation. With the advent of inexpensive, efficient and reliable data collection and curation capabilities, many Procurement executives have the opportunity to efficiently create actionable intelligence from their data. Though a myriad of tools, methods and services are available to support this work, a significant hurdle remains for organisations: leaders must determine the best tools and services and curate an appropriate data strategy and data-driven culture to drive the change necessary to remain competitive.  All this, while cutting costs and reducing complexity.

As leaders embark on their Procurement analytics transformation, they face three major considerations: data and data governance strategy, data cleansing and curation, and skill gaps in core analytics and data science skills. In this blog, I will provide suggestions for each consideration based on my experience with global clients at various levels of maturity.

1. Data and data governance strategy 

Many Procurement organisations begin their digital transformation by thinking that data strategy and technology strategy are one and the same, when in reality these are two distinct, codependent pillars. A best-in-class approach to data strategy is to begin with the outcomes you are looking to drive from your Procurement data.  These outcomes can range across various domains beginning with traditional spend analytics, risk and compliance monitoring, to AI-based trending of key metric behavior within your environment, and many more in between. Once you have a clear view of the outcomes you want to drive, begin thinking through important questions like: 

·   What data needs to be captured and what level of structure is required within those elements? 

·   Is this data captured today, and if so, how?

·   What data gaps are present against target outcomes?

·   Does reasonably consistent master data exist across various source systems?

·   How can data completeness, accuracy, and meaningfulness be assured over time?

·   What is the best way to collect and curate data over time?  (This is not a “one and done” event!)

·   How can Procurement processes be optimised to ensure efficient and effective data capture?

These types of questions will help shape your data and data governance strategy. It is important to understand that there will always be a trade-off between speed of execution and granularity of data capture. Finding the right balance is key, and ensuring you have the right technology and innovation partners in place is crucial to optimising this balance. 

2. Data cleansing and curation 

There are two primary factors to consider with regard to data cleansing and curation: determining who from your organisation should be involved and maintaining value drivers in your dataset. 

Who should be involved?

Procurement data teams within an organisation typically lean toward one of two strengths: data science or Procurement. Some organisations focus on pulling data experts from other parts of the organisation to Procurement to help curate an accurate merge of their datasets into a “source of truth” dataset. However, through this method, Procurement subject matter experts (SMEs) have a limited stake in the data cleansing activities.  Knowledge of Procurement is essential to rapidly increase the data return on investment, such as supplier name normalisation and logic flagging.  If those knowledge assets are not brought into the process early, the path to monetisation will be slow and spotty. 

Alternatively, some organisations choose to assemble a team of Procurement professionals who can educate themselves on data techniques and procedures and curate the source of truth data. For these organisations, technical issues and lack of repeatability of process steps ensure the source of truth dataset will require a similar pruning process again in the future. This also has drawbacks in that data architecture is best left to data professionals – especially data that will be used for AI and Cognitive algorithms.  Merging Procurement SME talent with data design in a Procurement environment is tricky. Couple that with the reality that top data and Procurement talent have “day jobs” makes this investment in talent critical, complex and expensive. 

What are the key value drivers?

Organisations that pull their data into a central repository and want to utilise it to its fullest should maintain two value drivers within their dataset: 1) Procurement-specific categorisation and 2) knowledge-infusion based on outside information. 

Cleansing data to support a Procurement taxonomy cannot rely alone on a set of off-the-shelf tools built for classification of natural language – sentences and paragraphs – but will need to be curated for terms and phrases specific to Procurement’s categories. Furthermore, high-accuracy categorisation of spend data hinges on multiple fields such as supplier name, GL classification and rich line-item text fields. 

Utilising these Procurement-specific fields in classification requires more advanced algorithms to decide between potentially disagreeing field content.  To further complicate categorisation and curation, data experts are regularly tasked with combining non-structured information into the source of truth dataset. This work requires technical knowledge and industry acumen to execute as well as regular refreshes of data and terminology.  For example, these data points could include diversity supplier type, occupancy and building information as well as market intelligence purchased from third party providers. This work requires an in-depth knowledge of the source of truth dataset and supporting datasets which may be unstructured. These fields must be updated and verified with Procurement stakeholders. Categorisation work and additional field inclusion require a significant investment by Procurement organisations to create and maintain.

Determining the right team and the value drivers within Procurement-specific data is a task that takes dedicated individuals, time, and effort. However, the size and forethought of this effort will determine the return on data initiatives.

3. Core analytics and data science skills 

A pervasive issue I see with organisations that hire data scientists from top schools at high salaries is that they struggle to extract value from the data that already exists in their systems due to lack of Procurement acumen.

Another common issue is that an organisation’s current team cannot afford incremental budget for the aforementioned data resources, and therefore leans on its existing Procurement and IT staff to monitor, maintain, and report utilising spreadsheets and visualisation tools.

Cross-collaboration

Both approaches leave a significant amount of value unrealised for the business. Instead, I recommend cross-collaboration across the organisation, designating analytics champions and emphasising grassroots training.  Without these, the value of your data will remain untapped and will require a significant amount of future investment to digitally transform your business.

A successful data-focused organisation is one that is fully integrated within your Procurement function. The data team cannot be a siloed organisation, building point solutions for the loudest stakeholder’s pain point. There needs to be an agile approach to daily activities, with a robust backlog and tasks prioritised for highest return to the business.

Analytics champions

Analytics champions are an important, yet often overlooked, position. Data Translators are another name for this role, as organisations need to treat data as another language with certain speakers of the database and statistics “dialects.” 

For example: if an executive has a short turnaround project that is important for continuing operations, they need to meet with their function’s analytics champion before they meet with the data team. The intent of this role and meeting is to vet, assess and format answers to the rudimentary questions that often derail otherwise productive data initiatives. Potential topics to cover include data availability, awareness of the project backlog, agreement on fair timelines and investment, and blockers. 

Organisational growth

Analytics champions need to be cultivated internally first as functional experts and grow as the organization evolves. There are positives to hiring versus training, but as discussed earlier, without the proper functional understanding you will likely see a lack of results without the proper structure in place. 

Your current functional team knows your business, processes, industry, and supply base best, so enable them to make decisions and give structured guidance to the data experts, even if a data translator is required.

Meaningful transformation through modern Procurement

Analytics is at the forefront of high-impact Procurement organisations as a trusted business advisor role, as a supplier relationship reference source, and as the foundation of effective compliance management. Through analytics, modern Procurement can be predictive in their actions and trusted throughout the broader business. To produce the granular level data required for actionable intelligence, source data has to expand beyond basic accounts payable and purchase order elements.  New sources of information, such as demand, consumption and compliance data from a variety of internal and external sources must be linked. This process appears daunting, but we have seen meaningful transformation happen over small, structured, prioritised steps with a focus on data as the foundation for meaningful transformation.

To solve for this complex need, Procurement Business Process Outsourcing services are innovating through AI-based technology infused with an influx of new and re-purposed Procurement talent skilled in data science, mathematics, statistics and computer science. Ensuring the correct mix of skilled data resources with Procurement experts has proven to be an expensive challenge for CPOs, and an opportunity for market-leading specialists such as IBM Procurement Services. These services assist Procurement organisations to meet their analytics demands while empowering their sourcing practitioners to focus on taking action based on the analytically discovered opportunities. Incorporating knowledge built across clients and industries, these services allow Procurement to adjust focus around high yield data and statistically verified opportunities.

Advanced Category Management: It’s Not Just About Savings

Category management is still misunderstood as a specific function in procurement. While understanding the category is important, the focus should be on the word “management”: managing internal stakeholders, understanding their needs, and managing suppliers by understanding their needs to find win-wins, generate value and ensure continuous improvement. Jaggaer’s Georg Roesch explains.


Category management is not a difficult concept to grasp. Really. Just answer the following question: Which do you prefer: a) shoddy or mediocre goods and services at high prices, or b) excellent value? When it comes to execution, however, things get a lot more complicated. Category management is a technique used to understand markets, analyse spending, and make good purchasing decisions that save you money while securing quality goods and services.

If you are new to the subject, there are many tactics, but a common one is to start with bundling items to take a bigger deal to market in order to be in a better position to negotiate a better price. One of the most popular and accessible books on procurement poses the question that goes to the heart of category management, and very simply: Why are hot dogs cheaper in IKEA than in the supermarket?

That’s all well and good, but IKEA sells a standardised range of products through near-identical superstores all over the world. It makes total sense that it bundles everything it buys from hex keys to drapes to hot dogs and gets a fantastic deal. What’s not so easy to understand is how that works for a company whose products are highly sophisticated and/or non-standardised. Take, for example, the Swiss company Bühler.  Each day, two billion people enjoy foods produced from raw materials such as grain, coffee and rice processed on Bühler equipment; and every day one billion people travel in vehicles manufactured with parts produced with Bühler machinery. But the important point here is that every single machine that Bühler produces for its customers is unique. In that sense it is the absolute antithesis of IKEA.

Yet in another sense, it faces a similar challenge. The global orientation of the company’s products, its presence in 140 countries worldwide with 20 business units, 30 manufacturing sites, 100 service stations and 25 application sites mean that sourcing is a global operation – and for Bühler, category management is crucially important to business success. And it is incredibly complex because, whether Bühler is producing air pressure systems, silos, compressors or steel constructions, the company always sources for specific projects, which means there is a huge range of differentiated categories.

Of course, companies like Bühler want to minimise spend, but for companies that believe “you cannot put a price on quality”, category management has many other dimensions.

A misunderstood term

Category Management remains a largely misunderstood term. The confusion arises in the fact that it was originally coined by marketers in the retail industry: Nielsen defines it as “a process that involves managing product categories as business units and customising them [on a store-by-store basis] to satisfy customer needs”. Others define it as managing a line of products as a business unit, as opposed to individual brand management.

Only later did the term get adopted by procurement, where it is defined as “a strategic approach to procurement where organisations segment their spend into areas that contain similar or related products, enabling opportunities for consolidation and efficiency” (CIPS). Many procurement professionals might argue that this is what procurement has always done: understanding markets and looking for ways to strike a good deal. However, what category management as a distinct activity and organisational structure brings to the table is greater depth and sophistication.

A category is basically any group of similar items that you want to buy under a single deal: goods and services that are available from the same or a similar supplier base. Examples are stationery, fuel, travel services, transportation and logistics, advertising and legal services. But we should focus more on the management part, which is about applying robust methodologies (and a good deal of business acumen) so that you not only maximise savings (for example by designing the right sourcing events that are appropriate for each category) but also achieve other goals such as shortening time-to-market, reducing risks, increasing environmental sustainability, broadening supplier diversity or even creating new revenue streams. All of this implies a much stronger connection between the procurement function and the organisation’s strategic objectives and even its mission, vision and values.

The key to effective category management here is understanding the internal customers’ needs, as well as what’s going on in the supplier market. Category management is by its very nature a role that is normally a center of excellence, but it must be responsive to local needs and win stakeholder buy-in. To be successful and to command respect, a category manager must know how to leverage internal knowledge and expertise and must be able to work cross-functionally. In practice, this could involve, for example, involving key stakeholders such as operations and quality control managers – and in the case of strategic suppliers, senior executives – on factory or site visits to build confidence that suppliers have what it takes (human and technological resources, financial strength and resilience, physical size of the business etc.) to satisfy everyone. 

Time-to-market, for example, has become a decisive factor in the success or failure of a product, and in particular, the launch of a new product. Category managers can play a critical role in reducing lead times, as long as they are involved in the production process early on. For example, the lengthy request process for customised parts can be drastically cut down with excellent supplier communication supported by the right IT tools. To ensure that the price of a material or a part is not the only deciding factor in their selection, the category specialists need to look for further streamlining potential in purchasing and striking the right balance between stimulating competitive pressure on suppliers and consolidating spend.

In practice, you might for example negotiate a bonus to suppliers for beating the delivery deadline, or a penalty for missing it. With the emphasis on the former: the best category managers treat suppliers as partners, rather than people you need to beat up on price. In a complex category such as transportation, category managers should seek to balance savings with objectives such as reliability and operational integrity. The outcome should be a win-win for buyer and seller alike. Often the best way to do that is to keep the strongest incumbents on good rates while leveraging smaller operators who offer great performance.

If category management can achieve all of the above, it will succeed in raising the profile of procurement across the organisation, changing the perception from a functional, operationally focused activity to a business process. As well as making breakthrough savings, the organisation will notice improvements in service levels, quality, availability and value for money, and a reduction in disruptions to the supply chain.

The supplier’s perspective

Understanding things from the supplier’s perspective can be approached scientifically and systematically. Just as we are accustomed to plotting suppliers on a matrix to assess their status (as strategic, tail spend etc.) so a category manager should do the same from the supplier’s point of view, which means plotting Attractiveness of Account against Relative Value of Business. Suppliers see their customers as falling into one of four basic categories:

Nuisance: The customer has driven a very hard bargain on price and is highly demanding, which gets in the way of my other business. I have no incentive to compete for their business in future and am not motivated to give them good service.

Growth: The customer is not profitable right now, but the account is worth developing as I expect bigger opportunities. So, I will show willing and “use a sprat to catch a mackerel”, as the saying goes.

Profitable: The account can bring me potentially huge gains in the short term, but I don’t see it going anywhere. I will respond to requests but get the best price, even if that means losing the account. So, let’s make hay while the sun shines.

Core: I value this relationship. It’s profitable in the long term, so I will do what’s necessary to give excellent service in order to beat off any competition. That means I have an incentive to work collaboratively with the customer to reduce costs, innovate and add value.

Whereas strategic sourcing will tend to recruit new suppliers into the “growth” segment, the job of category management should be to move them into “core”. This requires category managers to develop the ability to walk in the supplier’s shoes. And once again, this will require cross-functional stakeholder engagement across the organisation so that both parties understand each the other’s needs in greater depth, appropriate training and joint activities are arranged, etc.

In this way the initial savings secured through sourcing will not be eroded over time; on the contrary, the benefits will be extended as the relationship matures. Both parties have an incentive to look for ways to reduce costs and increase value, e.g. through process improvements, which typically drive year-on-year benefits equivalent to around 5% cost saving with each renewal.

Above all, category management is a continuous process, and one that is multidimensional. Therefore, it is not always easy for mere human beings to grasp in all its aspects. Increasingly, category managers are relying on business analytics and artificial intelligence to undertake continuous analysis of market data and supplier performance against benchmarks to deliver a range of benefits across multiple inter-related projects. The future of category management will be a matter of harnessing what advanced analytics is good at to what humans are good at. If you’re interested in hearing more on category management and how to effectively digitize the process, tune into our webinar with The Hackett Group and AstraZeneca! We’d love to hear your thoughts in the comments!


A Waste Of Time Or A Gold Mine? Why You Need To Classify Your Spend Data ASAP

Classifying your spend data? A big waste of time, surely … or a crucial step that needs to be taken without delay? The Classification Guru Susan Walsh explains why this needs to happen immediately.


So, picture the scene: it’s budget time and as far as you can see everything is under control, the bottom-line balances out, you’re in the black and life is good. But, are you really getting the full picture? You’ll never know unless you accurately classify your spend data.

You may already be thinking about it; or can’t justify the time or resources; or it might be something that you think is just a complete waste of time or money. Let me tell you why it isn’t, and you should have your spend data classified as soon as possible…

First things first, there’s that full picture I mentioned. If you’re only using your General Ledger codes, I can guarantee that they are wrong! Now, I know that’s a bold claim, but it is based on years of experience of working with GL codes. More often than not they’re used by people who don’t necessarily understand or know what they’re logging or the importance of accuracy. The result? Items logged under random GL codes.

Now, have a think about your department budgets: Karen in marketing’s maxed hers out, but she’s just placed an order for 5000 new leaflets to be printed. How? In my experience, it’s been snuck into someone else’s budget. Think about marketing and sales, would an order for 5000 leaflets really look out of place in a sales budget? Probably not, unless you look a bit closer. And this means you’re not really getting a true picture of what’s going on at ground level or what you might need for specific areas of your business. You can’t increase the marketing budget if you don’t know they’re spending it all.

We also, unfortunately, need to mention the possibility of fraud or embezzlement. It’s not pleasant to talk about and no one wants to think the worst of their staff or suppliers, but it can and does happen. Someone may have tried to mislead or take advantage of you in some way and if the spend data is messy or they’ve been clever it can be very difficult to spot. This is why it is also a very good idea to have an external party look over it, because then nobody has a vested interest in hiding what’s in the data – they’re just classifying it!

Now, I’m not saying it is a quick and simple process, good classification can take weeks and weeks … and weeks! But it’s worth the wait when you get back your brand new, shiny data set with all this new and organised information. Then you’ll probably say to me, what do I do with this now?

Well, the first thing you do is actually look at what you really spend your money on and find out if you could or should be negotiating better rates with your suppliers because the data’s shown you’re actually spending a lot more than you thought you were or have been automatically accepting price increase when there’s much better deals out there!

Then once you’ve done that, you’ll probably want to review your processes because, as I said before, I can almost guarantee something will have been flagged up during the classification process which indicates spend isn’t being accurately logged.

Ultimately, it’s all about saving you money and that’s no bad thing for anybody. Now, more than ever, it is so important you know where your businesses’ money is being spent and I am sure every single person who has their spend data classified will find at least one hidden surprise – like a data Kinder Egg! (Sorry my American friends, they’re not banned in the UK!)

So, although you may be put off by the upfront cost of having your spend data classified, it will save you money in the long run and the benefits to your business are pretty massive.

Susan Walsh is the founder of The Classification Guru, a specialist in spend data classification, supplier normalisation and taxonomies.  You can contact her at [email protected] https://www.procurious.com/professionals/susan-walsh

3 Key Differences Between CIPS & ISM Certification – But Why It Doesn’t Matter!

When it comes to professional accreditation for procurement and supply chain, there are several options available. But, as it turns out, all are equally good for your professional development.


Unlike other professions, procurement and supply chain does not have one, single governing professional body. While this does make things slightly more complicated, it does provide professionals with a greater degree of choice when it comes to their professional accreditation journey.

Individual decisions may be based on geography, field of procurement, or even previous and current job roles. And while people will make different choices, it does not mean that any of these options are better than the other or will hinder career progression in the long-term.

Previous articles on Procurious on professional accreditation have focused largely on CIPS and the MCIPS/FCIPS qualifications. However, in order to provide a broader view on available accreditation, we need to look at other institutions like the Institute of Supply Management (ISM), and their widely-recognised Certified Professional in Supply Management (CPSM) qualification.

To understand which qualification is better suited to you as an individual, we need to look at the key differences in the organisations and accreditation, and how your decision may impact your future career.

1. Geographical

The main difference between the two organisations is a geographical one.

CIPS is headquartered in the UK and has a very strong network in its home country. It has also developed strong network bases in EMEA and Australasia, with each region having its own management structure, as well as a strong presence in Africa and East Asia. It is a truly global Institute, with over 200,000 members worldwide.

ISM was founded in North America in 1915 and has consolidated its base in this region. It doesn’t have the same global branch network as CIPS, with its networking predominantly focused in the USA. But it is starting to spread its network worldwide, including an increasing membership throughout Latin America, with over 50,000 members from 100 countries.

2. Time & Study Format

When it comes to qualifications, it’s hard to split the two bodies. Both take procurement and supply professionals from student or entry-level members and provide learning, development and examination in order to progress to accreditation. The time taken to achieve the qualification and the method of study are slightly different, however.

CIPS’ key accreditation is MCIPS, with the opportunity to become a Fellow (FCIPS) of the Institute beyond this. Depending on the starting level, experience and nature of study, accreditation can take anywhere between 3 and 6 years to complete. Learning materials and exams are all available digitally, though study can be undertaken in person where available.

CIPS also provides the opportunity to gain MCIPS via an accredited degree, a Management Entry Route or Corporate Award, all of which reduce the requirement for CIPS exams themselves.

The ISM Certified Professional in Supply Management (CPSM) qualification generally takes between 6 and 12 months to complete, depending on the method of study, time and experience. The Institute offers both self-study and classroom-based learning, but the only way to gain the qualification is to go through the three CPSM exams and have the required level of experience in procurement.

Currently there is no option to use other qualifications (degree, post-graduate degree, etc.) to provide an exemption for exams.

3. ‘License to Practice’

Possibly the biggest difference in the accreditation offered between the CIPS and ISM is what is offered beyond the main qualifications.

For ISM, this is the ISM Mastery Model. The model is based around a set of 16 core competencies and more than 70 sub-competencies which are seen as critical for a successful career in procurement and supply. Further learning resources help take individuals and teams from the first level, ‘Fundamental’, right up to ‘Mastery’, helping to provide a level of standardisation in skills for the profession.

Where CIPS differentiates from ISM is in its chartership programme. CIPS’ ambition with this when it launched its chartership programme was to create a ‘license to practice’, similar to other professions. With procurement looking to achieve the same recognition as these other professions, chartership seems like something that many people may consider going forward.

So which is better?

In some areas the differences between the organisations and their respective qualifications are stark, in others they are slight. Despite these differences, it doesn’t mean that one qualification is better than the other, or that there is more positive benefit for long-term career prospects in being a member of one institution over the other.

This is because of the key thing that both have in common: international recognition as a gold standard accreditation for procurement and supply chain. CIPS and ISM have together raised the bar for procurement, providing standardisation in learning, development and qualifications, and applicable to all areas, industries, sectors and individuals involved in the profession.

Irrespective of which route you choose, by choosing to undertake professional development and further qualifications, you’re playing your part in advancing the procurement profession. The best thing you can do is look at the organisation and qualification that suits you best and go for that. If everyone takes this step, then procurement will be the ultimate winner!

LEAD LIKE A BOSS: MASTER GLOBAL SUPPLY CHAIN SHIFTS

In light of COVID-19, is the status quo still the best way, or is it time to move away from Globalisaton to embrace Localisation and its benefits? Tania Seary explains what such a gargantuan shift would entail and how you can master it.


The supply chain strategy paradigms we have held close and true for decades are being challenged. The questions are complex, important, urgent and without easy answers.

Consider some of the traditional supply chain paradigms such as lean manufacturing, just-in-time inventory management and extended payment terms. In light of COVID-19, is the status quo still the right way to operate? Take supplier payment terms, for example. Maximising working capital has been a top priority for as long as we can remember. Now, given the rise in bankruptcies and the clear connection between supplier viability and business continuity, many procurement leaders are taking a step back and thinking more about their suppliers’ cash flow in addition to their own.

These paradigm shifts are substantial but pale in comparison to the potential changes around supply chain globalisation.

Supply Chain Globalisation: Is It Time to Localise?

For decades, supply chain strategies have revolved around moving production and sourcing to low-cost geographies. This traditional low-cost sourcing mindset affects everything from lead times, supplier selection, production, quality, margins and more.

Today, leaders everywhere are asking if their heavy reliance on global suppliers is less strategic and more of a risk. When Procurious asked more than 600 procurement and supply chain professionals where COVID-19 had the biggest impact, 21% said logistics and transportation slowdowns or delays. Over one in four cited lack of available supply due to production downtimes and shutdowns. Ninety-seven percent said they were impacted in some capacity.

Pressure and attention are heightened when disruptions cause shortages to critical supplies such as ventilators or personal protective equipment, direct materials and popular merchandise. Beyond the headlines, there’s also a significant impact to the services supply chain. When critical outsourced services, including customer support, security and IT, were suddenly forced to go remote, we saw a corresponding rise in risks related to quality, fraud and compliance.

When a supply chain disruption occurs, it is impossible to control what is happening, especially when the product or service you rely on is thousands of miles away and completely inaccessible. What business leaders can control, however, is from where they source. That explains why over one-third of the profession is currently planning to either expand their supply base or shrink their global supply chain and depend more upon local suppliers.

The idea of realigning supply chains is not new. Questions about globalisation and the heavy reliance on China have been bubbling for years. Macro and geo-political events such as the China-U.S. trade war and Brexit brought the topic to the surface. COVID-19 caused it to boil over. Forbes even went as far as to say COVID-19 will become the final curtain on China’s nearly 20-year role as the world’s leading manufacturer.

Our research shows that over half of supply chain and procurement professionals believe Fortune 500 companies should reduce globalisation by localising supply chains and bringing manufacturing back home. But as most industry veterans recognise, that shift is far easier said than done.

The Catch-22 for Supply Chain & Procurement

Surprisingly, 27% of executives plan to stay the course and not make any meaningful post-pandemic strategy shifts. Many of them probably want to alter approaches, but recognize the inherent complexities and costs associated with doing so.

Understandably, most executives have never before experienced a supply chain disruption to this extent. While localisation seems like an appealing strategy to minimise future risks and boost the local economy, it’s far from a quick and easy fix. The obstacles are plenty.

Overcoming the deep reliance on low-cost sourcing is the first challenge. The second is production complexity. Technology gets more innovative, personalised and sophisticated by the day. It would be nearly impossible for a single manufacturer to hold all the technical capabilities and expertise to produce these products 100% in-house. To keep up, manufacturers outsource critical components to others, who outsource to sub-suppliers and so on.

Breaking this chain, while simultaneously bringing production closer to home and swaying the board to accept lower margins, will require executives and procurement teams to perform in a new reality.

Of course, there are clear benefits of going local. The end-to-end supply chain impact on carbon emissions is more than five times that of companies’ direct operations. Localisation optimises and shortens the supply chain network, lowering emissions.

In addition, sustainability performance is proven to impact the bottom-line. According to the World Economic Forum, sustainable procurement practices can reduce supply chain costs by 9 – 16%. On a larger scale, shifts toward localisation strengthen national and local economies, support the job market and, in many cases, reduce enterprise risk.

What’s to Come?

The decision to move production requires long-term planning and commitment. It won’t and can’t happen overnight.

Companies planning to make seismic strategy shifts like localisation require proper technology investments. Over 90% of companies are already using at least one Industry 4.0 technology, including blockchain, artificial intelligence, internet of things and more. While adoption of blockchain is still relatively low, the network promises to play a pivotal role in whatever changes come next.

The following 6 – 12 months will be crucial for every company and require a great amount of flexibility and adaptability. It’s impossible to predict (with 100% accuracy, at least) what’s next. Anyone that tells you differently is out of their mind. My advice to C-suites and supply chain and procurement leaders is to remain agile, invest, lean on your peers and prepare for anything.

Is Your Contract Rollout Turning Into A Psychodrama?

The critical moment between signing a contract and handing it over to the business seems like the perfect time to take the hands off the wheel and celebrate. But don’t pop that champagne just yet – this is a time for procurement pro’s to shine! Ensure you remain front and center for the contract roll out and implementation to make sure you deliver the value identified during the sourcing process!


You’ve gone through the pain of a long, drawn out sourcing and negotiation process. You’re exhausted. The business agrees that you’ve selected the right supplier to award the business to. After all, they signed off on the decision…right???  Oh no. The ink isn’t even dry on the contract when the backstabbing and psychodrama begins!

5 contract implementation pitfalls

Read on to find out the top 5 reasons contract implementations go wrong and what you can do to get it back on track.  

1. Lost your true north

The supplier is delivering the services in accordance with the new contract, but the reactions seem mixed.  Some people are happy and some people are not. Key stakeholders are offering completely different views of how successful this project implementation has been.

  • Pitfall: The problem definition or opportunity statement was not correctly nailed down. 
  • Resolution: Facilitate a group meeting about the purpose and scope of the contract. Reset expectations about what the supplier has been contracted to provide. You may be able to get the supplier to make minor adjustments to appease some of the requests.
  • Tip: Ensure the focus is on resetting stakeholders back to the shared outcome and not individual desires or opinions.

2. People don’t like change, get in front of this

New people have come out of the woodwork that suddenly have an opinion about how things should have been structured or worse – who you should have chosen and they’re kicking up a fuss. Drama!

  • Pitfall: The wrong people were involved or the right people weren’t in the room.
  • Resolution: Most big project changes or contracts need a reference group or project team to help the implementation phase bed in for the first 6 months to a year. Offer to bring these people into the project team and get them involved with future reviews. It’s hard to complain if you’re part of the group….right? 
  • Tip: Make sure there is a solid communications and change management plan taking people along the journey and communicating the major project steps. Try to think of ways to involve end users to gain maximum chances of buy in e.g. trialing new furniture for a fit out project or sampling coffee for a new catering contract.

3. You specified the how

Things aren’t quite right and you can’t really put your finger on it. Things aren’t happening like you planned. The issues aren’t disappearing. Your managers aren’t as wowed as they were expecting and they’re starting to ask questions.

  • Pitfall: You got what you asked for and that’s the problem. Buyers can sometimes feel the need to define not only what they need, but also how the supplier should solve this problem.
  • Resolution: The market will respond to what you put out, so be careful what you ask for. Leave as much room as possible for suppliers to make their mark and do what they do best, which is to know their stuff and their industry. Ensure you leave room for creative solutions, suitable alternatives and innovation.
  • Tip: If you’re trying to solve a problem have you nailed down the right root issue? Try the five whys concept to ensure you buy what you really need

4. Contract Management, what’s that?

The project team disappear once the contract is signed, they high five each other as they head back to their day jobs and slap the documentation on the contract manager’s desk. You check in one month later and the contract isn’t working – complaints are rolling in from all fronts.

  • Pitfall: Often the time investment of managing a contract particularly at the mobilisation phase is not properly scoped out and/or other priorities creep in. 
  • Resolution: Ensure the project team sticks around for the all important start-up and that the contract manager is in the sourcing project from the beginning. You’d be surprised how often this simple action is not undertaken.
  • Tip: Keep the regular project meetings for the first three months of the contract. Ensure you try to realistically gauge how much time this contract will take to manage and get the right cover.

5. Different supplier but same result, what happened?

This contract was meant to deliver real changes, but a year or two in, it’s just the same service and results the last supplier gave. What happened to the agreement of innovation, ideas, incentives for high KPI scores and phase 2 of implementing a new system?

  • Pitfall: There are a few things that could be going on here: either the process asked for a whole lot of things the buyer wasn’t ready for, or didn’t have the commercial readiness to be able to realistically achieve; The supplier hasn’t been managed or given any clear direction; Protracted contract negotiations stifled innovation, goodwill and squeezed margins.
  • Resolution: Time for an honest 360 feedback meeting. Be clear on what you want and what you are able to achieve.
  • Tip: It’s great to have thirst and hunger to do things differently, but be careful not to over scope what you need or what the organisation is ready for. If you aren’t going to portion risk evenly then don’t enter into a pain / gain share model (for example).

Next time you’re part of a large project team or leading a procurement process that will result in a new supplier, make sure you think ahead and mitigate these potential pitfalls to ensure your next contract implementation ain’t no drama llama.

How To Keep Your Career On Track During A Recession

With the world economy in such a state, layoffs, redundancies and furloughs are commonplace – but even so, you can appear indispensable to your organisation.


There’s no denying that this year has been a year that will be remembered, and definitely not for the right reasons. Many of us know of, or personally know, someone who has lost their job, which is unsurprisingly given that more people have lost their jobs this year than during the Great Depression. Fortunately, many of us in procurement and supply chain have been protected thus far, but we do not know for how long. So is there anything we can do to ensure we keep our career on track and avoid being laid off? 

When you work for large corporations as many of us do, it can be easy to feel powerless against a potential redundancy. But rest assured, there are a few significant things you can do to keep your career (and your job). Here’s what you can do to keep afloat when everyone else seems to be on the sinking ship: 

1. Be visible

In a perfect world, you would be judged on your work and your work alone. But career success requires so much more than that: to learn and grow, you’re also expected to volunteer for extra projects and committees, network, pursue development opportunities, and so much more. 

Doing so makes you more ‘visible’ to more people, but it also makes your effort far more visible. And ultimately, if more people value you and your input, it’s more likely that if the time comes to lay people off, your job will be seen as essential. 

Of course, visibility has taken on a whole new meaning this year. You may not be able to show up in person anymore, but if you’re looking to keep your career on track, volunteer for that committee you might have skipped in the past. Be as engaged as possible, even when meetings bore you. And make time to connect with colleagues, even if it’s just for a quick social video chat. 

Work is not a popularity contest, but the more connections you have, the more likely you will be to stay. 

2. Be optimistic 

Being optimistic in this environment is challenging at best, impossible at most. And why should you bother? It’s doom and gloom for most of the world for the foreseeable future, with no real end date. 

Could optimism actually help your career, though? Science says yes. 

Research into who survives massive layoffs shows some surprising results. In a nutshell, being optimistic at work is important for one key reason: people will be more likely to want to work with you. In business, people are almost twice as likely to want to work with someone they consider congenial, over someone who is more capable, yet less likeable. 

When a company is considering layoffs, they will consider how much work each individual or department needs to do. If you’re optimistic and great to work with, you’ll likely get the lion’s share, and will be less likely to be able to be replaced. 

3. Support your leader

When times get tough, it’s tempting to make an enemy out of your boss. After all, they often have a say on whether or not you’ll keep your job, and sometimes are in the terrible position of having to deliver you the bad news – while keeping their own job, which can feel crushingly unfair. 

Yet if you’re looking to keep your career on track during a recession, going dark on your boss is not advised. 

Managers, just like everyone else, suffer through recessions and not many (if any) enjoy laying people off. Recognising this, and showing empathy for them, can help create an important emotional bond. In turn, this bond will help them see you as mature and resilient, and hopefully, all things being equal, an asset to the company, and one that is not easily replaced.  

Keeping your career on track in this economy is certainly a challenge, and sometimes you simply go into survival mode. But remember, you’re not powerless. There are things you can do every day to show how invaluable you are to your company, so next year – hopefully – you can not just survive, but thrive. 

Make Sure Your Data Has Its COAT

Dirty data can be costly – but accurate data is always a great investment. Make sure your data has its COAT and you’ll never be out in the cold, writes Susan Walsh


If your data doesn’t have a COAT, there could be a range of bad or costly decisions made which could affect the business performance, financial situation, risk jobs, or even the fate of the company.  You wouldn’t go out in freezing temperatures without the appropriate coat and you shouldn’t work with data or make business decisions without the same level of protection – accurate data.

And, just like with coats, there are different levels of quality data services out there. If you buy a cheap jacket, it might not be waterproof or protect you from the elements, it won’t last much longer than one season and you’ll need to buy another the next time winter rolls around again. It’s the same with data – if you don’t invest in good quality service you will end up paying twice as much, if not more, in the long run to fix the earlier mistakes. Don’t be left out in the cold.

So, what is COAT?

Consistent

Generally data is used by many people or teams, which can lead to multiple classifications of one product. For example, one person might put DHL as a ‘courier’, while another might log it as ‘logistics’ or ‘warehousing’.  A taxi might be classified generically as ‘travel’ when it should be classed as ‘Travel > Road Transport > Taxis’ and a project cost should be assigned to the same budget or GL code, not several.  Or it could even be a simple as units of measurement. One person may use ‘Litre’, another ‘Ltr’ and another ‘L’ – but these should all be one format.  This means everything can be reported accurately, you get a true picture of what’s going on and better business decisions can be made.

Organised

Data is only useful if it’s organised.  Think of a messy closet: you’re looking for your favourite top but can’t find it as everything has been thrown in there.  And, much like your closest, you can organise your data in different ways, depending on what you want to get out of it and that will produce different reports/analytics.  You may want to assign data to employees, teams, departments, functions or internal categories, as well as time periods such as months and quarters, or year groups like P1, P2 etc… So, for example, when you need the information on the accounts that Sharon in Finance is working on, or the sales teams’ performance for the quarter – you can pull that information quickly.

Accurate

This can mean different things to different people. At its most basic level, accurate data is correct.  In more detail, this could be no duplicate information; correct invoice descriptions; correct classifications; no missing product codes; standard units of measure (e.g. ltr, l, litres); no currency issues; correctly spelled vendors; fully classified data; or the right data in the right columns.

So, what does this mean?  It means greater visibility across your business in several areas, allowing better decisions, as well as time and cost savings and increased profits.

Trustworthy

This is critical.  Business decisions around jobs, staffing, budgets, cost savings and more are all based on data.  Data is used by everyone from the bottom to the top of an organisation. You have to be able to trust that what you’re looking at is the right information, and you need it to be accurate in order for your teams to use the data in their daily jobs. 

If they don’t trust the data, then they might not use the fancy new expensive software you’ve just spent tens of thousands installing.  Or the new AI you’ve installed may not produce the right results because it’s learning from dirty data.

Like a good coat, data is an investment – not a cost.  By making sure it has its COAT on, you’re saving time, money and avoiding future problems.  And also like any coat, it needs to be maintained.  You need to continually ensure your data is consistent, organised, accurate and trustworthy to get the most out of it.

Have you ever experienced a make or break moment at the hands of your data? Let us know in the comments below!

How To Get The Most Out Of The Big Ideas Summit This Year

It’s the digital event of the year that everyone’s been talking about and recommending – so how do you make the most of it? Here’s 7 ways you can maximise every avenue of opportunity the Big Ideas Summit has in store.


You all know what we’re talking about when we describe this. You registered for the biggest procurement event of the year; the one that every industry expert out there says you simply can’t miss. You’re determined to get the most out of it.

But it’s virtual. Your day is still packed with meetings. You plan to login from home (with all the distractions that come with it.) And your to-do list is a hundred items long.

You’re afraid that this crucial professional development opportunity might pass you by … But not this year. You deserve this opportunity – and want to make the most of it.

For anyone out there who has ever felt a little intimidated by events, this year’s online Big Ideas Summit will provide you with unparalleled (and many would say, easier!) opportunities to learn, grow and network. But it will also be different.

Over 1,100 of your peers have signed up alongside you. We have an action-packed agenda including sessions on  how to think the unthinkable, understand the new risk landscape, protect your career and much more. 

To get the most out of the event, you need to prepare. But don’t worry, the prep is quick and easy.

Here’s how to get the most out of Big Ideas 2020:  

1. Register for the Event

Once you’ve registered (if you haven’t, do so here), you’ll receive an email inviting you to the Event Hub. To accept this invitation, you’ll need to click on the link and enter your first and last name, and email address you registered with. You’ll then receive an event code, which you can use to enter the event (note that this code is only valid for 24 hours).

2. Block off your calendar

Let your team, boss, family and internal stakeholders know what you’re up to. The best way to benefit from the conference is to give it your time and attention.

3. Explore  the Event Hub

You’ll find all of our great sessions in the Event Hub. Each session has its own unique link, and when you click it, it will open a new viewing screen on your browser (or phone/tablet etc.). Take time to review the sessions in advance to ensure you don’t miss the one you most want to attend. 

4. Partner networking

Within the Event Hub, there are also Partner Virtual booths. These information-rich booths enable you to network and get to know our partners (online!)
Simply click the booths to enter. 

5. Live networking sessions

There are 2 live 20-minute facilitated networking sessions, to cover all of your networking needs.

6. Share ideas and ask questions

Have you ever had a burning question during a presentation, only to have forgotten it by the time the session ended? Cue another benefit of a digital event! This year, you’ll be able to comment on each session while it’s happening, so you never forget a question or forgo an opportunity to have your say. 

7. Bring it home

Okay, this is more of a post-event action. Take notes, share ideas and make a concrete plan to bring your learnings back home.

And as always, we’ll be with you every step of the way. If at any point you need any help, reach out to [email protected]

This year, we need more Big Ideas more than ever. We can’t wait to see all of your virtual smiling faces and help you dream big.

Getting Your SOW Right The First Time

The Statement of Work (SOW) is the heart of any contract – so ensure you get it right the first time, thanks to this expert guide by Lawrence Kane, COP-GOV, CSP, CSMP, CIAP


The Statement of Work (SOW) is the heart of your contract. It defines requirements and success factors for your supplier, describing what services, tasks, and/or resources must be delivered along with metrics that govern whether or not those obligations have been met successfully (such as acceptance criteria, Service Level Agreements, and the like).

It is costly to change a SOW once set in place not only because your negotiating leverage is reduced after contract signing but also because any modifications can drive operational, financial, legal, and reputational risks for both parties. Unfortunately unresolved disputes harm the relationship and may even end up in court, so it is imperative to get your SOW right the first time.

A quality SOW will be distinctive for each type of contracting relationship (such as supplemental staffing, managed services, outsourcing, or Vested outsourcing) and will vary substantially depending on the type of work acquired (such as labor, hardware, software, services, etc.). The document itself tends to have some background information that levels the playing field for non-incumbents during the bid process along with your requirements for such things as request fulfilment, governance, implementation, transition, innovation, transformation, technology, operations, knowledge management, business continuity, incident management, security, performance management, information protection, change management, etc.

All SOWs should be aligned with your sourcing strategy so that you’re buying the right things (and retaining the appropriate functions). SLAs and other metrics must be reasoned, reasonable, and achievable so that you’re paying for a solution that meets your business need without costly over- or under-engineering.

Since the people who negotiate the deal often change roles and/or companies before the contract expires or is terminated it is important that the original intent is clear regardless of who reads the document. That means using clear, unambiguous language and enforceable terminology.

Choose your verbs carefully. “Shall” is a requirement the supplier must follow whereas “will” shows intent, “may” is optional, and “expect” is aspirational. I may expect to win the lottery, for instance, but that’s unlikely to happen unless I buy a ticket and probably not even then… As you can see, grammar matters in contracts. To reinforce that point, there’s a huge difference between the following three sentences:

  • Lets eat grandma.
  • Let’s eat, grandma.
  • “Let’s eat,” Grandma.

To delve a little deeper, proven practices vary with the type work you need to buy. The following are some tips for assuring first time quality when writing your SOW for supplemental staffing, managed services, outsourcing, and Vested outsourcing deals:

Supplemental Staffing is used to acquire qualified workforce from a supplier. This is “pay-for-effort” work, so onboarding and off-boarding processes must be predetermined and followed, and integration with retained efforts well thought out. For supplemental staffing SOWs:

  • Focus on job descriptions and daily management
  • Normalise requirements with industry benchmarks, describing any certifications or bona fide occupational qualifications necessary
  • Include badging, background checks, and other vetting requirements and processes that help assure the supplier employees will be capable, competent, and appropriate
  • Clearly specify any non-labor elements provided by both parties (supplier and buyer)
  • Describe how and where the work will be performed, establishing governance for daily management

Managed Services contracts are used to put a performance agreement in place with a supplier. This is “pay-for-unit-of-service” work, so clarity in service obligations and performance levels is essential. For managed services SOWs:

  • Focus on transactions, business rules, measurable objectives, and acceptance criteria
  • Levy only minimal requirements for interoperability or security to the extent feasible so that your supplier can do what they’re best at (which is why you hired them after all)
  • Specify any export controls, legal, security, or badging requirements that apply to supplier’s on- or offsite personnel
  • Describe the “what,” and also the “how” where necessary
  • Develop clearly defined and measurable outcomes (but not too many) to set SLAs and other key metrics
  • Optimize cost/service trade-offs
  • Establish governance for oversight

Outsourcing is a long term, results-oriented business relationship with a supplier. This is “pay-for-result” work, so deliverables must be closely aligned with business needs. For outsourcing SOWs:

  • Focus on business outcomes and most significant service levels
  • Facilitate supplier’s ability to do what they’re best at by not over-prescribing obligations, levying only minimal requirements for interoperability or security
  • Specify any export controls, legal, security, or badging requirements that apply to supplier’s on- or offsite personnel
  • Describe outcomes, not transactions, focusing on the “what,” not the “how”
  • Identify inputs, outputs, and interfaces, and develop clearly defined and measurable service levels (but not too many) to set SLAs
  • Optimize cost/service trade-offs
  • Establish governance for insight more than oversight

Vested Outsourcing is a long term business relationship with jointly designed solutions to a business imperative. This is “pay-for-outcome (solution)” work, so innovation is mandatory. For Vested outsourcing SOWs:

  • Must be linked to a shared vision (often outlined in a statement of objectives instead of a traditional SOW)
  • Focus on innovative solutions to your business imperatives
  • Requires extensive “open-book” collaboration to design an affordable solution that simultaneously meets both buyer’s business needs and supplier’s objectives
  • Solution taxonomy includes processes managed by both parties to show an end-to-end view
  • Uses flexible Statements of Objectives rather than a traditional SOW and architect the details together
  • Guard against constraining the scope too tightly, allowing supplier to accept all work scope (and risks) that are not core to the buyer’s business
  • Develop clearly defined and measurable outcomes, focusing on the “what,” not the “how”
  • Establish a governance for joint insight, not oversight

It can take 4 to 6 months to write a quality SOW (and associated SLAs and other key metrics), but the end result is worth it. For example, the US Air Force saved 50% by specifying that their floors must be clean, free of scuff marks and dirt, and have a uniformly glossy finish, rather than requiring that their contractor strip and re-wax their floors weekly. Seems obvious, perhaps, but this simple example shows why good, clear requirements matter.

Putting it into action… Let’s pretend, for a moment, that you are a busy professional and need someone to cut your lawn rather than doing it yourself. Here are three possible ways of writing the SOW to buy a lawn-cutting service:

  • bad SOW would be,
    “Cut my grass.”
  • better SOW would be,
    “Supplier shall cut my grass to a height of 1” and trim along the walkways once a week between the hours of 10:00 AM and 6:00 PM local time.”
  • The best SOW would be,
    “Supplier shall provide care and maintenance for the lawn at [address], including all fertilization, weeding, trimming, edging, thatching, and debris removal necessary to keep it healthy per American Lawn Care Industry organic lawn care standards. Supplier shall assure that the height of the lawn remains between 1” and 2” at all times, there are no bare patches, and that it does not overlap curbs or walkways or spread into flowerbeds. Supplier shall perform all work that creates noise levels over 100 decibels between the hours of 10:00 AM and 6:00 PM local time. All Supplier employees shall pass a criminal background check and conform to OSHA safety standards while on the job site. Supplier shall provide all tools, equipment, and ingredients necessary to perform the work. Buyer will provide water, power, garden hose, and sprinklers.”

It takes time and effort to get it right, but the better the SOW you write the more likely you are to receive all the value you expect when engaging with a supplier. Ultimately an investment in first time quality leads to a better, more affordable outcome.

This article was originally published on LinkedIn and is reproduced here with kind permission.