Here at Procurious, we saved the best for last. Register today to reflect, re-energise and refresh for another year of innovation at the most inspiring supply chain and procurement conference of the year.
We’ve (finally) entered the homestretch. However, before we can bid farewell to 2020 – the year that quite literally turned our world upside down – we still have quite a bit of planning and ideation left to do. That’s why now, more than ever, you deserve a distraction.
But do not head for the couch and sign into Netflix just yet. Instead, step back from the day-to-day chaos and join us virtually for the 2020 Big Ideas Summit (BIS). Reflect on the year that was and the opportunities ahead; represent your organisation and all its accomplishments despite the pandemic; regroup and re-energise among like-minded professionals.
Procurious itself is proof that great things can happen when we come together. As a community of 42,000-plus supply chain and procurement professionals, we adapted to survive and thrive under the conditions of the “new normal”.
BIS 2020 takes us a step further. Since the beginning of the pandemic, we’ve gone above and beyond what was asked of us. Now, together, we’ll welcome 2021 stronger than ever – both individually and as a community.
Take, for example, our response to the challenges McKinsey & Company presented us with earlier this year:
We redefined the procurement mandate and fostered a culture of innovation to evolve beyond the traditional, transactional stereotype.
We made investments in digital and analytics, integrating automation and digitisation to optimize performance and leverage untapped data that enhanced productivity across the board.
We future-proofed our organisations by making proactive investments that develop existing talent and enable a more agile workforce.
Somehow, we were able to find the silver lining, increase our influence and succeed against all odds, positioning our function for a watershed 2021. So, together, let’s make next year full of innovation and shared success. That journey starts at BIS 2020.
Big Ideas: Make a Difference and Get Ahead
All it takes is one idea. A single idea can change the trajectory of your company and your career. A single idea can make a difference. A single idea can solve problems for people and businesses across the world.
But good ideas don’t always come easy.
You need time to think, create, learn and share. We’ll provide this in a BIG way at BIS 2020 – and give you everything you need to ignite your passion, fuel your creativity and THINK BIG.
BIS 2020 will have dedicated sessions on everything that’s top of mind for you right now: leadership, supply chain threats, supplier management, digital transformation, supply chain continuity and more.
Together, our community will present and share hundreds of ideas and best practices to help you make a difference, advance your career and get ahead in 2021. But remember, you only need one.
Think the Unthinkable and Prepare for Anything
Those that have joined us at Big Ideas in the past have learned the importance of thinking the unthinkable. Never has this lesson been more true than in 2020.
We’re in the midst of a transformational journey that is changing business and life as we know it.
The good news: our digital-first network is designed to change the face of the profession from the inside out, starting with each individual member of the community. The BIS and our Procurious community will help you think differently: we provide big ideas, first-hand experiences and lessons learned – from the best and brightest from across the world – to help you navigate through this unchartered territory and stand out from the rest of the pack.
Trust me, events don’t have to be in-person to be inspiring. Come ready to share what you are proud of and encourage others to do the same. The more you put in, the more you get out. It’s time to lead, thrive and take back control of your professional development. Rest assured; you’ll leave with everything you need to do just that.
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!)
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.
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.
What ought to have been a huge success for U2 turned out to be critically panned – and if you’re having a “Rattle & Hum” year, here’s how to turn it into your “Achtung Baby” era.
I bought my Dad Rattle & Hum as a present in 1990. I was only 14 and didn’t really know much about music, but he had played Dire Straits Brothers in Arms for years at me and U2 looked similar but cooler (to me). The LP was a giant doubler and it was all black and shiny. I loved it.
Still Haven’t found. Angel of Harlem. All I want is You. That song captured the essence of my unrequited love for Carol in 4th year. I didn’t even realise Helter Skelter and Along the Watchtower were covers!
I had the documentary on VHS and when Bono chimed up with ‘this is not a rebel song’ to the opening drums of Sunday Bloody Sunday, it made my hairs raise on my arms every time.
It led me on a U2 odyssey, through Unforgettable, War and October, Under a Blood Red Sky. I joined their Propaganda fan club and queued for 24 hours for tickets to see their Zoo TV tour in a big shed in Glasgow.
It was only much later that I realised that Rattle & Hum was considered a critical and commercial dud, their zenith being the Joshua Tree of course and my dear Rattle & Hum being self indulgent, cultural appropriating over-blown nonsense.
I played Rattle & Hum today. Still loved it and it inspired this post.
I look back at my “career” and had a good upwards trajectory. I smashed my 20s, 6 promotions, lots of talk about my ‘high potential’ and was going places. I excelled as an individual contributor. October. War.
My 30’s, I was on a roll. Managing multiple teams, functional directorship level (Unforgettable Fire), knocking on the door of general management.
I was at my peak at 40, having led a team that sold a $200m deal – my own Joshua Tree, (although that value gets larger in every retelling as the years go by and my memory fades).
….but then the wheels slowly fell off.
Don’t get me wrong, 20 years of moderate success gives a cushion not afforded to many. But through a combination of false starts and bad choices (mainly mine!) I will end 2020 having earned less than I’ve earned in any year since I turned 30.
I got to the Joshua Tree late. It’s really rather good isn’t it? If you’re reading this I suspect you like U2 too.
Since January this year, I’ve been looking for work … a.k.a “developing my business” for the self employed. I spent 7 months of 2020 wondering if I’ll ever get the chance to create another Joshua Tree.
Will I ever work at a senior level again?
I was seeking to build my own skills development business and struggling to convert good interest into sales. There were also precious few permanent jobs on offer. I was applying for roles that I wouldn’t have considered ten years ago simply out of the desire to work and stay relevant, but getting nowhere. (This is not a great job search strategy, for reference).
It makes you self-reflect, all the spare time. Makes you highly self-critical and in my worst moments even jealous of others successes. Why isn’t that me? Once upon a time, we were the same (or at least in the same room!).
My list of limitations others may spot although it naturally took me longer to. I am self deprecating, which I think make me friendly and likable but appears to others as low confidence. I want to be liked more than I want to be respected. I still get tongue tied with authority at times. I can be indecisive. I want to please and have sometimes sought to please my boss over my team. I’ve kept quiet when I should have spoken out. I can ramble when clarity of message is important. And on. And on.
If you peruse my linkedin profile for the last years I’ve still had some great roles. I’ve had roles at a couple of big retailers and learned loads. And sometimes the above limitations bit me despite delivering the metrics. I’ve had other consultant and interim roles too where my strengths came to the fore ahead of my weaknesses.
But in all cases, my sense of forward momentum was disappearing: it was like my star potential was falling, my impact diminishing.
Was this it? I guess that’s how Bono and the boys must have felt after Rattle & Hum’s reception.
Rebuilding one’s Mojo, 2020.
Some of 2020 was a struggle: applying for full time jobs and hearing nothing back almost ever; the call from a recruitment agency; the false hope as they ask for your CV; the disappointment when you get nothing back; the days tailoring CVs and cover letters to get a rejection a few weeks later.
Some of 2020, however was hugely rewarding. Of course lockdown. But it was wonderful (for me): Sunny with family at home. Getting fit with my daily exercise … Heaven.
But also, thanks to Linkedin I “met” 4 or 5 random connections who had similar interests and were in similar positions. Over zoom it was weird but some genuine, now firm friendships formed. We created business ventures, simply through graft and enthusiasm, and supported each other in the search for clients and jobs, through the lows (not many highs!). None of us had to play the ‘corporate’ persona, it was liberating and most of all fun. Simply being able to be have a giggle whilst building to a purpose made me want to get up each day.
No money was coming in but I was enthused and energised. I had rediscovered purpose.
They reminded me what my strengths were: corporate life too often focuses on your weaknesses and the weaknesses of your teams. We found areas of common interest and simply started sharing views, research and ideas: each of us seeking to make sure that in our interest topic we were jointly the most informed, and had THE WORLD’S BEST body of knowledge on that topic. And created from there.
In the last month, I had the opportunity to return to consulting with a big-4 player. It’s early days but so far its been really exciting, if startlingly hard work. I feel that I’ve got somewhat lucky given the current environment to get a role at all, and am determinedly bottling up the mojo my new (and some old) friends gave me.
When things are low, particularly when you’re out of work, find a community and get busy. Doesn’t matter what initially, just have some professional fun. That’s essentially my tip from this post. Get busy and you’ll find your mojo again.
I loved Rattle & Hum. And I loved my Rattle & Hum year of 2020.
But watch out: I’m hoping my Achtung Baby (of course U2’s best album) is just around the corner. And yours too.
This article was originally published here – it has been reproduced with kind permission.
Perhaps the best way to get things done is, ironically, to abandon the myriad processes we established to get things done!
I’ve discussed with a number of CPOs during the last months on how they have managed procurement during COVID-19. One recurring answer is along the lines of “we broke all of our processes and went to wild-west-mode.” Now, many say this with an interesting combination of sadness and pride. Sadness that they had to give away the great processes perceived to be the basis for any professional procurement organization. Pride and excitement of how procurement teams were able to improvise, work hard, and survive.
There shouldn’t be sadness for the breakdown of processes. This period has shown that processes are slow, boring and self-centered – and that we can live and thrive with much less of them. Many processes are manifestations of control-freak, risk-averse mediocre management but I admit there are cases where they can be beneficial.
Occasionally processes are great – when they allow for (almost) complete automation. For example, it’s great when routine tasks are mapped out as a process and automated to save people’s time and attention. Even in this case I see process more as a tool to enable (software based) automation rather than as the end-game.
Sometimes, processes can be helpful guidelines for a less experienced employee, and/or to facilitate coordination in teams. If you’re doing a supplier risk evaluation for the first time (and if it needs to be manually done), it may be good to have a process description to guide through the first steps. In these cases, processes should be seen as a learning method. Having consistent vocabulary and descriptions of a process helps communication and coordination across individuals.
Those are the exceptions. In most cases processes bring many hidden costs to our businesses.
Why procurement needs less processes
Processes are, almost by definition, designed to cover all sets of actions taken. This tends to lead to complex multi-step processes that often include a number of bottlenecks in the form of approvals and reviews. Whenever something bad happens in a company, management often asks “how we can prevent this from happening again.” The answer commonly is “let’s create a process.” Over time, there are more and more complex processes in place, gradually suffocating the organization and its creativity.
All this put together brings on a number of problems with processes:
Things get slow – there are so many steps to cover and so many approvals that getting even a simple task done takes a lot of calendar time. I believe this is the reason that lot of processes were broken during COVID-19: they were just way too slow to create a meaningful result.
Things get boring both for managers and the people driving the processes forward. CPOs often talk of a talent shortage in procurement. How to fix this? Definitely not by trying to reduce our exciting work to a process-led obstacle course. Nobody ever said “I just completed a 15-step sourcing process and that was the greatest moment of my life.” People don’t get excited about running processes but, unfortunately, they may get overly excited designing them. People get motivated about purpose, outcome, creativity and freedom, but not about executing processes. If we provide processes as tight guidelines on how to do things, we don’t get talent. Once we get real talent, we definitely can’t keep them with strict processes. It’s equally bad for managers – their job becomes one of reviewing and approving. Approving POs, business cases, vacation requests, what not. The brightest people who have worked hard, learned a lot, and would have a lot to give become rubber stampers.
Processes are also very self-centered. They assume that we can dictate the timeline – it may make our own lives more plannable, but it also takes out any options to leverage the opportunities that are coming up. Say, for example, you follow a strict quarterly business review cycle with suppliers. If supplier collaboration happens only through process-driven reviews, you are not leveraging opportunities coming up in between.
The world is getting faster and more volatile. In this new world, as the COVID-19 era has proven, processes are just too slow. I truly hope that COVID-19 did not only teach us that remote work is possible, but also that a more action-oriented, exciting procurement world is possible … But more on that on my next blog article.
This article was originally published here – it has been republished on Procurious with kind permission.
Three main trends will positively impact the Procurement space post-COVID-19 and beyond and help in responding to unexpected challenges
What a strange year it’s been. As we marked the start of 2020, and news started to circulate about a virus in China, no one could have anticipated the global health crisis that was on its way.
As more countries ease lockdown restrictions and business find new and creative ways to meet the needs of their customers, there are many learnings we can take from the pandemic. These range from critical changes to growth plans to adjustments to company culture to operational improvements to increase supply chain agility.
Like many companies, we recognized early in the crisis the difficulties we would all face in this new reality. To get ahead of the curve, our co-founders Samir Bodas and Monish Darda, along with our leadership team, developed a framework based on our values of Fairness, Openness, Respect, Teamwork and Execution—FORTE—to help everyone at Icertis make decisions to meet the demands we faced.
We call that framework our four rings of responsibility—taking care of self, taking care of family, taking care of community and taking care of business—and prioritize them in that order. We see the Four Rings of Responsibility as our way of amplifying our FORTE values to ensure we do our part to help win the battle against COVID-19.
Outside of our own workplace, I’ve been speaking with our customers about how the industry is coping with the upheaval. Their experiences map closely with the findings from the ‘How Now? Supply Chain Confidence Index’ from Procurious that show only 1% of procurement/supply chain professionals felt ‘frozen’ by the COVID crisis. This is a testament to the rate of innovation across the profession and the strong role technology is now playing in helping drive speed and agility within procurement.
There’s no doubt that the pandemic exposed weaknesses in modern supply chain strategies as evidenced by the survey’s finding that 38% of respondents plan to expand their supplier base over the coming months. One of the main lessons that we are hearing from customers and prospects is that businesses need to create stronger, more flexible and diverse supply chains. To do this, it will be essential for businesses to identify areas in their supply chain where efficiency improvements can be made.
Leading brands are increasingly realizing this work starts with contracts, which define how your supply chain runs. By harnessing the critical business information in their contracts, companies can quickly address areas like value leakage and regulatory compliance, while accelerating the pace of supplier onboarding and reducing business risk.
Three Post-COVID Trends
In fact, a greater focus on risk management is one of the three main trends that will positively impact the procurement space post-COVID-19. Risk management used to be an abstract concept in the C-suite, only a concern for the CFO or the audit committee; now it is painfully tangible to everyone in the organization. Every business now recognizes (or should recognize!) that they need to take a programmatic approach to responding to black swan events. This underlines the need for having solutions in place that will allow organisations to clearly understand the risk/reward trade-off in all business processes. For example, being able to identify and manage risk throughout the contract lifecycle, is enabling procurement teams to examine their sourcing strategies to ensure they are not overly dependent on a single supplier. In the current business environment, where unfortunately many businesses are still struggling to survive, having a multi-sourcing strategy in place is a business imperitive.
Secondly, we will see greater alignment between the CFO and CPO. By the nature of their roles, CFOs have always been focused on those technologies that can give them business oversight of income and spending. However, the impact felt by COVID on that cashflow—from supply chain failures to shift in demand—has increased their focus on working with other areas of their organisations to identify and mitigate risk. As a result, they have become more invested in being able to structure and connect all of their company’s contract data, applying Artificial Intelligence (AI) tools to enable them to quickly surface and respond to threats, growth opportunities and challenges.
And finally, it’s well documented that the pandemic has forced an acceleration of digital transformation efforts. Satya Nadella put it best when he observed, “We’ve seen two years’ worth of digital transformation in two months.” It is clear that innovation will take a front seat in the post-pandemic business world. Companies have seen the benefits of having cloud-based technologies and processes such as contract lifecycle management available to them when working remotely. I anticipate that we’ll start to see increased investments across the board as businesses look to protect themselves for future disruptions and reinvent how they do business.
Then beyond digitisation, a greater focus will be placed on investing in technologies that can enable advanced data analytics, so that businesses are able to use this insight to keep out in front. This is where contracts will take a central role, providing more intelligence and connecting to key business processes so they are able to provide the right foundation for growth and evolution, and allow organisations to respond to unanticipated challenges and changing marketplace dynamics.
It’s been a challenging few months for everyone, but I am more confident than ever that if we keep our four rings of responsibility top of mind and take the lessons learned from COVID seriously, we will look back at this strange time and realise that it transformed the way we do business for the better.
We should care more about strategic supplier management right now, despite this being the time of COVID, budget cliffs, and “everything is on the table” portfolio reviews.
While procurement’s roots sometimes feel operational, based on the tactical action of turning a requisition into a PO, the trunk of the procurement tree is strategic sourcing. In even moderately mature organisations, we see teams organised around execution of an n-step sourcing process designed to consolidate volume with fewer suppliers and generate cost savings.
For those teams that have advanced to category management, there’s an effort to better understand stakeholder needs and the external market, and to build out a longer-term project plan to drive value beyond savings. Think of those projects as the branches that continue to grow and generate new value. Check out this post for more on cost savings opportunities and this one on post-COVID strategy.
It’s often not until we get past a certain stage of organisational maturity that supplier management really becomes an area of focus. In a seedling organization with a thin trunk, the idea of spending time out on thin branches may feel wasted when there is fresh spend to be sourced.
However, now that most procurement organisations are mature enough to be thinking about value beyond savings – and I believe most are, whether they are recognised for it or not – we need to think about the opportunities hanging off those branches. Where do we want to spend our time? On the thickest, strongest branches that can support our future objectives, with many offshoots for new value, of course.
Stepping away from the tree analogy (sorry if that went too far), what many of us in the function have learned over time is that more value can come from nurturing our existing supplier relationships than from sourcing events with new suppliers. In fact, when growth stagnates and we rely on these partners to see us through hard times, strategic supplier management can become a competitive differentiator. Companies with access to the latest technology, the best support levels, and the freshest ideas, are the ones winning in the modern world.
My first research study on Supplier Relationship Management (SRM) was back in 2006, and these concepts were just coming into vogue. Then I did two more studies, each five years apart, with very little difference in industry maturity.
In that time, I had numerous large organizations come to me saying, “we need to build up an SRM program.” Sometimes the same company, five years after the last attempt had failed and management was back to square one. Here I am again, testing the market with another study, this time focused on the practices and outcomes from our most strategic suppliers.
Why should we care about strategic supplier management right now, in the time of COVID, budget cliffs, and “everything is on the table” portfolio reviews? It’s important for a few reasons:
In times like these, we rely on our partners even more
As much as we want to run out and negotiate cost reductions, we all know many companies would not have made it through the last six months without a strong supply base. Monitoring risk and financial stability is critical right now. Knowing enough about the financials of a key supplier is important when seeking out savings – some are hovering on the brink of collapse, while others are doing just fine. (Talk to me about outsourcers’ margins here).
Innovation will get us out of this
If you thought digital transformation was a buzz phrase, wait until you are the only company handling paper mail from customers in a work from home environment while your peers have digitised their customer interactions. For those behind the tech curve, the last six months were more painful and lit a fire under some management teams to start investing. Who will enable that technology? Unless you have vast internal resources and capabilities, you’ll be leveraging third party partners (i.e., suppliers) to realize that vision. Categories like IT services are exploding with demand, and managing the outcomes of the largest partners will be critical to stay competitive.
Portfolio reviews should be fact-based
What does that mean in this context? It means that if you are deciding which suppliers to keep and which to phase out, RFP away, or replace, you need to have a quantitative understanding of past performance. Too often, opinions, anecdotes, and emotions are brought to the table to keep or remove a partner. Strong performance management processes mean decisions can be rooted in actual performance, and perceptions can be validated or addressed proactively.
With these current day realities in mind, Everest Group recently launched a Pinnacle Model® study specifically targeted at management of strategic suppliers. Our Pinnacle Model methodology maps capabilities to outcomes and attempts to find the correlation between best practice implementation and results. By plotting organizations against each other, we can clearly see what is working and what is not.
In this study, we endeavor to understand how procurement organizations are handling the following challenges:
Lack of clear stratification of the supply base. With most organizations having thousands of suppliers per billion dollars of spend, it’s important to know where to focus your efforts. If the squeaky wheel is getting the grease, it’s easy for category managers to spend too much time chasing issues with less impactful suppliers.
Inconsistent or ill-defined internal roles. Many organisations have groups managing suppliers throughout the business as well as SRM efforts from procurement. If roles and responsibilities of various groups are not well defined, there can be overlapping work and missed opportunities. We delve into the objectives and activities of Vendor Management Organizations (VMOs) and other supplier management teams.
Too much manual effort due to lack of automation. Service management tools are well developed within IT but may not be broadly used across spend categories. There are now Supplier Performance Management (SPM) tools on the market using AI to tie contracts to service levels. Without proper tools in place – and adoption is still fairly low – tracking performance, monitoring risk, and planning actions across the supply base becomes highly manual. This is, in my experience, a primary reason many SRM initiatives failed. When we rely on spreadsheets and sweat, without a hard ROI, this is the first initiative to drop.
Poor outcome measurement. Even if the functional scorecard measures outcomes – and many don’t – are individual category and supplier managers rewarded for work done to manage suppliers? It’s typical to, at best, measure activities such as number of business reviews. Too often, teams are focused on savings to the detriment of value driven by innovation, performance improvements, and risk mitigation, and other stakeholder valued metrics.
Taking all these factors in consideration, are YOU giving your strategic suppliers enough attention? Take our Pinnacle Model study here to find out. I look forward to reviewing the results with you soon.
If you’re an ambitious procurement or supply chain professional, there’s plenty to learn from Dawn Tiura about the power of networking, and upskilling yourself in the important areas of third party risk.
“You’ve got to meet Dawn,” said Gabe Perez from Coupa.
“You’ve got to meet Dawn,” said Chris Sawchuk from Hackett Group.
“You’ve got to meet Dawn,” said Alpar Kambar from Denali.
So, I said to myself – “I’ve really got to meet Dawn!”
There’s literally only a handful of women in the world who own and operate their own businesses serving the profession.
So… it was great to finalIy meet the much-admired Dawn a few years ago at the LevaData conference in San Francisco. Finally – I had found someone out there just like me – someone who also believed in the power of bringing our profession together.
Dawn and I are still really getting to know each other. We next met up at the SAP Ariba conference in Austin. Then she did a fantastic job keynoting at our Big Ideas Summit in Chicago last year (on third party risk…which is her specialty and very timely for what we were about to experience this year!).
So, I wanted to make sure the Procurious community knows all about Dawn and her amazing company….so I asked for this interview..
When you started SIG, what was your vision? Were you trying to build the largest sourcing network in the U.S.?
I actually am not the founder of Sourcing Industry Group (SIG). I took over the leadership in 2007 and my original intent was to remake it from a “good ole boys” network into the leading organization for sourcing, procurement and outsourcing professionals. My vision was to be a disrupter to the industry, pushing the latest ideas to members and to help elevate the role of the CPO.
Has your vision become a reality? Has SIG become what you thought it would be?
Yes and we’re making progress everyday as we continue pushing the envelope to adopt emerging technologies and find new ways to streamline the process of procurement. Over the last 10 years, SIG has become the largest network for sourcing professionals in the world. But more important than the size of our membership is the collegial nature and information sharing that we have fostered. SIG brings people together to share best practices and next practices in a non-commercial manner that creates success.
What have been your secrets to success? And what advice would you give to others thinking about starting their own entrepreneurial venture?
The secret to my success is surrounding myself with people who are smarter than me. They are my inspiration and they never say “no” to my new ideas. I also pride myself with only hiring people who volunteer in some capacity in their personal lives. For me, I think that people who give back to their local community or for a nonprofit says a lot to me about their character. We also allow people to take time off work, with pay, to support their own causes. The people I have recruited to the team often come from my volunteer work where I’ve seen their work ethic up close and personal.
Why do you think people join networks? And, in particular, your network, SIG?
The reason people join is most likely not the reason they ultimately stay. People join SIG to network, share best practices and to become better educated. They stay largely due to the network itself and the fact we are non-commercial. People enjoy the camaraderie, the fun we have and most importantly how we lift one another up and help each other. Our members are all great people, they participate fully and care for one another.
Why did you decide to have both buyers and suppliers in your network?
This was easy for me, I came from the supplier side, having consulted in sourcing for more than a decade. I know first hand that consultants/suppliers/advisors/tech companies each work with hundreds of clients and therefore bring a wealth of knowledge to the table. I encourage this interaction and these relationships.
I really admire how you have very clear guidelines on how your suppliers, vendors and sponsors can interact with your members. What are some of those guidelines and why did you put them in place?
I am proud of our Provider Code of Conduct and it is critical that providers acknowledge the fact that our practitioners are very sophisticated and won’t buy from you if you are a “slick salesperson.” They engage you because you have the right thought leadership that strikes a chord, or the right technology at the time they are ready to investigate it. They don’t buy from brochures or from being “sold to.” If you are found to be actively selling, you are given one warning and the second time your membership is revoked and you have to sit out of SIG for two years. At that time we will allow you to come back into the SIG Tribe.
When we caught up last year at the Big Ideas Summit in Chicago (by the way, you did an amazing job talking about Third Party Risk! Very timely!), I really learnt how busy your life is – running your business, organising your major events, hosting webinars, mentoring young people….you fit a lot into your day, week, month, year! What’s your advice to others who are trying to manage and prioritise their time better?
I feel best when I have a lot of projects to take on, from building curriculum, to mentoring and parenting. The more I have to do, the more deadlines I have, it motivates me. Without deadlines, I would achieve very little. For example, you didn’t ask me for a deadline for this article, so it didn’t get done for over a month. I set my priorities by keeping them balanced. I must do something to help someone else every day, that is one thing that I believe in. Whether it is donating time or money to a good cause, shopping for an elderly neighbor or mentoring youth, we have an opportunity to be kind and to give back every single day and we should take advantage of that opportunity.
What’s your advice to ambitious professionals out there? What should they be doing right now to make sure they succeed into the future?
Learn to open your mouth wider so you can drink more easily from the fire hose, because technology is going to change at an increasing rate of acceleration. Accept it, embrace it and never fight it. Also, bring your authentic self to your role, whatever it is. You can’t be successful without living your own truth. Don’t try and be what someone else wants you to be, be who you are and who you want to become. Err on the side of kindness always.
Most importantly, how are you personally right now? Florida is being hit hard by COVID. Are you and your family OK? What’s happening in Florida right now?
Thank you for asking, we are doing well. I have a high school senior in virtual school and kids in college all working from their apartments.
Wow! Whichever way you look at this, Dawn is an inspiration.
If you’re a budding entrepreneur out there, you have hopefully been inspired by Dawn’s vision and determination.
If you’re an ambitious procurement or supply chain professional, there’s lessons to be learned in the power of networking and upskilling yourself in the important areas of third party risk.
If you’re a supplier, looking to truly partner with our profession, SIG provides a trusted and valuable conduit into the important buying community.
What did you learn from today’s story? Let us know.
Step away from the emoji button. Read on to learn how to build genuine influence in your personal brand. Learn to move beyond the micro engagements of liking and sharing. Be bold and brave – expand your connections and network by following our pro tips.
Mirror mirror on the wall
While browsing idly through social media recently I concluded that many of my peers have confused visibility with influence. Procurement is a small industry especially if you’re in a niche field or a small country. What makes this contracted market even smaller is that we stare into our own reflection.
Seek to expand not reinforce the bubble
Commenting, liking, gaining followers and profiling only those within your bubble only serves to reinforce the echo chamber that you reside in. Expansion and growth should be the aim of the game and that’s the trick that many are missing!
Number of likes and connections is not influence
All the chat about the importance of “raising your profile” has seen many people reach for the emoji button. They equate visibility and these micro engagements with achieving influence. I’ve even heard some peers brag about it “mate did you see my pic? Got 12 likes, brilliant ay? I’m raising my profile and building influence.” Um no, but I’m glad people liked your photo.
Sure, visibility will get your name out there and you’ll make connections but just like the platforms we use in our personal life, professional networking sites can create a trap for the uninitiated. They offer so much more than just how many followers you have!
Think about how you engage online, do you make the most of all opportunities?
Chance to connect with and observe thought leaders
Expand your learning beyond your sector and follow other industry trends
Grow your knowledge of different areas within your technical field
Expand your support base by utlising online connections
Taking part in free webinars
Check out these tips to ensure you are getting the most out of your Procurious experience!
Fear stops meaningful engagement and expansion
Platforms where personal profiles are created on a “work self” image can fuel the fire if people view their professional / work self as separate to their “real life” self. On professional networking sites people can struggle to make genuine comments, challenge / ask questions or engage meaingfully for fear of looking dumb or speaking out of turn.
It’s such a lost opportunity! Don’t be afraid to be yourself, engage and connect with people.
What is influence and why care?
Influence is earned and grows over time. The difference between visibility and influence is that with a focus on your sphere of influence and who you engage with, you are building longevity and sustainability into your personal brand and therefore your career. You are thinking beyond your immediate role or even career.
There are many studies out there that have shown that people will change their careers significantly two or three times over the course of their lives, as described in this NY Times article.
How to get started
Hold up, I hear you… how on earth and am I meant to do that?
Start the same way everyone else does but don’t limit your professional networking to just likes, commenting and growing your connections. Keep your eye on the bigger prize.
Step one: getting started
Join an accredited membership organisation like CIPS or IACCM. There are usually many ways to get involved and connect with lots of people through these avenues. This provides a supportive environment to get involved in chairing committees and speaking / hosting events.
Awards. Keep an eye out for industry awards, nominate your team or yourself! I’ve seen some surprise winners – the only thing that set them apart from others was that they simply backed themselves and applied.
Network. Don’t simply add just people on social media, if you do send an invitation add a note and make sure it’s relevant to something they just posted or wrote about. Think of people in your industry, can you reach out to any of them for a coffee chat? And then ask, who else do you think might be of value for me to connect with?
Content. Remember the dictionary definition of influence: “the capacity to have an effect on the character, development, or behaviour of someone or something, or the effect itself.” what content are you producing or contributing to that is building impact?
Step two: grow
Use your network of genuine connections to try and find ways to get involved in different projects and start expanding your reach.
Offer to mentor someone
Offer to host an event at your organisation
Ask for speaking opportunities
Write your own blog on an existing platform or your own profile
Connect with people through the content you’re consuming e.g procurious webinars and groups!
Ask to shadow a senior for a day to learn what they do
Talk to your suppliers and learn the other side of the fence
Learn from other sectors and follow other thought leaders for inspiration
Find someone you admire and see if you can unpick what makes them tick. You can check out Kelly Barner’s journey for some inspo
Think about yourself as a brand, what do you want to be known for?
Take the plunge! Expand your connections beyond micro engagements and you will add sustainability and longevity to your personal brand.
Remember: be yourself, be humble and be authentic.
Are you part of the 99% who don’t? And what’s stopping you from taking advantage of this free, simple way to reach people?
Maybe you’re worried about what to post, which Moore says is a common concern.
That’s why you should write something that is authentic to you. “This can be your opinion on an issue, an article that speaks to you, or even proposing a simple question to your connections,” Moore advises.
“Writing from a place of sincerity can really reduce the social angst in deciding ‘what’ to post or ‘when’ to post. When we do something often, we feel less nervous about it as we have acclimatised.”
Moore suggests making it part of your routing by blocking out 15 minutes in your calendar each week to post something. Also use that time to ‘like’ and comment on other people’s posts that you find interesting.
Recruiters like to see candidates who use LinkedIn regularly, says Martin Smith, Managing Director at Talent Drive – a UK procurement recruitment specialist.
“We look for people that are…clearly active on their LinkedIn whether that’s someone that has written blogs, engaged in webinars or just generally engaged with their audience,” Smith says.
“This allows them to stand out from their peers and if you can put some personality and authenticity behind that engagement that’s the key differentiator.”
2) Make it personal, but not too personal
A mistake Smith sees is people who blur their personal and professional lives on LinkedIn.
“Your LinkedIn is a professional network and there is nothing wrong with every now and then posting a day’s leave or a picture of your kids to show your human side,” Smith says.
“[B]ut LinkedIn is a professional social media platform and should be used for work-related content, not what you had for breakfast or what your favourite 80s band was. Keep that for Facebook, TikTok and Instagram!”
You should also aim to strike a human yet professional tone in the way you interact with other people on the platform, says Andrew MacAskill, Founder of Executive Career Jump.
“Pay into the ecosystem by providing comments, taking on mentees, appearing on podcasts and sharing valuable insights,” says MacAskill.
“The best way to get what you want is to help other people get what they want!”
3) Keep it clear and simple
When it comes to your own profile, MacAskill advises describing yourself with keywords that match the kind of role you want.
These keywords are unique to your skill set and make you more searchable on LinkedIn.
“Above everything else, candidates need to ensure they have the right keywords in their headline, ‘about’ box, and job detail to be found,” says MacAskill.
Recruiter Martin Smith adds another way to catch a recruiter’s attention: have a clear overview on your profile of what you do and where you are working at the moment.
“We see too often now people have very over-complicated LinkedIn profiles with grand titles such as ‘Procurement Leader/ Top 100 Procurement Influencer/FTSE 100 leader/ Thought Leader and engagement consultant,’” says Smith.
“This can make it confusing and can dilute the message on who they actually are and what they do.”
So drop the multi-hyphenated-super-title in favour of clarity.
4) Reach out to recruiters
Ideally, the recruiters come to you with suitable roles. And they likely will, once you spruce up your profile and get active on LinkedIn.
But if they aren’t chasing you yet, is it ok to approach them directly? Especially if they often post roles that seem ideal?
Of course, says Smith. But brevity is key.
“Recruiters don’t want you sending them a 10-page document via LinkedIn on why you feel you are appropriate for the job,” Smith points out.
“The market is tough right now and is very candidate-rich and job-light which can be a challenge.
“But if you really want to stand out, send a personal yet succinct message to the recruiter on who you are, what you do and why you want the job with a follow up number and that will get the best engagement.”
Smith says recruiters are very busy at the moment trying to manage candidate expectations in a challenging market, so be considerate. You can still be persistent, but always be courteous.
“A recruiter will see every approach they have and if you look right for a role they will follow up,” Smith advises.
And it doesn’t hurt to make connections with recruiters long before you need a job.
“Build your network, reach out to businesses that interest, build relationships with recruiters to help you with your search but ensure it’s a targeted and measured approach without too much distracting noise around the message you want to give,” Smith says.
Emphasis on the word ‘relationship.’
“Don’t be afraid to reach out to potential hiring managers and build a relationship with a soft approach,” says Imelda Walsh, Manager at The Source – the Melbourne-based procurement recruitment firm.
“Don’t start the conversation asking about job opportunities of course. Don’t just connect with someone without following through with an introduction message to kickstart a relationship that can add value to both parties.”
5) Ask for recommendations
You can also improve your chances by identifying the right people in your network to ask for LinkedIn recommendations, Walsh says.
“Be strategic about who to ask for recommendations – professionals that are well connected and respected in your industry and that know the value you bring to a role/organisation,” Walsh advises.
And it’s ok to guide the people who are writing you a recommendation.
Obviously don’t force words on them, but you can give some pointers to help them write something truly unique to you.
What did you enjoy about working with me the most (include an example)
What word would you use to describe me and why (include an example)
One problem that you had, which I helped you overcome and how (include example, their feelings, and your action points)
These can help your recommendations stand out from the generic but ever-popular: “Joe is a team player.”
Attract job opportunities to you
This might sound like a lot of work, especially if you’ve not spent much time on LinkedIn before.
But in strange times like these, you’ll want every advantage you can get your hands on, adds Imelda Walsh.
“If you don’t have an online presence, it’s not a matter of ‘you might be missing out on roles,’ it’s a case of you will be missing out on opportunities,” Walsh warns.
So it’s worth investing the time to make your LinkedIn presence shine.
And think of the possible rewards. “HR, hiring managers and recruiters will bring opportunities to you instead of you having to apply for roles through various company pages and job boards,” says Walsh.
So if you’re tired of throwing your CV into the job board black hole, you might want to try the LinkedIn route to your next role.