CPOstrategy - Issue 22

Execu tive In sig ht

I s s ue 22 • w w w.c p o strate g y.co m

Procurement technology in 2021: where are we really?

Humility and discovery

The journey of procurement transformation — R achel Lemos, Director, Procurement at Canadian Western Bank

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Tania Seary

VP of transformation at Virgin Media, put people first in digital transformation

Founder of Procurious, on ‘falling in love’ with procurement

Welcome to issue 22 of CPOstrategy How important is it, when undergoing a transformation journey, to focus on your role as a leader of people in order to deliver meaningful change?

It’s certainly a key question for any procurement professional and one that Rachel Lemos, Director, Procurement, Canadian Western Bank, has spent the best part of her career looking to answer. She sits down to tell us how procurement leaders are often guilty of losing sight of what we really need or what we are trying to solve in transformation.

“We’re looking to ride that wave of procurement transformation and say ‘Let’s do something about it!’, which ends up with us just breaking things that were working instead of solving problems,” she says.

Stephany Lapierre, CEO of Tealbook, walks us through the 2021 Supplier Information Study, produced by Tealbook and Wakefield Research. After surveying 200 Procurement and Sourcing Executives (Director-level or higher), we have a clear picture of the current procurement and supplier data landscape.

Lance Younger, CEO and Founder of ProcureTech, joins us to explore where we are on the procurement technology maturity curve and what we can be doing to push the needle further. Hint: it includes the way we work with tech vendors! There’s also part two of our discussion with Michael Pleuger and Detlef Schultz, and insight into how the control tower is one of the most effective ways to achieve resilience, visibility, and agility in the supply chain.

Dale Benton, Editor content@b2e-media.com

EDITOR IN CHIEF Andrew Woods

EDITOR Dale Benton

SOCIAL MEDIA MANAGER Callum Rivett

CONTRIBUTING EDITOR Nell Walker Kevin Davies

GRAPHIC DESIGNER Dhruti Vithani

CREATIVE LEAD Mitchell Park

VP GLOBAL FINTECH & INSURTECH Alex Page

VP TECHNOLOGY Andy Lloyd Craig Daniels

VP PROCUREMENT Heykel Ouni Greg Churchill Richard Deane

PRESIDENT & CEO Kiron Chavda

Contents

26

Building a data foundation

6

Humility and discovery

34 Changing the game

74

52

In conversation with...

The secret to resilience

60 Technology in procurement: where are we?

84

Change, outcomes, risk and agility

www.cpostrategy.com

5

Humility and discovery

The journey of procurement transformation Rachel Lemos, Director, Procurement at Canadian Western Bank, shares her experience as a leader in procurement in times of great change...

Written by

Dale Benton

Produced by

Richard Deane

Hum i l i ty and discover y: Th e jour n ey of p ro cu rement t ra n sfo r mat i o n

www.cpostrategy.com

7

W

hy is procurement and

consider, be they amidst a transforma-

procurement transforma-

tion journey or not: what are you trying to

tion, such a leading topic of

solve? The answer is something which

discussion for organisations the world

most, if not all professionals reading this

over? It’s no secret that the last 12 months

will recognise, but few will admit and take

in particular have shone a light on the

the time out to address. “People really

procurement function and all the ways

don't know and they're merely trying to

in which it has allowed many organisa-

copy what somebody else did success-

tions to mitigate the impacts of the global

fully somewhere else,” adds Lemos. “We

COVID19 pandemic, but procurement

are guilty in places of losing sight of what

has been on its own transformation jour-

we really need or what we are trying to

ney for the best part of two decades now.

solve. We’re looking to ride that wave

So, where do we stand on procurement

of procurement transformation and say

in 2021? To borrow a clichéd (and some-

‘Let's do something about it!’, which ends

what blinkered) expression, has it earned

up with us just breaking things that were

its seat at the table?

working instead of solving problems.”

“I truly believe that we still need to move away from the reactive nature

The changing face of procurement

that sits at the very core of procure-

Lemos, a procurement professional with

ment,” explains Rachel Lemos, Director,

more than two decades of experience

Procurement at Canadian Western Bank.

under her belt, started her procurement

“We're constantly trying to solve things,

journey like many almost by accident.

therefore we need to be in a much more

While earning a degree in international

forward looking position in procurement

affairs with plans to be a diplomat, Lemos

in order to be on a transformation journey

found herself working with import and

at the right time, in trying to resolve the

export processes and her eyes were

right problems. The challenge for many is

opened to the world of procurement.

that they are trying to solve problems that

Working for an organisation which was

are not there to solve, or they're not look-

multi-national and multisite, she was

ing into the right space.”

exposed to a lot of the complexity of the

Lemos highlights a key question that all procurement professionals must

supply chain and procurement world.

Long story short, she ‘fell in love’ with it.

Hum i l i ty and discover y: Th e jour n ey of p ro cu rement t ra n sfo r mat i o n

Rachel Lemos, D i r e c t o r, P r o c u r e m e n t , C a n a d i a n We st e r n B a n k

www.cpostrategy.com

9

Get the 5 steps to revolutionize Accounts Payable Get Steps Now

Elevating the art of procurement with Michael Van Keulen, CPO of Coupa Software The COVID19 pandemic brought disruption that was felt the world over and still remains today.

From a procurement perspective, adversity brought opportunity and transformation was accelerated for many, as procurement entered the spotlight of most if not all business conversation. In 12 months, organisations have propelled their procurement functions to levels of maturity that they would not have achieved for another five years. The biggest catalyst for this acceleration is the recognition by the C-suite.

“It’s about risk and supply chain visibility. What do we know about our suppliers? What do we know about their relationships? What do we know about contingency to those suppliers, and all business operations?” explains Michael Van Keulen, CPO of Coupa Software.

“The C-suite now understands that procurement is here to provide business critical answers.”

Where once such things like risk mitigation, visibility, compliance and control were mere necessities, procurement functions are now being positioned to turn those into competitive advantages. Visibility is key to procurement transformation and COVID has catapulted this need for it, but with this acceleration comes the risk of rushing to find an answer to a question we don't actually know yet. It’s important that we

focus on people, process and technology to fully capture the value procurement brings to the table.

“Historically, organisations had a very siloed approach to this thought process.

It’s changing and the technology is allowing us to change rapidly,” “Procurement functions need to be built with people from different backgrounds, not just procurement.

We’ve spent far too long simply talking to ourselves, NOW is the time to elevate the art of procurement.”

This changing profession is signified not only by the traits, but by the process. Procurement is no longer defined by the business coming to procurement, it is now very much part of strategic planning. It connects internal stakeholders and aligns them with suppliers through Strategic Relationship Management. This is procurement of 2021 and technology plays an integral role in enabling this seamlessness.

“Procurement should lead the transformation conversation and it’s fundamental that you partner with the business to fully understand what the business needs, what strategic objectives we have as a company and what it means to drive adoption,” he says.

“While procurement leads with cross-functional stakeholders, it’s important to recognise that in some instances you don't have all the answers and expertise. This is where you can rely on partners that do have expertise which you can leverage. Digital savviness is something you absolutely need in procurement, but we don't all need to have it. As a leader, working with a partner that can help you access that and implement it across your organisation is critical.”

Procurement has, for better or worse, always known the value it brings to a business. The challenge it has and continues to come up against, is storytelling. Results, savings and data speaks the loudest and so procurement has to improve the way in which it communicates its value proposition and why it’s worth investing in now and in the future. “Storytelling is critical and procurement does not do it well enough,” says Van Kuelen.

“So what's the secret? Understand what you would tell your CEO, or any key stakeholder, about the value proposition you bring. Understand why procurement is uniquely positioned and qualified to do that better than anybody else.

If you have the right “elevator pitch” and articulate why procurement matters, they will listen.”

“A joke I often tell to other procurement professionals is that I got to spend large sums of money that are not mine to spend,” she laughs. “But there is variety.

It's different every day and you're always challenging yourself to see how you can improve, how you can do better.”

Fast forward 20 years, and Lemos finds herself in a position where she can call upon these formative procurement years and her diplomacy skills to build a procurement function at Canadian Western Bank from the ground up. Her diplomacy skills have also been in great use over her career, as not only has she witnessed and experienced this great shift in procurement first hand, but she’s also come up against the barriers and the challenges of being a woman in largely

may be experiencing with a lot of diplo-

male dominated industry space. These

macy and be prepared to start difficult

are a crucial part of hers and any female

conversations sometimes, and touch on

procurement professional’s story.

the discomfort of other people when you

“We're far away from where we should be. But we see that there is a change,

are sitting at that leadership table.”

A key part of the procurement journey

there's a trend and there's willingness for

is enabling positive change for an organ-

organisations to develop more and more

isation and Lemos recognises the duality

women into leaders,” says Lemos. “My

of her role; to enable positive change for

personal experience has shown that the

a business from a procurement perspec-

more you progress in your career, the

tive, but also to enable positive change as

more challenges you face because you're

a female leader and to open the doors to

dealing with something that people are

future female leaders. “I have a responsi-

just not comfortable with. You have to be

bility to coach, to inspire, to mentor,” she

prepared to deal with the discomfort they

says, “I take personal time to do that. It’s

Hum i l i ty and discover y: Th e jour n ey of p ro cu rement t ra n sfo r mat i o n

“ We are guilty in places of losing sight of what we really need or what we are trying to solve. We’re looking to ride that wave of procurement transformation and say ‘Let’s do something about it!’, which ends up with us just breaking things that were working instead of solving problems” — R a c h el Lemo s Direc to r, P ro c ure m e nt , C an adi an We ste rn B an k

not only with my team. Very often I get

itself. Results are not gender based and

people asking me to help them and be

they speak for themselves and they

their mentor. Interestingly enough, I have

speak loud many times. So if you present

also received a few invites from men in

results, if you do your best, you're in the

procurement for mentoring too, which I’m

right place and you will succeed.”

always happy to provide.”

“It is a responsibility. You can't just

A journey begins

dismiss that. You're not here just to look

A procurement journey on paper sounds

into your career path, but what you do

fairly simple to some degree. Here is

in your career influences others. My

where you are, here is where you want

advice for females is this: come with an

to be and here is how you’re going to get

open heart and with a winning attitude.

there. But as Lemos has already high-

Give your best, be humble to learn, step

lighted, the why is often something that

back when you need to and be ready to

gets lost and so identifying the why is

advance when the opportunity presents

perhaps the biggest and most important www.cpostrategy.com

13

part of the journey. Aside from winning

the data. A centralised function requires a

results of course.

deep understanding of the data. “So, how

For a CPO coming into a business

do we bring this all together under that

looking to deliver real change, Lemos

umbrella of the pre-commencement func-

believes it starts with analytical system-

tion?” adds Lemos. “You begin with that

atic process review. She is humble

systematic approach to learn and to see

enough to admit that as a CPO ‘you don't

what you are trying to establish and what

know a lot of things once you join any

you are trying to solve.”

new organisation’. Day one must be a day of learning, what works, what does

You don't know what you don't know

not work and what's missing. The next

Lemos is a firm believer of recognis-

key step is answering the question: how

ing that you don't know what you don't

does that interlink and interface with

know, and when given the keys to the

the existing processes that procure-

procurement kingdom you need to find

ment and other areas of the organisation

out and find out fast. The systematic

already has in place?

approach will allow you to get so far, but

“How am I responding regularly to a

there will come a time when you need to

requirement, as opposed to creating

bring in expertise from market leading

things that I just like, and were successful

vendors who can help you on this jour-

in my previous role,” says Lemos. “You will

ney of discovery and benchmark against

get nowhere believing that your process

the best of the best. “You have to go to a

is bulletproof. So you have to look at what

source that you can trust, right? There

you have and think about how about you

are a lot of good sources out there that

partner with the business to align the

can be fantastic today and then be your

procurement function. It becomes a case

disaster tomorrow. You really need to

of, we're solving our problem and helping

know where you are looking for infor-

you in solving yours, together.”

mation,” she says. “I wanted to run an

As seen in many procurement organ-

analytical process to find the best solu-

isations the world over, a centralised

tion for us, but I was trying at the same

function works. But one cannot advance

time to be very efficient, not go out and I

the function without a system, such as an

know that there's like thousands of soft-

ERP system, that allows all of the busi-

ware solutions. I was looking not for a

ness to look at the spend knowledge and

solution,but for a partner in that journey

Hum i l i ty and discover y: Th e jour n ey of p ro cu rement t ra n sfo r mat i o n

C h r i s F o w l e r, President and CEO, C a n a d i a n We st e r n B a n k

to be with me and provide the guidance

to be there, but this is balanced against

that I was seeking.” Here Lemos speaks

the need for a true partner. But what

of COUPA and how a partnership with

makes a true partner? And what makes

the company brought clarity. This is

a partnership count?

where we're going. As a procurement

“It starts with very candid communication

professional, one must consider the

between both parties, creating that rela-

ROI, and the key benefits it brings to the

tionship where you really feel that there's

organization. Cost benefit analysis has

a true partnership there,” affirms Lemos. www.cpostrategy.com

15

Global Business Spend Management Advisory & Implementation Experts Our Services • Digital Transformation & Customer Strategy • Post Merger Integration • New Product & Service Development

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• Legal Spend Optimization

• Analytics & Reporting

• Procurement & Strategic Sourcing

• Change Management • Operational Strategy

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• Process Engineering

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• Program & Project Management

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• Systems Implementation

Think+Do

www.acquisconsulting.com Spend follows the path of least resistance. For that reason, transforming the procurement function is something more and more organisations are beginning to embrace. Similar to recent transformations in the IT space, in which technology and organizational structure were once roadblocks to progress, procurement is beginning to evolve. Often seen as a blocker to end-user comfort, procurement wasn’t customer focused or customer facing. The procurement arm was seen as a hard stop from a buying perspective.

“Procurement is now evolving to focus on end-user experience. Their end customers are users and employees of the organization, as well as vendors,” explains Tyson Moore, Spend Management Leader and SVP at Acquis Consulting Group. “The conversation and focus is beginning to shift from strict compliance to compliance-with-ease. Meaning, let’s ensure that we’re getting the best price possible, establishing and maintaining the best vendor relationships and focus on how our employees can effectively be good stewards of the organization. It all starts with making the process easier for them.”

This is where technology and software plays a key role.

Implementing focusing on user experience, that once arduous process is transformed into something that users can follow

with relative ease and even enjoy it in the process.

With transformation, the benefits may be clear to see from a procurement perspective, but change management is vital in making those benefits visible to the wider organization. It is no secret that some organizations will struggle. “Why do we need to focus on procurement if we’ve never issued requisitions or POs before? What’s the benefit?” - these are key questions that procurement leaders continue to face. Without proper communication and training, your answers will fall flat. “We help our customers focus on the change assurance components of deploying their procurement policy, as well as the technology, to provide a holistic, executable plan of success,” explains Moore.

“Instead of driving policy and communicating that you’re going to start requiring requisitions and PO’s for business spend, using that as the lever to ensure compliance, we help clients re-focus that conversation to highlight different areas where the transformed procurement process is actually faster and easier to use than the status quo.”

The idea is to sell the benefit of the transformative procurement process to users and suppliers with data and clear examples of why this new process will

actually be better for them, turning them from blockers to evangelists.

Transformation is nothing new, but it is unique to every organisation in its own way. To approach transformation with a one-size-fits-all approach is to fall at the first hurdle. Every organisation has its own goals and own view of what procurement transformation means to them. “When somebody like Acquis partners with an organization on its procurement transformation journey, we feel like they should really focus on the why more than anything else,” he says.

“The key is to find the right partner to help your organisation reset that understanding and explore the conversation in both quantitative and qualitative ways in order to identify the why. The how then comes organically. What really makes this type of transformation and partnership truly successful is looking at it as a conversation between friends and allies, and engaging the right partner as your trusted advisor.

You need a partner to be focused and obsessed with your organisation’s success.”

Tyson Moore Business Spend Management Leader and SVP

Certified Partner

“Partnership is kind of a buzzword that

other: how can you fit into this? How do

sometimes people use in different ways,

you think you can help me with this? How

but we are talking about a relationship

do we fit together in this journey?" she

that's fluid and real.” She continues:

says. “That's how you build partnerships.”

“There’s an old mindset when it comes to suppliers. One that says if you don't

The challenges of change

work within my boundaries, within my

It goes without saying that a journey of

rules, then you're not for me. That's not

change involves a great deal of challenge.

the way you build a relationship with your

The last 12 months and the COVID19

suppliers. That will never become a part-

pandemic have undoubtedly presented

nership.” So what does she advise? Talk

some of the greatest challenges for us all

constantly, not when a supplier issue

and while procurement has found itself in

arises. Remove the belief that it’s an obli-

an increasingly elevated position thanks

gation of the supplier to start a conversa-

to the success stories, it has not been

tion and challenge one another as much

without its difficult moments.

as possible. “You have to be asking each

It is natural to celebrate the successes

Hum i l i ty and discover y: Th e jour n ey of p ro cu rement t ra n sfo r mat i o n

and to shine a light on the moments of real

Lemos examines the internal factors

achievement, but what can we learn from

that we can control and we can avoid if

it? As Lemos has already highlighted,

we simply take a step back and look at

success can often breed a misguided

them differently. A common challenge

demand for repetition in places where it

that many CPOs face is that once set out

simply cannot be replicated. So how do

on a roadmap, things within their project

we learn? “You have to take the opportu-

timelines do not perfectly align with other

nity to learn from the failures and believe

people's timelines. Why? Because you

me, there are always failures,” she laughs.

need the input and involvement from

“I tell my team It's OK to make mistakes

those other people and other business

provided that we're learning from them.

lines. “You have to create that wiggle room

If you're not learning, then you're not

to accommodate this and deal with these

making yourselves any favour.”

self-imposed deadlines that we place

Challenges, and indeed failures, can

upon ourselves as you navigate through

come from a number of different factors.

changes,” she says. “Just step back, talk

These can be external or internal and

about it, figure this piece out and set a

“ Results are not gender based and they speak for themselves and they speak loud many times. So if you present results, if you do your best, you’re in the right place and you will succeed” — R a c h el Lemo s Direc to r, P ro c ure m e nt , C an adi an We ste rn B an k

www.cpostrategy.com

19

new date when need be. No problem.”

So it’s as simple as that then? She

procurement journey is the people.

There are many platitudes spoken of how

continues; “Easier said than done. It’s

people make procurement and how a

not an easy exercise for me as I'm a

function is nothing without it’s team. But

very goal oriented individual, but I have

what is actually being done, as opposed

learned that we make mistakes when we

to simply being said? Lemos is quick to

pay more attention to the deadlines than

inform that as a leader she has a respon-

trying to do the right thing. Give yourself

sibility to take the proper time to assess

time to do those things. There's a lot of

her teams and to understand and support

silent fear in the workplace. Fear of fail-

their career goals. Talent is crucial and

ing. As a leader, it’s important to empha-

when change is constant it can be easy

sise that we learn from any mistake we

to lose that talent as you focus too much

make. Remove the fear and you get a

on what can be, rather than what it is. “You

much more productive and bolder team.

should always keep an eye on and review

That’s how we grow, that’s how a leader

what type of talent you have and how you

helps their teams to flourish.”

are working to retain those talents,” she says. “It’s really the responsibility of the

The people in your procurement

leader to assess, understand, see what

Something that often gets lost in the

the gaps are in your people. Can we build

Hum i l i ty and discover y: Th e jour n ey of p ro cu rement t ra n sfo r mat i o n

Rachel Lemos Director, Procurement, CWB Rachel is a strategic and highly results-oriented procurement leader with over 20 years’ experience in international companies in the North and South America.

With a diverse experience both in public & private environments, Rachel has dealt with the complexity associated with supply chain operations, procurement, with proven ability to deliver a world-class procurement, driving results that directly affect the top and bottomline of highly-regulated organizations.

Credentials include: MBA in Supply Chain & Logistics, Bachelor’s degree in International Relations, professional designation as a Certified Professional in Supply Management (CPSM) & Executive Business Leadership certified.

www.cpostrategy.com

21

“ Success is borne out of the people surrounding you.

You cannot think of success by looking to one person, one leader - that’s a failure right there” — Rach el Lemo s

D i re c to r, P ro c ure m e nt , C an adi an We ste rn B an k

Hum i l i ty and discover y: Th e jour n ey of p ro cu rement t ra n sfo r mat i o n

in time to develop? Do those individuals

our resilience and our ability to adjust and

want to develop? Because you can’t just

adapt to new things,” says Lemos. “We

assume they are open to change.”

were all forced not just in procurement,

This isn't the sole responsibility of

to adjust and to adapt to the realities.

Lemos, or other CPOs, alone. It’s a shared

There’s no human contact at the moment,

responsibility of all levels of the leader-

so how do we keep our presence and

ship team to get together and have what

how do we keep our delivery to a level

she describes as “mature and honest”

that we can show our true value. That's

conversations that identify what the

where I say that it's our moment to shine.

endgame is, what’s needed to get there,

Reach out to the vendor, let's start having

and identify any gaps in our teams that

the conversation. Let's look at ways we

need to be addressed. “Success is borne

can prove the value that you bring to

out of the people surrounding you. You

their organisation, even though we have

cannot think of success by looking to

to work differently. Adapt together and

one person, one leader - that's a failure

shine together. With your teams and with

right there,” she says. “It's becoming rare

your vendors.”

to see leaders taking interest in people's

It goes without saying that the world

journeys and career goals. You need to be

has changed and the way that we as

candid. You need to be honest, and you

people, as well as procurement profes-

need to be having those conversations

sionals, go about our daily lives and

and that’s how you grow your team and

approach our jobs and our teams. What

achieve any form of success.”

once was perhaps considered a sure

The focus on people has shifted further

fire way to success, if such a thing ever

in light of the last 12 months. Perhaps now

existed at all, has been ripped apart over

more than ever before, leaders have been

the last 12 months. One could argue that

forced to rethink the way in which they

procurement was already ripping apart its

engage with their teams on an emotional

own rulebook long before COVID, but it’s

level as well as a professional level. The

undeniable that the pandemic has indeed

pandemic has been a leveller and a reset

exacerbated it. So what does a CPO

button, as we have all been forced to shift

like Lemos do now? What does she call

and adapt to a new environment entirely.

upon to help guide herself and her teams,

“It has been an opportunity for procure-

forward into this new world? “I really

ment to shine and it speaks a lot about

believe in three things that have certainly www.cpostrategy.com

23

helped me in my journey in a way that I feel is successful,” she says. “Be humble to learn, be a good listener and be creative. I think being a good listener is something that a lot of people are lacking and that can be a career rendering element.

You need to listen, you need to rethink how you listen to people and before you put your ideas out there, digest what you heard, reformulate your thoughts and then present.” This is perhaps the most important advice Lemos would give to any procurement professional and certainly something she would tell her younger self during her formative procurement years. And as procurement journeys continue to formulate all over the world, in every industry at every turn, she feels this humbleness to learn may very well be the one key to success as these journeys continue to take hold, continue to explore new opportunities and continue to evolve.

She continues: “Keep a constant open and innovative mindset. There's always something new and always something to learn about. You can always be learning something new right now and finding entirely different ways to approach your everyday life and job.”

Hum i l i ty and discover y: Th e jour n ey of p ro cu rement t ra n sfo r mat i o n

2021 Women of Inspiration™ Nominee Rachel has been nominated as a 2021 Woman of Inspiration, run by The Universal Women’s Network. An WmA is an extraordinary woman who leads by example, lives on purpose and inspires others to be more and do more. She is a modernday hero, game-changer, mover and shaker, and role model who leads by example.

With courage, confidence, commitment, and integrity, she inspires others to go further, making a ripple impact across her community and around the globe. We are moving the needle to recognize the achievements of women making an impact locally, nationally and globally.

Recognize the leaders within your organization and champion to advance women in business.

www.cpostrategy.com

25

On Solid Ground: Building the data foundation for agile procurement Following the release of the the 2021 Supplier Information Study, commissioned by, Tealbook CEO Stephany Lapierre joins us to take a closer look at some of the key findings

Written by

Dale Benton

On So l i d Ground: Building t h e data fo u n d at i o n fo r agi l e p ro cu rement

www.cpostrategy.com

27

I

n March of 2020, the world was

leaders discovered that their supplier

only just beginning to experience

data was less than completely adequate

the disruption and the full force of

during the pandemic.

change from the COVID19 pandemic.

Fast forward to March of 2021 and

It seems a lifetime ago now, but at

Tealbook, together with Wakefield

the time 81% of procurement leaders

Research looked at the current procure-

repealed that they were not entirely

ment and supplier data landscape,

confident in their supplier data. These

and surveyed 200 Procurement and

seeds of doubt would bloom into crisis

Sourcing Executives (Director-level or

when COVID-19 truly took hold of their

higher) at companies with $200 million

respective industries. As time moved

or more in annual revenue.

on and procurement functions were laid bare, 82% of procurement

As procurement leaders recognise that they must act fast and take action, not only to weather the storm of future disruptions but to position their companies to capitalize on supplier innovation they must learn from both the difficulties of the past and to reorient into a new era of data driven procurement strategy.

With the right data foundation, procurement leaders can reinvent their data strategies for the better, both in the pandemic and beyond.

On So l i d Ground: Building t h e data fo u n d at i o n fo r agi l e p ro cu rement

The Key Findings 96% 96% of procurement leaders agree that being agile is maore important than cost savings for their companies’ bottom line in the long run.

72%

73%

Nearly a year after COVID-19 upended supply chains, 72% are concerned that their companies’ supplier intel has not significantly improved.

Despite this, almost 3 in 4 (73%) have not yet made the necessary improvement to future-proof supply chains.

33% Concerns add up despite the cost of the data: the average cost of a single supplier record is estimated to be $2,431—and perhaps more alarmingly, a third of procurement leaders (33%) admit they have no way of knowing how much a supplier record costs.

63% Furthermore, COVID-19 put into perspective the need for best practices in ESG—but 63% still lack full visibility into supplier data to fulfill this mandate.

57% Meanwhile, 57% of procurement leaders rely on manual entry of this already costly data,compounding the time and resources going in.

74% Nearly 3 in 4 procurement leaders (74%) are concerned their company isn’t in a position to leverage supplier relationships to drive innovation—including 21% who are extremely concerned.

Procurement professionals have a multitude of concerns about their lack of data foundation, including missing out on innovation (30%), falling behind the competition (26%) and not being able to determine ROI (22%).

92% Looking to the future, a solid data foundation will be critical to operational success—this is why 92% of companies have become more strategic in their indirect procurement as a result of COVID-19. www.cpostrategy.com

29

Executive summary with Stephany Lapierre, CEO, Tealbook Why is this survey important now, almost exactly a year after the initial wave of disruption was felt during the covid19 pandemic?

“Because it highlights that the world recognizes the problem but we still have a very long way to go. Organizations know they need to make investments but most still have not done so. As far as Procurement is concerned, they may be thinking more strategically, but tactically they willed their way through the problem. Most experts predict many more disruptions in the years to come and this is something we need to get ahead of”

Not to shame the function, but shouldn't supplier intelligence

Who should be paying attention to

have been a bigger issue for many

the findings of this report?

prior to the pandemic?

“All businesses globally. Procurement

“Yes absolutely, but procurement is

now is seen just as much as a reve-

often underfunded and one of the last

nue protecting organization as a cost

areas technology companies are innovat-

saving one. Organizations who could

ing. Organizations rush to provide intelli-

not source effectively during times

gence for sales and marketing, but half

of disruption did not survive or had

of the buy/sell business equation has

massive revenue impacts”

been largely ignored”

On So l i d Ground: Building t h e data fo u n d at i o n fo r agi l e p ro cu rement

Looking at the data, the numbers

organizations need to move into the stra-

are alarming, but why? Why

tegic build phase, most haven’t yet which

are we seeing such staggeringly

is why the numbers are so alarming”

high results when it comes to not addressing concerns, or

If COVID hasn't been the big

lack of investments and improve-

push for many, what will be?

ments made?

Will there ever be one?

“Just like anything, there is a time for

“We predict that this is just a timing

tactical maneuvers to navigate the crisis

thing and that investments will be made

and there is a strategic time to build. Now

because of covid. But there is a risk that

that we are on the tail end of the crisis

some organizations forget, and if that www.cpostrategy.com

31

does happen, those organizations may not survive the next global disruption. And let’s be honest, we live in a time where there are major geo-political concerns, new variants, rising weather issues due to global warming, and it is inevitable that other disruptions will come”

The report revealed that procurement leaders have multiple concerns stemming from a lack of high-quality supplier data, especially missing out on supplier innovations or solutions (30%), IT integrity (29%), falling behind the competition (26%), and not being able to assess or improve supplier diversity (26%) - how important is it to try and focus on addressing the right concerns, obtain the right wins, and move forward, rather than try and solve everything at once and ultimately make no progress?

“We believe that these numbers highlight that there is a systemic data problem, with so many pain points felt in such a wide array. All of these issues stem from poor data which theoretically means we can eliminate these concerns with high quality supplier data”

On a positive note, 92% of companies have become more strategic On So l i d Ground: Building t h e data fo u n d at i o n fo r agi l e p ro cu rement

in their indirect procurement as a

rewards in the future: 96% agree

result of COVID-19, what is meant

that in the long run, being agile is

by “more strategic” and what does

more important than cost savings

this do for the broader conversa-

for their company’s bottom line.

tion around procurement evolution/

How important is this for procure-

transformation?

ment? To be truly seen as MORE

“Absolutely, organizations that flourished

than just bottom line monitoring

during the disruption were very highly

and cost saving?

recognized and they kept their organiza-

“This is extremely important. Maybe

tions whole. Procurement now is seen as

the most important thing in the survey

a strategic asset for revenue protection,

because now procurement is valued

business continuity, and for an organiza-

for the reasons highlighted above.

tion to remain agile.

Procurement is sometimes seen as the team that will negotiate a few dollars

So all these concerns and efforts

of your agreement. But now they are

build to the key lesson learned by

being recognized as the team that will

procurement leaders—the impor-

keep your organization afloat during

tance of acting quickly to reap

tough times” www.cpostrategy.com

33

Changing the game of procurement Ahmed A. Alblaly, Director, Procurement and Contract of Elm, looks to answer the question; what kind of function does procurement need to be for Elm?

Written by

Dale Benton

Produced by

Heykel Ouni

El m : Changing t h e game of p rocu rement

www.cpostrategy.com

35

W

hat does procurement

Procurement and Contract. “Companies

maturity mean? We often

used to deal with procurement as a

hear it spoken of as we

tool to record purchasing and do some

navigate the procurement transforma-

saving. In recent years we realised that

tion discourse, but how do we define

we need to change the model and the

maturity? Is it through benchmarking

role of procurement. A lot of compa-

against other procurement functions?

nies faced declines on their revenues

Is it through our own strategic defini-

impacting their profitability and so a

tions based on our own KPIs and goals

procurement function based on strategic

as decided through a collaborative effort

sourcing agreements and following the

from the entire c-suite? It’s a key ques-

broader strategic roadmap of the busi-

tion for any procurement practitioner

ness and truly partnering with the busi-

and most certainly forms a core compo-

ness is key to improving that profitability

nent of Elm Company’s procurement

and adding true value.”

transformation journey.

Elm Company, the leading provider of innovative secure services and solutions to both public and private sectors in Saudi Arabia, is currently undergoing a significant transformation of procurement. While the journey is ongoing, it has already allowed the company to implement faster processes, enable greater agility and create a culture that unlocks true innovation and creativity across the entire organisation. As a provider of e-services, customised IT solutions, governmental support services and consultations, agility and speed are crucial to the business and procurement is the key to that.

“The game has changed,” explains Ahmed A. Alblaly, Director, El m : Changing t h e game of p rocu rement

By its very nature, Elm is a truly digital company which provides digital solutions and digital services to its customers.

Technical procurement makes up around 70% of procurement activity as a spend and so the transformation looks to enable agility, higher quality and better costs for both its government contracts and the private sector.

In order to achieve any form of change and growth, it’s crucial that you start at the very beginning and ensure you have the information you need in order to put the right foot forward in that first step.

Alblaly spent a lot of time with the organisation identifying what they felt were pain points in the procurement process.

This took the form of workshops with senior management, wider business units and external vendors and suppliers.

www.cpostrategy.com

37

El m : Changing t h e game of p rocu rement

“ There was also a key conversation as to what kind of function that we needed procurement to be for Elm? Is it just to support the business or to be a hub for our clients (as outsourced services)?”

— Ahm e d A . Al b la ly D i re c to r, P ro cu rement a nd C o nt ract of Elm

Doing so allowed Alblaly to obtain a holistic understanding of the business and not focus solely on procurement for procurement’s sake.

“This can be broken down into three stages; Understanding the Corporate vision and goals, identifying the pain points and gaps and setting up a procurement strategy that is aligned with the corporate strategy and addressing the gaps and issues.,” he says. “There was also a key conversation as to what kind of function that we needed procurement to be for Elm? Is it just to support the business or to be a hub for our clients (as outsourced services)?

With a strategy and roadmap laid out before him, Alblaly began this transformation journey. Like many, one of the first steps was to look for and achieve quick wins as to build momentum. A pain point for Elm, prior to this journey, was cycle time. In the fast moving worlds of both public and private sector, speed with quality is everything and so Alblaly looked to improve the cycle time that would see www.cpostrategy.com

39

Rayz’s

Collaborative Synergetic Partnership with Elm The evolution of procurement is the topic that defines the current strategic roadmaps of many organizations. It is no secret that agility, technology and speed are crucial components of any modern successful procurement function, but why? For Rayz, strategic partner to Elm throughout its significant procurement transformation, agility, speed and efficiency are the cornerstones of its value proposition.

“Procurement can often fall victim to slow RFP processes and in some cases they come in beyond a certain deadline,” explains Yazeed AlGhuraibi, Co-Founder and Acting-CEO at Rayz Co.. “So that's why the agility, speed, and the efficiency from the procurement department needs to be aligned with the project owner that’s requesting the scope for their department.”

To achieve this, organizations such as Elm look to strike key strategic relationships with partners they can truly rely on. In times of great change, these reliable partners are key to business continuity thanks to the existing successful relationship in place. Elm’s transformation journey since 2015 has seen the company utilizing technology to improve and streamline the procurement process, and Rayz has been heavily involved in this journey.

Leading players in the Saudi market have driven a shift in vendor management that has pushed the procurement needle further forward.

Technology, such as innovative new ERP and procurement systems, have been adopted and are widely used by private companies and the government alike.

“These electronic portals are improving the relationship between the entity and the vendor in a very transparent manner,” he says. “This goes a long way in driving maturity and will be the baseline from here and moving forward.”

Through technology and transparent communication, Rayz’s strategic relationship with Elm has grown considerably. Elm has invited Rayz on a number of occasions to be fully integrated into projects at every stage of the cycle. “If they have a challenging matter and need to think about how to utilize their budget in a well-planned efficient systematic way, Elm turns to Rayz for consultation and guidance,” says AlGhuraibi.

“With Elm, we work in a collaborative and synergetic manner on how to organize our procurement cycle, examining how we can organize receiving RFP’s other than those from project owners, this in turn is a continuously growing and achieving process.”

Procurement has been and will continue evolving, as organizations and their transformations are a

continuous journey. For Elm, and in turn Rayz, the future is a journey, where the partnership evolves further through better pricing, better quality of service, and further transparency and efficiency. “Rayz will continue to be a dynamically reliable and strong partner for Elm,” says AlGhuraibi “Our relationship will continue to be a win-win for both ends, where we continue to leverage each other’s expertise and resources to reach shared successful accomplishments together.”

Yazeed AlGhuraibi

Co-Founder and Acting-CEO at Rayz Co.

all of the completion of all of the tender-

customers and our internal business in

ing and sourcing process end to end. Not

an area where they expressed a key pain

only that, but to do so with greater visibil-

point,” says Alblaly. “What we’ve managed

ity of the process while satisfying internal

to do is remove that pain and make it a far

and external customers. This quick win

more enjoyable journey. Our customers

opened the doorway to a midterm goal

can see and feel the value that procure-

of overall improvement to the contract-

ment is providing. In fact, many of our

ing and operating model of procurement

clients outsource their procurement or

while initiating new types of purchase

sourcing to Elm as a result of this.”

orders (POs) in order to better serve the needs of procurement at Elm. “We were trying to please our El m : Changing t h e game of p rocu rement

Alblaly is a firm believer that buy-in, or sponsorship, form the internal and external customers is the key cornerstone of

that when discussing some issues related to the improvement and proposals in procurement, the first people supporting us were people who are dealing with us on a daily basis,” he says.

“Sometimes a change is sensitive, difficult and outside of our comfort zones. We give more authority to the business and with that comes more liability. But this isn’t a case of being left alone to deal with that. The processes and model allows them to be connected to the organisation through procurement. It’s truly collaborative” Transformations can often be dominated by talk of process, new operating models and even new technologies being put in place. But those transformation stories forget what makes the procurement function truly tick; the people. All of the greatest technologies any transformation and so these “small

and new ways of working are nothing

wins’’ go a long way in showing them that

without the people in place to realise

procurement is working with them, not

the true potential. So what is Elm doing

against them. Procurement has histori-

to ensure that it is bringing the people

cally gained a reputation as a policer of

along with it in this journey, and not leav-

spending, which we know not to be true,

ing them behind?

and so Alblaly is working with procure-

Alblaly speaks of the way in which Elm

ment to facilitate a new understanding of

really cares about its resources and its

procurement. Procurement, and all of its

employees from top to bottom and he

processes, are here to add value, not to

considers them a key asset to success

control requests or demand. Empowered

- something that Alblaly truly values in

by their trust and understanding, we found

times of great change. “When we started www.cpostrategy.com

43

El m : Changing t h e game of p rocu rement

“ What we’ve managed to do is remove that pain and make it a far more enjoyable journey.

Our customers can see and feel the value that procurement is providing. In fact, many of our clients outsource their procurement or sourcing to Elm as a result of this.”

— A h m e d A . Albla ly D i recto r, P ro curement and Contra ct of E l m

this huge change in procurement we

it puts the organisation in a fantastic posi-

had to keep all of the employees around

tion to continue to move forward.”

us, and those of our external clients and

Transformation and change is a jour-

vendors, right here with us in the same

ney and it is a constantly evolving one at

boat. I think one of the challenges we

that. While there are timelines embed-

faced was the fear of having more

ded within the overall roadmap, Alblaly

process; changing to another or a newer, more controlled, operating model,” he says.

“These are the fears

is quick to highlight that you cannot look at it as simply as moving from point A to point B in a set amount of time. There are far too many intricacies and complexi-

that we had from

ties inside (and outside) of the procure-

our employees, not

ment ecosystem for that to be possi-

just procurement. Through

ble. Unfortunately, 2020 saw one of the

an awareness programme, we reached all

biggest external challenges faced by Elm

of the employees with clear messages of

and many others procurement functions

why we are changing, how we are chang-

the world over: the COVID19 pandemic.

ing and what value we (and they) will gain

The disruption from the pandemic is still

from such changes. Today, we are in a

being felt to this day, but we have seen

very good position with a mature level

over the last 12 months how procurement

of acceptance and buy-in of our change

has helped many overcome and mitigate

journey both internally and externally and

some of these challenges, so what has www.cpostrategy.com

45

Tawuniya & Elm Partnership...

Our Way To Optimizing Operations Offering over 60 insurance products and serving more than 2.5 million clients in three distinct market segments – medical, motor, and property and casualty – Tawuniya boasts the largest range of insurance programmes available in the Kingdom of Saudi Arabia. The publicly-traded company, founded in 1986 and now the kingdom’s pioneering insurer, maintains an exceptionally strong financial position and the attendant top international recognition and credit rating – sustained for over a decade.

Our positioning fortified by our technical expertise, prompt claims processing, high standards customer service, perfect valueadded services and innovative products & programs, the company preserves a leading

edge over the competition. Tawuniya, one of the Saudi Arabia’s most admired brands, offers its products and services through advanced digital channels and a network of more than 60 branches and claims centers that reaches all regions of KSA. As part of our effort to keep pace with modern technological developments and to adapt them to serve our customers and to improve our operations, we partnered with Elm Company since 2013. Through this successful partnership, we have exploited the digital solutions that Elm offers to modernize many aspects of our business and operations including our Data & IT environment as well as handling millions of transactions yearly.

T: 9200 19990

www.tawuniya.com.sa/en

Thanks to Elm. Using the integrated technical solutions such as Yakeen, Natheer, and Basher to serves our LOB nees, Tawuniya managed to accelerate and enhance its operations, and have able to: 1. Optimize issuance process, as Elm services help to facilitate our client journey by saving time spent on paper work.

2. Increase retail client’s satisfaction and keep them highly satisfied.

3. Enhance sales quality services, since Elm services enhances the client journeys as it enables Tawuniya employees to carry out a large number of requests from various kinds of clients within assorted channels and minimizing client efforts.

4. Increase the accuracy of customer information data. Elm services assures

the validity and accuracy of provided information, since the company is associated with NIC “National Information Center” to provide and support Tawuniya with accurate information.

5. Reduce customer waiting time, by providing the required data instantly within Seconds, through Elm Web Method Technology.

6. Reduce risk such as fraud and corrupted data, and increase profitability of insurance policies.

The partnership with Elm, reflects our abilities in understanding the latest DT trends in the local market and allow us to utilize modern technologies to create insurance solutions that protect various customer segments and enable us to focus on one of our strategic pillars “Customer Centricity”.

Elm’s own procurement journey done for the business in this regard? “We are far more mature as a procurement function than we were three or four years ago.

And we have reached a very acceptable level of maturity and satisfaction for what we’ve done,” he says. “But I am a big believer in improvement. We have to improve every time. We are welcoming and hunting for more opportunities and more challenges for better improvement.

When Elon Musk, CEO of Tesla, participated and decided to invest in the spaceship business, he came up with a solution for SpaceX with a cost that was $300 million cheaper than the standard Space Shuttle. The improvement can never end. There is a space to improve things.

With the pandemic, changes happened and we had to deal with them. We had to change our methodology and improve our services, because everything changed so rapidly. Unbelievable things happened last year and we needed to work with

checks for all internal and external activities. Like many, Elm found itself looking at spend as either a

these changes and get the best results

cost centre or profit centre, determining

out of these dilemmas.”

which spend it had to keep to maintain its

Cast your mind back to early 2020 and

corporate activities. This can be, and was,

nobody could anticipate that the world

a difficult process of having to consider

would face such a challenge. The role of

which spend Elm needed to adapt, which

procurement for Elm was very important

projects it could spend more and invest

in order to maintain the spend in each

in, and which projects it would have to

organisation, to keep the cash flow and

slow, or even, stop the spend. It’s here

to participate in major analysis and health

where the work Elm has achieved as part

El m : Changing t h e game of p rocu rement

of its transformation journey allowed it to get through what could have been, and indeed was, a difficult time.

“These things cannot be decided very

feel the true value

easily unless you have a collaborative

of what Elm is as a busi-

effort from all of the areas of the busi-

ness, not just as procurement.

ness,” he says. “Because of our process

Being seen as a driver of activities

and our model, we were able to work with

that brought real value for people within

our vendors and clients in order to iden-

Saudi Arabia and sometimes outside,

tify and outline the best way forward for

during the pandemic, shows that what we

all involved.In many ways, it opened the

do as a business and how we do it goes

door for more opportunities. We played a

far beyond improving our bottom line or

key role in the distribution of the COVID19

focusing on cash flow.”

vaccination project and were central play-

As a procurement function, partner-

ers in mass testing projects across the

ships and the supplier relationship model

Kingdom. These are projects that we can

can be the ultimate deciding factor when www.cpostrategy.com

49

it comes to success and successful outcomes. For Elm, the strategic relationships it had in place with its strategic partners long before the pandemic were a testament to the value it placed in those partners. As the pandemic hit and attention turned towards unique challenges with a varying degree of complexity, Alblaly knew that he and Elm could depend on these partners to go above and beyond in order to deliver.

“We worked together with the Saudi Ministry of Health and our partners to prepare, for example, the vaccination centers across Saudi Arabia. This required a 24 hours workdah from all the resources in this project, including the procurement, in order to maintain the needs and the demands of these centres,” he says. “When the call went out for these centers to be built, there were a matter of days to build it, to prepare it, to hire people and to provide the supply chain necessary in order to run these vaccination and test centres,” he explains.

“I’m incredibly proud that, together with our customers and partners, we could achieve this. All these activities were done with alignment and partnership with our partners in a very short time in a very tough environment. This alignment, and the success, would not have been possible without the work we have been doing El m : Changing t h e game of p rocu rement

“ I am a big believer in improvement.

We have to improve every time. We are welcoming and hunting for more opportunities and more challenges for better improvement.”

— A h med A . A lblaly D i re c to r, P ro c ure m e nt an d C o ntrac t of E l m

externally in a world where face to face engagement has been limited. So what does the future hold for Elm and how has the last 12 months shaped and reshaped its procurement roadmap? “With the pandemic, everything changed and so what we are targeting overall in the end is to reap the benefits of these changes. We are adopting now, for example, remote working as an option for the business (and maybe permanently in the future as a way of work), which is now made possible thanks to the changes we’ve made this last year,” he says. “There’s also the digitisation angle, which is something that was on the radar prior to the pandemic, but has of course accelerated during it. to foster and maintain those strategic

So, we’re trying to increase the level of

relationships. What we achieved now, will

the digital communication and processes

act as a catalyst for future successes.”

with our vendors and clients.

As Elm, and the world, navigates its

“But I guess the main goal from all

way out of this pandemic and into the

of this is agility and flexibility. We see

new normal it can do so with a manner

that we can improve and adjust our

of confidence in its own abilities. The

operating model to quickly react and

procurement journey has, perhaps, faced

adopt any changes in the future. As I

its biggest test, and so the future looks

mentioned before, there’s always room

to be one of hope for the business as it

to improve and to challenge your think-

continues its procurement transforma-

ing. That’s the key to realising new

tion. Key lessons have been learned from

opportunities for both procurement and

the pandemic around data and the role

for the wider business.”

it plays in risk management and compliance, remote working conditions and how we communicate both internally and www.cpostrategy.com

51

CON ROL OWERS With unparalleled level of disruption and change in consumer demand, what can control towers do to bring agility, resilience and visibility in the supply chain?

The Secret to Supply Chain Success

Written by Joe Lichtenberg, Product and Industry Marketing at InterSystems

Co ntro l Towers: Th e Secret to S upp l y Ch a i n Su cces s

T

his year, supply chain

this was largely due to data silos

organisations have faced

and disparate systems causing a

unparalleled levels of

lack of flexibility and visibility.

disruption as consumer demand

As supply chain businesses

changed overnight. Yet, despite

continue to experience significant

many of these businesses having

and sudden changes in demand,

already begun their digital transfor-

increasing resilience, visibility, and

mation journey, the majority found

agility in the supply chain is critical

themselves ill-equipped to respond

with the control tower emerging as

to sudden changes, with research

one of the most effective ways to

from InterSystems discovering that

achieve this.

www.cpostrategy.com

53

What is a control tower?

Co ntro l Towers: Th e Secret to S upp l y Ch a i n Su cces s

The concept of a control tower

both within their enterprise and

is simple, if not yet widely imple-

those of their partners, such as

mented. According to Gartner

manufacturers and distributors.

control towers combine people,

In short, a control tower removes

processes, data and organisation,

data silos to provide a real-time,

supported by a set of technolo-

trusted view of the supply chain,

gy-enabled capabilities, for trans-

and consequently offers busi-

parency and coordination. In prac-

nesses more visibility. In turn, this

tice, this means that supply chain

gives supply chain organisations

businesses can use a control

a better foundation from which to

tower to gain a real-time, compre-

make more accurate and insightful

hensive view across different

business decisions to respond to

parts of the organisation, as well

changes in demand and circum-

as of data silos and applications

stances in real-time.

www.cpostrategy.com

55

Getting the most from control towers Gaining comprehensive control

existing infrastructure, rather

tower functionality isn’t some-

than ripping and replacing exist-

thing that can be achieved with

ing solutions.

an off-the-shelf solution - after

Using a data platform-driven

all, every organisation has a

approach to implementing a

unique set of processes, part-

control tower also allows supply

ners, and technology, as well as a

chain businesses to incorpo-

custom set of goals and thresh-

rate intelligence such as busi-

olds. Therefore, the most effec-

ness rules, machine learning,

tive approach is to implement a

and self-service analytics. As

control tower by implementing

well as allowing them to gain

and customising a data manage-

more actionable insights from

ment platform to create an envi-

the data, it ensures that if a busi-

ronment within which businesses

ness analyst sees a potential

can connect all data sources

problem, for example, that they

and harmonise that data so that

can interrogate the data in a

it’s consistent. In doing so, busi-

multitude of ways and visualise

nesses can continue to leverage

the data to understand the core

Co ntro l Towers: Th e Secret to S upp l y Ch a i n Su cces s

drivers behind it.

Ultimately, a successful control tower implementation enables organisations to diagnose an issue, notify relevant stakeholders, and then enable them to introspect and analyse the issue.

Armed with this information, the analyst can then make smarter decisions and continuously learn from the solution. This approach offers supply chain businesses the simplicity and speed they need to be agile and resilient, so that they can make necessary changes to respond to fluctuations in demand and any problems that occur.

www.cpostrategy.com

57

Gaining resilience and agility For supply chain organisa-

adequate stock levels, while early

tions, this resilience and agility

warning alerts will allow them to

is vital not only to cope with the

identify and rectify any issues

ongoing pandemic and unex-

in terms of supply and demand

pected surges in demand that it

before they occur. Meanwhile,

has brought for products such

advanced analytics allow organ-

as bicycles and vitamin D, for

isations to make better predic-

instance, but also to ensure they

tions to foresee which products

futureproof their business.

might be popular and when to

End-to-end supply chain visibil-

better prepare for changes in the

ity will help to ensure supply chain

types and quantities of products

organisations are able to maintain

that are needed.

Co ntro l Towers: Th e Secret to S upp l y Ch a i n Su cces s

Futureproofing the supply chain Currently, the vast majority of

gain a comprehensive and real-

supply chain businesses have the

time view of their organisation.

underlying data needed to gain the

However, like digital transforma-

right insights to improve supply

tion, increasing resilience in the

chain resilience, but they just don’t

supply chain is a virtuous cycle,

have the capabilities to make them

therefore, long-term success

visible and actionable. Control

will only be achieved if busi-

towers provide this functionality

nesses also have the right people,

by breaking down data silos and

processes, infrastructure, and

helping supply chain organisations

architectural approach, in place.

www.cpostrategy.com

59

Technology in procurement: where are we?

Lance Younger, CEO & Founder of ProcureTech, joins me to discuss the current procurement technology landscape….

Written by

Dale Benton

Te c hn o l ogy in p rocurement : Wh ere a re we?

www.cpostrategy.com

61

Procurement, as part of the evolu-

only in procurement, but also across other

tion of global industry, continues to

functions like sales, marketing and HR that

be disrupted by technologies and

are becoming digital at a faster pace.

innovative solutions and we hear a lot about how companies are invest-

What do you think is holding

ing in procurement transformations

procurement organisations back

defined by technology. But how

with regards to embracing

mature is the broader procurement

technology and innovation?

landscape with regards to technol-

Beyond the traditional challenges like

ogy? Is it as advanced as it should be

data quality and availability, capacity and

or is it lagging behind?

capability of resources, poor integration

There are clear leaders in the application

and current applications, lack of budget

of digital procurement, and a substan-

and ROI … I think two of the biggest

tial number of companies also making

challenges have been digital leader-

progress to digitalising their organi-

ship and the digital procurement vendor

sations across processes, operating

landscape.

models and categories.

However, the speed of adoption could

What do you think is key to

be improved and with nearly 70% of busi-

overcoming those challenges?

nesses adopting technology that’s not

Firstly, with regards to digital leadership

achieving the desired outcome (Deloitte)

we have seen a shift in the last few years

there is also a challenge with regards to

in the corporate and individual lead-

the impact of digitalisation.

ership mindset which has seen digital

COVID demonstrated how we can

being embraced at scale and as a way of

address the speed issue through greater

working. This has been embraced across

collaboration, agility and drive to adopt

digitally native and analogue businesses

critical tools and approaches rapidly and

driven by customers, productivity and

at scale – it is possible, we just need the

innovation. In turn there is a step-change

imperative and the ambition to do it.

in how leaders are approaching digital

In the words of William Gibson “the

as a natural choice when looking to real-

future is here but not equally distrib-

ise business goals. For example, how to

uted”, there is a significant opportunity for

increase visibility, resilience and prove-

procurement to learn from the leaders not

nance across my supply chain, old school

Te c hn o l ogy in p rocurement : Wh ere a re we?

www.cpostrategy.com

63

thinking phone calls, spreadsheets and

from leading organisations couldn’t be

shared service teams, digital thinking

satisfied. Today, in the majority of use

supply chain mapping, IoT and block-

cases supply equals and in some areas

chain. Digital leaders are championing

exceeds demand and it is the procure-

the application of digital solutions and a

ment and broader business function

more mobile, agile, social and inclusive

that is slowing down adoption. In addi-

way of working. A ‘next generation’ way of

tion, many of the more modern digital

thinking, where more digital leaders are

procurement solutions go beyond core

diverse and cross generational.

capabilities, providing deep value adding

Secondly, there has been a shift in

functionality and a great UX.

the digital procurement landscape.

Historically procurement was held back

With technology comes trends and

because there was a lack of supply of

we often follow the trends, rather

pioneering procurement digital solu-

than starting with the problem and

tions – procurement demand for new

looking for the solution.

Te c hn o l ogy in p rocurement : Wh ere a re we?

“ There is a significant opportunity for procurement to learn from the leaders not only in procurement, but also across other functions like sales, marketing and HR that are becoming digital at a faster pace.”

— L an ce Yo u n g er C EO an d Fo un de r of P ro c ure Te c h

How important is it to identify a

adoption of technology, and getting the

problem before diving into the

balance right between leading edge

market for technologies and

solutions eg blockchain, quantum

technology vendors?

computing and IoT, and more established

Identifying the problem, or opportunity

solutions eg traditional ERP.

up front is imperative, and this should be done ideally as part of the wider devel-

How important are technology

opment of a digital procurement strategy

vendors in procurement and

and plan that supports the overall busi-

procurement transformation?

ness and procurement objectives.

The whole digital procurement ecosys-

By doing this as well you are also able to

tem, from software, technology and data

create a stronger business case and ROI

providers to consulting and outsourc-

with the digital change that you are look-

ing partners are fundamental for the

ing to implement. You can also ensure

transformation of procurement. They all

that you also sequence and prioritise the

act as core enablers to accelerate the www.cpostrategy.com

65

“ Digital leaders are championing the application of digital solutions and a more mobile, agile, social and inclusive way of working. A ‘next generation’ way of thinking, where more digital leaders are diverse and cross generational.”

— L a n ce Yo u n g er C EO and Fo u n der of ProcureTech

Te c hn o l ogy in p rocurement : Wh ere a re we?

transformation and each business needs

channels to embrace and accelerate

to look to deploy the optimal mix of digital

the adoption of new ideas from tech-

on their transformation journey. That mix

nology providers. Since the 90s (and

will be shaped by the size of the business,

before) leading procurement teams have

stage of evolution, pace of change and

established deep relationships with tight

the overall ambition.

supplier communities, often an extension of a keiretsu, where innovation is

Procurement professionals and

originated from suppliers and embedded

procurement organisations are not

in the ‘advanced purchasing’ practices.

technology organisations and so

Procurement innovation ‘scouts’ have

attention turns to external parties

also existed for decades, especially in the

and vendors. How important is it to

automotive industry, Mercedes being a

approach these vendors and rela-

great example of this. These approaches

tionships with an honest approach

have been infamously scaled by organi-

and admitting that you don't have the

sations like P&G with significant success.

answers, but the vendor might?

These best practices are being magni-

Fundamentally, procurement has to

fied by the era of ‘software (and data)

become more digital, as per every part

eating the world’ with a corresponding

of an enterprise, they have to adopt and

acceleration in the introduction of new

develop digital processes, digital operat-

digital business models and solutions.

ing models and digital category manage-

Procurement teams with a focus on

ment – without it procurement will fail to

maximising the input and impact from

perform at its best.

technology providers are reducing barri-

Procurement approaching vendors for

ers to entry, providing accelerators and

ideas, solutions and collaboration is a

incubators, co-developing and funding

core approach for leading procurement

solutions, creating new alliances and

functions, not just for technology, but for

ecosystems, adopting agile ways of work-

every area of 3rd party spend. Leading

ing operating across business functions

procurement functions are creating

and much more!

www.cpostrategy.com

67

What do you think procurement

and unique approach and under-

organisations look for in a vendor,

standing, so what do you think is key

outside of the simple “they have the

for any procurement organisation

solution we need” approach?

looking to the market for the right

Beyond cost, quality, delivery, design

vendor with the right fit and the right

procurement teams are becoming more

approach for their business?

sophisticated in their supply base and

Start with understanding the overall busi-

supply chain management. They are look-

ness strategy and digital procurement

ing at how vendors provide them with both

strategy, operating model and roadmap.

their basic requirements and also the abil-

This will be ‘light’ and reviewed / refreshed

ity to provide them with a point of differ-

on a regular basis – the environment and

entiation. Where a procurement team is

market is increasingly dynamic. Working

looking for differentiation then this is typi-

with a cross functional team will highlight

cally aligned to either a customer, product

current and future needs, a combination of

or operating excellence focus based on

core or critical solutions as well as niche

the business priorities.

micro services.

In addition, two areas are increas-

Depending on the needs, the market

ingly important. Firstly is the impact

and the timeframes involved, the

that the technology vendor has on the

approach to engaging vendors will be

triple bottom line of social, economic

different. Yes, there has to be an agreed

and environmental impact – both the

set of selection criteria, clear process,

solution and how the vendor’s business

desired outcomes, executive sponsorship,

is run. Secondly is the vendor’s leader-

clear business case etc… and yes this will

ship, culture and mindset, which have

incorporate geographical, customer, tech-

an impact on both the ambition and

nological, cost, regulatory, integration and

performance of the vendor, and in the ‘fit’

innovation considerations. Procurement

between companies.

leaders are looking further. They are creating ecosystems of solutions, antici-

Much like the plethora of technolo-

pating the adoption of new technologies,

gies on the market, there are a pleth-

adopting a plug and play approach, driv-

ora of vendors who can promise to

ing digital first value delivery across the

solve all of your problems. But each

supply chain and embedding agility in

vendor will have their own expertise

preparation for future changes.

Te c hn o l ogy in p rocurement : Wh ere a re we?

www.cpostrategy.com

69

Technology evolves and so does procurement. It is a fluid conversation and it cannot be looked at a fixed moment in time. How important is it when working with a vendor, and selecting a vendor, to consider the way that relationship (and performance) will shift and evolve over time?

Procurement and individual organisations will continue to evolve and the accountability of procurement will continue to change too. We have seen a shift in procurement’s role over the past few decades from price into cost, risk, innovation and now sustainability. Procurement’s approach to the adoption of technology should aim to support organisational needs and evolution. This has a number of implications, as whilst many technology solutions are focused on procurement needs eg supplier

‘micro services’ that provide a USP or

discovery and sourcing, more solutions

capability for a period of time.

are involving cross functional involvement

Another perspective is how the vendor

eg contract management with Legal, third

evolves over time too. Many digital

party management with Risk, sustainabil-

procurement solutions didn’t exist 10 years

ity with CSR/ESG functions. So procure-

ago, and we are seeing an exponential

ment should aim to build an ecosystem of

growth in digital procurement solutions

solutions that can support procurement’s

that have found both product market fit

functional evolution (and expansion). This

and go to market fit too. This growth can

ecosystem should be ‘bi-modal’, that is,

be beneficial to procurement teams if the

has the ability to firstly build core applica-

goals of both companies remain aligned.

tions, typically more ERP like, over a longer period of time, whilst also utilising niche Te c hn o l ogy in p rocurement : Wh ere a re we?

Finally, most digital procurement solutions are very product and customer

orientated, however, in some instances

to make informed decisions with

solutions do not meet expectations,

regards to their technology vendor

customer support is poor or the

relationships?

roadmap is not realised. With over 60%

Procurement follows typical best practices

of companies looking to change an

through research, experience and refer-

element of the digital procurement solu-

rals however, the process is too slow and

tion set it is clear that selecting the right

the successful match rate is too low. At

vendor can be improved.

ProcureTech we have created a new digital platform to support buyers and vendors in

Is there anything right now that

navigating the rapidly evolving procure-

procurement professionals can

ment ecosystem and enable them together

access or look at to comb through all

to quickly source and build intelligent, flexi-

of this data and information in order

ble, digital solutions. www.cpostrategy.com

71

“ Procurement leaders are looking further. They are creating ecosystems of solutions, anticipating the adoption of new technologies, adopting a plug and play approach, driving digital first value delivery across the supply chain and embedding agility in preparation for future changes.”

— L a n ce Yo u n g er C EO an d Fo u n der of ProcureTech

What does the next 12 months look

solutions and journeys. These macro

like for the vendor relationship model

trends range from the pandemic to trade

and how has the pandemic (and other

shifts, to climate and diversity and inclu-

external factors generally) impacted

sion, to the advance of quantum comput-

the way organisations work with and

ing and new ways of working, to venture

approach vendors?

capitalist investment.

There are a number of macro trends

The majority of businesses will focus on

which will act as catalysts for digital

short term objectives to improve cost and

procurement, and 2021 will be an inflec-

resilience. Digital procurement solutions

tion point for many digital procurement

in these areas will continue to be a focal

Te c hn o l ogy in p rocurement : Wh ere a re we?

point for procurement, and in turn the

procurement ecosystem. These new

stronger solutions with positive relation-

digital solutions and ecosystems will

ships will experience significant growth.

fuel growth and differentiation for the

A few businesses will be able to do this (as they probably have always done), and they will also do more. They will find

business that invest intelligently in digital procurement.

Ultimately, the pandemic and other

and create new channels to source new

macro trends have accentuated the need

digital procurement solutions, and they

for collaboration, speed and scale within

will then partner with those companies

the way organisations work with and

so that they scale within their digital

approach vendors. www.cpostrategy.com

73

IN

CONVER

In c o nve rs ation wit h Mich ael P leuger a n d D et l ef Sch u l tz

RSATION WITH...

Michael Pleuger and Detlef Schultz Part two

Part two of an enlightening discussion with Michael Pleuger and Detlef Schultz, two key procurement practitioners, to talk about the current state of procurement and what tomorrow may look like for the procurement professional….

Written by

Dale Benton www.cpostrategy.com 75

Dale: Let’s look at the broader procurement conversation happening right now where we are wondering what the future of procurement is going to look like and not just the next 12 months but the next 12 years and beyond. For me, I’ve only entered the procurement arena in the last five or six years, but in that time I’ve definitely witnessed and seen an explosion of it, as it were.

There’s an unmistakable increase in focus on it, but I keep asking myself about whether the bubble would ever burst?

Procurement is always going to have value but do you think this elevated status and current spotlight will move on? The obvious answer is no, because procurement feeds into every part of the business, but as with any trend, I just wonder with this current boom of procurement people being front and center, could it possibly end?

Detlef Schultz: Let us distinguish between traditional procurement departments, which deliver savings

equation. If you’re just defining yourself by

and manage the demand - supply side,

delivering savings, you can be replaced by

and others which start to move into the

artificial intelligence, by automatic RFQs.

direction of value chain orchestration as

All the work you do can be done by your

I described before*.

business partners themselves. Take the

If we take the first group of procurement

marketing department in your company,

departments, I’m of the opinion that those

why can’t they, with the help of smart

could become obsolete. Why do I say that?

applications, prepare the RFQ, send it to

They run the risk of being divided out of the

the vendors, get insight from the tool, and

In c o nve rs at ion wit h Mich ael P leu ger a n d D et l ef Sch u l tz

*Check out part one of our discussion, where Detlef describes the procurement professional adopting the role of the o r c h e s t r a t o r, i n i s s u e 2 1 of CPOstrategy!

decide which vendors should be contacted

tactical work. The entire P2P process is

or should be taken into this RFQ.

automated anyhow, and can be done by

At the end of the day, you have six or

machines, but if this is your understanding

seven different prices. You can then evalu-

of value contribution, better focus on your

ate which one fits your business best and

retirement because you’re history, honestly.

you make a choice. Boom! No procurement involvement whatsoever.

The same of course is true when it comes to the question of who’s managing the

Look at the other group and the value chain orchestration, when I talked about management of stakeholders and business partners, the involvement in the www.cpostrategy.com

77

“ I believe that procurement will be some kind of facilitator of all the relationships between the ecosystem and the company” — D et l ef S chult z

definition of new business models, etc. If

variety of players as well with regulators,

you define yourself through that, then you

with suppliers, with institutions, associ-

suddenly become a completely different

ations, universities, etc. These relation-

player in the field.

ships produce an avalanche of data which

So how will procurement look in the

is a treasure if it is managed, analysed

future? I believe that procurement will be

and used for business insight and fore-

some kind of facilitator of all the relation-

sight. That I think is the future role of

ships between the ecosystem and the

Procurement. That’s where Procurement

company. Internally Procurement is work-

moves into the role of the facilitator of

ing with everybody from finance to R&D

activities in the company.

to manufacturing, to marketing, to sales.

Michael Pleuger: Category is a word

Externally, Procurement is working with a

that is only used by procurement, nobody

In c o nve rs at ion wit h Mich ael P leu ger a n d D et l ef Sch u l tz

thinking in categories, because nobody else thinks in categories. The same holds true for other industries: in automotive the CPOs tell me that they don’t buy in categories any more – they buy for cars, platforms or mobility concepts, in pharma procurement buys for new blockbuster drugs or a new production site. There are many more examples.

And in fact, the thing about buying in categories is being able to bundle demand in supply market categories across internal business models and business units, end-products and customer solutions to drive additional savings. I am sorry, but every procurement professional knows that procurement can only exploit the full value potential, if and only if - involved early and continuously by its stakeholders, e.g. in R&D and manufacturing, marketing and sales as well as finance. By thinking and else in the organization thinks and acts

acting BEYOND category, procurement

in categories. If I talk to the CPO of a new

is moving closer to the core business,

economy player in Berlin, he tells me, we

becomes the facilitating function Detlef

need to bring a new business model to

describes and is thus delivering value far

life, and I cannot go there and bring with

BEYOND savings.

me seven or eight category managers

And finally, picking up on Detlef’s point

because it impacts eight or seven cate-

about the digitalization of procurement.

gories. He needs to center the procure-

There is a massive opportunity to enable

ment activity around that business model.

exactly this future role: by providing a

This allows procurement to be much

collaboration platform to orchestrate the

closer, more integrated and connected

strategic procurement process across the

with the core business and stops us from

internal and external ecosystem. www.cpostrategy.com

79

In c o nve rs at ion wit h Mich ael P leu ger a n d D et l ef Sch u l tz

Dale: So we’ve talked about the future of

Michael: When I was working with

procurement, but what about the future

Detlef as a consultant, he wanted new

of the CPO? Whenever I’ve spoken to

ideas and he asked really challenging

a CPO, we focus on their current job

questions about the future of procure-

and their particular experience at that

ment. I held my hands up and told him that

moment, but we never really talk about

I didn’t know. I just didn’t know.

what groundwork they’re laying for the

His procurement organization in

future, when it comes to hiring the next

Vodafone was recognized for being one

generation of CPO.

of the most advanced, and he’s asking me

Let’s look at how procurement function

what it would look like in the future, I had

exists in a ten-year period; it continuously

no clue. I came across a quote by David

adapts and evolves and by the time the

Ben-Gurion; “ all experts are experts in

next generation of CPO comes around,

what was, there are no experts in what will

their expectations, worldview and experi-

be”. The conclusion is that if you want to

ence comes from a world that’s different

be an expert for future topics, three things

to what that organization is used to. What

are replacing experience; vision, leader-

work goes into ensuring that it’s a procure-

ship, and collaboration”. And I guess that

ment environment that will enable them to

tells you a lot about what the requirements

come in and make real change? They don’t

were in the past. The focus clearly was

want to come into an environment that’s

on subject matter expertise and relevant

behind the curve, so to speak, and one that

experience in the field and ideally even

needs significant change just to ‘catch-up’

in the very industry, i.e. having bought the

before being able to make changes and

same or similar categories.

deliver any real impact.

Now, It’s much more about attitude

“ There is a massive opportunity to enable exactly this future role: by providing a collaboration platform to orchestrate the strategic procurement process across the internal and external ecosystem” — M i ch ae l Pleuger www.cpostrategy.com

81

“ You will be a sought after function in procurement if you’re able to deliver business insight and business foresight, clearly.”

— Det lef S ch u ltz

In c o nve rs ation wit h Mich ael P leuger a n d D et l ef Sch u l tz

procurement more attractive.

So it’s not only on the CPO level, but it’s on all levels of procurement that I think it’s more about an attitude than super specific relevant experience.

Detlef: When I said earlier that I see procurement as the facilitating function in the organization, that’s exactly what Michael is saying there. If you look at the current composition of a procurement department, who would have thought that in procurement, you have business analysts?

Sure, analytical skills are needed in procurement. Procurement will look much different. Data Analysts make data speak. If you are in the position to make data speak, and our ability to bring the “vision, lead-

you suddenly create a business insight,

ership and collaboration” idea to life. It’s

which hasn’t been there before. You even

not to say that 20 years of experience is

create business foresight, which then of

obsolete. Not at all. But at least 18 years

course contributes largely to the value add

of it is. I think that gives procurement an

you give to the company.

opportunity. Procurement has never been

Now, you will be a sought after function in

the function to attract the best people. It

procurement if you’re able to deliver busi-

was always sales, marketing, engineer-

ness insight and business foresight, clearly.

ing, even finance. These areas got the

That elevated the function of

best people and procurement got what

Procurement. The future CPO certainly is

was left – including myself. But I think

a member of the Executive Committee in

here with this attitude, procurement has

future organizations and largely impacts

the opportunity to bring in new talented

how the future strategy of companies look

people, to give them that opportunity to

like, how Operations is managed and has a

really think outside of the box and make

big influence on the business in general. www.cpostrategy.com

83

CHANGE, OUTCOMES, RISK AND AGILITY The major sourcing trends of 2021 Written by

Dale Benton

Cha n g e, Outcomes, R isk and Agili t y: Th e ma j o r s o u rci n g t ren d s of 2021

The world has changed and we are still to this day asking the major question; what will the ‘new normal’ be? The only certainty in the supply chain and procurement space is uncertainty. Continuous, and often disruptive, change defines sourcing, procurement and vendor management. Here are five major sourcing trends leaders can expect to see this year.

www.cpostrategy.com

85

Cha n g e, Outcomes, R isk and Agili t y: Th e ma j o r s o u rci n g t ren d s of 2021

fter the COVID-19 pandemic, business leaders are accelerating change to cope with the “new normal.” Digital transformation is accelerating in most organizations, while mergers, acquisitions and divestitures (MA&D) will also happen in many organizations.

CIOs are challenged to cope with massive parallel changes where only achievement of business outcomes, ROI and time to solution count. Long-term initiatives must be broken into agile steps, and CIOS are challenging complacent service providers.

Bimodal drivers (cut cost while investing in innovation), accrued resilience, risk reduction and risk sharing require far more careful selection of providers, detailed solution co-design, and high-quality relationships.

Years-long outsourcing negotiations and low satisfaction service relationships that have been the norm for the past 40 years are not suitable for the new normal.

Organizations will be challenged to rapidly switch to the new dynamic sourcing and its 90-day agile deals” www.cpostrategy.com

87

We’ve already begun to see that busi-

Change is accelerating

ness leaders, CIOs and CPOs are facing a vast array of business-critical initiatives that are associated with an intensity of change, and the request to achieve business outcomes at a speed never seen in the past.

It’s no secret that the expectation for

Cha n g e, Outcomes, R isk and Agili t y: Th e ma j o r s o u rci n g t ren d s of 2021

rapid results is reinforced by recent

“To cope, CIOs will have to focus

achievements during the COVID-19 crisis,

on three main aspects: Their internal

in which organizations have achieved in

resources, their existing providers’ rela-

days what had originally been outlined as

tionships and the need to rapidly leverage

a much longer project. Naturally, business

new and more agile providers to deliver

leaders are asking to sustain this newly

on new requirements”

accelerated rate of change which is both a positive and a negative.

A large number of new sourcing initiatives will need to be executed to provide the required capabilities to handle the massive change, replace incumbents that are not delivering enough speed and innovation, and successfully onboard new providers to deliver on mission-critical priorities.

The key here is the implementation of an agile dynamic sourcing approach; a must-have under the economic, business and organizational stress caused by COVID-19 and recession.

www.cpostrategy.com

89

Business outcome achievement and time matter the most

Cha n g e, Outcomes, R isk and Agili t y: Th e ma j o r s o u rci n g t ren d s of 2021

As CIOs find themselves increasingly challenged to cope with massive parallel changes where achieving business outcomes, ROI and time to solution seem to matter more than anything else, only by leveraging external sourcing options can they overcome the limitations that come from internal skills, knowledge and capability to scale up/down and difficulty to hire and retain the best talents.

So CIOs, CPOs and SPVM leaders need to sit down together and truly break down long-term initiatives into agile steps, challenge incumbent service providers (when complacent) and strengthen the IT capabilities with a selective sourcing approach (e.g., multisourcing, avoiding single-source and large-scale lock-in into a single provider). These will be the true critical success factors in the new normal.

“Challenge, challenge, challenge incumbent providers in areas where their delivery is weak or unsatisfactory like never before. Use agile solution co-design, risk reduction measures for transition and transformation, and faster deals” www.cpostrategy.com

91

Multifaceted, changing demand and supply calls for risk-optimised sourcing options The main drivers of sourcing initiatives are becoming increasingly multifaceted.

As a result, well, a multifaceted demand with fast ROI requirements and expectation to mitigate and share risk with key providers requires both a careful selection and a flexible approach to solution design and deal negotiation. This, might we add, is typically not part of traditional paper-based approaches like RFI/RFPs. It stands to reason that a careful selection can be done with fact-based and auditable shortlisting and evaluation tools. The flexibility is provided by the agile process and the competitive co-de-

environment, it’s important to consider that: Risk optimization cannot be done just

sign of each part of the deal (solution,

“on paper” within an RFI/RFP process.

processes, contracts)

It’s about identifying all assumptions,

When looking to achieve multifac-

containment measures and alterna-

eted objectives within a risk-controlled

tive options that must be dynamically

Cha n g e, Outcomes, R isk and Agili t y: Th e ma j o r s o u rci n g t ren d s of 2021

managed over time (during the deal negotiation and the whole contract term).

The identification of risk containment

The identification of risk-sharing mechanisms can be done during the deal solution design and then finalized in the

measures can be done while design-

contract negotiation (third month of the

ing the detail of solutions and activities

deal negotiation) so that it is clear who

(second month of the deal negotiation).

does what when. www.cpostrategy.com

93

Were you to ask any supply chain and

The fact of the matter is, these simply

procurement professional what they

are not suitable anymore, and fixing

thought of Years-long outsourcing nego-

them is a critical issue in the new normal.

tiations (often between nine and 18

Organizations are rapidly switching (30%

months) and low-satisfaction service

to 40% of organizations in North America

relationships, they’d probably tell you that

and Europe) to the new dynamic sourc-

this is the usual drill.

ing practical principles and their 90-day

The fast tuning of supply to demand requires short deals and dynamic options

Cha n g e, Outcomes, R isk and Agili t y: Th e ma j o r s o u rci n g t ren d s of 2021

agile deal and so SPVM leaders launching sourcing initiatives and aiming to evolve

approaches for transformational deals.

4. Start applying all 2020 dynamic

from static RFI/RFP approaches to agile

sourcing practical principles and

deals and from static vendor manage-

let their current providers join up

ment into the dynamic tuning of a sourc-

and collaborate to achieve shared

ing ecosystem need to think about:

customer objectives and risks.

5. Start managing your growing set

1. Establishing an organizational readi-

of sourcing options

ness and improving the lacking areas, by evaluating their SPVM operations.

2. Evaluate the current relationships

Over time, develop the management and fine-tuning of their ecosystems by adding

using vendor management standard

new options, removing options that no

principles

longer apply and rewarding providers that

3. S top renewing outdated contracts, and

do good work while reducing or dismiss-

refrain from using traditional RFI/RFP

ing the providers who are not delivering on promises.

www.cpostrategy.com

95

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