CPOstrategy Magazine - Issue 23

Diversification through procurement w w w .c 23 •

postr

ategy

.c o m

Reconsidering value for a sustainable future — R enee Leong, CPO, ENGIE North America E xe cut ive In si g hts

I s sue

Revolution.

Not just transformation

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

Welcome to issue 23 of CPOstrategy Procurement transformation is very often the name of the game in the pages of CPOstrategy, but what happens when that transformation acts as more of an enabler towards greater sustainability in the supply chain?

What does sustainability really mean to an organisation and how can procurement accelerate the conversation? Well, Renee Leong, CPO of Engie NA. says it’s a question of how we actually measure the value of procurement that’s important before looking at how it can help a company significantly improve its impact on the environment around it. We caught up with Renee as she discussed procurement and the company’s ongoing move away from fossil fuels.

“We have the power to actually influence how the product is being made and how the services are being offered to us so we can really help drive positive change to society,” she says.

EDITOR IN CHIEF Andrew Woods

EDITOR Dale Benton

MARKETING MANAGER Tracey Harris

CONTRIBUTING EDITOR Nell Walker Kevin Davies

GRAPHIC DESIGNER Dhruti Vithani

CREATIVE LEAD Mitchell Park

VP GLOBAL FINTECH & INSURTECH Alex Page

We also caught up with Mahmoud Al Alawi, HCT Director of Procurement & Contracts, two years after launching a significant procurement transformation to see how the organisation continues to take procurement to new heights even during the challenging COVID19 pandemic.

And finally, we speak with Douglas Klimak, CPO of Banco Bradesco, as he walks us through a procurement journey that will see an institute of Brazillian banking define a new age of procurement maturity.

Dale Benton, Editor content@b2e-media.com

VP TECHNOLOGY Andy Lloyd Craig Daniels

VP PROCUREMENT Heykel Ouni Greg Churchill Richard Deane

PRESIDENT & CEO Kiron Chavda

Contents

26

A quick look at…

JAGGAER’s Digital Mind

6

Procurement and a sustainable future

38

Diversification through procurement

56

92

Procurement transformation in times of uncertainty

Five KPIs for every procurement professional to consider

74

Procurement revolution

104 The next phase of the event industry

www.cpostrategy.com

5

Re co n si der ing value: p rocurement a n d a s u sta i n a b l e f u t u re

Reconsidering value Procurement and a sustainable future Renee Leong, CPO, ENGIE North America, explores how procurement is the key to defining a future away from fossil fuels...

Written by

Dale Benton

Produced by

Richard Deane

www.cpostrategy.com

7

hen discussing

successful model,” says Renee Leong, Chief Procurement Officer, ENGIE North

procure-

America. “There is scope there for a model

ment trans-

that can be copied, leveraged and utilized

formation or exploring

across all the industry and companies. But I think we have a long way to go.”

the concept of a best-in-class procure-

The question then becomes one of

ment function, a consistent and widely

change. More specifically, changing the

accepted truth is there is no ‘one size

way we measure procurement, especially

fits all’ approach to defining and operat-

for an organization like ENGIE North

ing a procurement function or a procure-

America, proudly part of the ENGIE

ment model.

company, a global leader in low carbon

Each organization has its own unique

energy and services with €55 Bn revenue

complexities within its procurement and

globally. The company provides capabil-

supply chain functions which makes it all

ities and solutions in the United States

but impossible to simply lift a successful

and Canada to help customers decar-

operating model and drop it into a different

bonize, decentralize and digitalize their

organization in an entirely different indus-

operations and run their facilities more

try. But, while that may be true, the contin-

efficiently and optimize energy through

ued evolution of procurement and indeed

clean power generation, energy stor-

the way it is being perceived (and invested

age, and retail energy supply. As such,

in) has created an incredibly exciting time

the focus of procurement (and how it is

for the procurement function and for

measured) takes on a whole new dimen-

procurement professionals. Opportunity is

sion when compared to some other

well and truly knocking for procurement.

procurement functions.

“As much as procurement has become

Where once, procurement was simply

far more strategic in nature, with some

a cost saving operation, it has tran-

incredible strides being made in the func-

scended this somewhat narrow defini-

tion all over the world, I think if we were

tion. While cost saving is and will always

to ask: what is the perfect procurement

be a crucial part of procurement, the role

operational model that can be translated

it can, and is, playing in organizations like

from organization to organization, I just

ENGIE are shining examples of the true

don’t think we have institutionalized a

power of procurement.

Re co n si der ing value: p rocurement a n d a s u sta i n a b l e f u t u re

“ ...from an organizational perspective, I think we need to really think about a much better way to measure procurement’s contribution and value to the organization besides those hard saving metrics, right?”

— Renee Leong CP O, EN GIE N orth A m e ri c a

www.cpostrategy.com

9

Make your costs work for you Closed Loop Spend Management (CLSM) helps transform costs that don’t create value into opportunities for growth. It’s how we deliver new procurement value.

Visit: accenture.com/clsm

It’s time to close the loop on all your spend Global economic uncertainty, continued disruptions and sharp top-line declines have created a harsh new reality for companies across industries.

What does that mean for CPOs? Mounting pressure to increase resilience, sustainability and revenue while eliminating cost that doesn’t deliver value.

It’s a big challenge, and it calls for a robust response. That’s why Accenture developed Closed Loop Spend Management (CLSM). It’s an approach that helps companies take a forensic look at their entire spend to identify opportunities to turn non-working money into working money. At the same time, companies can embed new processes, capabilities and behaviors to capture those opportunities and sustain the value generated.

Don’t just cut spend.

Transform it with CLSM. Take a zero-based look at spend CLSM starts by applying a zero-based perspective to all third-party expenses to identify every opportunity to remove costs that aren’t creating value. With zero-basing, you can reimagine your cost base as what it should be if you were to start from scratch. These savings can fund investments in innovation, distinctive capabilities and specific activities that drive growth. Sophisticated artificial intelligence and machine learning tools can help you gain full visibility into your costs and supply base. And these tools allow you to categorize all your spend to identify specific savings opportunities to pursue.

Think bigger than pure cost savings CLSM also drives resiliency and responsibility.

Sustainability-enhanced zero-basing goes beyond cost savings to help you create a strong purpose for cost reduction. It can enhance trust and help you get buy-in for change among internal stakeholders. And, it adds a dimension to savings that’s attractive to the external investor community.

By incorporating responsible sourcing analytics tools, CLSM can also help you visualize current sustainability performance compared with your peers. The result? A clear view of how cost-saving initiatives can influence sustainability, and how sustainable interventions can save money.

Change behaviors and mindsets CLSM powers new ways of working across the enterprise. It’s a durable and repeatable process, and a true decision-making and management tool that can become core to your company’s culture.

CLSM brings together procurement, finance and the business to collaboratively agree and speak the same language. Together, you can make insight-based decisions about the full range of savings opportunities CLSM has uncovered.

Doing so effectively “closes the loop” with planning and budgeting activities and ensures that procurement is an integral part of all purchasing decisions.

New procurement value.

Delivered.

CLSM can generate significant benefits for any company, in any industry. Several companies Accenture has helped adopt CLSM are seeing cost savings of $1 billion or more. And they’re establishing company-wide cultural change to help control costs on an ongoing basis to improve margins and unlock funds for growth.

With those kinds of results and the challenges you face, isn’t it time for you to take a fresh look at how your company spends its money?

For more information on Closed Loop Spend Management, visit accenture.com/clsm Copyright © 2021 Accenture. All rights reserved. Accenture and its logo are registered trademarks of Accenture.

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“We all understand the importance of driving cost savings for an organization.

It is absolutely a critical part of our role,” says Leong. “But from an organizational perspective, I think we need to really think about a much better way to measure procurement’s contribution and value to the organization besides those hard saving metrics, right?”

“Let’s look at how successful we are in being able to help support development teams with competitive and creative proposals to win more energy bids, to get more business opportunities, and how well we actually help the business organization manage supply chain risks and execute projects on time and under budget,” shares Leong. “How do we measure how well we actually provide solutions to business to solve problems?

We don’t have those metrics. It’s very important right now and, as an organization, we need to rethink the way we

in Leong’s eyes, is right at the heart of the

should measure our procurement efforts.”

business. In her own words: procurement

A procurement leader with a wealth of leadership, category management and transformation experience under her belt,

is the hub in the center of a wind turbine with three blades.

“Procurement is the connection with

Leong was brought into ENGIE North

suppliers and our business. That’s really

America in 2018 to oversee Strategic

our function. The value that we extend to

Sourcing and Supply Organization and

our suppliers and our business is done

Digital Procurement Transformation to

so through those three blades,” she says.

support ENGIE as a global energy leader.

“The first blade represents how we help

Where procurement fits into the equation,

ENGIE to make a difference. We want to

Re co n si der ing value: p rocurement a n d a s u sta i n a b l e f u t u re

sits in the perfect place to really have the opportunity to look into what the supplier can offer to us and understand the problems the business is facing and how serve ENGIE’s business transformation

we can connect and work together to

goal. We want to be more focused on the

try and to find the solution,” says Leong.

performance and help the company gain

“Simply put, we’re able to leverage tech-

competitive advantage, and we really hold

nology and the supplier’s creative solu-

ourselves accountable to this mission.” As

tions to solve our business problem.

such, the procurement team has consist-

We are an army of problem solvers.”

ently exceeded performance saving targets each year over the past 3 years.

The third blade is perhaps the most important one as it speaks to a broader

The second blade represents creating

conversation around the shifting nature of

business value by working with the busi-

procurement. For Leong, the third blade is

ness and the suppliers. “Procurement

all about the culture of the team. “How are www.cpostrategy.com

13

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Re co n si der ing value: p rocurement a n d a s u sta i n a b l e f u t u re

we going to develop as a team?” she says.

“Procurement is constantly shifting and evolving, so we want to make sure we are adapting our mindset and how we work with the business to build more sustainable value,” she says. “How are we going to develop new ways of working together?

We should encourage diversity, cherish our supplier relationships and build trust with our internal key stakeholders. These are the essential ingredients for what we want to achieve.”

Procurement transformation is well trod-

“ Simply put, we’re able to leverage technology and the supplier’s creative solutions to solve our business problem.

We are an army of problem solvers.”

— Ren ee Leo n g C P O, E N G I E N o rth A m e ri c a

den ground, but it remains very fertile and as businesses the world over continue to invest in and communicate their procurement transformations, it’s important to recognize what exactly is changing. As Leong says herself, if we are changing

naturally, this created a challenge and

the way we measure procurement and its

thus, the transformation was born.

value, how are we actually going about it?

“It was actually the first opportunity for

For ENGIE, the procurement transfor-

me to say, “Hey, this is a great opportunity

mation can be broken down into three

for us to really try to standardize and opti-

parts: 1. strategy and process, 2. technol-

mize and, most importantly, simplify the

ogy and 3. sustainability. At the time of

source to pay process,” she says.

her appointment, ENGIE had completed

“The way that we need to do it is

the divestiture of its coal fired assets and

through technology. Procurement tech-

acquired new businesses focusing on

nology is key in streamlining the oper-

low carbon energy and services as part

ational efficiency and gives us greater

of the business transformation. What

control and enables a more consistent

this brought with it (alongside growth)

and transparent process.”

was multiple business models, different systems and different processes and

To this end, Leong started a digital transformation journey to standardize source to www.cpostrategy.com

15

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contract to pay business process by using one single procurement platform across all businesses. She introduced a whole new suite of source to contract to pay procurement solutions in collaboration with Coupa as platform provider and Accenture as implementation partner. Over a 21-month period, this procurement suite was implemented in 11 business units and enabled significant efficiencies throughout all procurement activity. Leong is extremely proud of the results: 90% of all purchase orders can now be raised automatically and a PO backed invoice rate of 94%.

“We also mapped over 90% of spend with category classification and 80% spend under contract - all through the new system,” she adds.

Leong is also keen to highlight that over 80% of supply onboarding is now achieved electronically with suppliers in a ‘self-service’ model. “The self-service model basically allows suppliers to come onto our system, provide all the information and set them up as our active suppliers,” she says.

“This allows for real time collaboration with the suppliers, which in procurement is crucial. This in turn allows us to capture the majority of spend across all the business.

Capturing accurate category spend data and insight is not only critical for procurement to identify saving levers and manage effective supplier relationships. www.cpostrategy.com

17

Renee Leong Chief Procurement Officer.

ENGIE North America Renee Leong is Chief Procurement Officer of Strategic Sourcing & Supply Organization at ENGIE North America (over $3 Bn spend).

She leads a team of category management, strategic sourcing, performance management and procurement operations professionals across US & Canada business entities. She has a passion for Procurement and transformation, having been in multiple industries with significant leadership, category management and global sourcing experience.

Over the past 2 years, Renee has led the Procurement transformation at ENGIE North America, implementing digitalization of source-contract-pay process to enhance Procurement capability and improve operational efficiency, expanding the scope and strategic influence of the team, helping connecting suppliers with business to develop innovative solutions together, and accelerating sustainable and inclusive procurement.

Re co n si der ing value: p rocurement a n d a s u sta i n a b l e f u t u re

It is also important for the business to understand our commitment with the suppliers and our supply market exposure. This realtime data means real transparency, which benefits everyone in the ecosystem.”

While the technology is not the defining feature of this transformation, it does play a key role in building the foundation for the future of procurement at ENGIE, which in turn reflects the future of ENGIE as a business. As the company divested away from oil and gas, and moved more towards renewable energy, procurement had to evolve with it. The technology to automate the procurement process acts as a true enabler for procurement to be able to support that evolution. Leong recognized that in order to do this, category management was needed and in particular; new expertise was required. As a successful business working in one particular market for over a decade, pivoting to a new arena will bring about new challenges and so, as part of procurement’s rising credibility to the cause, Leong seized the opportunity.

“We need to speak the language of the business and really become the experts in all areas,” says Leong. “It goes back to the question about what our value is. We won’t just be category managers who know this market. We also capitalize on the disruptive technology in our industry.

We are managers that are truly helping the www.cpostrategy.com

19

business to leverage the disruptive tech-

the suppliers and provide the solutions to

nology in our industry by providing guid-

enable our business to compete.”

ance and looking at what the supplier’s

Over the last two years, Leong had the

latest offering in products and technology

unique opportunity to lead procurement

are. We also look at what our business

due diligence and manage post acquisi-

needs are so we can work with strate-

tion integration with the acquired entities.

gic suppliers to pilot the new technology

Taking advantage of economies of scale

with promise of higher power genera-

across businesses in North America

tion output or test more flexible systems

and leveraging existing ENGIE frame-

to enable us to generate a more reliable

work agreements, the procurement team

supply of power while lowering our oper-

has been able to deliver cost benefits to

ational cost.”

these entities while introducing major

“This way, our value becomes so much

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Re co n si der ing value: p rocurement a n d a s u sta i n a b l e f u t u re

“ Procurement is constantly shifting and evolving, so we want to make sure that we are adapting our mindset and how we work with the business to build more sustainable value” — Renee Leong CP O, EN GIE N orth A m e ri c a

digitally driven, organizations and their

procurement talent. Our teams feel really

people need to be capable and comfort-

good about how we are not only providing

able with the technology at their disposal.

the traditional contribution to the organi-

With ENGIE’s transformation, Leong has

zation through savings, we’re also taking

given her teams an opportunity to expe-

center stage and leading the initiative and

rience, learn and utilize some of the best

playing a really critical role in terms of

technologies in the market and how they

helping to improve the environment. Once

drive true best-in-class procurement. This,

again, it’s about how we can define our

she feels, is key in ensuring her teams are

value as a function.”

upskilled, engaged and truly excited to

Any procurement professional will

be a part of this journey. But it’s not only

understand and recognize that the func-

technology that excites the modern-day

tion possesses a very unique position

procurement professional.

with regards to supply diversity. Given

“The top talents really want to work

the divestment of its assets, ENGIE has

for a company that promotes sustaina-

focused on decreasing its carbon footprint

bility, diversity and inclusiveness,” she

and providing sustainable product solu-

says. “We’ve done a lot within ENGIE in

tions to its customers all over the world.

terms of bringing sustainability and inclu-

But this is just one example and there’s

sive procurement into the supply chain.

much more it can and is doing as procure-

This is key to attracting and retaining

ment through its vast supply chain. www.cpostrategy.com

21

“ The top talents really want to work for a company that promotes sustainability, diversity and inclusiveness” — Re n e e Leong CP O, EN GIE N orth A meric a

“We have the power to actually influence how the product is being made and how the services are being offered to us so we can really help drive positive change

Leong. “These are the suppliers we want

to society,” says Leong. “ENGIE is very

to do business with. But for those who are

aggressive in this area, so procurement

not meeting the requirement, what we try

actually has a goal from 2020 through

to do is to focus on working with them to

2030 in that 70% preferred and major

make sure they are taking action and we

suppliers must have Corporate Social

provide support to help them get there.

Responsibility (CSR) rating above the

I’m really excited about the action we will

controlled CSR risk level by 2025, meas-

be taking this year, in partnering with our

ured by EcoVadis as well as 100% of our

suppliers to make sure that we’re taking

preferred and major suppliers will be able

steps to not only assess, but also act on it.”

to meet CSR requirements by 2030.”

ENGIE utilizes EcoVadis as its strate-

When trying to address sustainability, it requires an upfront commitment and in

gic partner to assess all of its major and

most cases an investment in order to make

preferred suppliers on their CSR. “We

it work. Leong firmly believes however that

really want to focus on those who are

the investment is nothing when compared

meeting our CSR requirements,” adds

to the long-term value it will bring both to

Re co n si der ing value: p rocurement a n d a s u sta i n a b l e f u t u re

the business and to the world around us.

sustainability and the opportunities

She notes it’s going to help ENGIE as well

for real change will be endless.”

as the suppliers in the long run to be more

While success has indeed come the

operationally efficient, to be able to reduce

way of Leong as part of this transforma-

overall costs and most importantly, make a

tion journey, the road ahead is perhaps

real difference on the environment.

equally as significant (if not more so)

“It’s going to be a win for them and

than the previous years. Having achieved

for us,” she says. “We are setting a good

key milestones around standardized

example to showcase and inspire the

procurement processes, digital solutions

procurement leaders and our peers to

to enable greater efficiencies, bringing

say, hey, we can do this and there is a

in supplier innovative solutions for busi-

way for us to work together and help

ness, and working with teams and suppli-

our environment. Look within your own

ers around sustainability, diversity and

company at what you can do and be

inclusivity in the supply chain, the next 12

very open minded. Welcome the ideas

months look to be ones of doubling down

from your suppliers on how to improve

on all of this great work. “We want to do www.cpostrategy.com

23

Re co n si der ing value: p rocurement a n d a s u sta i n a b l e f u t u re

small businesses that, whether it’s womenowned, minority-owned, or whether it’s veteran-owned or disabled, these are the variety of the supply that becomes part of our supplier ecosystem. It helps us to drive competitiveness because it allows us to have more qualified suppliers to compete and provide us services and it also helps stimulate economies because we engage with local suppliers.”

Procurement transformation is a conversation driven by real change. Add sustaineven more in terms of digital procure-

ability into the equation and that change

ment technology and build even smarter

becomes increasingly difficult for some.

AI-enabled contract systems to help our

But despite this, Leong is a firm believer

procurement further,” muses Leong. “In

that in order to make change, whether it is

the future, I think procurement needs to

large scale business changes or changes

be leaner and more agile so we need to

globally, you need to be bold. “Look for

do more, for example, by utilizing robotic

new and different ideas and opportuni-

process automation (RPA) to take away

ties to help to improve your business, or

many tactical activities that consume a

to help solve a problem, overcome what-

lot of our team’s time and free us to focus

ever barrier that we need to overcome and

more on strategic activities such as cate-

improve our society,” she says.

gory management and supplier management to support the business.”

“I’m extremely passionate about

“Then you can challenge the status quo.

If you find there’s opportunity, seize it.

It’s the only way that can actually help to

supplier diversity and this is a focus for

continue to drive the improvement. As long

ENGIE North America. We are identifying

as you take the calculated risk in order to

the areas where we can expand our inclu-

drive the success, being bold and taking

siveness and supply diversity to better

that risk is always worth it.”

support ENGIE’s strategy.

Supply diversity is important because it enables flexibility and agility. These are the www.cpostrategy.com

25

THREE WAYS RELIABLE SUPPLIER DATA CAN YOUR PROCUREMENT STRATEGY Thre e ways reliab le sup p lier data c a n s u p erch a rge yo u r p ro cu rement d ata

Why supplier data can make or break procurement

Written by Jim Bureau, CEO of JAGGAER

www.cpostrategy.com

27

upplier data is the lifeblood of procurement and leaders rely on the strategic insights they get from data analysis to make decisions that reduce risk, boost cost savings and drive performance.

Even so, if the data is faulty, the insights will also be faulty, and a surprising 81% of companies say they are not completely confident in their supplier data. There are a variety of reasons for this: Suppliers may not always keep their data fully updated in self-service portals.

Information isn’t enriched with independently verified data to the level procurement teams need, to include diversity status, proof of compliance, data protection policies and more.

Researching, assessing and auditing suppliers can be tedious and time-consuming. This means organizations make decisions on incomplete or unreliable data or skip the process altogether.

Thre e ways reliab le sup p lier data c a n s u p erch a rge yo u r p ro cu rement d ata

These challenges have long plagued

Supplier financial health also remains a

the procurement function. The issue has

top concern. According to riskmethods’

come to the forefront of procurement

new report, the biggest supplier risks

discussions over the past 18 months

aren’t directly related to COVID. In fact,

for many reasons, but most notably

several key indicators of supplier financial

because organizations have had to

instability increased over the last half of

make rapid decisions in response to the

2020, including ownership structure, field

COVID-19 pandemic, have increased

issues such as product safety risks and

concerns about business integrity, and

force majeure warnings. Reliable supplier

face calls from government and civil

data is instrumental in meeting these

society for greater diversity and equality

challenges and building supply chain

of opportunity.

resiliency, agility and diversity. www.cpostrategy.com

29

Thre e ways reliab le sup p lier data c a n s u p erch a rge yo u r p ro cu rement d ata

ABOUT THE AUTHOR Jim Bureau is CEO of JAGGAER, which celebrated 25 years in business last year. Jim is responsible for the company’s overall vision to transcend customer experience by providing intuitive and intelligent spend management solutions that allow clients to transform their supply chain.

Here are three ways reliable supplier data supercharges procurement.

1. Drives agility with deeper visibility.

One of the most important lessons we’ve learned from COVID is the criticality of supplier diversification. When production slowdowns, closed borders and fluctuations in customer demand caused global supply shortages, organizations had to adapt quickly and find alternatives. Outdated or incorrect supplier data prevents procurement from confidently deciding on the fly which supplier is the next best to tap.

Total visibility and a deep understanding of the supplier base – capabilities, current orders, past performance, financial risk indicators, whether they’re thirdparty risk certified, have been audited for cybersecurity vulnerabilities and more – are critical for being able to respond and www.cpostrategy.com

31

bounce back from unexpected supplier events. Without this 360-degree view, how do you know if your backup supplier can deliver? What if they can deliver, but are out of compliance or close to bankruptcy, which opens you up to new risk?

Disruptions are inevitable. Reliable data puts procurement in a position to effectively navigate change, reduce risk and take advantage of new opportunities.

Thre e ways reliab le sup p lier data c a n s u p erch a rge yo u r p ro cu rement d ata

2. Boosts supplier diversity with

exceed buyers’ expectations. Companies

detailed insights.

that also allocate 20% or more of their

Increasing spend with diverse suppliers

spend to diverse suppliers attribute

is the right thing to do because it contrib-

10-15% of their annual sales to supplier

utes to social and economic value by

diversity programs. A diverse supply

helping traditionally underrepresented

base supports marginalized groups and

groups that typically encounter barriers

advances innovation, opens more chan-

to growth. Diversity is also good for busi-

nels for goods and services, drives prices

ness. According to a study by The Hackett

down and ultimately contributes to bottom

Group, nearly all diverse suppliers meet or

line success. www.cpostrategy.com

33

Poor data quality is often a roadblock to reaping these benefits. Organizations don’t always have clear insight into supplier diversity status and which companies are considered historically underutilized vendors -- minority, women, veteran, LGBT-owned or Small Business Administration-defined small business vendors. This makes it incredibly difficult to understand the inclusivity of the supplier network and where to boost representation and spend.

Reliable supplier data equips organizations to confidently identify and fill gaps and invest in the suppliers that directly support company values and initiatives, whether that’s diversity and inclusion, corporate social responsibility, sustainability or another important cause.

3. Strengthens supplier relationships with one source of truth.

If data is the lifeblood of the function,

– procurement history, supply catego-

supplier relationships are the heart.

ries, financial stability, purchasing and

Strong, collaborative partnerships drive

contract records and any other signs of

product quality, risk reduction, compet-

the supplier’s relationship to the organ-

itive advantage, growth and more.

ization. This insight enables teams to

Cultivating that type of relationship with

segment out business critical partners,

strategic suppliers requires intentionally

identify any risky partnerships and move

managed insights.

forward mutually beneficial opportuni-

Reliable and centralized data helps

ties that establish trust and unlock new

procurement get an intimate and

value. The better you know, communi-

complete understanding of suppliers

cate and work with your suppliers, the

Thre e ways reliab le sup p lier data c a n s u p erch a rge yo u r p ro cu rement d ata

more likely these partners are to help

In fact, Gartner research found that

you address your own needs.

poor data quality can cost businesses, anywhere between $9.7 and $14.2

The bottom line Not having reliable data to guide

million a year.

With access to stronger and more reli-

procurement decisions is like driving to

able supplier data, procurement organ-

an unfamiliar destination without a map

izations can broaden their supplier

or GPS. You might eventually get there,

network in a meaningful way that super-

but you’ll likely have taken a wrong turn

charges strategy, maximizes effective-

or two, and spent more time and gas

ness and speeds the path to achieving

money than needed, in the process.

critical objectives. www.cpostrategy.com

35

A quick look at…

Digital Mind Earlier this month, JAGGAER announced a new strategy aimed at boosting customer success in the adoption and use of its source-to-settle JAGGAER ONE platform.

Written by

Dale Benton

There’s a new data - driven digital

with more intelligence on all aspects of

procurement strategy in town. It’s called

their spending and delivering more stra-

JAGGAER Digital Mind. Digital Mind is

tegic outcomes throughout their digi-

a core set of advanced technologies

tal transformation. This is the promise

that incorporates prescriptive and

behind Digital Mind.”

predictive analytics, machine learn-

As part of the broader JAGGAER 21.1

ing, natural language processing and

release, the company has launched

other innovative capabilities to deliver

three unique solutions: JAGGAER

solutions and capabilities across the

Adopt, Assist, and Advise. Each lever-

JAGGAER ONE platform.

ages the capabilities of the JAGGAER

It goes without saying that, when

Digital Mind to provide companies and

combined, these solutions will signif-

their users with more insights, contex-

icantly boost organizations’ return on

tual guidance, decision support, and

investment (ROI) in the digital transfor-

automation to improve adoption and use

mation of procurements.

of the JAGGAER ONE platform.

“Our company’s focus is 100% on customer success,” explains Jim Bureau, CEO of JAGGAER. “We have developed the most advanced solution suite in procurement technology. We want to go beyond that to empower users on every step of their journey, by providing them

CHECK OUT Danish Crown A procurement transformation ( F e a t u r i n g J AG G A E R ! )

Thre e ways reliab le sup p lier data c a n s u p erch a rge yo u r p ro cu rement d ata

Watch now: Jim Bureau and Tealbook CEO Stephany Lapierre on why supplier data is crucial

JAGGAER Adopt increases the success

provides real-time support and guidance

and ROI of a procurement organiza-

to complete tasks, and even takes on

tion’s digital transformation by giving

some tasks on behalf of the user.

360o visibility into user adoption, feature utilization, and compliance

JAGGAER Advise enables users to be

with company-defined processes,

more proactive in recognizing areas of

coupled with guided help, training,

improvement and mitigating challeng-

tips and tutorials to improve skills and

ing situations such as supplier risk. It

increase user performance exactly

enables procurement professionals to

where and when the user needs it.

access data-driven actionable insights and recommends next steps to mitigate

JAGGAER Assist is an intelligent virtual

the risk of supply disruptions, supplier

assistant, JAGGAER Assist, helps users

qualification and performance issues,

find specific information or reports,

and underperforming sourcing events. www.cpostrategy.com

37

Diversification through Procurement Manoel Guedes (Procurement Director) and Douglas Klimak (Head of Procurement Transformation), look at how procurement can prove essential to Bradesco’s future...

Written by

Dale Benton

Produced by

Richard Deane

Di ve rsi fi c at ion t h rough P rocurement

www.cpostrategy.com

39

A

s one of the leaders in Brazil’s private financial sector, a procurement transformation

for Banco Bradesco carries with it a responsibility to unlock real change for procurement throughout the country.

Maturity, particularly in procurement, is a key goal that underlines procurement transformation for many organizations and for Bradesco this is no different. Look across the procurement arena across Brazil and the picture is somewhat different when compared to procurement in Europe or the US. For Douglas Klimak, Head of Procurement Transformation at Banco Bradesco, he recognizes the significance of his company’s transformation in moving the procurement needle further to where it should be for both the company and wider Brazil.

“I do feel that we have a huge opportunity to elevate procurement function

Procurement, as we know, has spent

in Brazil,” he says. “All businesses are

the best part of the last decade trans-

being transformed aiming to be more

forming in the eyes of the board into a

innovative, digital and cost effective, and

more strategic function that aligns with

Procurement has all tools and disciplines

(and sometimes dictates) the broader

to play a protagonist role in that scenario.

strategic roadmap for organizations the

As a result, Procurement acting strategi-

world over. Klimak has seen this first

cally will drive a more mature education

hand and recalls his earlier days where

process for procurement professionals

he was almost admonished for electing to

in the country. We face a long path ahead

follow a career in procurement. “I’ve been

of us in the next few years to truly elevate

working for a business area and was told

the procurement function in Brazil.”

previously that procurement was a back

Di ve rsi fi c at ion t h rough P rocurement

office area inside a financial organization

where increased competition (such

with no protagonist,” he says. “It wasn’t

as fintechs) and a changing customer

until I was inside the function myself that

behavior has forced a rethink as to what,

I began to understand just how important

and how, banks can provide for their

it is for a company and I believe that this

customers. Diversification is not a new

importance continues to grow year by

concept, but diversification through

year which provides huge opportunities to

procurement is most certainly the

establish a protagonist career,” he says.

way forward for Bradesco and this is

For Bradesco, and banking in general,

because procurement is moving away

procurement transforma-

from cost reduction and avoidance

tion is born out of an

and focusing on adding value to the

environment

Business and their strategies. www.cpostrategy.com

41

Rethinking the future of Procurement for the new needs

imposed by key business imperatives The role of the procurement executive is changing and all over the world, the maturity of procurement is an evolving conversation. In areas such as the US and UK, procurement sits in a significantly elevated position within an organisation, with a broader and more strategic scope of action. In others, such as Brasil, the procurement maturity conversation to beyond transactional scope, is only just beginning.

“The role should be much more strategic,” explains Rodrigo Damiano, Partner, PwC. “Procurement must be the main element of the whole digital transformation that companies are partaking in right now, but with a completely different role, a completely different way of interacting, and way of proposing alternatives to the business.”

In Brazil, most of the procurement fuctions is still structured and focused on cost, control, compliance and risk.

Procurement is designed to keep the transactional engine running.

PwC Brasil is supporting Bradesco’s procurement transformation to become a key cog in achieving innovation and growth.

In order to transform procurement in such a huge organization, a strong partner is required. The first step that was taken together, was a step towards benchmarking. Bradesco and PwC looked across the globe at leading procurement functions in order to truly understand what the company wants (and needs) its procurement to be. In doing this, visiting international companies and assessing Bradesco’s existing infrastructure, PwC and Bradesco identified a vision.

The challenge comes from bringing about real change while maintaining business continuity. Disrupt the cog in the middle and the whole system falls apart. To overcome this, Damiano believes that knowledge and level of specialization of the personnel are key.

“It’s about possessing a deep knowledge of the business, the pain points and complexities across the business - which procurement is in prime position to possess,” he says.

“Combine that with experience of the categories and the deep knowledge of the suppliers’ market and then you generate great value for the business.”

“And then there’s the data, which we use to support the discussions, the prepositions and everything that is part of the life cycle of the procurement.

By accessing and understanding quality data, procurement can spend quality time focusing on strategic and tactical discussion, using deep business knowledge, the experience of the suppliers’ market and backing it up with the data.

“Procurement must be the main element of the whole digital transformation that companies are partaking in right now, but with a completely different role, a completely different way of interacting, and way of proposing alternatives to the business.”

Bring challenges. Take trust.

www.pwc.com.br

“It doesn’t matter what kind of transformation you have, or what kind of operating model you design, it’s not possible to have the benefit if you don’t change the way, the direction and the board thinking.”

Rodrigo Damiano Partner, PwC Brasil Supply Chain Consulting leader

For me, if we combine these three elements, we can have a procurement function that is well positioned and takes real value to the business.”

Change management; two words that can make, or break, a transformation and yet change management is a key part of the way transformation provokes the organization. In procurement, leaders need to communicate this to the organization and show in a structured way that it is generating results. “You are helping the business generate results, to create or increase the business and to meet strategic targets,” he says.

PwC Brasil

@PwCBrasil

“Change management needs to be aligned to everything that the procurement is promoting, creating and discussing during the transformation.”

With the larger, legacy-laden organisations, global benchmarks and/or partner/consultants can prove key to provoking the conversation.

“It doesn’t matter what kind of transformation you have, or what kind of operating model you design, it’s not possible to have the benefit if you don’t change the way, the direction and the board thinking,” he adds.

PwC Brasil

@PwCBrasil

PwC Brasil

“Everything should start from the beginning. Start from a maturity understanding, look at the process, organization and technology.

Bring in global, local and industry specific benchmarks and look at both the qualitative maturity level and what your current KPIs are. Then you can see what the main areas of opportunities are, what’s the size of the expected benefits, how long the whole transformation roadmap will take and how to prioritize your movements in order to begin achieving the wins required to gather momentum”, ends.

@PwCBrasil

PwC refers to the PricewaterhouseCoopers Brasil Ltda. member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/ structure for further details. © 2021 PricewaterhouseCoopers Brasil Ltda. All rights reserved.

“We are the main link between the company and the market,” explains Klimak. “We should have a clear view of business needs and what the market is offering to bring innovation for the company. To achieve that, Procurement should be at a good mature level with a close relationship with business areas.

Right now, we are reshaping procurement by looking at the end to end journey, considering all aspects of the change: people, process, governance, structure and system. Not only looking for the purchase side but also establishing demand, contract and supplier management disciplines, procurement is increasing the risk coping in Bradesco.

I’m seeing firsthand just how much the procurement department function can add value to the company.”

Procurement is the main link between the company and the market, as Klimak highlights, but to think of it as simply like

challenging the way that we have

that possibly reduces the true poten-

done our job and we are willing to do

tial and scope of the function. Manoel

it far earlier. This way, we can start the

Guedes, Procurement Director, believes

procurement planning sooner and

that the procurement area must be part

find out how we can better support the

of the very first moment when businesses

business needs.

are discussing the needs.

“In sticking with a traditional view

Guedes continues: “We’re also challenging ourselves to go further. Not only

of procurement, our scope of action

looking at the pricing dimension, but

has been limited and, consequently,

the services that are actually delivered

the added value,” he says. “We are

and the quality of them. This journey is

Di ve rsi fi c at ion t h rough P rocurement

about looking at how we can improve the role of procurement and bring more value to business.”

So Bradesco is on a procurement journey, one that will see procurement walk hand in hand with all areas of the business and their strategies and be the key cog in achieving innovation and growth. Klimak outlines it as such: when other business areas think about their strategy, procurement needs to participate and play an active role in that strategic discussion.

For him, if Procurement departments achieve that level of recognition, it means that the transformation is succeeding.

“We are moving closer to the business to add value to their strategy,” he says. “By doing this, we take the company to another level with regards to costs and revenue, innovation and customer experience.”

“ We are moving closer to the business to add value to the strategy. By doing this, we take the company to another level with regards to costs and revenue, innovation and customer experience” — Do u g l as Kli m a k Head of Procurement Transfor m ati o n , B an c o B rade s c o

www.cpostrategy.com

45

Challenge number one is identifying

broken? Bradesco has a strong legacy

the why, which Bradesco did and so chal-

of successful operations and Klimak

lenge number two becomes: how? What

says bringing best practices from the

does it look like and how is the company

hub of Procurement was very important

going to get to where it needs to be?

because it allows people to learn from the

This is where Bradesco worked closely

best of the best and to see for themselves

with PwC as Klimak recognizes that in

the true benefit that will come from the

order to transform procurement in such

transformation.

a huge organization, a strong partner is

“This benchmarking allowed us to

required. The first step that was taken

understand what are the best world

together, was a step towards benchmark-

class procurement standards and the

ing. Bradesco looked across the globe at

principal issues that will be addressed in

leading procurement functions in order

the next future.

to truly understand what the company wants (and needs) its procurement to be.

In doing this, visiting international

It’s not only about bringing more efficiency or cost reduction, but actually boosting the innovation process of our

companies and assessing Bradesco’s

organization. Procurement as a strategic

existing infrastructure, Bradesco iden-

part in order for us to add more value in

tified a vision. And Klimak speaks of

our operations and best services to our

another key benefit that comes from

clients,” adds Guedes.

striking a key relationship with a strong

A common challenge that many

partner. “Simply put, it brings a good

procurement professionals face is:

sense for the project,” he says. “What I

procurement knows procurement, but

mean is that I can show the business that

other business areas and disciplines do

we have a strong partner, that we are

not. Klimak is all too aware of this chal-

bringing the best practices in the market,

lenge and that notion of credibility helps

and we know that it works. It solidifies

communicate the value of procurement to

credibility for the project.”

those who simply do not see it for what it

This credibility proves crucial in an

is. But the key for him is recognizing one

organization that has operated success-

thing. “We are specialized in procure-

fully for a number of years. When trans-

ment, but we are not specialized in other

formation enters the conversation, the

business matters,” he laughs.

first question is often why fix what isn’t

“As part of that international

Di ve rsi fi c at ion t h rough P rocurement

Manoel Guedes, P r o c u r e m e n t D i r e c t o r, Banco Bradesco

www.cpostrategy.com

47

“ ...if we aren’t a collaborative department, and if the business doesn’t understand our idea or how we can help them to achieve their goals, it means they don’t believe in us...”

— D o u gl as Kli ma k Head of Procurement Tra nsform ati o n , B an c o B rade s c o

benchmarking we looked at how those

In order for Bradesco to do this, Klimak

companies moved Procurement from a

speaks of how this movement can only

transactional role to a strategic one and

come once procurement has reached

we saw that all of them even though they

that higher strategic level in the company.

are in a high mature level they are still

“To create that environment where busi-

running long transformation journeys.

nesses understand the Procurement

Also, we looked at how procurement

importance, Procurement should be

works closer with the business and to

customer oriented. What I mean by that

do that they put in place a strong talent

is, all pillars of procurement (people,

management and also create an envi-

process, governance, structure and

ronment to establish the procurement

system) should focus on how we can

business partner role which has a strong

make the business grow. Working with

knowledge about the business and make

this mindset Procurement will become

a link between those areas. Increasing

a more sexy area mainly for talent (both

the business knowledge inside procure-

existing and future talent)”.

ment and having strategic discussions

“Another important aspect that we

with them, the businesses start under-

mapped during benchmarking even

standing how much value procurement

though we are talking about Procurement

can bring to their operations.”

4.0, focusing only in technology doesn’t

Di ve rsi fi c at ion t h rough P rocurement

increase the procurement maturity level

waves: fundamental changes – rede-

because it doesn’t solve all procure-

sign the operating model, consolidation

ment problems, especially relationship

– automation; and then evolution – new

matters – firstly it is important to focus on

techs (AI, Blockchain, etc.).

organization redesign, people upskilling

In transformation and change, results

and culture change – those items play

speak the loudest and for Klimak and

an important role to put procurement in

Bradesco these results will continue

another level. When procurement already

to define the road ahead for procure-

defines the business model, technology

ment. While this procurement journey

should come to support that operation

has certain KPIs that are unique to

and of course bring automation, effi-

Bradesco, such as cost reduction or risk

ciency and time to market.”

mitigation, the one overarching achieve-

In order for Bradesco to follow those

ment is that move towards becom-

good practices, Klimak says that the

ing a true business partner. Achieving

transformation is established in three

that status is the key to enabling true www.cpostrategy.com

49

innovation, increased revenue and reducing the costs of operation.

In the quest to achieve this, Klimak is

reach their needs,” he says.

“Our people are really committed to the Transformation Project. We take

quick to highlight that this isn’t HIS story.

good care of communication, what we

Nor is it Bradesco’s story. It’s the people

are doing and goals. We all share the

who make up procurement and those

same desire to elevate our procurement

collaborating and driving the movement

area to a world-class level. Sharing this

forward. This transformation is nothing

journey with our team has been the best

without the people. “When we talk

part of this project.”

about transformation, we are not just

A collaborative culture is all well and

talking about process, system, govern-

good, but it needs to be built on honesty

ance, or structure. We are talking about

and transparency. Procurement sits in

culture,” he says.

a very strong position within the busi-

“We are transforming our procure-

ness, but it’s also a very challenging one.

ment culture, increasing the scope of our

Procurement is an orchestrator for busi-

day-to-day activities. We are working

ness continuity and a conduit which all

very hard in branding our transformation.

It’s easy for us to say: ‘This change is good so get on board’ so it’s very important that we take care of the communication and work very closely with our teams, and our people, to help them understand just how key each and every one of their roles are in all of this.”

As Procurement Director, Guedes knows full well just how important people are. For him, Procurement will always be a job where people add the greatest value. “We must automatize processes and operational acquisitions, but the value that people add is incredible.

People always bring the knowledge about markets, suppliers and the best way to Di ve rsi fi c at ion t h rough P rocurement

www.cpostrategy.com

51

Douglas Klimak Head of Procurement Transformation at Banco Bradesco Douglas has 14 years of experience working for Financial industry, leading transformations in a diversity of disciplines such as Business Intelligence, CRM, Digital Channels, Information Technology, Procurement and Retail Banking.

He holds a bachelor’s degree in Business Administration, a MBA in Project Management, a Master’s degree in Lean Six Sigma and an International Executive MBA with extension classes at University of California, Berkeley and Stanford University.

Di ve rsi fi c at ion t h rough P rocurement

business areas run through. Procurement has a connection like none other and it’s important that when it engages with the business it can tackle the key issues that the business is facing. “As a cross-functional team, we should engage other areas on sourcing/purchasing discussions, creating an environment of cross-boundary ownership of tasks and problems and make all involved move to the same direction,” Klimak says.

“We are involved in a hard scenario internally; if we aren’t a collaborative department, and if the business doesn’t understand our idea or how we can help them to achieve their goals, it means they don’t believe in us and they won’t open the space or the subject that we need to

“ Seamlessly working with the business to participate in their strategies and add value to those strategies is the best possible KPI we can achieve. If we keep this mentality, then I have no doubt that we will succeed” — D o u g las K limak H e ad of P ro c ure m e nt Tran sfo rm ati o n , B an c o B rade s c o

address value to them.”

Guedes reaffirms the significance of

A procurement transformation is a

working closely with the business. “It’s

never-ending process of continuous

extremely fundamental. It’s impossible to

improvement, continuous challenge

add value to our internal clients if we are

and continuously pushing the bound-

not close with them,”

aries of what’s possible and while

“We are implementing business part-

Klimak and procurement at Bradesco

ners to our internal clients to better

are working hard to achieve consid-

understand their needs since the very

erable successes to date, tomorrow

start and manage it through the process.

is a new day. Over the next 12 months,

To do it, we have to be there from the

procurement activities will continue to

very beginning till the end. If we are

accelerate as Klimak looks to continue

distant from our internal clients, we will

to reshape the collaboration between

not be able to reach their needs, and the

procurement and business, implement-

organization will suffer.”

ing a new procurement platform and www.cpostrategy.com

53

Di ve rsi fi c at ion t h rough P rocurement

looking at how the procurement model

value to those strategies is the

can continue to inform and influence the

best possible KPI we can achieve.

future of the business.

If we keep this mentality, then I

For Klimak, when he started working on Procurement Transformation, he did

have no doubt that we will succeed.”

Guedes adds: “At the beginning of this

so with a single belief that he consid-

journey, we knew that it was necessary

ers one key KPI for the transformation

to have a view of the best purchasing

success. He hopes this is a belief that

practices, the potential for the evolution

many others share.

of these functions and the value that

“Procurement, broadly speaking, has become so elevated that it finds

we could add to our organization.

Now we know that our main objective

itself involved in the important discus-

is to implement an environment, where

sions because they have a policy in the

our people could continually improve

company, or they have the documents

the pillars of efficiency and innovation,

that make the business involve procure-

through agile and effective purchases.

ment, but I don’t believe that is the best

This journey is like a wheel that we will

way to be involved in Business matters,”

keep turning because procurement will

he says. “I don’t want to be involved

always evolve, but we have gained the

because it’s an obligation. I want to be

hearts of our people and are working and

involved because I add value to you.

we are committed to deliver a world-class

Seamlessly working with the business

procurement function that will play a key

to participate in their strategies and add

role in the future of the organization.” www.cpostrategy.com

55

An airline has many assets of course, but in procurement our assets are the people” J u rr i a a n Lo m bae r s , SVP & CP O, Air Fran c e - K L M

Procurement acceleration and certainty in the volatile airline industry

Pro cure ment t ransfor mat ion in t imes of u n cer ta i nt y

www.cpostrategy.com

57

Dale Benton Kiron Chavda

Written by Produced by

T

he continued evolution of procurement has seen ‘acceleration’ fast becoming the key

goal. 2020, and the COVID19 pandemic have applied copious amounts of pressure on an organisation’s ability to not only manage cash flow, but to secure a sense of stability in a future of uncertainty. Over the past ten years, procurement has been slowly stepping out of the shadows and moving into the centre of business and now it finds itself truly in the spotlight.

Jurriaan Lombaer s, SV P & C P O, A i r Fr a n c e - K L M

For Air France-KLM, operating within an incredibly volatile industry, procure-

excellence. Doing it in an ‘excellent’ way

ment has perhaps always been recog-

and raising the maturity of both procure-

nised as a vital cog in business continu-

ment and the wider business operations

ity. The evolution of procurement within

as a result. None of this is possible of

Air France-KLM comes in the form of

course, without investing in our people. An

seeking out and enabling innovation

airline has many assets of course, but in

and unlocking new opportunities and

procurement our assets are the people.”

value for the business. As part of a major

Ultimately, for Air France-KLM and its

procurement journey, the call-out to the

procurement journey, the goal is to drive

business now is: How do we optimise

greater consistency across the busi-

and accelerate procurement further?

ness. But a key challenge, and a chal-

“The core of what procurement does

lenge faced by many if not all CPOs, is

is build solid strategies and run sourcing

defining the journey and what procure-

projects to maximize value for our busi-

ment excellence and consistency means

ness stakeholders,” explains Jurriaan

for them. In order to embark on the jour-

Lombaers, SVP & CPO, Air France-KLM.

ney and make progress, the why, how

“It’s not only about doing it, but doing it

and what, must be answered and clearly

together with the business and in doing

identified. This is easier said than done.

so you need to consider procurement

In an industry discipline whose dialogue

Pro cure ment t ransfor mat ion in t imes of u n cer ta i nt y

“ Very often in procurement organisations we're so very busy with the execution, with the focus that we assume all stakeholder are aware and can see it. The reality is, very often they don't and so it's important that we bring our story forward, particularly when it comes to the buy-in as it whets the appetite to do more.”

— Ju rri aa n Lom ba ers , SV P & C P O, A ir Fra nce-KLM

www.cpostrategy.com

59

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is completely dominated by notions of transformation, and all the trends and buzzwords that come with it, this is incredibly important and something that needs to be done right.

“We need to ensure that between the two entities, Air France and KLM, that we continue to have a very open dialogue,” says Lombaers. “It’s also about looking collaboratively at how we do things, what can we learn from each other and what can we glean from looking at different industries or by many different ways to

L a u r e n s Vo n ke m a n , C o n t r o l l e r, P r o c u r e m e n t , A i r F r a n c e - K L M

try to benchmark ourselves. Whether that’s in how well we rate our sourcing

procurement realm; does the business

plans and execution or how well we’ve

know procurement? Lombaers is a long-

digitized. How data driven we are? How

time subscriber to the notion that the

efficient we are in our operations and the

procurement function needs different

way we organise ourselves? Look at this

ideas, different mindsets and different

first and foremost and the road ahead

approaches to enable true innovation.

becomes clearer.”

Ironically, it’s these different experiences

Lombaers was brought into Air France-

that lead to greater consistency.

KLM to lead this procurement transfor-

“Very often in procurement organisa-

mation journey, and right from the word

tions we’re so very busy with the execu-

go he set about understanding the busi-

tion, with the focus that we assume all

ness, the culture and ultimately what

stakeholders are aware and can see it.

procurement meant for Air France-KLM.

The reality is, very often they don’t and

During this time, he decided to focus on

so it’s important that we bring our story

one core element of procurement that

forward, particularly when it comes to

perhaps gets lost in the conversation:

the buy-in as it whets the appetite to do

storytelling. Procurement profession-

more,” he says. “But it also means that we

als know procurement, the challenge

need to start spending time on building

comes when you step outside of the

that story and have the data available. It www.cpostrategy.com

61

starts with getting the procurement function organized for that and valuing the effort that you need to do that.”

Lombaers brought in Laurens Vonkeman, Controller, Procurement, Air France-KLM, to help enable and aid in that storytelling approach. Vonkeman understands exactly just how important that narrative is in getting your voice heard in an organization. “Storytelling is very often accompanied by reporting to the different stakeholders. Right now we are in the process of utilizing new data systems in order to create that story within the procurement community,” he adds. “We need to all be on the same page as a business so that we understand together how procurement operates.

We’re reasoning financial awareness, ensuring that we are better connected and truly understand each other through reporting to tell the story.”

Lombaers speaks more of the specific nature of Vonkeman’s role and what it means for the broader storytelling angle.

Vonkeman will operate, to a certain extent, as an independent person. He is neither 100% a representative for procurement nor 100% a representative for the wider business, he sits right in the middle and listens and reports from both sides. What this does, Lombaers believes, is help establish and solidify Pro cure ment t ransfor mat ion in t imes of u n cer ta i nt y

“ We need to all be on the same page as a business so that we understand together how procurement operates.

We’re reasoning financial awareness, ensuring that we are better connected and truly understand each other through reporting to tell the story.”

— L a uren s Vo n keman , Contro l l e r, P ro c ure m e nt , A i r Fran c e - K L M

www.cpostrategy.com

63

the credibility of the transformation and allows procurement to really earn its seat at the table.

While a procurement transformation does involve technology and indeed a new system, be it a P2P suite or a reporting/data capture solution, to focus entirely on this is to ignore the key element in which Lombaers has already highlighted: the people. After all, the best systems and software mean nothing if the people within the function are not equipped with the best skills and enabled by the right culture to grow and develop alongside the journey. At this point strategic sourcing comes into play. “You look at focusing the roles in procurement a little more and where you have people working in categories or domains, you want them to be able to focus on strategic sourcing, on collaborating with the business but also challenging the business and bringing new ideas in,” says Lombaers. “Ideally you want them to have data at their fingertips so that they can focus 80% of the time on creating value with and for the

more dedicated teams, to digitize those

business, and 20% on getting the data.

processes and make them more efficient

Versus the other way round. The more we

and consistent. Lombaers speaks to the

can facilitate that, the better.”

idea of investing not only in a controller,

This is where you often see across the

but business analysts too. “We can then

procurement space a move to extract

start a journey of creating actionable

the so-called “transactional work” from

insights and making data easier, and more

those categories and domains into

available,” he says. “This is where you

Pro cure ment t ransfor mat ion in t imes of u n cer ta i nt y

get that Centre of Excellence model and this allows us to drive our procurement excellence journey forward where we’ve further invested in expert and transformation roles; people that really focus on how we get to the next maturity level.”

“On one hand, they work on setting the strategy but also work side by side with our procurement directors, to implement those strategies and provide a service and look at how we digitise the source to contract process or do risk management for example.”

The people, Lombaers continues,

www.cpostrategy.com

65

are the real key enablers for the over-

before, what’s worked (and proven unsuc-

all transformation and in order to bring

cessful) and then building on those foun-

those people along (aside from the CoE

dations. “It’s important that you recognise

model approach) newfound impetus is

everything that’s already in place and

given to the notion of change manage-

then recognise that your desire is to make

ment. Change management can be two

it better, or even better than it already is,”

words that unlock a procurement trans-

he says. “You need a balance between

formation, or indeed block it - so getting

speed and alignment. If we need to align

it right is key.

with everybody, the process becomes

Lombaers highlights once again the

slow because that alignment will take

significance of obtaining that deep level

time. You’ve got to find the balance.”

understanding of the business and its culture, reflecting on what has come

Lombaers speaks of sometimes having to push your team a little harder in places

Pro cure ment t ransfor mat ion in t imes of u n cer ta i nt y

“ Businesses are tasked with making critical decisions based on their data and it is essential that this data is as robust and as accurate as it can be to make those decisions.”

— N a d i a L aw, Ros s lyn Dat a Technologies

and easing off a little in others, recognising that there is no secret to success in change management and transformation. Once again, Vonkeman’s role as a Controller proves key as he (along with business analysts and experts) are able to connect with the procurement domains, hear about their pain points and then both explain and adapt the strategy. “What it boils down to,” Lombaers adds, “is communication, communication, communication.”

Data, as we know, is the key to www.cpostrategy.com

67

storytelling for procurement. Data,

from both a procurement and financial

perhaps more than anything else, speaks

perspective. Air France-KLM partnered

the loudest and a reporting system is

with Rosslyn Data Technologies, a soft-

required to truly enable this conversation.

ware company providing procurement

Air France-KLM, being an airline group,

and master data management solutions in

is not by definition a technology devel-

the Spend Analytics, Supplier Information

oper and therefore it needed to look to

Management, Supplier Performance

the market to find a solution and in turn a

Management and Supplier Contract

partner to enable the data-driven trans-

Management arena. Here, the company

formation. Lombaers acknowledges that

implemented its RAPid Spend (known as

there was a need for the business to “step

MySpend within Air France-KLM) solution.

up” it’s spend analytics reporting capa-

“Businesses are tasked with making

bilities and to classify its spend properly

critical decisions based on their data and

Pro cure ment t ransfor mat ion in t imes of u n cer ta i nt y

it is essential that this data is as robust

processes and cost management.”

and as accurate as it can be to make those

With transformation, no matter the

decisions,” says Nadia Law, Rosslyn Data

size of the company or the scope of the

Technologies. “If you have inaccurate or

journey, change cannot occur overnight.

badly categorised data, the output of your

The journey from where a company is to

procurement initiatives won’t lead you to

where it wants to be is not as simple as

make the right choices. Having a really

moving from a A to B and both Lombaers

clean, enriched data set enables a busi-

and Vonkeman understand this. For them,

ness to categorise their data in a way that

navigating this journey is as much about

is meaningful for them, supporting the

recognising and accepting the time it

identification of procurement initiatives

takes to achieve the key goals

that can improve cost savings, business

as it is about the goals themselves. www.cpostrategy.com

69

Pro cure ment t ransfor mat ion in t imes of u n cer ta i nt y

“ You see in procurement organisations either the early adopters or you see people that are finding it a bit more difficult to embrace the change and so the approach is different for everyone.”

— L au ren s Vo n keman , C o ntro l l e r, P ro c ure m e nt , A i r Fran c e - K L M

www.cpostrategy.com

71

Much like establishing a balance between speed and alignment in change management, it’s about establishing a balance between quick wins and successes and the realities of operating in a volatile industry space.

“Gaining adoption is a step by step process ultimately,” says Lombaers.

“But it’s also important to think about quick wins and creating success stories.

You see in procurement organisations either the early adopters or you see people that are finding it a bit more difficult to embrace the change and so the approach is different for everyone.”

Vonkeman adds: “You also want to recognise the figures that should be recognised. As the data quality improves and becomes even more enriched and takes procurement to the next level, that helps acceptance. But that’s only part of the story. Those early adopters in the business can really help the other people who are in the second or third wave of adopting because the

of transformation, but are we guilty

truth is: these journeys are hard work.”

of focusing solely on the successes

Despite transformation being

and ignoring the failures? Lombaers,

such a broadly recognized conversa-

like many, is an avid subscriber to the

tion happening all over the world right

thought process of learning more

now, with success stories easy to find,

from the things that don’t happen

there is and perhaps never will be any

compared to the lessons learned

guarantee of success. There is no one

from the things that do.

single way to navigate the complexity

“It’s hugely important to talk about

Pro cure ment t ransfor mat ion in t imes of u n cer ta i nt y

mistakes because if you don’t make any

Ultimately we have to be open enough to

mistakes you’re probably not taking

pick up the concerns and address them

enough risks,” he says. “I think one of the

and that helps us to make the approach

big ones is that we’re probably not, at the

better in the next version.”

beginning, talking enough about the why.

“Not doing so will still see us get there,

Why do we change? We identify the why,

but by really working together in this

but do we talk about it enough? Then of

way we can travel a lot further. It gener-

course there’s biting off more than you

ates sustainability within the journey of

can chew and trying too much too fast.

getting there.” www.cpostrategy.com

73

HCT ’s procurement revolut ion

R PROCUR E MENT V O L U T I O N Mahmoud Al Alawi, HCT Director of Procurement & Contracts, catches up with CPO Strategy, two years after launching a significant procurement transformation...

Written by

Dale Benton

Produced by

Heykel Ouni

www.cpostrategy.com

75

T

he Higher Colleges of

In tandem with HCT 2.0, 2018 saw

Technology, the largest applied

HCT set itself a strategic mission to bring

higher education institution in the

upon a “revolution in procurement”, led

UAE, developed its transformative HCT

by Mahmoud Salem Al Alawi, Director of

2.0 strategic plan (2017-2021) in line with

Procurement and Contracts. When we

the future aspirations and vision of the

spoke in 2019, HCT was already 30% of the

UAE’s wise leadership. Subsequently, this

way through this bold mission, achieved

strategic plan evolved into HCT 4.0, in

through its Annual Procurement Plan in

2019, to further support the international

the first quarter. As 2020 drew to a close it

challenges and changes brought about

proved to be a pivotal year in defining the

by the “Fourth Industrial Revolution.”

future of HCT’s procurement function.

HCT ’s procurement revolut ion

As we speak in 2021, the world has

When we started we had the seeds of a

changed dramatically, thanks to the

strategy for the department. Today, we

further digitalisation of procurement and

have a robust and improved strategy. We

the seismic ramifications of the COVID-19

have a long-term strategy that's aligned

pandemic. So what has this done for the

with our organization and which is linked

procurement revolution within HCT?

to the UAE government strategy, espe-

“The strategy that we put in place has

cially for the education sector. We are

really started to show results,” says Al

further aligning ourselves with the HCT

Alawi. “The pandemic accelerated and

4.0 strategy, where we have created

helped achieve our strategy, especially

Procurement 4.0, as well. We now have a

when we talk about digital transformation.

procurement strategy that's concentrating on people and the organization.”

Elsewhere, HCT has invested in training its employees and hiring qualified human capital to create a veracious competency framework. These trainings are delivered through a partnership with the Chartered Institute for Procurement & Supply (CIPS), where HCT continues to leverage the global expertise of the organization in order to achieve a best-in-class procurement function.

“We talked about our procurement processes back in 2019 and how we were looking to shorten the process.

Well, today I can confirm that we have completely streamlined and re-engineered the whole process, down from two weeks to being able to complete and close a process within one day,” beams Al Alawi.

“This isn't just transformation, this is revolution.” www.cpostrategy.com

77

This revolution of procurement extends to HCT’s supplier relationships, something that proved particularly important throughout the COVID-19 pandemic.

Here, through enriched supplier relationships, HCT has been able to provide full support to its vendors during some of the most challenging moments, over the last 12 months. As Al Alawi describes, ”they are our partners in success and partners in our journey”.

From the start of the pandemic, HCT provided cash flow for its vendors and shortened, or reduced, payment terms; extending the same terms for any SMEs with which it worked. For servicebased vendors, HCT also established special agreements, whereby it could match the salaries and benefits of their employees, so as to ensure the employees’ jobs were secure during difficult and uncertain times.

“We never used force majeure. We

revolution in its procurement relation-

preferred to use business continuity,”

ships with external vendors, but also

says Al Alawi. “So, we helped our vendors

in its relationships with internal stake-

and the business with us by supporting

holders. Procurement, as a function, is

them in shipments, revising the deliv-

evolving all over the world and, at HCT,

eries and revising the service scope to

the Procurement Department has grown

be aligned with the situation during the

significantly, developing and maturing

pandemic. We came up with good results.

exponentially to where it is recognized

We have partners who are supporting us

as a vital strategic function. Most notably

more than ever before.”

for Al Alawi, a man who has always recog-

HCT has not only witnessed a HCT ’s procurement revolut ion

nized and valued procurements' true

We showed them the challenges and the procurement process, so that they understand what they should expect as being part of our process when they place a request with us.”

“It’s all about the engagement with our internal stakeholders to make sure that they are aligned with the process and to make their lives easier when they create any request.”

Another key area of development for both HCT, and indeed procurement, is digitalisation. In 2019, Al Alawi spoke of the need for a new ERP system and dashboard. As HCT looked to increasingly focus on excellence, performance management through KPIs proved key.

Here, the COVID-19 pandemic actually helped accelerate this conversation.

“We work in a very dynamic organization and a very dynamic country. The decisions here can be made within a worth, he is confidently assured that the

minute. Leadership has a very clear strat-

business sector understands and appre-

egy about where they want to go, where

ciates just how important procurement is

they want to be and so the implementa-

to the institution’s optimal operation.

tion should be done with no time to spare,

“We also understand the business

with good quality. It's a big challenge for

requirements more,” he says. “Believe it

us, as procurement, to match this triangle

or not, in the pandemic, we spent more

- the quality, time, and to give the proper

time with them. Everyone was working

cost,” explains Al Alawi.

from home and so we had more time to

“When the pandemic hit, management

talk, to understand their requirements

needed us to be ready within a week, to

and to really put ourselves in their shoes.

work from home and to support the whole www.cpostrategy.com

79

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Cloudia’s secure and cloudbased system streamlines the process into an easy-to-use tool.

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Find out more at cloudia.com

business 100%, without any disruption.”

Naturally, the Procurement Department

manually until the day they called for the lockdown. So, within a week, we came up

found itself receiving an extensive list

with the solution. We worked hard with

of requirements from internal business

IT, day and night to get this part done

units, essential to maintain a seamless

because this was the most critical part.”

continuity of operations. It needed an

Once this new solution was in place,

ERP system, but doing so within a single

the work was only just beginning for HCT,

week is a challenge that even the greatest

as it needed an ERP system that could

procurement leaders will admit is practi-

handle both internal and external sourc-

cally impossible. But that wasn’t part of Al

ing with vendors. Once again, time was

Alawi, and his team’s, lexicon. Al Alawi and

everything and so it needed to find a solu-

his team were able to source temporary,

tion with a quick implementation period

alternative solutions to support a digi-

and at a price that was fair. It is here

tal transformation remotely. Even so, Al

where HCT entered into a key partner-

Alawi knew this was a short term fix.

ship with Cloudia.

“Very early on we began customizing

Initially, this system was only required

our portal to receive, for example, the

for sourcing and commercial evalua-

technical and commercial pieces through

tion. HCT’s biggest concern was centred

an online portal,” he says. “For compa-

around tenders, and commercial and

nies who had ERPs, it was easier mainly

technical evaluations within the system

because the system was already there

itself to maintain control of the process.

and they could use it. But for us, we were still handling this part of the process

“We told Cloudia what our requirements were and they were more than

“This isn’t just

transformation,

this is revolution”

— M ahmoud Al Alaw i

HCT Director of Procureme nt & C o ntrac ts

www.cpostrategy.com

81

excellent with us in implementing the system. Within two weeks, to a month, we had the system live with the basic functions that we needed,” he says.

“But once we went through the system, we pushed it to do more.”

This involved solving challenges around its document management systems and, by collaborating with another vendor, HCT was able to create an E-Procurement Committee (EPC).

By digitalising each step of the process (sequence, quality control, procurement director and procurement committee secretary) it made for quicker, and more effective, approvals and move towards the authorized signatory stage before final closure.

“I'm very proud to say that today, we have the only solution in the UAE government that has end-to-end approval for the Procurement Committee,” beams Al Alawi. “The Procurement Committee is fully automated.”

“This database is something that we are very proud of and together with the digital procurement system from Cloudia, our lives are now easier,” he adds.

This acceleration of digital procurement, together with the key relationship with Cloudia, has done an incredible amount to add further cachet to what Al Alawi and the Procurement department are doing for HCT. HCT ’s procurement revolut ion

www.cpostrategy.com

83

Al Alawi continues: “We are very lucky

effective ERP system because now we

to have Cloudia with us as a partner. After

have everything that we want customized,

we finished the sourcing, we expanded

based on our requirements.”

with them. So, now we have the Annual

One could be forgiven for thinking that,

Procurement Plan completed on the

due to the incredible changes success-

system and instead of planning annually,

fully implemented within HCT, the last

now we have a three year plan.”

few years have been completely hurdle-

“We can see the project, and the bigger

free. However, Al Alawi is the first to

picture. Through a solution, called the

admit that this has not been the easi-

Big Data solution, we link Cloudia with

est of journeys and that procurement

our PR and PO system and our document

transformations are far too complex

management system to create a holis-

to expect a simple journey from A to B.

tic system, which operates as a more

The pandemic has proven to be one of

HCT ’s procurement revolut ion

the biggest unforeseen challenges in

challenges were in the physical nature of

many years; the impact of which we are

procurement and tenders. Due to quaran-

still experiencing to this day. While it

tines and travel restrictions, the tendering

has presented great opportunities for

process was significantly impacted, lead-

procurement to step into the spotlight

ing to delays and businesses having to

and mitigate disruption, the challenges it

shut down entirely.

has thrown up cannot go unnoticed.

As Al Alawi has mentioned, HCT had to

“Once again, we utilized our good relationships to work with our end-users to

work in a different way with its vendors

find new vendors,” he says. “Rather than

and suppliers, providing cash support

accepting that we are going to be late

in order to maintain business continuity

in delivering their requirements and we

and significantly altering its procurement

don't provide what they need on time, we

terms to allow for greater flexibility. The

work with them to develop a new list that www.cpostrategy.com

85

we could call Plan B at that time. Now it's our Plan A.” “We came up with a new process to qualify the vendors from the beginning, where we float a tender and once we do the technical evaluation we will consider that technical evaluation as part of the vendor's profile, as a pre-qualification and evaluation for the vendor during the tender,’ he says.

“We built a new database of new, pre-qualified vendors, saving both our time and the end-users’ time. Instead of a problem, we came up with an innovative

“I’m very proud to say that today, we have the only solution in the UAE government that has end-toend approval for the Procurement Committee. The Procurement Committee is fully automated” — Mah mo u d A l A lawi H CT D i re c to r of Procu re m e nt & C o ntrac ts

HCT ’s procurement revolut ion

solution that's now our plan A. We do this

“We need to go further. So we have

process with all our tenders. It's now the

reduced the cycle from 120 days to 66

norm instead of a solution for a problem.”

days for the public tender. Today the

Once significant changes are made,

public tender is 66 days, we can get it

and successes achieved, on the procure-

down from anywhere between 40 to 50

ment journey, it is usually the stage

days, and even less. With the system we

where an organization stops and asks:

have control,” he says.

“What next?” As Alawi has noted, with

“It’s about making procurement much

a new ERP system the team is already

easier for the end user. We want to

making strides on its next three-year

make use of a solution, with Cloudia,

plan for procurement to further align with

where users can find their require-

the HCT 4.0 strategy. So what does the

ments ‘on the shelf’ through a digital

immediate future look like for HCT?

store. They purchase their requirements www.cpostrategy.com

87

and, through a seamless experience, it arrives in their canvas or their department, without going through the step-bystep procurement process. Just like the Amazon experience.”

Sustainability in the procurement function, and wider supply chain, is an immediate and growing concern for all procurement professionals and organizations, and it’s certainly a key topic for HCT. Sustainable best practice is a topic that hits close to home for Al Alawi, as he takes both a personal and professional interest in exploring what more can be done to leave a lasting, positive impact on the world through procurement and supply chain.

As an MCIPS - CMILT (Chartered) Sustainable Procurement Ambassador, Al Alawi is in a position of great influence to help drive sustainable best practices across HCT. “We’re working on creating a truly sustainable procurement function and

we are helping the world in so many ways.

process. We’ve already been work-

It's in our agenda and it's going to be a key

ing closely with our Health and Safety

part of the future transformation for HCT.”

department, as well as aiming to achieve

As the largest applied higher education

ISO and sustainable procurement certifi-

institution in the UAE, HCT’s successful

cation in the near future,” he says.

procurement transformation has a larger

“We are constantly exploring how we

impact on the wider region. As Al Alawi

can look at resourcing and procuring

has noted already, the work that HCT has

wisely and how we can procure green

done around business continuity through-

supplies from vendors to make sure that

out the pandemic has enabled SMEs and

HCT ’s procurement revolut ion

local industry to thrive in a time where force

HCT recently achieved the CIPS

majeure was the more favourable option for

Ethical Procurement and Supply certif-

many procurement professionals all over the

icate and were recognized at the CIPS

world. The organization's key partnership

Middle East and North Africa awards

with CIPS is another pivotal element in the

where we received the 2021 Best

procurement story of the Middle East, where

response to Supply Chain Resilience

HCT uses CIPS to benchmark against

Award. The organization was among

global best practices. Consequently, it has

nine other competitors from the region,

already been recognized as an influential

including Turkey, Kuwait, Bahrain,

procurement model in itself.

Saudi Arabia, and the UAE - a testament www.cpostrategy.com

89

“ We built a new database of new, pre-qualified vendors, saving both our time and the end-users’ time. Instead of a problem, we came up with an innovative solution that’s now our plan A. We do this process with all our tenders.

It’s now the norm instead of a solution for a problem” — Ma h m o u d A l Alaw i HCT Di rector of Procurement & Contrac ts

HCT ’s procurement revolut ion

to its excellent work with its vendors during the pandemic.

But, as with HCT 4.0 and Procurement 4.0 strategies, the journey doesn't end there. To quote Al Alawi; this has been a journey or revolution, not simply transformation and while these accolades are richly deserved the challenge now is to take procurement further.

“Now we are working with CIPS to explore how we benchmark ourselves internationally,” says Al Alawi. “We are participating in the CIPS Excellence in Procurement Awards - a real truly global benchmark.”

But it’s not all about the accolades. “Of course we want to get the award, but we want to position ourselves internationally.

We want to build our function and to build our standards to be at the very best international standards,” Al Alawi stresses.

“So, when we deal with vendors, or with suppliers from Europe, North America, Asia or from Africa, our standards are leading-edge and up there with the best standards around the world, not only within the UAE, or within the government.

This, for me, will be a true sign of what procurement can be, and what it is on the road to becoming for HCT.”

www.cpostrategy.com

91

Five KPIs for every procurement professional to consider Fi ve K PIs for ever y p rocurement p rofes s i o n a l to co n s i d er

As procurement continues it’s ascension (long may it continue) what does this mean for the way we define and measure KPIs? Once THE big buzzword of change and now arguably pushed to one side, KPIs are still key (pun intended) to success for any procurement function. So what has happened to the way we measure, report and analyse KPIs during the major evolution of procurement? This list is derived from Kissflow Procurement Cloud

Written by

Dale Benton

Kissflow Pro cu eleven procu rement Cloud’s re organisation ment KPIs that every should keep track of: • Com

pliance rate • Supplier d efect rate • P O and inv oice accuracy • Rate of em ergency purc has es • Supplier le ad time • P O cycle ti me • Vendor av ailability • Cost per in voice and P O • Spend und er manageme nt (S UM) • Procurem e nt R O I a n d b enefits • Price Com petitiveness

www.cpostrategy.com

93

Compliance rate

01 02 03 04 05 Fi ve K PIs for ever y p rocurement p rofes s i o n a l to co n s i d er

Compliance is everything and yet, even now in times of great uncertainty, compliance is something that we still see lacking the proper attention it deserves. Contractual and policy compliance are pivotal to ensure legal security. When your compliance rates dip down, they can very much spike up indirect and maverick spend - which opens a whole host of concerns and negative attention directed towards procurement. Kissflow Procurement Cloud suggests that a foolproof purchasing contract with clearly defined penalties can improve the compliance rate, so what do you need to consider? When thinking about your KPI metrics for compliance rates, think about the ratio of disputed invoices to total invoices and also think about the total difference between the price paid and the price quoted.

www.cpostrategy.com

95

Supplier defect rate

01 02 03 04 05 Fi ve K PIs for ever y p rocurement p rofes s i o n a l to co n s i d er

Your suppliers are, to a certain extent, your lifeblood. The greatest processes and teams mean very little if you dont have the right suppliers. So why wouldn’t you pay close attention to the way you evaluate the individual quality of them? Measuring supplier defect rates and breaking it down based on the defect type will offer actionable insights about a supplier’s trustworthiness. Supplier defect rates are usually measured in defects per million. So here’s a quick way to work out your supplier defect rate: Number of substandard products

÷

Total number of units tested

=

Supplier defect rate

www.cpostrategy.com

97

Rate of emergency purchases

01 02 03 04 05 Fi ve K PIs for ever y p rocurement p rofes s i o n a l to co n s i d er

Perhaps now more than ever before, we have all had to think about our emergency purchases.

What are they? All those unplanned orders which are acquired to prevent the shortage of products/ services. This last 12 months during the pandemic has seen a lot more focus on shortages, and what we can do to overcome them and avoid them in the future. The best way to approach this is to take the ratio of emergency purchases together with the total number of purchases over a fixed period of time.

So if you were to lower the rate of your emergency orders, you may very well find that you can save costs, improve your procurement plans, significantly reduce any supply risks and ensure continuity.

www.cpostrategy.com

99

Supplier lead time

01 02 03 04 05 Fi ve K PIs for ever y p rocurement p rofes s i o n a l to co n s i d er

Another key thing to consider, alongside your supplier defect rate, is your supplier lead time. The amount of time that elapses between the time a supplier receives an order and the time when the order is shipped can make or break a supplier relationship and your whole procurement situation.

Almost as a testament to the significance of your supplier lead time is often measured in days. That’s how quick the assessment needs to be done. Your vendor lead time starts with availability confirmation and ordering and it ends with the delivery of goods.

Delivery time

(Goods and receipts delivery)

-

Order time

(PO acceptance)

=

Supplier lead time

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Procurement ROI

01 02 03 04 05 Fi ve K PIs for ever y p rocurement p rofes s i o n a l to co n s i d er

ROI can open doors, and slam them shut.

Whether it’s technology, or it’s a new vendor, the ROI needs to be there and it needs to be just right.

When it comes to procurement, your ROI is used to determine the profitability and cost-effectiveness of the procurement investment. While not restricted to internal analysis, it is a common note that this metric is best suited for internal analysis.

So, here’s the magic KPI equation: Annual cost savings

÷

Annual procurement cost

=

Procurement ROI

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The Next Phase of the Event Industry After the Consumer Electronics Show fiasco should we consider virtual events a failure? What lessons can the event industry learn? Will this digital strategy continue after the coronavirus crisis? Is this the end of physical events?

The N ext P h ase of t h e Event indu st r y

Written by Baptiste Boulard, CEO & Co-Founder, Swapcard www.cpostrategy.com

105

The event industry has changed more in 12 months than it has within the past decade.

Like the retail and television industry, events are finally coming to a digital pivoting point. Virtual events have been the major player over the past year due to COVID-19 restrictions putting an end to in-person events, vVirtual models have shown great potential and even, some say, saved the industry in 2020. But there are challenges that cannot be overcome in a 100% online world.

The event industry was for too long focused on the old world. For the past ten years, management has been trying to

Baptiste Boulard, CEO & C o - F o u n d e r, S w a p c a r d

protect their margin at any cost, blocking their digital evolution. Digital has always

usually smaller, more agile and had strong

been considered a threat to their business,

management leading them.

which explains why they did not have the mindset or tools to run virtual events.

Large events often belong to large

By the end of 2020 when the effects of COVID-19 on the industry were widely felt, we'd seen two types of mentalities.

corporations that grow through acquiring

The "looking forward" mentality where

events. They are usually decentralized

organizers reacted and adapted quickly,

and the headquarters have limited digi-

and the "looking backwards" mentality

tal team members and a limited budget.

where organizers preferred to pause their

Many people in the event industry have

events until the crisis came to an end.

been doing the same all their life. Without

Unfortunately, nobody knows for how

the vision, skills, agility and budge to pivot

long COVID-19 will continue to halt travel,

to virtual and to adapt their business, it

meetings and face-to-face interaction. We

was an impossible feat.

can only hope that vaccines become more

The companies that were able to go virtual and save their business were The N ext P h ase of t h e Event indu st r y

widely available and that this will allow the world to open back up again shortly.

About Swapcard Swapcard is the leading all-in-one technology platform for virtual, hybrid and in-person events without borders.

The event industry is changing. Imagine a platform that offers all the tech you need - registration, engagement, matchmaking, community, and more. A platform that works for all your event formats - virtual, hybrid and in-person. A platform that helps you to build a never-ending community.

Swapcard is more than just software - we're a partner in your success. Want to find out how we can help you?

Book a demo here. www.cpostrategy.com

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Lessons for event planners We learnt that content is king. The main reason we attend face-to-face events is to network. But the main reason we attend virtual events is to learn and get inspired. A virtual event's success is often determined by the originality, demand for and educational value of its content.

Engagement goes hand-in-hand with valuable content. When watching virtual sessions, it's almost too easy for attendees to open up their email, start online shopping or even get up and do the dishes. So keeping them engaged and active is key. This can be done through designing content in an engaging way with tools for the audience to feel like their voices are being heard.

Live discussions, Q&A functions, polls and faceto-face meeting opportunities with speakers go a long way to making attendees feel engaged. At virtual events, attendees have unprecedented access to speakers, experts and other high-level industry leaders - people they would never have been able to approach at a physical event are now just the click of a button away.

Virtual events are profitable, even more so than their in-person counterparts, when you consider the fact that they require lower overhead fees and higher income potential. High operating costs such as the venue, security, booths, food and beverages and insurance, are removed and the beauty of virtual is that a larger group of attendees and exhibitors from different regions can easily participate.

The N ext P h ase of t h e Event indu st r y

www.cpostrategy.com

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Are virtual events sustainable?

Virtual formats are not without challenges.

and use advanced event platforms that

Lower ROI for exhibitors, inefficient use of

provide matchmaking and group meet-

virtual platforms, lack of authentic, seren-

ings between buyers and sellers.

dipitous networking opportunities and

Virtual events and platforms will never

less motivation to buy online are some of

replace face-to-face interactions, and

the obstacles that virtual organizers and

that's not the goal. But while gathering

exhibitors face today.

in-person is impossible, tech can provide

At the beginning of the pivot, many

valuable networking and learning oppor-

organizers rushed to select their virtual

tunities. Exhibitors and attendees just

event platforms and settled for webinar

have to familiarize themselves with the

tools. This left no room for the networking

platform, start reaching out and sign up to

capacity that can be optimized in a more

all the roundtables, meetings and educa-

advanced event software platform and

tional sessions they can. Many platforms

explains the dashed hopes of sponsors

also provide speed networking and online

and exhibitors. SoSo, what can event

roundtable video rooms, where attendees

organizers do to solve this? Now is the

can meet in a serendipitous environment

time for them to benchmark providers

and start building their tribes.

The N ext P h ase of t h e Event indu st r y

The future of the event industry 100% virtual events will start playing a

experience, where attendees and exhib-

different role as hybrid events will kick

itors can interact, share, learn, buy and

off when vaccines become accessible

sell 365 days a year.

and travel returns. Most interactions will

The phase of education and discov-

still take place online as a large number

ery of new exhibitors and innovations will

of attendees and exhibitors will no longer

be done online throughout the year with

travel and be present on-site for the sake

updated content. Business meetings,

of efficiency, cost reduction, and environ-

with the background knowledge of a year

mental awareness.

of research and discussion in the online

The mere term "event" will evolve because it implies a beginning and an end to an occurrence. Perhaps it'll be

platform, will become more prominent in the on-site experience.

The event of tomorrow is smaller, more

replaced with a word more descriptive

efficient, tech-centric and focused on

of the year-round community interac-

profitability and efficiency. We'll see less

tions that are starting to grow. The way

visitors, less square metres, but more

our industry interacts is moving from

on-site qualified meetings that should

a temporary occurrence to a timeless

increase the ROI of exhibitors. www.cpostrategy.com

111

The right platform can make or break an online, in-person and hybrid experience In a digitally overloaded world, where

remove the barriers that were affecting

attendees have become more demand-

their growth. At Swapcard we believe that

ing about the content they absorb and

a hybrid model of some online and some

how they interact with it, the right platform

in-person meetings with a year-round

is key. The platform is where everything

community platform will be the most

intersects - smooth content production,

profitable and valuable model, offering a

audience interaction, networking, commu-

powerful, unified, data-driven experience.

nity building and sales. Organizers are

We're experiencing an exciting time for

being asked to improve the value proposi-

the event industry. We are undergoing a

tion they are selling to their attendees and

profound transformation that's bringing a

exhibitors, and this can only be done on a

touch of modernity to an ageing industry

platform that meets everyone's needs.

by making it digital-first, data-driven, and

Online events are a great opportunity for event planners to grow, as they The N ext P h ase of t h e Event indu st r y

more focused on the visitor experience and the ROI.

A few virtual events to look out for...

CIPS Global Conference

Procurecon Interactive

Innovation In Asia Pacific 15-16th June 2021

Attend the CIPS Global Conference from the comfort of your own workspace to stay ahead of the curve and ensure your supply chains are fit for the future. Let’s look to rebuild and reshape the profession through strengthening leadership, driving responsible procurement and championing innovation.

Times may be uncertain, but one thing remains true. There is power in people coming together.

ProcureCon Interactive is 100% live for you to benchmark with your peers and collaboratively source solutions. Build on your procurement team’s elevated reputation following Covid-19 and capitalise on your seat at the table

The Asia Pacific region leads the way towards a restart following the Covid-19 pandemic, but where now for globalisation and global supply chains? Investigate how a shift to greater regional reliance will impact both indigenous and multinational businesses...

8-9th June 2021

8th June 2021

Join IN:IN to re-evaluate the tools and strategies needed to add business value across 2021 and beyond.

www.cpostrategy.com

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