BeNeering’s MD and CRO dig into the company’s history with AI, and the necessity of seeing beyond the hype of new technologies
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A privately-owned company with over 20 years of procurement digitalisation experience fueling it, BeNeering is at the forefront of the AI-powered revolution in its sector. BeNeering was founded in 2007. At the time, Christoph Moll, BeNeering founder and Managing Director, was busy implementing SAP SRM systems for large European multinationals. While this provided great experience, Moll could see the limitations – and he wanted to move beyond them. He wanted to do something more.
“That’s how BeNeering was founded,” he says. “We focused on consulting until 2013, at which point we transitioned to being a solutions provider. I cherry-picked a great development team, and I’m happy to say that the same strong team is with us still today. Stability is our value.”
Natalia Parmenova, Chief Revenue Officer, is an example of one such strong team member, who has enormous faith in the business. “From my perspective, BeNeering is a super special solution provider for a few reasons,” she states. “First of all, we believe in co-innovation. Everything we develop is built together with very large and advanced customers. We try to stay close to those customers, to people who are forward-thinking and developing their procurement functions, so we can develop solutions for them with them. We are not just inventing things we think are useful – we are basing our development on customer needs. That’s really important.”
Simplify and optimise
Many people fall into procurement accidentally. It’s a common story among procurement professionals, and a source of amusement considering how passionate many of them become about it. For Parmenova and Moll, however, it was a case of seeing the way the wind was blowing and following the scent of change.
“In 2001, when I was employed by SAP, I wanted to do things better to help users in procurement,” says Moll. “That was how it started for me. My vision was really to simplify and optimise steps and processes for both requestors and buyers.”
We spoke to Chief Product Officer Prerna Dhawan about what it takes to move from experimentation to execution.
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As AI continues to dominate conference stages and boardroom discussions, the pressure to use it is everywhere. As this technology becomes further embedded in enterprise strategy, many organisations are still grappling with how to apply it in a way that delivers real, measurable value.
Rather than focusing on AI for the sake of innovation, the question is how to align new tools with real business problems. That means looking beyond dashboards and pilots to deploy AI where it can simplify decision-making and improve processes.
At Beroe, this principle is central to how AI solutions are developed, deployed, and scaled. As the company behind the world’s leading procurement intelligence platform, Beroe provides real-time market data, cost analysis, and supplier risk assessments, empowering thousands of organisations globally to streamline operations and mitigate risks. Its latest advances in autonomous negotiation, supplier discovery, and predictive analytics show what it means to align AI with business objectives.
We spoke with Prerna Dhawan, Chief Product Officer at Beroe, during this year’s DPW New York conference. The discussion explored how procurement leaders can move beyond hype and start unlocking the full potential of AI.
Misalignment with business needs
There are plenty of real-world examples of how AI can improve efficiency within a business, from automating manual tasks like invoice processing to identifying new suppliers based on complex sourcing criteria. Accessing this technology is easier than ever with a wide range of tools available to procurement professionals. It can be tempting to jump on the bandwagon and integrate AI across every area of an organisation, but success requires a more nuanced approach.
The key is to ask the right questions, Dhawan explains: “We talk about all the latest and greatest technology out there, but what does it mean in practical terms? We need to ask, ‘How can I apply it today in the work I am doing as a head of product or as a procurement professional?’”
The allure of generative AI is especially strong, but business leaders should ask whether that’s the right solution for their needs. As with any decision, it’s important to consider the business problem. “It starts with a little bit of knowledge about what you’re looking for,” says Dhawan. “What are some of your biggest challenges, and which of those challenges could AI technology solve?”
Matching the right tool to the job
Once an organisation has identified a specific problem, it’s possible to find the AI solution that fits. While generative AI gets a lot of attention, other AI technologies and machine learning based systems might be more appropriate.
In some cases, prescriptive, rule-based, or predictive AI could be a better choice to solve a problem without the need for a large language model. For example, forecasting commodity prices doesn’t require generative AI, just strong, contextual machine learning.
“We are looking at AI across two dimensions,” says Dhawan. “Firstly, what is our offering to customers, in terms of procurement intelligence and autonomous negotiation technology. Second, we are looking at AI internally. Let’s say in product development, how do we use the latest AI solutions to accelerate our product development cycles so we can release new modules and capabilities more quickly.”
Regardless of the type of tool chosen, it should cover a high-impact use case. Integrating AI to solve a problem that only surfaces for a small group of people a couple of times a year won’t have a great return on investment. Instead, look for regularly occurring problems that, if fixed, could have a huge impact on productivity or quality.
Reducing the cognitive load
We’re already bombarded by information, and the use of AI to add to this doesn’t make sense. “I don’t need another dashboard in my life,” says Dhawan.
When implemented correctly, AI can make data more accessible while reducing cognitive load for users. The result is increased productivity and faster decision-making.
“I think the power of AI is to simplify access to data. This is why ChatGPT has been a success: it democratises access to information. That’s what our B2B technology world is waiting for. It gives me something simple that allows me to talk to my data. Then I can focus on what insights I need to make a decision or take action.”
For most B2B users, the key is intelligent simplification. Look for ways to simplify access to data through agent AI tools and conversational interfaces. This brings the focus back to action rather than dashboards.
Inside Beroe
While many procurement teams are still exploring AI’s potential, Beroe has already embedded it across both its platform and internal operations. The company, founded in 2006, provides procurement intelligence to thousands of organisations worldwide. Its platform delivers the critical data that professionals need to make informed sourcing decisions, from commodity prices and risk indicators to ESG scores and supplier intelligence.
“We provide all data that procurement needs for decision making, whether it’s cost data, risk data, ESG data or price data,” says Dhawan. “Our reimagination of the future is not just giving access to more data but creating that layer of recommendations that help you make decisions at speed and scale.”
One of the clearest examples of this in action is Beroe’s new ‘autonomous negotiations’ platform resulting from its recent acquisition of negotiation technology business, nnamu. Delivering a significant evolution in the procurement technology landscape the platform enhances the foundational elements of AI and game theory with Beroe’s industry-leading market intelligence and, according to Dhawan, it’s being deployed successfully in live sourcing scenarios.
“This is a technology that is being used for multilateral negotiations,” Dhawan explained. “It’s no longer just a POC or prototype, it’s live and being used at scale.” These new tools reflect Beroe’s core mission: to help procurement professionals minimise surprises and maximise margins.
Crucially, Beroe isn’t waiting for perfect data to apply these technologies. Instead, the company is using AI to work with what’s available — cleansing, interpreting, and extracting value from both structured and unstructured sources.
“You can use AI for cleansing data – even paper contracts,” Dhawan says. “Historically, we thought data had to be structured. But now, with vision models and image analytics, that’s no longer the case.”
Rather than striving for 100% accuracy before taking action, Beroe embraces a more agile mindset that balances speed and precision.
Is mindset holding procurement back?
The technology is ready. The use cases are proven. So why do so many procurement teams still hesitate to embrace AI? “There’s this subconscious fear that I think is a barrier to adoption,” she said. “And to some extent, it’s to do with our friends in Hollywood.”
There’s the myth that AI is a job-threatening black box, especially in industries where trust and experience are the backbone of good decision-making. For procurement, where professional judgement and business context are critical, the idea of handing over tasks to AI can feel risky.
But Dhawan believes this fear is misplaced. At Beroe, AI isn’t replacing procurement professionals, it’s augmenting them. Whether it’s surfacing new suppliers, automating elements of negotiation, or flagging risks earlier in the sourcing cycle, the aim is to enhance human decision-making. She says: “I think with the new kinds of AI technology that’s available to us, it is an opportunity for us in B2B tech to embrace more human-centred design with higher focus on UX.”
Looking ahead
Looking ahead to 2026 and beyond, Dhawan sees procurement evolving into a more personalised and responsive function – one where AI plays a critical role in both strategy and execution.
“We see hyper-personalisation coming, both in supplier relationships and internal stakeholder engagement,” she explains. “AI will be at the centre of that.”
Rather than one-size-fits-all sourcing strategies, AI will enable procurement teams to tailor their approaches to specific business units, categories, or even individual suppliers. This means smarter segmentation, more relevant insights, and stronger commercial outcomes.
Another key shift is the growing ability to connect macro events, such as geopolitical shocks or regulatory changes, with micro actions inside the business. AI can help procurement teams identify these signals earlier, respond faster, and still align with long-term goals such as cost efficiency or sustainability.
“It’s about balancing your fire-fighting reactions to market events with your long term goals and strategy,” says Dhawan. “Procurement needs visibility and flexibility at the same time.”
Beroe is already moving in this direction. Alongside its growing AI capabilities, the company is refining how it delivers intelligence, building agents and recommendation layers. These not only inform decisions, but also help teams take action on them. Whether that means automating routine negotiations or proactively flagging supply risks, Beroe is evolving to meet the needs of a procurement function that’s more dynamic than ever.
As Dhawan points out, the goal isn’t to overwhelm teams with more tools, it’s to make their lives easier. “It’s about reducing complexity and giving procurement professionals confidence in what to do next,” she concludes.
For many procurement leaders, AI still feels like a long-term ambition. But the solutions are already here, and through companies like Beroe, they’re already in use. The challenge now is not whether AI can deliver value. It’s whether teams are ready to adopt the mindset and cultural shift that will allow them to unlock that value.
There were many inspiring themes on peoples’ lips at DPW Amsterdam 2024, including collaboration. One of the major reasons procurement…
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There were many inspiring themes on peoples’ lips at DPW Amsterdam 2024, including collaboration. One of the major reasons procurement professionals flock to DPW is the opportunity to learn from their peers, strategise with them, and make connections in order to partner up and grow. We sat down with Dr Matthias Dohrn and Sudhir Bhojwani, business collaborators of several years who prove the benefits of coming together for growth.
Dohrn is the CPO of BASF, a global chemical company, making him responsible for direct, indirect, and traded goods. Prior to this role he headed up a business unit – and things weren’t going well. It got to the point where the question of how to drive performance became a priority. The business needed to consistently drive value, not just be, in Dohrn’s words, a “one-hit wonder”.
“I’ve been in a lot of meetings where people come together and say, ‘we should do something’ – but the next month, you have the same meeting and nothing has changed,” Dohrn explains. “Structuring an organisation in a manner that really drives and extracts value, that’s key.”
This eventually led to meeting with ORO Labs and asking how it could help BASF build a solution that enabled the growth it needed. Sudhir Bhojwani, CEO and Co-Founder of ORO Labs, knew Dohrn already from his SAP Ariba days He even credits him with explaining what ‘supplier management’ means. When he co-founded ORO Labs, his team wanted to focus on being a procurement orchestration platform and build smart workflows.
“When Matthias was running his business unit, as he mentioned, he had this Excel-based process where he was running thousands of measures,” Bhojwani explains. “It was an interesting process. We let him know that our workflow could solve his problems way more efficiently. So we worked with this business unit at that time and saw some positive results. Roughly a year later, Matthias took over as CPO and wanted to bring in the same structure that we’d implemented at the business unit, but on a bigger scale.”
Kicking off the project
Getting this project off the ground meant having a business case, first and foremost. This required actually sitting down with the people who do the ordering, because procurement needed to understand the options it had. “So, with every plant in BASF – all approximately 150 of them – we had to talk to them, and look at the individual spend of each plant,” Dohrn explains. “This included direct procurement of raw materials, energy, logistics, indirect spend for services, and so on. Then we had brainstorming workshops, generating between 30 and 50 improvement measures per workshop.
“Then, because it’s bottom-up, you bring in the performance management tool to prioritise the measures. Then you go through the business case and confirm the value. As these measures go through the implementation levels, it’s very satisfying because you can see how you’re making progress in driving value every day. The people who own the measures set the timeline themselves, and there are incentive schemes behind the best ideas.”
Driving value to motivate people was a priority from the start, and something BASF discussed with ORO Labs early on. People are able to see the status of their measures thanks to ORO Labs, which means they’re able to see the results and also see other peoples’ great ideas. “You create a wave of people who are driving value, much faster,” Dohrn adds.
Addressing the challenges
From Bhojwani’s perspective, there were multiple challenges when approaching BASF’s requirements. Fundamentally, ORO Labs was building a brand new workflow, as BASF required a very different take on what that means. ORO understanding how that translated to what BASF needed was the first challenge.
“We needed to understand the structure Matthias has, and what the work streams should look like,” Bhojwani explains. “We had to figure out how to model these work streams within our tool in a way that made sense. An indirect work stream is not the same as something in direct material; those things are very different. So here’s where our workflow tool worked quite well. We could customise how direct material work streams should behave, compared to indirect work streams, how country A should behave compared to country B, and so on.
“It was important that we could bring flexibility, and that we could solve workflow problems in innovative ways. Another challenge was the user experience part. We had to make sure that the system worked for everybody, otherwise nobody would participate in the system. We had to keep working on it, keep fixing it, and that took a good 18 months of tweaking. The biggest thing has been understanding how BASF actually generates value, and how a workflow can help. It’s been very interesting.”
Identifying the value
Collaborating with ORO Labs has unlocked an enormous amount of value for BASF. Dohrn has seen the business come together thanks to the work that was put into communicating and collaborating with every site across businesses and functions, and BASF is continuing to conduct workshops for further improvement. There’s also, of course, the EBIT being gained from the business cases, putting BASF on track to generate sustainable savings.
“There’s been a real mindset change,” Dohrn states. “We’re now really focused on value, and we’re using this ORO Labs tool to hold each other accountable. You can see the progress every day. We call it the iceberg because you can see below the implementation levels. Everything starts off below the water line – no value created yet, just potential. Then you see it moving beyond the zero line into the positives, and every day I can see the difference between now and yesterday with just a click. It’s so fulfilling to see what we have created.
“We’re able to see the interaction with the plants, the interaction between people, and interaction with the requisitioners, and we can create something positive together. I think that’s huge. It’s only going to bring more and more value over the next few years. People are used to the tool now, they find it easy. It has created value and everyone’s happy because the cost pressure on the plants has gone down.”
When we’re talking about technology in procurement, the importance of partnership is a major component for success. No business is…
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When we’re talking about technology in procurement, the importance of partnership is a major component for success. No business is an island, and joining forces with experts is, increasingly, the direction many move in for the sake of growth.
At DPW Amsterdam 2024, we met many businesses who were looking around at the procurement sector in search of either what direction to move in next, or who they can help. The event is one that brings people together to learn, to teach, to discover the cutting edge of procurement, and be inspired by it. So when we sat down with the CEO of Fairmarkit, Kevin Frechette, it wasn’t surprising that he brought Nick Wright, who leads bp’s Procurement Digital Garage, into the conversation.
For Frechette, one of the best things about working in the advanced procurement technology sphere is joining forces with other businesses to help them keep improving, and vice versa. “Having the chance to work with people like Nick, who are pushing the envelope when it comes to autonomous sourcing, is amazing,” he explains. “We’re fired up to be at DPW, absorbing this atmosphere.”
While it’s something of a running joke in the procurement world that most professionals in the sector don’t deliberately choose it, Wright actually did. “I went to university and thought ‘wow, I fancy a career in procurement or vendor management’. I know a lot of people don’t have that story, but I’ve been doing something I’m passionate about from the beginning. I love making deals, whether I’m buying a car, a house, or something for BP.” The Procurement Digital Garage he leads exists to look at problems being faced across procurement, and figuring out possible solutions.
For Frechette, the intention wasn’t to start a company in the procurement space, but his team quickly saw the opportunities within it. “We had this ‘aha’ moment,” he says. “It was a tough pivot. There was a lot of debate, a lot of late nights. I’m super glad we made it because we got to be in a space where people can be forgotten about, and we’re able to give them centre stage.”
The realistic approach to 10X
DPW itself exists to put procurement under the limelight. Each event is themed in a way that gets conversations flowing around the next big thing in procurement. For Amsterdam 2024, this theme was 10X – something Frechette believes isn’t achievable right off the bat.
“It’s something to strive towards,” he says. “It’s something where you work on getting a little better every single month, every quarter. You keep getting those small wins, and you build credibility. There’s no silver bullet. You just have to start the journey and learn as you go.”
For Wright, it’s about not getting caught up in the hype, but figuring out what’s realistic. “There’s a lot of hype out there, and the beauty of something like my team at the Procurement Digital Garage is to weed out that hype, because what’s right for us might not be right for someone else. Having a team that’s out there in the market, testing and figuring out what’s real, will put you in good stead.”
“There’s a leap of faith element that can be challenging to achieve, before you can really strive for 10X,” Frechette adds. “It’s like Amara’s Law: humans typically overestimate the value of technology in the short term, but underestimate it in the long term. So the hype is needed. We have to help people on that journey and sometimes, a leap of faith is needed. For the people that risk it, it’s exciting, and they’re then well positioned for the future.”
However, again, managing expectations is important. “People might be on the sidelines expecting a 10X solution,” says Wright. “But the reality is, you’re going to get 5% here, 10% – smaller pockets of improvement.”
The benefits of advanced technology are absolutely being seen at this stage, but being realistic about the future outcomes is important. “The benefits are there – not at the scale of 10X – but if you just make a start, you’ll achieve wins,” says Frechette. “You broadcast those wins across the organisation. That generates excitement, and then you can work on the next thing because you have ground swell.”
How ‘the future’ has changed
What’s interesting is that this 10X focus, this drive towards incremental wins, has reframed the way businesses plan for the road ahead. ‘The future’ used to mean having a three or five-year plan. Now, the future is only 12 months away.
“The thought process right now is ‘what can we do that’s super optimistic in just 12 months’?” says Frechette. “Then you can put in realistic time frames and set off on a sprint to get there. You have to be able to move fast. We have launches every two weeks now, and we have to be flexible with our roadmap along the way. But we always know where we’re going – we have a north star.”
“To me, that’s the only way to do it,” Wright adds. “I don’t have a crystal ball. Nobody knows what’s going to happen in two or three years. So what’s the point of creating a plan that’s going to get you to a certain point in those two or three years? You have to work on small iterations, make adjustments, change direction as necessary.”
It’s part of what makes Fairmarkit and BP an active partnership – the ability to be flexible and open up discussions at every point. It’s all about real-time feedback and trust-building, to the extent that both parties feel like they’re on the same team.
The right people in the right places
Because ultimately, it’s the human element that makes transformation happen. Having the right people in place is one of the elements that’s key to making sure implementing advanced tech for the sake of business strategy works at all. “It’s about access to talent and making sure you’ve got a capable user group that can make the most of that technology,” says Wright. “You don’t need to be a data scientist, but you do need to have the right mindset to take advantage of the tools you’ve got.”
“I agree – you have to get the right people on the bus,” adds Frechette. “You all have to be committed to going on the journey together. Prioritise where you start and where you’re going to have the most value with the lowest risk, and have people on your side who can give suggestions and ideas.”
While the much-discussed talent shortage can create challenges there, DPW as an entity proves that not only does procurement keep becoming more appealing and exciting, but where there are gaps, there are digital tools. “I’ve noticed a lot of folks under 30 who are here at DPW Amsterdam, and they’re genuinely interested in procurement,” says Wright. “We’re at a tipping point that makes me really excited about the profession I’m in.”
Linda Chuan, Chief Procurement Officer at Box, discusses the value of delivering effective and long-lasting change management in procurement.
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Being at the forefront of change requires a specific type of person – it’s not for everyone.
But for those that are equipped to deal with the volatile and at times, disruptive, nature of change, that’s where the rewards can be uncovered.
Knowing this all too well is Linda Chuan. She is a seasoned sourcing and procurement operational excellence executive with a public accounting background and a strong ability to execute from vision and strategy. Her innovative experiences with organisations large and small have culminated in a unique, but practical end-to-end view and understanding of business processes. Chuan’s approach to problem-solving is holistic, mixed with a blend of discipline, creativity, agility and resilience. She has demonstrated successes in her execution and delivery with real results time and again, while also leading successful transformational digitisation strategies.
Procurement’s transformation
The industry she serves has undergone quite an evolution in recent times. Having transformed from a back-office function into a dynamic, exciting, enterprise division at the forefront of change. Procurement and its professionals have been on quite the journey in recent times. As such, Chuan explains that the space is, in fact, so unrecognisable that even its definition has changed. “Procurement started out as purchasing for primarily manufacturing companies decades ago,” she discusses. “Then it evolved from purchasing to procurement where the practice and the profession required more skills around understanding contract verbiage and how the commercial terms would impact the business. There was a little bit more skillset required, legal terms, understanding contracts, all the way to what we know today as strategic sourcing.”
Fast forward to 2020’s Covid pandemic and procurement was forced to shift again amid significant disturbance to supply chains. As a result, procurement was swiftly elevated to the c-suite and became front of mind for most CEOs globally as businesses looked to tighten their belts while urgently finding alternative methods of supply.
“Following Covid, I think we, as procurement professionals, are now mandated to be even more than strategic sourcing and add value to the company,” affirms Chuan. “We’re asked to look ahead and think about the macroeconomics as well as the microeconomics and how it could impact the company and get that translation to direct company impact earlier. This is all while being able to help either prevent large risks or promote opportunities within the company so they can then maximise what’s happening out there in the marketplace versus where everyone was reacting to what has already happened and trying to be prepared for what was coming.”
Tech disruption
Disruption has meant procurement was propelled to become even more strategic and forward-facing following a recent surge of black swan events as technology takes a firmer grip on the space. “The whole profession has evolved, especially over the last 10 or 15 years, where we’re becoming increasingly more strategic and important to a company.”
The company Chuan serves is a cloud content management company that empowers enterprises to revolutionise how they work by securely connecting their people, information and applications. Founded in 2005, Box powers more than 115,000 businesses globally, including AstraZeneca, JLL, Morgan Stanley, and Nationwide. Headquartered in Redwood City, CA, Box has offices across the United States, Europe and Asia. Chuan joined Box over four and half years ago and was recruited to help with establishing the firm’s procurement function and building it from the ground up.
“Any engagement or relationship with a third-party provider, whether it’s buying widgets, purchasing services or even SaaS across the entire company is under my scope,” she explains. “Box has grown globally to reach new regions such as Japan and Poland to UK and Australia. We’ve continued to grow even throughout the pandemic. It’s my third role to establish and build out a sourcing and procurement organisation from the ground up. I find that to be so rewarding and every company’s a little different. What might’ve worked in my previous roles may not work at Box. I love having to tailor and think about which processes and what systems could work that would fit each company’s specific and unique culture, executive level preferences as well as the employees. It’s very exciting.”
Blank canvas
For Chuan, her passion is to make things as easy as possible for the end user. She likes to think about a procurement organisation as a service firm. “We’re like a small entrepreneur company within an enterprise,” she tells us. “Our customers are our internal employees. As the company and the employee base grows, the customer base increases too. To me, it’s really imperative that we think about the user experience because every company has policies to check off, but who really ensures that we are compliant to those policies? A lot of other larger companies find it’s easier to make the policy a mandate where employees must follow, but I find that with high-tech companies, it’s more of a case of “influencing” rather than “mandating” in that kind of environment.
“In order to establish more of a centralised process where all of the employees would have to come through this one system and one intake, it has to be so user-friendly or else people are not going to want to come to you. If you make it easy for them and design the process in such a way that the policy is already incorporated, then employees will want to utilise the process. It should feel like they’re just going through the process, but they’re walking through the actual compliance policy and ensuring that we’re doing all the right things to protect the company, but they shouldn’t have to feel the burden of it.”
The Box Advantage
According to Chuan, unless she can show her people a new process or system that’s guaranteed to be more efficient, she understands there will be a degree of reluctance to accept change initially. “I’m already thinking about the whole change management programme at the beginning of when I need to select a solution, especially if there was an RFP involved, rather than waiting until we’ve selected a solution and are in the implementation phase. To me, that’s too late,” she explains. “Change management happens when a project has been approved for you to go find a solution or when the project has been initiated by your senior executives through an investment committee meeting or via a software review committee. That’s where change management actually starts.”
Chuan is passionate about harnessing a positive company culture. She stresses within Box operating with a mentality of collaboration, transparency and inclusiveness holds the key to success. Chuan explains that one of her best strategies is to imagine herself as an owner of a company as it leads to better decision-making. “It’s about always trying to think about doing the right things by the right people,” she discusses.
Secret sauce
“The culture is so special and it’s truly about walking the talk versus just talking the talk. It’s about making that culture real and living every single day like our two founders, Aaron Levie and Dylan Smith. The culture itself makes it easy to collaborate and build that relationship and that trust with my fellow employees, knowing that the procurement sourcing organisation is there to help protect them and make the company better. Doing it together is so much easier than trying to push through by yourself, and I call it with every deal that ‘it takes a small village’. We have a really, really good relationship with our legal department and with our vendor trust department. I am enjoying a level of engagement and utilisation of my function more than any other company I’ve been blessed to be a part of. The culture at Box is our secret sauce.”
Given the speed at which the procurement function is shifting, being proactive to the latest trends in transformation could be the key between success and failure. Indeed, one of the most highly anticipated innovations of the past few years ChatGPT has captured the imagination of procurement professionals globally. The race to explore the technology and examine how the natural language processing tool could be introduced into processes is already underway. However, its arrival brings with it fresh fears that AI is here to replace humans.
Future-facing
According to Chuan, that couldn’t be further from the truth. “I don’t see it as taking jobs away, I see it as improving our job and work life,” she explains. “Most people don’t want to do those mundane, low-level data entry, tactical tasks anyway. But if you don’t have people or the right system checking that the data going in is of good quality, then you can’t count on the reporting and the analytics on the backend. But the problem is that people don’t want to do it. Wouldn’t it be perfect to have a replacement with AI, robotics and machine learning that could do all of the things that people don’t really want to do anyway?”
Looking ahead
Having said that, Chuan is clear that there must always be some form of human influence and oversight over AI. One of procurement’s biggest challenges in 2024 and beyond is making new tech work for each respective organisation. Chuan believes procurement, and indeed the world, isn’t to be ruled by technology, but instead used as a tool. “There has to be some kind of monitoring and human judgment to QC/QA the results,” she says.
“I don’t think we’re at the point where machines can replace judgemental thinking. I think we need to have an eye on ensuring we’re doing the right thing ethically by people and making sure that we’re using technology responsibly. Let’s say we do all of that, the increase in the level of job productivity that AI could bring to many people should outweigh people’s fears. I don’t think we should be fearing it. I think we should be looking at it from an analytical and strategic view and get excited about the prospect of having all the time to be more innovative and forward-thinking. To me, that’s where the fun and rewarding work is.”
Hear more about Linda Chuan’s passion for delivering change management in procurement in our CPOstrategy Podcast.
From shared responsibility to “blackmail”, an array of relationships exist under the umbrella of “partners” in the source-to-pay value chain.
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Whether in earnest or just in cynical pursuit of a hot new buzzword, it seems like no one in the procurement and supply chain sectors actually buys things anymore. Instead, goods are sourced from a strategic partner—implying a simple transaction has been replaced by a closer, more meaningful and, supposedly, beneficial relationship.
For example, in the fashion industry—traditionally one of the most transactional industries for buyer-supplier relationships—McKinsey’s 2023 CPO survey found that even between fast fashion brands and their suppliers, relationships are becoming more strategic, long-term, and mutually beneficial.
The number of transactional relationships reported by CPOs in the fashion industry reportedly fell by more than 50% between 2019 and 2023, from 22% to just 10%. That number is predicted by McKinsey’s analysts to drop to just 3% by 2028, as more than half of relationships in the industry evolve into “long-term strategic partnerships with volume commitments”.
The future of strategic partnerships?
According to McKinsey, the future of strategic partnerships between procurement teams and their supplier ecosystems looks bright in the fashion industry. This should be good news across other fields like medical supplies, consumer goods, food, and industrial manufacturing—as fashion is perhaps the industry with the most historically hostile relationship between buyer brands and the suppliers who manufacture their clothes, often for no guarantee of purchase, at rates so low they often result in untenable labour conditions. If some of the most predatory supply chains on the planet can grow into thoughtful, considerate strategic partners, then it surely bodes well for the rest of the world.
Or it would, if any of that were particularly true.
I’m not saying McKinsey or the CPOs that took their survey were lying. I’m sure they truly do believe their transactional relationships are evolving into strategic partnerships. But, as Maliha Shoab pointed out in a piece for Vogue Business this week, while “Those in charge of contracting suppliers for fashion brands say they are investing in longer-term strategic partnerships,” their suppliers “tell a different story.”
The reality is that research conducted by Fashion Revolution found that just 12% of brands publish a responsible purchasing code of conduct (virtually the same as last year and the year before that), and data gathered by Sanchita Saxena—visiting scholar at the NYU Stern Center for Business and Human Rights and senior advisor at human rights-focused consultancy Article One—points to truly collaborative and strategic partnerships between procurement teams and their suppliers being much rarer than procurement executives would seem to believe.
Reimagine supplier relationships
Some suppliers Saxena spoke to even characterised their relationships with fashion buyers as “blackmail”, revealing to Vogue Business that one supplier in particular recalled: “The company was threatening [us] saying, if we don’t agree on a reasonable discount, maybe next season [our] business volume might be affected. We were also told that if we don’t give the discount then there might be cancellations coming, and that kind of pressure… I wanted to give them a $20-25,000 discount, but eventually with the pressure I have to probably agree on almost double that amount… we didn’t want to offend them by any means.”
Other relationships were more mutually beneficial, and it does seem as though there is some action behind the partnership rhetoric in some areas of the fashion industry.
The point is, however, that procurement professionals’ imagined relationships with suppliers may be a whole lot more strategic than they actually are. There is a fundamental power imbalance between supplier and buyer in many industries, where small organisations farther up the value chain struggle to dictate terms to large corporations looking to cut costs more than build meaningful long term relationships.
Blockchain promises added transparency and security for the procurement process, but are the benefits worth the price of admission?
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Blockchain—the decentralised ledger technology that powers cryptocurrencies and NFTs—could be an immensely disruptive force in the procurement and supply chain management sectors. We’re going to take a look at how blockchain might impact procurement, and whether it represents a meaningful innovation or if the costs outweigh the benefits.
Blockchain: the hype
Using a combination of different technologies, including distributed digital ledgers, encryption, asset tokenization, and immutable record management, blockchain creates an unbroken and tamper-proof (in theory) chain of information.
For example, storing the entire service history of a vehicle, the transaction history of a house, or the provenance of a piece of art on a blockchain theoretically renders it trustworthy and incorruptible. A potential buyer could review the timestamped information included on the blockchain and be confident in its accuracy. In principle, blockchain could reduce or remove the need for intermediaries in highly regulated and complex transactions—like real estate, for example.
“Have you bought a house lately? Imagine if you could have transacted with the seller directly, even though you had never met, confident that the deal would be recorded in a way that neither of you could change or rescind later,” write Gartner analysts David Furlonger and Christophe Uzureau, suggesting that “You wouldn’t have to reconcile rafts of personal information with a real-estate agent, mortgage broker, insurance agent, property inspector and title company” if you were making a transaction using the blockchain.
Furlonger and Uzureau suggest that record keeping and verification is just the beginning and, once developed and combined with other technologies (characterised by lots of hyper and limited real world applications) like artificial intelligence (AI), the Internet of Things, and the Metaverse, the real potential of the technology will be unleashed, creating “whole new social and economic constructs in the peer-to-peer age of Web3.”
Blockchain: the reality
In actuality, Blockchain outside of applications for cryptocurrency isn’t actually… very interesting? It’s certainly not new. Blockchain technology not used to underpin a cryptocurrency is just a distributed append-only data structure. Often there are some users that are allowed to make additions to the structure. In the real estate example used Furlonger and Uzureau, that might include the homeowner, a surveyor conducting an appraisal of the property, the utility company providing electricity and water to the house, and professionals hired to perform maintenance on the property. A private blockchain could collect and verify the history of a property like rings on a tree, and provide an authoritative account that is, in theory, free from tampering. The thing is, that sort of verification is called a consensus protocol, and they’ve been around since before the 1960s—as have append-only data structures.
The reality is that the new, shiny applications for blockchain aren’t actually very useful. Supposedly, Blockchain technology offers up a way to verify information (or conduct a transaction) without relying on an intermediary, or blindly trusting a third party. “Trust-less” is the phrase that gets thrown around a lot. However, the result is often that you’re just trusting the technology underpinning the blockchain over a human or a public institution.
Building trust
As Bruce Schneier pointed out in an article for WIRED, “When that trust turns out to be misplaced, there is no recourse. If your bitcoin exchange gets hacked, you lose all of your money. Your bitcoin wallet gets hacked, you lose all of your money. If you forget your login credentials, you lose all of your money. If there’s a bug in the code of your smart contract, you lose all of your money. And if someone successfully hacks the blockchain security, you lose all of your money.”
One glaring example was the 2019 case of cryptocurrency exchange CEO Gerald Cotten, who died while being the only person with the password necessary to access US$145 million worth of other people’s Bitcoin. Far from being trustless, it would seem the people who lost access to their money were placing their trust in a single individual who died, leaving them no physical or legal recourse to get their money back.
There’s also the very valid criticism of blockchain-based technology that it’s an environmental disaster. NFTs caught most of the heat for this over the past few years, but all blockchain-based technology needs to be stored somewhere in a constantly active server. As noted by the NASDAQ in a report from earlier this year, “The energy consumption of blockchain technology results in significant greenhouse gas emissions, which contribute to climate change.”
So, blockchain is bad?
Not necessarily. I, personally, will stake what reputation I have on the fact NFTs and cryptocurrencies are misguided and valueless gimmicks at best and insidious, cynical techno-cults (that burn fossil fuels more enthusiastically than the UV lights at the Bored Ape convention burned out crypto bros’ retinas) at worst.
However, remember the boring version of blockchain technology? The append-only data sets we talked about before may not be new or especially sexy, but they’re an element of blockchain technology that could be incredibly useful for the procurement sector.
Blockchains in procurement
The procurement sector has traditionally struggled with opacity. Sourcing goods—especially from overseas markets—through networks of distributors and middlemen can muddy the waters and conceal vital steps in the source-to-pay process. The origin of goods, labour practices, contact with modern slavery or deforestation, can all be concealed in a murky supply chain.
Tracing the progress of an item from its raw materials through to a finished product is “often a challenge for today’s supply chains due to outdated paper processes and disjointed data systems that slow down communication. The lack of data compatibility exposes supply chains to problems like visibility gaps, inaccurate supply and demand predictions, manual errors, counterfeiting, and compliance violations,” notes an AWS report. However, with blockchain, procurement and supply chain management organisations can “document production updates to a single shared ledger, which provides complete data visibility and a single source of truth. Because transactions are always time-stamped and up to date, companies can query a product’s status and location at any point in time. This helps to combat issues like counterfeit goods, compliance violations, delays, and waste.”
Global network
If the documentation of, say, a shipment of EV batteries, can trace a direct line from a lithium mine in Australia to a factory in China through a global network of suppliers, all the way to their arrival at a factory in Ohio, the procurement department sourcing those batteries can scrutinise every piece of the value chain much more effectively for quality control, potential counterfeiting, and ESG compliance.
It’s not as flashy as Dogecoin, but it’s actually useful, especially as corporations make efforts to divest major polluters or other parties with poor ESG practices from their supply chains in an effort to reduce Scope 3 emissions and stop propping up reprehensible practices like modern slavery and deforestation.
How Big Data can increase resilience, mitigate disruption, and help procurement teams spot danger before it’s too late.
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In the procurement sector, successfully managing risks while achieving your other strategic objectives is what sets a successful procurement function apart from those that can expect to experience disruption. Today, however, procurement teams face greater risk than ever before as supply chains become more complex, ESG goals become more ambitious, and the parameters for compliance get narrower.
Technology—powered by artificial intelligence and big data analytics—is radically digitalising the procurement process. While this has the potential to increase efficiency, revenue, and accelerate the procure-to-pay process, it has also driven complexity. Luckily, digital transformation also holds the key to managing this complexity. Digital tools, powered by artificial intelligence and machine learning, can tackle larger and more complex amounts of information than ever before. These analytical tools and their more powerful capabilities in turn have seen viable data sets balloon to include vast quantities of structured and unstructured data from throughout the supply chain, gathered together under the umbrella of Big Data.
Data source
Big Data, in gathering together vast amounts of information about every aspect of the source-to-pay process, in addition to broader contextual information ranging from economic instability to weather patterns, can help procurement professionals build up a more comprehensive, nuanced understanding of their procurement process than ever before. The level of visibility is unprecedented, even in a sector where supply chains are more complex than they’ve ever been.
Complex supply chains are more prone to disruption. More moving parts and longer distances to travel mean higher likelihoods of things going wrong. Michael Higgins, founder and CEO of Clutch, wrote recently that “risk is inherent at every step of the supply chain, from moving raw materials to manufacturers and between manufacturers and the distributor,” adding that “The added value of big data analytics is predicting potential disruptions, giving procurement managers time to make intelligent decisions.”
Procurement transformation
Advanced analytical tools can be used to track the weather, potential disruptions to agricultural or construction operations, political unrest like demonstrations or riots, and changing legislature that may affect everything from compliance to price. Because Big Data analytics are increasingly capable of collecting and analysing all of these factors and more, procurement professionals have the capacity to counteract sources of risk that traditionally would have seemed as inevitable as an act of divine wrath.
The risks to a supply chain are really representative of risks to your suppliers and their networks. Big Data analytics is also granting insight into the workings of—allowing a huge number of variables tied to each supplier to be tracked and used to make decisions. The result is a more agile and reactive procurement process that can analyse and respond to data analytics in real time, as opposed to trying to make best guesses based on past results and limited human judgement.
Procurement is truly transforming from the back office to the boardroom—becoming more strategic, digitally empowered, and complex than ever before—and Big Data analytics are increasingly a vital part of the function within the modern source-to-pay process.
Efforts to address climate and social issues in the procurement process don’t have to be siloed, argues a new report from Business Fights Poverty.
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With more than 90% of a company’s environmental impact originating within its supply chain, not its internal operations, corporations are under greater pressure than ever to divest and draw down their Scope 3 emissions.
At the same time, other Environmental Social and Governance (ESG) issues concerning gender disparity, minority representation, and workers’ rights are also more clearly in the spotlight than ever before alongside climate change.
However, a report published on 5th December by social impact-focused network organisation Business Fights Poverty, argues that while there is “an urgent need for transformative action on environmental and social issues such as climate change, biodiversity loss, poverty and inequality,” there exists a tendency in the corporate sector to tackle these “complex and fast-moving challenges by simplifying them and breaking them down into separate, smaller issues”.
The result is often that solving issues of climate, social, and ecological justice becomes a zero-sum game, with one issue neglected at the expense of others, because of a siloed approach manifesting itself beneath the ESG umbrella. The report argues that, not only is this approach antithetical to the ideals of ESG initiatives, but “an integrated and systemic approach that recognises the interconnectivity of the challenges across environmental and social issues” is more effective at tackling these issues.
The report, titled Supply Chain Decarbonisation with a Gender Lens: Practical Guidance for Global Businesses, notes that vulnerable groups, especially women, are especially vulnerable to the effects of climate change. It goes on to provide guidance for corporate procurement strategists and leaders, describing how to ensure that “women are both unharmed by decarbonisation strategies, and that their participation in any benefits generated in the process is secured.”
Four Gender-Sensitive Routes to Procurement Process Decarbonisation
Supplier incentives: Recognise and co-brand with suppliers who are emerging as leaders on decarbonisation and/or gender.
Procurement policies and choices: Source from and encourage women-led businesses that are providing low carbon solutions
Product and services design: Switch to renewable energy and upskill women to participate in the switch.
Business model innovation: Promote a circular economy that includes women, for example decent work for waste and recycling pickers.
The need for decarbonisation in the procurement process is pivotal. As of Q4 2023, nearly 40% of Fortune 500 companies have now set Net Zero targets. It’s not good enough, and the actual meaning of Net Zero is being eroded and worked around by corporations looking for ways to continue harming the environment and damaging the global social fabric while making record profits. But it’s a start.
“Whilst a growing number of companies are investing resources to better understand, account for, manage and reduce their supply chain emissions, little attention is being devoted to the role of, and impacts of interventions on, the people working in those supply chains,” urges the report. “The decarbonisation strategies of large multinational companies with complex global supply chains have impacts on workers around the world, both positive and negative.”
Our cover story this month reveals how Dr Roman Salasznyk, Senior Vice President at Booz Allen Hamilton, and his team are driving innovation at the IT services specialist to deliver digital solutions supporting federal agencies in their quest to drive mission-critical programs
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This month’s cover story charts how IT services specialist Booz Allen Hamilton is delivering digital solutions to support federal agencies in their quest to deliver mission-critical programs.
Welcome to the latest issue of Interface magazine!
Technology is changing lives; from banking to transport and manufacturing to healthcare, the scaling of digital transformation journeys across global industry sectors is enabling and enhancing our lives… Harnessing the power of tech, to manage everything from the evolution of our supply chains to our response to medical emergencies like COVID-19, is changing the game.
Our cover story this month reveals how IT services specialist Booz Allen Hamilton is delivering leading edge solutions to support federal agencies in their quest to deliver mission-critical programs.
“We’ve made a concerted effort to invest and provide leading-edge capabilities to support some of our client’s most pressing public health challenges across the federal government space,” says Salasznyk. “Technology must add value, solve a business problem, and deliver measurable improvements in efficiency and effectiveness.” That efficiency is driven by over 29,000 experts around the world driving digital journeys, developing analytics insights, engineering, and cybersecurity solutions while working shoulder-to-shoulder with clients to choose the right tech to realise their vision and transform.
Nuffield Health: digital transformation for a healthier tomorrow
Nuffield Health is the UK’s largest healthcare charity (independent of the NHS) operating 37 hospitals and 114 Fitness & Wellbeing Centres. IT leaders Jacqs Harper and David Ankers describe the organisation’s incredible digital transformation and how its people-first attitude runs deep. Nuffield’s beneficiary-centric approach means “driving experiences” to be optimal and best-in-class is paramount. “What was really compelling when I joined Nuffield was how much of a difference this business can make to the nation in terms of improving its health,” says Ankers. “And equally, how we as a team can make the lives of practitioners so much easier. There’s a huge amount of value IT can add.”
Also in this issue, we hear from Celonis on why process mining can help companies stop wasting money on tech they don’t need, and we present the latest analysis from consultancy giant McKinsey’s Technology Council highlighting the development, future uses and industry effects of advanced technologies across 14 key trends.
