Anthony Payne, Chief Marketing Officer of HICX, tells us how working collaboratively with suppliers on sustainable procurement practices could act as an organisation’s competitive advantage.

Sustainability isn’t just a ‘nice to have’ anymore – businesses don’t have much of a choice in the world of 2024.

With ESG regulations now locked in place, organisations must comply or risk significant penalties. In order to achieve sustainability objectives more effectively and efficiently, collaborating with suppliers represents a real opportunity to get there faster.

When businesses work with suppliers to reach sustainability goals, they need access to the most accurate supplier data possible. However, obtaining this data isn’t necessarily straightforward. Ultimately, suppliers own it and need to provide it.

This means it is in a business’s interest to form and maintain a great working relationship with suppliers.

Anthony Payne, Chief Marketing Officer of HICX, the supplier experience platform, discusses the benefits of being supplier-centric and how giving brands a better experience adds value to organisations.

Anthony Payne: “There is a direct link. A good supplier experience makes it easier to communicate with suppliers because it allows for collaboration, whereas the opposite can harm communication efforts. For example, when businesses need ESG information, many will survey a broad group of suppliers even though the questions don’t apply to everyone. This is easier for the business. But it means every supplier who receives the survey must investigate whether it applies to them. The experience is more likely to frustrate suppliers than to help them offer the best information.

“Rather, we can help suppliers to help us by communicating better. The way forward is to segment suppliers into groups and send them only relevant requests. This creates a more positive experience in which suppliers are better able to provide helpful information.”

What about their motivation to help sustainability efforts – does this also rely on supplier experience?

Anthony Payne: “Yes, because if the culture of the business-supplier relationship is one in which each party looks out for themselves, then suppliers won’t be terribly motivated to offer the most helpful ESG information. It’s just human nature. Whereas if a business creates an environment in which suppliers can collaborate with them, then they’re more likely to become a customer-of-choice. This is a status worth having. A recent HICX survey showed that while 49% of suppliers would go the extra mile for their biggest customer, as many as 73% would make the effort if this was a customer-of-choice.

“Ultimately, if businesses give their suppliers a good experience, then more suppliers should be willing to provide helpful ESG information – even if it means spending a bit more effort.”

Anthony Payne, Chief Marketing Officer of HICX

What are some of your most effective strategies and best practices to building a future-proof ESG framework?

Anthony Payne: “Businesses can futureproof their ESG frameworks by viewing suppliers as value-adding partners. This principle suggests three ways to engage suppliers…

“First, have a corporate mindset in which every employee views every supplier as a valued partner. If COVID-19 taught us anything it’s how much we rely on suppliers. When the pandemic hit, non-strategic suppliers such as providers of IT equipment and protective personal equipment suddenly became as central to operations as those who supplied the main ingredients. If we take the view that ‘all suppliers matter’, then it becomes easier to treat them all as partners in the same eco-system and we can work together towards common goals.

“Then, through this lens, we can market to suppliers. In customer marketing, a business would require a certain action from customers – such as getting them to buy a product, read a newsletter or attend an event – and so would motivate this behaviour. Similarly, in procurement, we can appeal to suppliers in a way that encourages them to participate in ESG activities, for instance, by providing helpful carbon emission information. 

“One way to encourage the desired behaviour with suppliers is to segment them into the appropriate categories and send them only necessary messages. This is what a marketer would do with customers. By viewing suppliers as partners and introducing supplier marketing and segmentation, you can improve suppliers’ experience and get the most from them.”

What are the biggest barriers that organisations face to delivering more sustainable practices within their organisations?

Anthony Payne: “Once supplier data has been captured, however, the challenge continues because it must be maintained as a golden source of truth. Not having accurate supplier data is a major barrier to delivering sustainable practices because it means that businesses cannot see who all their suppliers are and what they’re doing. 

“Thankfully, with robust onboarding and data management in place, businesses can keep their supplier data up-to-date and accurate so that it can inform good sustainability decisions.”

What is the best way for procurement teams to assess and prioritise the suppliers they work with? How do you juggle environmental impact vs value to company?

Anthony Payne: “The best way to assess and prioritise suppliers is to have visibility. Businesses need to know who all their suppliers are and what they’re doing, at any given time. Only once leaders are informed, can they make the best environmental decisions.

“It’s imperative to manage environmental impact with suppliers, regardless of how much value they bring a company. Apart from the moral obligation to protect the environment, businesses also have their reputations to consider. An environmental infringement that gets exposed – no matter how deep in the supply chain it might occur – is very likely to cause reputational damage, which can have a knock-on effect on sales and share price. 

“In addition to brand reputation, businesses can also face expensive fines, if their suppliers are found to fall short of environmental regulations.”

Anthony Payne, Chief Marketing Officer of HICX

What are the challenges and opportunities when it comes to supplier diversity?

Anthony Payne: “The challenge is to source the right suppliers in the first instance and then be able to report on their activity. We know that finding diverse suppliers in the UK can be difficult. While the US market is more mature, supplier diversity is growing here. Considering this, many suppliers that could qualify as “diverse” are not yet certified. Additionally, when diverse suppliers are indeed certified, there is no guarantee that their skillsets will match your needs. 

“Thankfully there are ways in which businesses can proactively grow their networks of diverse suppliers. For starters, leaders can equip people within the organisation who work with suppliers, to find diverse suppliers by educating them and putting policies in place. Further, there are practical steps one can follow – such as defining the criteria for what qualifies a supplier as diverse in various territories and then finding the right businesses by searching online directories, desktop research and asking for recommendations.

“Once suppliers that are considered to be diverse are indeed found, they bring much value. Apart from being able to make a positive sustainability impact, the expectations of regulators, shareholders and consumers can be met. The by-product of this is a positive reputation which has economic benefits. 

“The opposite logic also applies, and failing to capture supplier diversity value becomes a missed opportunity. For instance, when third-party expectations to support supplier diversity are missed, this can damage brand reputation which hurts sales figures and share price. Also, the unique offerings that diverse suppliers can offer will be missed, and with it the chance to make an impact. Therefore, it’s sensible to make the most of the diverse suppliers that you worked so hard to find.”

Do you have any tips for readers who want to make the most of the diverse suppliers they have sourced?

Anthony Payne: “Yes, you can start by knowing that it’s possible to make the most of the diverse suppliers you find. You can do this by following a stepped approach. 

“Start by onboarding new suppliers who are considered ‘diverse’ with processes that reliably capture their information. This way, your diversity programmes can be well-informed. It’s hugely valuable to be able to tell, at the touch of a button, where a particular supplier might be based. Also, what qualifies them as ‘diverse’? And while they might hold diversity status today, how can we be sure it still applies tomorrow? 

“With all the right information collected at the start of each relationship, then it’s a good idea to instill processes that drive everyone who works with suppliers to spend more with those who are considered as diverse. As more diverse suppliers join the organisation, then you need to keep their data accurate. Do this by digitally transforming the procurement landscape to make master data a priority. With robust processes, it’s possible to maximise your relationships with all suppliers.”

How optimistic are you about the future of ESG within procurement?

Anthony Payne: “I am very optimistic about the future of ESG within procurement, because, we’re seeing the supplier experience movement grow in the UK and the US. For instance, we’re seeing new job roles come out in this area as the principle is popularised. And we know that having good Supplier Experience Management programmes in place sets up business to procure in the most ESG-friendly way possible. 

“And so, with Supplier Experience Management becoming increasingly popular, we believe that the future for sustainability is bright.”

Read the latest CPOstrategy here!

Costas Xyloyiannis, CEO of HICX, discusses why it’s time for leaders to take a fresh view of the data problem, and plan to reduce emissions.

The start of the year is a good time for business leaders to consider their progress against net zero commitments. It also nudges us nearer to carbon-cutting milestones, the nearest of which is in 2030. By this time, businesses across the globe need to have halved their carbon emissions. So, if they haven’t already, now is the time to step up delivery.

But first, there’s a barrier to overcome. Behind every credible net zero win, is credible carbon data. The problem is it’s in very low supply. Good data relies on good emissions information from suppliers, and securing it is notoriously difficult.

As 2024 gets off to a start, it’s time for leaders to take a fresh view of the data problem, and plan to notably reduce emissions. To enable net zero success, we can assess supplier relations in three areas: the power play, digital processes, and a principle that works tremendously well in marketing.

Suppliers are in the power seat

Gone are the days when suppliers view their role as subservient. If the Covid-19 pandemic showed business leaders anything it’s just how much they depend on suppliers – and not just a strategically relevant few. In 2020, we saw non-strategic suppliers, such as PPE and IT providers, become crucial to operations overnight. Since then, businesses have continued to need a broader range of their supplier networks. When further supply chain disruptions brought continued uncertainty, that dependence deepened. Today, as businesses require increasing amounts of carbon information, the fact that we need suppliers is cemented.

Despite this, how big businesses work with their suppliers is often outdated and counter-productive to their goal of gathering good information.

Digital processes are in the Stone Age

Bringing supplier relations into the 2020s will take some serious shifts. First, it’s time to assess the digital processes for managing suppliers, which frankly are not up to the task. A hybrid setup of old and new technology, often poorly integrated, stops procurement teams and their suppliers from communicating well. It causes other friction too, like logging in and out of multiple tools just to perform simple tasks, a headache for both parties.

Additionally, the various tools are data traps. Every time a supplier uses a tool, it collects and stores their data. Siloed in this way, supplier data can quickly become duplicated and outdated, because it’s difficult to maintain. Unreliable master data is no good at fuelling automated workflows, and so procurement teams get stuck with manual processes.

These clunky manual processes together with the frustrating communication methods are not a recipe for successful relations. Given that businesses lean so heavily upon suppliers to receive data for carbon reporting, it’s fair to say that the approach to supplier relationships must change.

Friction is building

When starting a business relationship, most suppliers don’t sign up for this level of friction. What they expect is to put in their first purchase order, deliver their first product, send their first invoice, and repeat. In a perfect world, they will simply transact and renew.

In practice, however, the relationship is not so simple. Businesses need more from suppliers than just transacting – for one, they need a significant amount of information for compliance and innovation reasons and of course on carbon activity. So, businesses send their suppliers an abundance of information requests.

Suppliers, then, who simply want to transact, must field these requests. Further bugbears such as manual processes, disparate ProcureTech setups and poor communication practices, make it difficult to respond. A recent Supplier Experience survey found that over a third of suppliers are expected to login to 10 or more systems, nearly half struggle to resolve queries with their biggest customers, and 61% find it challenging to do their best work. Yet, while suppliers don’t find the situation productive, it continues. Why? Because businesses need their carbon information.

Suppliers want a partnership

An important consideration is that suppliers have agency. When they have limited stock or an idea, they can choose who gets it. When it comes to making the effort to dig up vital carbon information they have a choice. This isn’t to say that suppliers purposefully hold information back. This would be unlikely because they too want the relationship to work. But when they are swamped trying to fulfil their original mandates whilst figuring out complex tech and deciphering information requests, the little time and energy they do have to provide information might well go to a customer-of-choice.

It’s no different in the consumer world, where shoppers decide which brands to buy from. Businesses can’t force consumers to buy from them, so marketing teams get involved and work their magic. They encourage people to spend their hard-earned, limited money on products which they may or may not need, by showing them value, often in the form of an emotional appeal.

Similarly, businesses can’t force suppliers to spend their limited time giving carbon information. But they can sweeten the experience. There’s an opportunity, therefore, for Procurement teams who manage suppliers to change things up. Rather than bombarding suppliers with information requests that they will struggle to fulfil, they can borrow the principle of ‘encouragement’ from Marketing. Procurement can show value to suppliers, according to what’s important to them, with the view to receive value in return. 

So, as we start a new year, business leaders can take a fresh perspective on how suppliers are engaged. By understanding the dependence on suppliers, this relationship can be improved. Ultimately, by viewing suppliers as partners, simplifying digital processes and “marketing” to them, business leaders can lay the groundwork for net zero.

By Costas Xyloyiannis, CEO of HICX

The HS2 rail project promises over 300 work packages, ranging from £1 million to £500 million for 2024.

The 2024 procurement pipeline for the HS2 rail project promises a £1 billion “boost” for British businesses, as the project administrators reveal details for a slew of contracts available over the coming year and a half.

The contract opportunities, collectively worth over £1 billion, give a heads up to potential suppliers looking to boost their order books and grow their business in the year ahead. So far, UK businesses have secured over £17 billion worth of work on HS2 and 2024 promises even more opportunities to get involved.

“Forward planning is absolutely crucial for businesses, so we’ve worked closely with our stations and civils contractors to develop a simple procurement pipeline setting out what we’ll need and when,” commented Robin Lapish, HS2’s supply chain lead.

HS2 – London with Manchester

HS2—a 140 mile high speed rail network project originally slated to connect London with Manchester—was first announced under the UK’s Labour government in 2009. In the 13 years since its announcement, the project has experienced delays, cost overruns, and controversies. Construction began in September of 2020.

According to the UK’s Institute for Government, while the project was initially estimated as “delivering £2.40 of benefit for each pound of public money spent, the government had revised the BCR down to 1.8 in 2013,” and “Lord Berkeley estimated that HS2 would only deliver £0.66 for each public pound spent, predicting both higher costs – at £22bn more than the 2019 Chairman’s stocktake – significantly reduced benefit from both passenger demand and train frequency, and less ambitious predictions of economic growth.”

As of February 2023, HS2’s total cost to date was calculated at £24.7 billion, and its BCR was calculated as having dropped to .80 following a reduction in rail use after the pandemic—prompting Prime Minister Rishi Sunak to announce the cancellation of the Birmingham to Manchester leg of the line.

Harry Menear

Anthony Payne, chief marketing officer of HICX, tells us why we won’t reach net zero unless we fix data collection.

As we approach COP28, large manufacturing brands are in the net zero spotlight. It’s been a year since the UN Expert Group released Integrity Matters, a report clarifying the exact metrics brands must meet if they wish to claim net zero success. Those planning to do so, account for around half of the world’s largest listed companies, according to the latest Stocktake, a number which has doubled in the last two and a half years. Despite this momentum, however, brands are slow to implement.

Now, with the conference marking another year closer to the 2050 Paris Agreement and other deadlines, it’s time to step up delivery. What this means is that the strategies behind net zero pledges need a boost.

As a supplier experience evangelist and a marketer, I view this challenge through a different lens. The way in which we engage suppliers to get their data needs significant improvement. And the way forward is to market to suppliers.

A growing conundrum

Most of today’s major brands have expensive procurement technology with which to engage suppliers, technology that has often evolved to be complex, clunky, and hard to use. As a result, supplier adoption of these tools is low, and therefore supplier engagement in projects to cut carbon and provide quality information is low. Brands have the challenge therefore of getting suppliers to adopt their expensive tech and engage in net zero efforts.

Additionally, we’re seeing that what each party expects from the brand-supplier relationship, is misaligned.

Anthony Payne, chief marketing officer of HICX

Suppliers, at the start of the relationship, are highly incentivised to work with a brand and they want to get to three things: the first purchase order, delivery of that first service or product, and payment. From that point, they just want to continue transacting and renewing business. This is their “steady state.”

A brand’s steady state, on the other hand, is more complex. In addition to transactional work, brands need a continuous flow of information around compliance, quality, performance, tax, carbon footprint and an awful lot more. Nowadays, brands also want to be efficient and automated. This brings new technology, whether it’s extensions to established technology or new specialist tools. Of course, with new tools come new processes. 

Suppliers, as we’ve discussed, primarily want to receive orders, deliver on them and be paid. But now, they are also expected to respond to requests for a whole set of information, on a continuous basis. They’re also facing a lot of change in the form of ever-complex technology landscapes and evolving processes – and this isn’t just for one brand, it’s for all their customers and it’s leading to suppliers suffering from what we sometimes call, ‘initiative fatigue.’

The need for brands to collect data is here to stay and it’s time to deal with the thorny issue of how we can get suppliers to adopt the necessary tools and engage in net zero requests.

We need suppliers

Further to this conundrum, brands face something of a basic and rather obvious truth; they need suppliers. For example, brands need suppliers to provide carbon information, ideally using the tech setups that already exist, and they need them to engage in this activity over and above “business as usual”.

Why then, don’t more brands make their suppliers’ lives easier? We’re missing a trick. Let’s flip the way in which we work with suppliers – rather than bombarding suppliers with information requests, let’s encourage them to do what we need.

We can learn from marketing

Let’s turn our attention to another department, one that has had to apply the principle of encouragement rather than force. Marketing cannot force potential customers to buy or adopt a product or service, instead, it engages customers, encouraging them to adopt or buy. This is usually by appealing to a need or emotion.

What’s obvious in the customer-facing world is customers have a choice. For example, as much as I would love to be able to require an audience to buy what we’re selling, to come to our events and read our content, I obviously can’t insist.

This is now, more than ever, the same with suppliers. Like potential customer, suppliers have a choice. The fact that brands need suppliers in order to collect net zero data, gives suppliers more agency. Suppliers now get to exercise choice through their behaviour, and it’s this choice that is absolutely central.

Now don’t get me wrong. It’s not that suppliers want to veto what brands need from them, it’s more that they’re facing too much noise in the form of new technology, information requests and the resulting processes. They’re overwhelmed.

If you want suppliers to engage in your net zero efforts, think differently. Simply piling on more pressure won’t get the best of them. Rather, let’s think more about persuasion and encouragement, and how to show them value. The marketing process involves engaging customers, building strong relationships with them and offering them value, with the purpose of capturing value in return. You’ll see three-quarters of this process is about how we appeal to customers, not the other way around.

If we apply this concept to suppliers, we get a useful way of thinking about the relationship. Why don’t we engage suppliers more, build stronger supplier relationships and create value for them? If marketing is anything to go by, the result will be that we capture value from suppliers – like getting them to complete compliance questionnaires, do forecasts, take part in quality programs and log into (and actually use) those expensive systems.

Rather than trying, in vain, to force suppliers to engage in net zero activity, let’s market to them.

Now, as net zero delivery dates creep closer, brands can empower themselves to step up by stepping into the shoes of suppliers and appealing to them. As we explore new ways of working with suppliers, who knows what solutions could be inspired?

By Anthony Payne, chief marketing officer of HICX, the supplier experience platform

Costas Xyloyiannis, CEO at HICX, discusses why the time is now for supplier experience in supply chain and procurement and its rise to the top of conversations in the space.

“I feel like the focus is shifting.”

Gone are the days of supplier experience being hidden away in the background. Today, it sits as an increasingly important target area within the procurement and supply chain space. But it hasn’t always been this way.

For Costas Xyloyiannis, CEO at HICX, he is pleased to see supplier experience’s conversation grow. “I’ve been in this space for 23 years and even if we go back three or four years ago, no one was talking about it,” he tells us. “It’s great to see a movement beginning to happen.”

Speaking with CPOstrategy at HICX Supplier Experience Live in Amsterdam, a day before DPW Amsterdam kicked off, he revealed how satisfying it was to see its evolution take place. And clearly there’s a market for it. Scores of people filled the Tobacco Theatre in Amsterdam all eager to listen to the many discussions and speakers attending the half-day event. “It is very satisfying because you see people’s minds changing in the same way that it did for the customer and employee experience,” he explains. “What you have to think about is that almost every company is also a supplier so it’s in your interest to focus on the supplier experience side. In another context, you’re also a supplier and people should understand that we’re all in it together. If you don’t think about solving it, then you’re going to have that pain yourself.”

Driving Supplier Experience

Indeed, it’s an issue that needs solving. Xyloyiannis explains that not understanding the necessity of supplier experience is a common misconception because it affects everyone in different ways. “Sales and marketing are the ones likely to understand what it means to be a supplier but they’re detached from the problem,” he says. “They are probably going into a portal and filling things in many times, it’s just not procurement doing it so that’s why they can’t make the connection. What we all need to realise is that focusing on supplier experience is in all of our interest. Ultimately, you have to think it’s just the right way of solving a problem because I create efficiency for myself and I’m also a supplier.”

HICX Supplier Experience Live in Amsterdam in October 2023

Xyloyiannis goes on to explain that if the focus is on supplier experience, an opportunity has been presented to create net efficiency – which is a massive win for all. “This benefits everyone because it’s not a zero-sum game,” he says. “If you think about business cases of other solutions, it’s we’re going to fire people and cut headcount. If I take the US government example of 150 million a year to DNB, this would’ve been a saving they would make without impacting any other functions internally. No heads would have to be cut; nothing would have to be outsourced. In a way, it’s free money for everyone when you can create net efficiency.”

Moving forward

Today’s Chief Procurement Officer has a lot on their plate. Amid navigating continuous innovation and transformation, ESG’s ever-increasing influence and battling inflation concerns all on the back of an already disruptive few years, procurement finds itself at an interesting moment. But looking ahead to 2024, supplier experience has its seat at the table and will only become a hotter topic in the years to come, according to Xyloyiannis.

“A lot of leading companies are putting huge amounts of focus on it,” he tells us. “Henkel posted on LinkedIn last year that they were driving their whole strategy around supplier experience. Then you’ve got Heineken and Unilever who are getting more involved in the space too. I think it is very much at the forefront, particularly in companies which produce goods and services. Supply chain has become very global and there’s a benefit to outsourcing and all these things, but it does make it very fragile. That’s why now it’s become important to focus on supplier experience because we have such a high dependency on one another.”

CPOstrategy visits HICX’s first Supplier Experience Live as organisations gear up to remove friction and become a customer of choice.

Supplier experience has never been such a hot topic.

After decades in the darkness, the importance of supplier experience is finally on the agenda.

Truthfully, success can’t be achieved alone. Without happy, committed and strategic supplier relationships, a business will stagnate. And now, organisations are waking up to the potential a robust supplier base could unlock.

The rise of Supplier Experience

Earlier this month, HICX launched its first-ever Supplier Experience Live the day before DPW Amsterdam. Hosted at the Tobacco Theatre in Amsterdam, it was recognised as an official DPW Amsterdam side event. The event’s vision was to help organisations use supplier experience to remove friction and become a customer-of-choice.

The half-day event began with a welcome from Ragnar Lorentzen, Chief Commercial Officer at HICX, who opened the door to the world of supplier experience and the market developments that have led the way. Lorentzen handed over to the first keynote speech from Dr. Elouise Epstein who explained that the ERP system was dead. Epstein suggested that the solution could be how well you exchange data with third parties.

Following Epstein was a panel discussion that featured Ruth Bromley, Director of Procurement Enablement at Heineken, Adam Hubbard, Senior Manager of Supply Chain, Governance and Performance at EDF which was moderated by Tommy Benston, VP of Global Client Management at HICX. The conversation advised of ways to gain a competitive advantage in procurement and supply chain through supplier experience management. Bromley highlighted three key learnings: speed, standardisation and simplicity, believing in a “single source of truth”.

Dr. Elouise Epstein
Dr. Elouise Epstein

Driving supplier adoption

Later, Anthony Payne, CMO at HICX, discussed how to drive supplier adoption and engagement through supplier marketing. Payne explained the value of segmentation which is the process of dividing the market into subsets of customers who share similar characteristics. Payne equipped the audience with six recommendations to take forward and advised them to use caution with the language they use with suppliers. Following the coffee break was Duncan Jones, former Vice President and Principal Analyst at Forrester Research, who unpacked the reality of how to decide on the correct types of solutions in the new best-of-breed era amidst a transition away from the traditional database-centric approach.

The afternoon continued with a panel discussion involving Marc Bengio, Senior Director and Head of Technology Enterprise Procurement at Johnson & Johnson, Lance Younger, CEO at ProcureTech and Jacy Bassett, VP of Professional Services, to explore the topic “Demystifying the technology landscape: How do you architect for Supplier Experience?” Each speaker gave their viewpoint on how to arm the procurement function of tomorrow to meet the challenge of an ever-changing digital world. The conversation offered guidance and counsel amid an explosion of transformative solutions in the space.

Costas Xyloyiannis, CEO at HICX
Costas Xyloyiannis, CEO at HICX

Bright future

Finally, Costas Xyloyiannis, CEO at HICX, took to the stage to announce the launch of IUBN which he explained was a streamlined way to identify legal entities in a bid to create net efficiency within the supply chain. One system, one time, everywhere.

Speaking exclusively to CPOstrategy at the event, Xyloyiannis told us, “It’s pretty significant running an event like this. I’ve been in the space 23 years, and finally, I feel like the focus is shifting. Two or three years ago no one was talking about supplier experience so it’s great to see a movement starting to happen. It is very satisfying because you see people’s minds changing in the same way that it did for the customer and employee experience.

“What you have to think about is that almost every company is also a supplier so it’s in your interest to focus on the supplier experience side. In another context, you’re also a supplier and people should understand that we’re all in it together. If you don’t think about solving it, then you’re going to have that pain yourself.”

Supplier experience is just getting started. Reimagine the possible.