Author

Nell Walker

Published

14 November 2024

Estimated Read time

6Mins

There were many inspiring themes on peoples’ lips at DPW Amsterdam 2024, including collaboration. One of the major reasons procurement…

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.”

Author

Sean Galea-Pace

Published

Estimated Read time

6Mins

Tonkean is built differently. Tonkean is a first-of-its-kind intake and orchestration platform. Powered by AI, Tonkean helps enterprise internal service…

Tonkean is built differently.

Tonkean is a first-of-its-kind intake and orchestration platform. Powered by AI, Tonkean helps enterprise internal service teams like procurement and legal create process experiences that transform how businesses operate. The transformation hinges on four key functionalities, intake, AI-powered orchestration, visibility, and business-led configuration (no-code), which internal teams leverage to use existing tools better together, automate complex processes across teams and tools, and empower employees to do better, higher-value work. 

Jennifer O’Gara is the Senior Director of Marketing, Director People and Talent at Tonkean. O’Gara’s route into procurement came when Tonkean became active within the space. “While we initially focused on solving complex process challenges across entire enterprises, we quickly realised how much procurement could benefit from this approach,” she explains. “Procurement processes are inherently complex and collaborative and cross-functional, making them a perfect fit for Tonkean’s orchestration capabilities. We were right. Since we entered the market, we’ve been blown away by how enthusiastically process orchestration has been received. That’s keeping us excited about procurement.”

This year, DPW Amsterdam 2024’s theme was 10X, with a focus on the importance of companies aiming for a moonshot mindset instead of an incremental approach. As far as O’Gara is concerned, achieving 10X improvements in performance is within reach for procurement, but it requires a shift in how the function thinks about growth. “It’s not just about doing more of the same faster—it’s about fundamentally rethinking the processes that drive your business,” reveals O’Gara. “Your processes are like your company’s infrastructure. When you optimise at the process level, you don’t just create incremental gains; you can fundamentally transform the way you operate at scale. You can remove bottlenecks permanently, facilitate easier collaboration org-wide, and drive true, reliable automation across all your teams and systems. The result is exponential performance improvements that can be sustained over time. Aiming for 10X isn’t just a lofty goal—it’s achievable. The key is focusing your improvement efforts at the process level.”

However, the journey to 10X isn’t straightforward. Some organisations believe they can just layer new technology on top of old processes. According to O’Gara, this won’t unlock 10X growth and will still leave your company lagging behind. “Getting to 10X starts, instead, with building better processes—and moving away from the idea that any one technology will do the trick,” she says. “For example, AI. AI is powerful, but it’s just a tool, and it’s only valuable if used strategically. To truly unlock 10X improvements in performance, you need to integrate technologies like AI into your core processes in a way that’s structured, strategic, and scalable. You will only ever be as innovative or adaptive or as effective as your processes are dynamic, dexterous and dependable. How do you build better processes? That’s where process orchestration comes in.”

Process orchestration refers to the strategy — enabled by process orchestration platforms — of coordinating automated business processes across teams and existing, integrated systems. These processes can facilitate all procurement-related activities. Importantly, they can also accommodate employees’ many different working preferences and styles.

Instead of simply adding to an organisation’s existing tech stack, process orchestration allows companies to use their existing mix of people, data, and tech better together. One promise of process orchestration is to finally put internal shared service teams like procurement in charge of the tools they deploy.

This goes a long way towards solving one of the enterprise’s most vexing operational challenges: the inefficiency of over-complexity born of too much new technology. It also allows procurement teams to truly make their technology work for them and the employees they serve. As opposed to making people work for technology. Process orchestration breaks down the silos that typically separate working environments. No longer do stakeholders have to log in to an ERP or P2P platform to submit or approve intake requests, just for example. The technology will meet them wherever they are.

“It helps you create and scale processes that can seamlessly connect with all of your existing systems, databases, and teams, while accommodating the individual needs of your employees and meeting them in the tools they already use,” adds O’Gara. “Orchestration allows you to automate processes across existing systems—like ERP, P2P, and messaging apps—so data flows automatically between them. It allows you to surface technologies like AI when and where they’re most impactful for stakeholders.”

Speaking of AI, it remains one of the biggest buzzwords in procurement. Indeed, anything that offers Chief Procurement Officers cost savings and efficiency will prick their ears, but the question remains: can the industry fully trust it? O’Gara believes it is ‘overhyped.’ “When it first emerged, it wasn’t just seen as a new tool—it was almost treated like magic,” she explains. “The hype still hasn’t died down, and that’s been a problem. It’s created unrealistic expectations and skewed perceptions of what innovation with this sort of technology actually entails; I can’t tell you how many procurement leaders have admitted to us that they’re getting pressure from the C-suite to invest in AI-powered tools just because they have ‘AI’ in the name.”

While clear with her scepticism regarding generative AI’s current place in the market, O’Gara recognises its potential. “Generative AI’s potential is huge—especially if it’s deployed strategically at the process level,” she reveals. “It could truly transform procurement, shifting teams from transactional roles to strategic partners who are involved early in the buying process and appreciated for their unique expertise—and for the unique business value procurement alone can deliver. But AI on its own isn’t going to save procurement. The reality is, many organisations jumped into the AI hype without a real strategy, and that’s why they haven’t seen its full value yet. The key is integrating AI thoughtfully into core processes—that’s when we’ll start seeing its real potential.”

With an eye on the future, O’Gara expects the next year to continue to revolve around AI adoption, but in ways that deliver real value. “I think we’ll see procurement truly stepping into a more strategic role, with businesses recognising procurement as a key partner, not just a back-office function,” she says. “This shift will be driven in part by new technology, especially process orchestration and AI, helping procurement bridge gaps in communication and collaboration across teams. Another big trend will be the rise of personalised, consumer-like experiences in procurement—making buying and approval processes smoother, more intuitive, and better tailored to the needs of individual users. It’s an exciting time, and we’re just scratching the surface of what’s possible.”

Author

Nell Walker

Published

Estimated Read time

6Mins

It’s impossible not to be inspired by the energy at a DPW event. DPW Amsterdam 2024 was buzzing with that…

It’s impossible not to be inspired by the energy at a DPW event. DPW Amsterdam 2024 was buzzing with that same energy, its attendees soaking in information and inspiration from speakers, peers, other experts. We caught up with Rujul Zaparde, Co-Founder and CEO of Zip, at the event to dive into the procurement landscape and chat about the specific qualities DPW brings to the sector.

Zaparde is the Co-Founder and CEO of Zip. At the beginning of Zip’s journey, Zaparde and his fellow founder, Lu Cheng, based the company around their own experiences as end-users of the procurement process. They took their lived confusion around having multiple intakes for a contract, for the purchase request, and all the different complicated components of the process, and created a solution.

“And so, we started Zip and created the category of intake and procurement orchestration. We’re very grateful to have been named the leader in the category,” says Zaparde, in reference to having just been named a category leader in IDC’s first ever Marketscape for Spend Orchestration.

So, as is often the case, procurement is something Zaparde fell into. In this case, he got involved with procurement specifically to solve pain points. Prior to Zip, he was a Product Manager and Cheng was an Engineering Leader, both at Airbnb; they knew very little about procurement. “We were just end-users,” he explains. The upside of this was that they were able to come into the industry fresh, without the baggage and legacy issues that can come with being in a sector for a long time.

UX first

“At Zip, we really try to take a user experience first approach,” Zaparde continues. “What we found is the highest leverage change you can make in any procurement organisation is to make it easier for your employees to actually adopt and follow whatever the right process is. If you do that, then all of finance, procurement, accounting, and even IT find that they’re suddenly swimming with the current, not against it. And you can’t do any of that unless you solve for user experience.”

Taking away problems, the way Zip does, also takes away a barrier to ambition. The theme of DPW Amsterdam 2024 was 10X, a term on the lips of many across all sectors. Once immediate issues and pain points are addressed, 10X is something businesses can aspire to, with many talks and workshops during DPW Amsterdam focusing on how to approach this.

Getting the mindset right

For Zaparde, 10X thinking is a necessity for growth. “You have to aim for 10X to even end up at something X,” he explains. “That requires ambition. I also think that when you think in terms of 10X, and your mindset is angled towards incremental change, you’re much more open to thinking of solutions that are perhaps a little more risky. It changes your perspective.” 

A mindset shift needs to happen before anything else. This involves considering the needs of procurement and the wider company, having a north star in mind, and then breaking changes down to an incremental level. 

“Then you can start to think about the steps you need to take to get there,” Zaparde explains. “A big component of this is bringing along your peers and stakeholders across every function that’s tangential and critical to the core procurement workflow and path.”

Innovating for good

The work Zip does is indicative of the shift towards continuous improvement and advanced technology that procurement has been going through in recent years. There are things that are possible now that weren’t possible even a year ago, thanks to the vast innovations being made. One of the hot topics right now is generative AI, something that’s opening up a world of possibilities.

“It’s the elephant in the room right now,” says Zaparde. “With the capabilities that gen AI unlocks, you can automate a lot more. That allows you to cut down a lot of the transactional and operational work that procurement and sourcing organisations are doing. Procurement is tired of the status quo. It’s been an underserved function for over 20 years, and I’m glad that’s finally changing. I feel privileged for myself and Zip to be part of the conversation, and that we’re seeing all these amazing changes happening.”

Zaparde believes we’re already seeing the benefits of the major changes that have occurred over the last couple of years in procurement. In fact, he knows this, because Zip has helped its customers save around $4.5bn of spend over the last two years, which is an astonishing statistic.

“One customer of ours, Snowflake, achieved over $300m in savings alone,” Zaparde continues. “We’ve seen tangible benefits already. The way procurement is evolving isn’t a hypothetical thing – it’s really happening.”

Fragmentation on fragmentation

The key, again, is overcoming base level issues for the sake of evolution. This is precisely what Zip provides, after all. But sometimes, the issue is at a data level. Unclean data is something that technology leaders are talking about a great deal right now, with some feeling that it holds them back from implementing new technology. Zaparde believes that businesses should be questioning why their data isn’t clean from the start, rather than worrying about trying to cleanse existing data.

“You don’t just clean your data – the real question is why is your data not clean in the first place?” he muses. “You have to have a clean entry point for it. I don’t think I’ve ever spoken to a Fortune 500 CPO that said they had clean data. I think it’s because of the upstream processes in intake and orchestration. If all the cross-functional teams – the IT review, the legal review, the finance – are being manually shepherded by the procurement operations organisation, then how can you possibly end up with clean data?

“People are keying the same information into multiple systems, which might mean they answer in similar – but different – ways. So you end up with fragmentation on fragmentation. But if you have one single door to that data, you’ll be able to drive only clean data, because it’s a funnel. If you let everyone have different swim lanes that never intersect, you won’t have clean data.”

As 2025 approaches, Zip has multiple product capabilities and features coming up that Zaparde and his team are very excited about. This includes leveraging gen AI, something we’re seeing incredible utilisation of across the sector.

For Zaparde, attending events like DPW Amsterdam to talk about what Zip does and interact with peers and clients alike is a joyous part of his job. “DPW is really accelerating the rate of change in the procurement industry. That’s very much needed, and it’s energising to see so many incredible people from the procurement world in one place. I love spending time with these forward-thinking procurement leaders at this event.”

Author

Nell Walker

Published

Estimated Read time

5Mins

Whether we’re talking about gen AI, 10X, or any other kind of advanced tech solution, data is at the core…

Whether we’re talking about gen AI, 10X, or any other kind of advanced tech solution, data is at the core of the discussion. And when data isn’t clean or ready for the implementation of something being built on top of it, businesses can end up significantly held back. Mithra-Ai is an organisation that helps its customers to build trust in their data, which is a core issue for many. 

“That sets us apart,” says Christophe Frère, Co-Founder of Mithra-AI. “We help procurement leaders and category managers create, execute, and realise their strategies. This is backed by reliable, comprehensive data, both internal and external, tailored specifically for their categories.

“Maintaining high-quality data is crucial as it influences the accuracy and reliability of AI-driven insights and recommendations. That’s where Mitha-AI comes in. Our cleansing, enrichment, and auto-classification engines ensure that procurement stakeholders, including data scientists, begin with a reliable data foundation.”

Cleaning and classifying data

Mithra-Ai is an AI-native SaaS solution, which starts off by proposing a meaningful spend hierarchy for every category. What’s key is that this is paired with an automated cleansing and classification engine. This is so important because the only way to achieve truly clean data is to make sure it enters the system clean in the first place. 

“Clear visibility into categorised spending eliminates uncategorised expenses and wrong assumptions,” says Frère. “When supplemented by relevant external data intelligence, category managers are empowered to negotiate with confidence, achieve greater savings, and monitor initiatives effectively.”

A world beyond cost savings

When launching Mithra-Ai in 2021, the company’s founders rightly foresaw that the role of procurement would evolve beyond focusing merely on cost savings, and become the central hub of every organisation. Because of that, they knew that accurate, reliable information was needed – hence the necessity for Mithra-Ai.

As procurement has shifted, the status quo is no longer good enough. It’s an exciting time for the sector, but also one of high demand in the race to adopt increasingly advanced technology. But it’s necessary for efficiency and growth.

“Tesla and Nvidia exemplify the power of embracing change over maintaining that status quo,” says Frère. “Procurement is facing intense pressure to evolve with organisational needs. Those organisations can opt for incremental changes, which will likely slow them down, or pursue a 10X leap to maintain competitive advantage. The latter requires bold and decisive leadership from heads of procurement.”

The road to 10X thinking

The way to drive 10X thinking, Frère believes, is through having a clear vision of your goals. Sometimes businesses, especially ones which are going through major change or those navigating outdated legacy systems, are at risk of losing sight of their goals. But having that vision is a foundational necessity, regardless of what stage you’re at.

“Set aspirations high, and question existing norms,” says Frère. “Procurement leaders can draw inspiration from startups by fostering a culture of innovation through small-scale initiatives that can rapidly expand. Reevaluate the skills and team structure necessary for future success.”

Another important aspect to bear in mind when considering these things is the level of risk you’re willing to undertake when setting goals and aspirations. “That’s often overlooked,” Frère continues. “Determining the acceptable level of risk is crucial. It significantly influences partner selection and the outcome of RFPs.”

Thinking big, starting small

While ambition is vital to 10X thinking and beyond, businesses must also make sure they don’t bite off more than they can chew. Launching into adopting huge volumes of advanced technology can lead to overwhelm and can make a business stall rather than evolving. A more careful approach is required.

“Think big, start small,” says Frère. “Prioritise high-impact, low-effort initiatives over those requiring significant effort. Many transformation projects fail to deliver the expected benefits and incur high costs during the program.” This is another reason to decide on the appropriate risk level early on, in order to guide prioritisation decisions and transformation pace. 

It’s an incredibly exciting time for procurement, and that includes Mithra-Ai. In a very short time, it’s developed several foundational modules for its data-driven category management solution. This includes the Collaborative Initiative Tracker that was launched during DPW Amsterdam 2024 – just one of Mithra-Ai’s inspiring undertakings as we approach 2025.

“The tracker means that procurement teams can now involve multiple stakeholders in collaboratively tracking and enhancing the impact of key initiatives, such as cost-saving measures,” says Frère. “Exciting times lie ahead.”

DPW Amsterdam is the perfect stage for launching a solution like this. It’s an event that inspires a culture of innovation, bringing procurement professionals together to teach, learn, and shout about their latest additions to the procurement landscape.

“DPW stands out as the premier procurement tech event of the year,” says Frère. “Practitioners can explore and engage with procuretech suppliers, showcasing valuable use cases and personal stories across multiple stages. DPW is a catalyst for ideation, creating trust and confidence in the benefits of applying cutting-edge technologies to improve business outcomes. This year’s event felt even more international than previous years. I look forward to seeing it continue to grow.”

Frère’s main takeaway from DPW Amsterdam this year is that a solid data foundation is essential – something he was well aware of as part of Mithra-Ai. “Without it, transformation projects and new technologies will struggle to succeed,” he concludes. “In the past two years, there has been increased focus on sustainability and risk intelligence, driven by numerous new solution providers. However, during the DPW Amsterdam 2024 conference, we observed new trends coming up and, again, more focus on data quality, which works to our advantage.”

Author

Nell Walker

Published

Estimated Read time

6Mins

When we’re talking about technology in procurement, the importance of partnership is a major component for success. No business is…

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.”

Author

Nell Walker

Published

Estimated Read time

6Mins

‘Digitalisation is just the beginning’ according to Crowdfox, a business which aims to improve procurement by bettering the ordering process…

‘Digitalisation is just the beginning’ according to Crowdfox, a business which aims to improve procurement by bettering the ordering process while lowering costs. That tagline speaks to Crowdfox’s dedication to advancing procurement using the exciting tools the sector now has at its disposal, and this push to innovate is being driven, in part, by Martin Rademacher, Crowdfox’s CSO. We sat down with Rademacher at DPW Amsterdam 2024, the exciting vibe of the event spreading far and wide around us. 

Rademacher is responsible for everything to do with Crowdfox’s customers. From sales, to marketing, to customer onboarding and success, and everything in between – that’s Rademacher’s wheelhouse. His background is in management consulting, with a focus on procurement and supply chain. So, while he started out in sales, he soon decided that procurement was the direction to move in.

“During my time as a consultant, I found procurement very interesting because it’s so versatile,” explains Rademacher. “Of course, it’s about the transactional phase with suppliers – but also you’re so connected with R&D, production, logistics, and so on. You have so many fields of application.”

10X thinking

At DPW Amsterdam, the overall theme of the two-day event was 10X. The concept of the 10X rule is around taking a goal you’ve set for yourself and multiplying it by 10. It’s an aspirational tool, coaxing all of us to aim higher. In procurement, that means innovating.

“In the last two years we’ve seen tools like ChatGPT trigger some big adaptations in the procurement world,” says Rademacher. “I think there is the opportunity now to achieve 10X in terms of efficiency gains. Especially when it comes to making better decisions, more quickly, in order to analyse data. We’re now finding out what AI can really do, and focusing on how that can help with strategy.”

For Rademacher, he believes people have the right tools to achieve 10X – it’s now about implementing those tools properly, and having the right culture.

“In the last couple of years, implementing tools has become much easier than it was a decade ago,” Rademacher continues. “They’re so well designed that they fit into large procurement systems, and can connect with other best-of-breed tools. I’d say implementation should be the focus, but it’s not that complicated anymore. AI tools especially are really intuitive. As a result, you don’t need much in the way of change management. People just intuitively cooperate with AI.”

The question of security

The big challenge, Rademacher believes, is data protection. When it comes to barriers preventing a 10X approach, concerns around data privacy are among the biggest issues. As a result, organisations have to take the necessary precautions before plunging into making major technological changes, or risk falling at the first hurdle.

“In the EU, it’s all about data protection,” says Rademacher. These concerns led to the Artificial Intelligence Act (AI Act) coming into force in the EU in August 2024. It was created in response to the rise in generative AI systems, and ensures that there’s a common regulatory framework for AI within the European Union. “Companies are very concerned about their data, but I wouldn’t call this an obstacle – more like a challenge.

“The key is making sure you have a protected environment. Start with a pilot in a limited space, for instance, and then make sure you can find a solution you can control in a safe environment that suits your operations.”

Shooting for the stars

With these measures in mind, it’s never been easier to implement new technologies and aim for that ambitious 10X goal. Certainly, advanced tools have never been more accessible, or more straightforward for businesses to educate themselves about. Even as recently as two years ago, integrating multiple elements of advanced tech – like genAI – wasn’t really possible.

“It definitely wasn’t easy to combine sources the way we can now,” says Rademacher. “Now, you can provide a much better user experience experience not only for procurement professionals, but for anyone who takes advantage of what procurement introduces to the company. Finding the supply to fulfil your demand is so much easier now. You no longer have to have difficult conversations starting with an email to your procurement professional to identify whether you’re allowed to purchase from a certain vendor, and whether they’re vetted or not. Streamlining processes like that makes that information quick and easy to identify.”

Additionally, we’re at a point with advanced technology where the tools we have access to are capable of handling more and more volumes of data at an extremely fast pace. “In consulting, for example, every project started with an analysis of the status quo of a firm,” says Rademacher. “We’d figure out who the vendors are, the categories, and the spend. Depending on the workforce, this could take one or two weeks. Now, with the tools we have access to, you can gather this information in 24 hours.”

The evolution continues

While we’re seeing many of the benefits that come with genAI and other advanced technologies already, it’s only the beginning of what we can achieve using these tools. GenAI is at a peak right now, but according to Rademacher, it might take another five years to achieve its full productivity level. “There’s also this ambitious idea going around of fully autonomous procurement, and it’ll likely take a good 10 years to reach that level of productivity,” he adds. “On the other hand, nobody is talking about robotic process automation anymore because we’re almost there with that already.”

Another challenge is data quality. The cleanliness of an organisation’s data can make or break its use of advanced technology, which is where making the right connections with service providers comes in. “It’s a good example of when to find the right partner,” says Rademacher. “Find someone from the innovative tech space who you think you can rely on. Don’t try to do it all on your own – that’ll just hold you back more and more. Be bold; find the right partner to make the most of your data and that helps you constantly improve. There’s a lot of talent out there, a lot of solutions that are really helpful for organisations of all sizes. You’ll improve step by step.”

There’s no doubt that it’s an exciting time for procurement. The atmosphere at DPW Amsterdam 2024 was electric for that exact reason. The event, in Rademacher’s words, has “a really strong influence on the sector and enables attendees to learn about how the landscape is developing in real time”.

“The AI-driven future is already a reality for us,” he states. “We’re beyond the pilot phase with our AI tool, ChatCFX, and now we really want to drive market share. 2024 going into 2025 sees us in a good position with high user visibility, and now we’re adding ChatCFX to the game, pushing it into the European market. We’re at DPW Amsterdam to meet the players who are looking for a solution exactly like ours, making it an invaluable place to be.”

Author

Nell Walker

Published

Estimated Read time

6Mins

Certain procurement pain points can prove debilitating for a business, freezing it in its tracks when it’s trying to grow…

Certain procurement pain points can prove debilitating for a business, freezing it in its tracks when it’s trying to grow and improve. This is where companies like Candex are able to step in and turn a headache into something so simple, it requires no further thought. 

Danielle McQuiston is the Chief Customer Officer at Candex. She’s been with the fintech startup for five years, spending two decades prior to that working in procurement at Sanofi. Candex is a technology-based master vendor that allows customers to engage with and pay one-off or small suppliers without setting them up in their system. This means that the system doesn’t get clogged up with suppliers that are rarely or never going to be used again. 

“We’re primarily used for what companies consider tail spend, and we typically deliver it as a punchout catalogue for a really simple user experience,” McQuiston explains. That ability to support lots of customers was what drew her to the role. “Coming to Candex, I was very excited about what they were doing and wanted to help as many companies as possible.”

Addressing tail spend

That ability to address tail spend in a unique way is the main thing that differentiates Candex. It’s an enormous problem for procurement professionals. The way Candex delivers it is through a digital plug-and-play solution, removing the need to be dependent on human intervention. “It’s a horizontal solution for any good or service, and it’s available in over 45 countries now,” says McQuiston. “It becomes part of the customer’s ecosystems and leverages the P2P process. It’s super compliant, and allows a lot of control.”

With this tool in place, Candex’s customers are able to gain much better control over their smaller purchases, defining what is allowed to be purchased. For many, this tool allows them to put tighter restrictions on purchases than their e-procurement systems are able to do. Additionally, Candex runs suppliers through screenings every day, which generally doesn’t happen for small, rarely-used suppliers.

“We run really detailed compliance and sanction screening against all those vendors, taking away a really daunting task from customers,” McQuiston states. “Customers probably check those suppliers once when they’re being set up, but then they never look at them again. Every day, we’re checking them, and keeping an eye on them when our customers can’t.”

Candex’s reporting is extremely detailed, and provides customers with the kind of real-time visibility they wouldn’t normally get – even in their own systems. Reports are generated weekly or monthly, including the diversity status of suppliers. This is data that a lot of clients then feed directly into their Power BI tools and data lakes, meaning they’re able to integrate it seamlessly into their other data.

Cleaning up the data

The whole purpose and aim of Candex’s tool is to make life easier for its customers, streamline its processes, and improve efficiencies. To that end, standardisation is key when it comes to business improvements, and that includes preparing data prior to implementing new technologies and processes. When it comes to ensuring a business’s data is healthy –  before launching into major tech changes – accepting the necessity of making foundational change is key. 

“Data cleansing processes are ugly, cumbersome, and long – and everyone has to do them,” McQuiston comments. “But you have to accept that you’re going to have to do something, if you want to get a handle on your spend. First and foremost, you need to standardise the way you name things, the way you put data in the system, and you need a really strict discipline around that. All of those things will make backend processes a lot easier.”

It’s just one of many considerations CPOs need to bear in mind when seeking out technology solutions and implementation. Modern procurement departments have a seat at the wider business table now, and what they do impacts the entire business. So when it comes to utilising solutions for the sake of the business at large, there are many factors to think about.

“As with any data or technology, it’s all about garbage in and garbage out,” says McQuiston. “Any advanced technology should be used with caution and viewed with a critical eye. You have to start with knowing what you want out of it. 

“A lot of times, people put technology in place because it looks interesting, but you need to start with the problem and work backwards. If the issue is user experience, you need to make sure that whatever you’re implementing focuses on a positive UX. If the problem is unclean data, you need to make sure you’re putting in place all the foundational elements you need to make that better. Always start from the perspective of implementing a technology based on a problem, rather than the other way around.”

Improving UX in 2025

It’s a seriously dynamic time to be involved in procurement right now, as evidenced by the intense buzz around us at DPW Amsterdam as we sit with McQuiston. As we look ahead, she envisions that procurement will have an increasingly powerful impact on user experience. This is particularly important at a time when tasks are becoming increasingly automated, with less and less direct human interaction.

“We’re also seeing a pretty big leap forward in terms of best practice sharing amongst our clients,” says McQuiston, something that events like DPW also encourage. “For Candex, a big theme of 2024 has been getting our clients together to share best practices and information, helping them to develop further expertise in the field. 2025 will have more of the same, but there’s now a higher level of maturity out there in the way customers are considering tail spend. As people continue to onboard solutions, it will be interesting to see how that impacts the UX in relation to Candex. We’re always looking for ways to make our tool more user-friendly and add better functionality.”

All of this is why Candex’s customers love the company. On a base level, Candex takes a complex pain point and makes it simple. In a broader sense, the reason Candex is becoming so popular is the way it works with people. “The most common feedback we get from customers and suppliers is that we’re great to work with because we’re so flexible,” says McQuiston. “We hired a team of procurement experts, so our team is made up of people who really understand the pain of our clients, and can anticipate their fears, their needs, and cater to those.”

Author

Nell Walker

Published

Estimated Read time

6Mins

The buzz of DPW Amsterdam draws in the most innovative minds across the industry. They’re there to have riveting conversations…

The buzz of DPW Amsterdam draws in the most innovative minds across the industry. They’re there to have riveting conversations with their peers, to inspire, to teach and learn in kind. And they’re there to keep an eye on an industry that doesn’t stop changing for the better.

This is a big part of the appeal for Fraser Woodhouse. Woodhouse leads the digital procurement team within Deloitte in the UK. His team historically focused on large-scale transformations, providing a backbone for suite implementation. Increasingly, however, it’s turning its attention to helping clients navigate a plethora of technology solutions. The goal is to help them build and scale, and take advantage of some of the more niche functionalities available. These are things that can be highly daunting for many customers, which is why Deloitte is there for support.

“We’re helping clients ask the big questions,” Woodhouse explains as he sits down with us at DPW Amsterdam 2024. “How do you connect the technology in a way that allows data to flow from one system to another? How do you deal with processes that are connected to solutions which all have their own release cycles? How do you approach change management? That underpins so much of where the value is going to be achieved, and a lot of the providers will be focusing on it. They just might not have the same capability that Deloitte can provide.”

For Woodhouse, getting involved with procurement was a total accident. He even left the sector at one point, but his strong foundational knowledge – and the exciting landscape procurement is enjoying right now – lured him back in. “It changes faster than I can get bored with it, that’s for sure,” he explains. “Procurement is fascinating.”

Aspiring to greatness

Especially now, with constant conversations around genAI, 10X, and beyond. Procurement is only becoming more interesting, more enticing, drawing young professionals in to fill gaps in the talent pool. 10X was actually the theme of DPW Amsterdam this year, a notion that’s on everyone’s lips. And for Woodhouse, it’s absolutely something to aspire to.

“Aiming for 10X is sensible. You just have to consider your timescale. I’d caution against running before you can walk, but a culture of experimentation is important. Running small-scale pilots can help you hone in on where you really want to see value, or where value is likely to be generated. Starting with requirements is a fundamental thing at the moment, but you shouldn’t underestimate how long that will take. And it’s a continuous consideration, because requirements change. Just keep trying to refine your solution in order to take advantage of everything that’s out there right now.”

Fotograaf: MichielTon.com

Having the wrong mindset is one of the major barriers to adopting 10X thinking. It all starts with the company’s culture, and whether that’s one of growth or not. “I imagine most of the people here at DPW Amsterdam have already made that mental shift,” says Woodhouse. “Last year, people were still trying to understand how they, as big companies, could utilise startups. That’s changed now, and it’s amazing to see companies that were startups three years ago working with all these big enterprise customers. 

“They have scaled and grown in partnership with those customers. Mindset is so important, and having the wrong one will only create barriers and missed opportunities.”

Always improving, never slowing down

When it comes to the advantages that technology has brought to procurement in the last few years, the list is endless. Procurement has gone from an overlooked segment of any given organisation, to having a seat at the table and helping make major business decisions. 10X thinking – whether it goes by that name or not – has been spreading across the segment and fuelling businesses to aim higher.

“The layers of automation have really improved,” says Woodhouse. “A year or so back, there were a handful of use cases that you could truly automate, but now you can do it at a much larger scale. Another big change is around security concerns. There are more tried and tested case studies to draw upon now, and solutions are more readily available. You don’t necessarily have to be a pioneer, because someone else has already taken that first step.”

The question of data

Something else that holds businesses back, despite the innovation at their disposal, is an element that can be harder to change: poor quality data. When trying to implement advanced technology solutions, bad data can make or break their success.

“It’s always useful to focus on that and have a dedicated work stream,” Woodhouse advises. “You need someone who really understands data. I think there’s a tendency to try to boil the ocean before you even get going in your transformation, which isn’t necessarily a bad thing. Cleaning up your data before you start, and having a fresh foundation will help you make decisions on what to implement on top of that good data. 

“Doing all of that is obviously hugely beneficial, but it’s going to slow you down, in many cases. There are ways around that, like embedding the cleanup of data within the new processes. Data is important – we shouldn’t underestimate that – but there are different approaches to solving the issue of poor quality data, like buying it or using genAI to restructure your data into something more powerful. Either way, you need a strategy.”

Novel thinking 101

Some businesses fall into the trap of thinking that they can’t achieve specific things because their data isn’t in the right position, but novel thinking around data can allow them to still drive forward. “You’ve just got to focus on it. You can’t assume the data’s going to fix itself,” Woodhouse adds. 

Novel thinking is certainly something that can be seen at DPW events, and DPW Amsterdam 2024 was no exception. People congregated there to learn, to share stories, to inspire. For Woodhouse, the magic of the digital procurement sector right now is that everybody recognises that their journey has no end. While that may be daunting, it’s a positive thing and keeps procurement professionals striving for more.

“It’s a continuous improvement journey, and I think the best-performing organisations will recognise that, and invest in the business capability to continue that journey,” Woodhouse concludes. “That’s how you get proper value. I love hearing about how people frame problems differently, and how they approach the solutions.”

Author

Nell Walker

Published

Estimated Read time

6Mins

Making procurement slicker, more streamlined, is the name of the game right now – and this is precisely why Globality…

Making procurement slicker, more streamlined, is the name of the game right now – and this is precisely why Globality exists. It’s an organisation which leverages advanced, native-built AI to make sourcing more autonomous for Fortune 500 and Global 2000 companies, meaning it has a finger on a pulse of the technology tools procurement now has access to as the industry shifts and evolves.

Keith Hausmann is the Chief Customer Officer at Globality. He has been working in procurement since the early 90s, both in industry as a service provider, and now, at a technology company. He came to Globality from Accenture, where he ran the operations business. During his first real job after college, Hausmann was also part of a training program at a major Fortune 500 company, working closely with a COO. At some point they got into a conversation about salespeople seemingly having an advantage over procurement people due to their access to information, knowledge, and training. The COO suggested that they launch a company to help support procurement. For Hausmann, it was a serendipitous entry to the industry.

“I came to Globality because I saw the business was struggling with how to scale, automate, and deliver a differentiated user experience. Ultimately, I found it really compelling, and joined about five years ago.”

Achieving 10X thinking

Hausmann admits that the concept of what procurement is has only been defined relatively recently, and he’s been in the industry long enough to have seen the shift happen and suddenly accelerate over the last few years. Now, procurement professionals are in a position where they’re able to think big, and they have the tools to support that way of thinking. One of the most-discussed topics right now is 10X, whereby businesses are setting targets for themselves that are 10 times greater than what they can realistically achieve.

“There continues to be, and always has been, so many mind-numbing manual activities that go on in procurement spaces,” says Hausmann. “We’ve built small armies of teams to handle those things. I think 10X has prompted us to take a step back and ask if there’s now technology that can uplift the role of people in the function and take on some of those automatable tasks. Whether that’s writing RFPs, discovering suppliers, or analysing proposals – these are all things that can be automated in today’s technological world. With 10X thinking, you can imagine the many, many, many things that can be automated and just go after them. 

“There are barriers, of course. The biggest one is not being able to convey a compelling vision of what we want people to do in the new world. It’s not necessarily about making them go away – it’s about making their daily jobs, lives, and work more valuable. There are so many things around category thinking and strategy that don’t get done because people are spending so much time on tasks that could be automated. So I think the barrier is creating that vision and that plan to shift the operating models, roles, and the skill sets to something new and different.”

People power

Hausmann believes that if roles are reshaped and honed in response to automation, it’s less likely that there will be resistance to change because employees will know exactly what they’re doing, rather than being concerned about their future. “They have to know what they’re doing before they jump on board. It just requires a mindset change and good change management.”

Hausmann believes it’s down to the CPO to drive that change management by conveying the activities, impacts, roles, and operating model they envision. If they can paint a picture of how humans can impact things in a new way, alongside the new technology rather than against it, suddenly it’s an exciting prospect and people are keen to make a bigger impact. 

CFOs and CPOs joining forces

While CPOs now have a long-deserved seat at the table to help push change business-wide, CFOs’ roles are also expanding and having an increased impact on procurement. “I think they’ve always influenced what’s going on in procurement,” says Hausmann. “CFOs are the champions of many things, but certainly improving the bottom line of the company. They’re also champions of using technology to make the organisation more resilient, more scalable, and more efficient. There was a time when people thought that the CTO or CIO would be doing that, but more often than not, the CFO is the ultimate owner of improving business impacts. More and more, we’re seeing our customers leaning on the CFO to help them make decisions about investments that have a big impact through technology and AI. 

“These days, the relationship between the CFO and CPO is wildly different to what it once was, and CFOs are showing more interest in procurement as a function than ever, making a difference to the bottom line. It makes sense because, in theory, procurement controls one of the biggest cost line items in a company, besides raw headcount.”

Matching the pace of technology

The fact that we still need to focus on change management and relationships confirms that the way procurement is changing isn’t just about the technology. Far from it. However, technology is moving at an incredible pace and needs to be taken seriously. There are things that are possible now which couldn’t be done even one or two years ago.

“A few years ago, technology couldn’t write an RFX document for you,” Hausmann says. “Technology could not instantaneously bring to light the most relevant suppliers from within a customer’s supply base, or in the broader market. It couldn’t write a contract, or an SOW, or a work order. It can now. Those are things that are near and dear to my heart that were impossible 3-5 years ago.”

With these tools in mind, procurement professionals are able to think about the future in short-term stints. Five-year plans are no longer good enough when it comes to the way procurement is shifting – a year is now the maximum for putting plans in place. 

“I’ve always thought that procurement, from the perspective of technological advancement and investment perspective, should sit under a broader business umbrella,” says Hausmann. “I’d guess that probably 50% of companies in the world right now have some kind of program in place to save money or improve agility by investing in technology. And speed to market is more important than ever, so sourcing can’t be a bottleneck.”

Looking ahead, Hausmann expects to see many of the unique, differentiated technology providers becoming interoperable together, because big enterprises want services that operate and scale well in combination with others. 

“We’re seeing that a lot, and working with our customers on how we improve interoperability and integration,” he says. “Tools will become more seamless, more easy-to-use, more scalable. Another big thing is, and will continue to be, analytics. It’s a hot topic in procurement, and I think there are profound opportunities to be deployed. For Globality, we’ll continue to endlessly innovate on user experience, ease of use, and beyond.”

Author

Nell Walker

Published

Estimated Read time

7Mins

“I’m overwhelmed,” are Matthias Gutzmann’s first words when asked about DPW Amsterdam 2024. At the end of the bustling two-day…

“I’m overwhelmed,” are Matthias Gutzmann’s first words when asked about DPW Amsterdam 2024. At the end of the bustling two-day event, we sat down with Gutzmann, the company’s founder, and Herman Knevel, DPW’s CEO, for a debrief. Gutzmann also quite rightly pointed out that the final word on summarising those 48 hours is in the hands of the sponsors and attendees, but if the countless conversations we had with said sponsors and attendees are anything to go by, it was the best DPW event yet. And Gutzmann and Knevel agree.

“I really think that’s the case,” says Gutzmann. “We almost doubled the number of exhibiting startups, we had over 120 sponsors, more startup pitches than ever, and all the feedback I’ve heard so far has been amazing. There are always things you can do better, but I’m absolutely happy.”

Across the 9th and 10th of October, DPW Amsterdam welcomed over 1,300 attendees through its doors at Beurs van Berlage, Amsterdam. Those attendees arrived from 44 countries across 32 industries, and the event itself featured 72 sessions with 140 speakers across five stages. It’s abundantly clear that people are deeply passionate about DPW.

“On day one, it was already packed at 8:30 in the morning,” Knevel states. “The energy in the room was contagious, and the numbers speak for themselves. The startups, the innovators, the corporates, the mid-market – everybody who’s here has a genuine interest in what these guys are bringing to the procurement space.”

Reconnecting with the vision

Gutzmann describes that intangible energy as “bringing a little bit of joy back to procurement”. For many years, procurement was a very ill-defined concept – almost as ill-defined as the role of CPO. The shift has been a quick one, accelerated further by the COVID-19 pandemic, and events like DPW Amsterdam are part of the reason why. CPOs having somewhere to go, to meet, to learn about the procurement landscape is vital, hence that inspiring energy that permeates every DPW event.

“A lot of people are missing that vibe,” Gutzmann continues. “It’s why I founded DPW. I was inspired by Mark Perera [Chairman of DPW], who I worked with at Vizibl, and had great technology while also being so inspiring. I realised we needed to connect founders with CPOs. I think every CPO should talk to one startup founder per week, at least. It’s important that we listen to their vision.”

Striving for 10X

The core of those visions for the 2024 event revolves around the concept of 10X, the idea being that you set targets for your business that are 10 times greater than what you think you can realistically achieve. It keeps people ambitious, always striving for greatness, and it’s especially prevalent in startup culture – hence Gutzmann’s belief that CPOs should be connecting with them more.

“Deciding on 10X for this year’s theme was serendipity,” says Knevel. “The term came along and Matthias said, ‘this is it – this is what we need in procurement’. This is what the industry needs, and we’re exploring it, diving deeper.”

“Last year’s theme was ‘Make Tech Work’, which was all about getting the basics right in order to scale,” Gutzmann continues. “This year we said, ‘how can we take it further?’ We are entering the biggest wave of AI yet. That technology is giving us the opportunity and the possibility to scale outcomes. The world around us is changing so fast, so we need to be more agile, scalable, and faster in procurement. It’s a very ambitious, maybe lofty theme, but it’s a mindset more than anything else.”

“It’s the mindset that drives innovation and speed,” Knevel adds. “That’s really important in this age of procuretech and supply chain tech.”

When it comes to honing that 10X mindset, it’s all about having a purpose in mind. A lot of the procurement professionals we spoke to at DPW Amsterdam called this a ‘north star’, which is the phase Gutzmann uses too. “That’s where it starts. There’s so much procurement can do. There are so many problems in the world, and I believe procurement can be the solution to many of those. So I think it starts with the CPO and their leadership, their vision. You also have to embrace startup innovation, be more experimental in the way you work, instigate new ways of working, and be bold in your thinking. You also have to remember it’s okay to fail.”

Growing DPW

Something that’s particularly impressive about DPW Amsterdam 2024 is that it’s actually the second of the year. Back in June, DPW ventured into the North American market with an intimate summit held in New York City, which CPOstrategy was fortunate enough to be invited to. Planning one wildly popular event a year is one thing, but venturing into a whole new part of the world with an additional one is incredibly dedicated.

“I’m a bit more conservative when planning ahead, so there probably wouldn’t be a New York event without Herman encouraging me,” says Gutzmann. “I’m glad he said ‘let’s go for it’. It was a short-term plan, but it was ultimately very successful and the right decision.”

Knevel adds: “The feedback we got from sponsors and delegates was quite impressive. They were asking for more. And it’s not just Matthias and myself – we have a great team here. This is a massive production, but we made the jump and it’s paid off.”

Inspiration for 2025

When it comes to the lessons Gutzmann and Knevel have learned in response to this event, it’s more about narrowing down the influx of ideas DPW gives them. By the time we spoke with them at the end of the Amsterdam 2024 event, their heads were spinning with inspiration.

“I have so many ideas,” says Gutzmann. “Every year we reinvent the show, so we never rest. We’re always asking what we can do better. How can we improve? I think this year we maxed out the number of sponsor stands that are possible to have. We doubled the number of under-30 attendees. There’s the potential to go a little deeper on the talent side, connecting students with the corporates and building a proper program around that.”

There was also the Tech Safari this year. The idea was to make the expo hall easier to navigate, since it was more crowded than ever this year. Members of the DPW team acted as ‘super connectors’ to help attendees find the right solutions and help startups find new customers. The aim was to simply make it easier for everyone involved to find what they’re looking for in small groups,enabling them to find who they wanted, talk to them, and ask questions. It turned out to be an amazing interactive experience for people, making sure they felt thoroughly looked after and valued.

“Plus there’s an opportunity to cater more to the corporates coming in,” Gutzmann continues. “Perhaps we will build a custom program for them around the event. Some of them are already coming in with teams and doing annual leadership meetings outside of the venue, but I think there’s scope to show them solutions and do some workshops within the event. We can also do more with day zero, where we have site events. There’s much more we can do.”

Giving CPOs what they want

As for the broader future of the event, DPW’s heart lies in Amsterdam and will continue to do so. The organisation is building its team even further and putting strategies in place for future events, allowing it to move forward. “We follow the demand of what our customers want,” Knevel says. That’s what really drives DPW and how the event is themed and set up. The organisation listens to CPOs so it can give them exactly what they need, and what will help the industry level up further and further. 

“There are things we’re still developing,” says Gutzmann. “For example, the podcast studio [something introduced in its current form for 2024] is something Herman is very passionate about, so it was great to test it out here. There’s more we can do with that. We have so many ideas and it’s important to engage our amazing team on these ideas and see what they think along the way.”

“We’re ideating a lot,” Knevel adds. “And we’re asking our ecosystem what we should do more of.”

“Ultimately, we’re bringing in the voice of the customer to make sure we’re giving them what they want and need,” Gutzmann concludes. “That’s the whole purpose of DPW.”

Author

Harry Menear

Published

9 October 2024

Estimated Read time

3Mins

Findings of a DPW survey point to AI adoption set to grow 187% in the next year, but just 20% of teams currently use AI at scale.

DPW Amsterdam, one of the procurement and supply chain sector’s leading events, has released the findings of its new 10X Procurement study. The study is a collaboration between DPW and Professor Remko van Hoek from the University of Arkansas. Its research draws insights from over 200 global procurement leaders, and claims to have found a “staggering disconnect” between the appetite for digital transformation among procurement teams and their ability to actually execute those transformations.

As businesses grapple with rapid changes in the market, the findings underscore the urgent need for procurement to evolve and drive meaningful change.

“Technology is advancing at the speed of light – but procurement leaders are struggling to drive change at the same rate,” said Matthias Gutzmann, Founder of DPW. “There’s a disconnect between the ambition to transform and the readiness to make it happen.” Gutzmann adds that the 10X Procurement study demonstrates that “while procurement is on the brink of something groundbreaking, teams are ill-equipped to harness that potential.” 

DPW: preparing procurement to capitalise on technological advancement

DPW aims to provide procurement teams with the insights, technology, and partnerships needed to “think and act ten times bigger than their current capacity.”

Key findings from the DPW 10X Procurement Study include:

1. Skills Gap Widens the Divide Between Vision and Execution

Procurement technology providers are sounding the alarm on a widening skills gap, citing a 30-35% shortfall in critical capabilities such as change management, openness to AI, and digital acumen, threatening the success of procurement’s digital transformation efforts.

2. Tech Adoption is Rising, But Underutilization Hampers Progress  

Despite AI making waves across industries, just 20% of respondents are adopting or scaling AI within their procurement functions, and procurement processes remain only 50% automated on average. This lack of adoption represents a significant missed opportunity to streamline operations and drive innovation, putting procurement at risk of falling behind on the digital transformation movement.

3. 2025 Set to Drive a Digital Revolution in Procurement

Looking ahead, respondents predict a dramatic 187% increase in AI adoption and scaling in 2025 across procurement processes and tech stacks. This points to a shift from operational technologies to more strategic, relationship-driven solutions.

4. Culture Lag Holding Back Digital Transformation Despite Clear Roadmaps

While many procurement teams boast clear roadmaps for digital transformation, DPW’s report finds that the culture required to embrace and sustain this change remains underdeveloped. Respondents rated their organisations’ readiness to drive the kind of sweeping transformations required to stay competitive as low.

5. New Playbook Requires Agility and Innovation Over Cost Savings

A large number of respondents were found to put cost savings before other objectives. In contrast, organisations that emphasise agility and resilience consistently see better results than their peers. This underscores the urgent need for procurement to redefine success metrics and shift away from rigid cost-saving goals toward more innovative, relationship-driven strategies that drive more resilience.

The findings of the study will be highlighted at the DPW Amsterdam 2024 conference currently underway in the Netherlands, featuring sessions led by industry experts designed to empower procurement teams and technology innovators in navigating the path toward 10X Procurement. 

Author

Nell Walker

Published

29 July 2024

Estimated Read time

3Mins

We chatted to Gabe Perez from RiseNow about prioritising humans during technological transformation.

RiseNow, as a procurement and supply chain strategy and design firm, is firmly plugged into the needs of the sector’s functions as they evolve. Its growth has been organic thanks to customers demanding exactly what they want. They can’t simply implement tech with the goal of ‘go live’ anymore. They need expert help to define the real outcomes. 

RiseNow provides end-to-end guidance for customers. This ensures that when they implement new systems, they explore the whole picture from the beginning. It was a topic discussed in detail at DPW NYC in June, where we met up with Gabe Perez, Chief Strategy Officer.

“What we’re seeing in the market is that people are asking for guidance around operating models,” says Perez. “Our focus right now is trying to keep up with demand. There are a lot of different service providers out there.

“We’re showing RiseNow’s clients how to design, execute, and operate. So we’re really focused on helping customers end-to-end, whether they’re optimising what they currently have, or starting from a new platform.”

Humans first, then technology

As procurement continues to digitise, roadblocks that hinder technology’s effectiveness and promise of value become more apparent. One of these is implementing technology for technology’s sake. Or, simply using tech to digitise already-existing processes versus examining the why behind those processes. 

“As David Rogers from Columbia Business School said, the best technology is not the most important part of digital transformation,” says Perez. “People are at the core of it. Procurement has to start focusing more on outcomes and let that drive technology. People are running to technology for answers, but they don’t have the right operating model set up by the right people. Plus, there’s a huge talent shortage.”

Addressing the talent shortage

Outside of technology, the talent shortage across procurement was a repeated topic of conversation during DPW NYC. Just as it is during CPOstrategy’s general conversations with leaders. Procurement has been too vague a concept for too long, and overlooked in the grand scheme of many businesses for decades.

“One of the issues is making roles attractive,” Perez states. “I recommend proposing the problems you’re trying to solve and asking whoever you’re interviewing: ‘how would you solve this?’ Because with all the cool tech we now have at our fingertips, they’re going to come up fresh ideas. The talent exists – they’re just not being engaged and attracted. That’s where tech comes into play.”

And technology moulded by a people-centric focus was another major theme of the day at DPW NYC. “While AI in procurement is a huge topic right now, creativity is still going to come from humans – not artificial intelligence,” Perez points out. 

“You need human minds to see the value of things. This is to figure out how money can be driven out of the bottom line and into the top line. Humans are still needed for proving that procurement needs to take risks to be better. AI is a great tool, but it still needs us.”

You can read our full rundown of DPW NYC here.

Author

Nell Walker

Published

12 July 2024

Estimated Read time

4Mins

We spoke to Clive R. Heal at LavenirAI about the innovative ways in which AI can be applied to procurement.

When you think about VR, the first things that come to mind are likely immersive gaming or scientific applications. But there’s so much more to VR as the relentless pace of technology marches on. With it, we start turning to other areas that could benefit from it; procurement, for example.

LavenirAI is an organisation so dedicated to leveraging AI for the betterment of procurement that it has created a negotiation training solution powered by this advanced technology. Communicating with AI-powered sales avatars using this solution allows users to learn masterful negotiation tactics. With procurement at the core of every organisation, and increasingly taking on a seat at the table, the ability to better negotiate, understand customer needs, and improve the ability to make decisions is more valuable than ever. That’s exactly what LavenirAI provides.

Clive R. Heal is the CEO of LavenirAI. We caught up with him at DPW NYC to discuss what the company offers, and dive into the real-world applications of VR in procurement.

VR as a procurement training tool

Images courtesy of DPW

“With what we do, you meet a digital mentor – Harini. She’s an avatar, a coach,” Heal explains. “She teaches you in an interactive way, and you can ask her questions. Then there’s negotiation practice where users can negotiate with sales avatars that negotiate right back. Virtual reality gives you a sense of presence, grounding the experience in realism.”

The VR version of LavenirAI’s solution – which will be released later this year – means users can train in that completely interactive way with avatars that are right in front of them. Heal led a session at DPW NYC whereby all attendees wore VR headsets. He guided them through the metaverse, meeting avatars along the way.

“The avatars are photorealistic. The quality of avatars has grown enormously over the last year,” says Heal. “So the avatar you’re talking to while wearing your headset is as close to real as it’s possible to get at this point.”

The potential of the metaverse

And these avatars, this metaverse, this AI-VR landscape – there’s so much that can be done with them beyond training. “In procurement, you might want to do a supplier audit before dealing with a new business,” explains Heal. “You’ll want to visit their plant. In the future, this won’t require a lengthy business trip to fly over there – you’ll be able to walk around a digital twin of the plant and meet the avatars of the people from manufacturing. You’ll be able to have actual conversations with them.

“There’s also the concept of collaborative workshops; innovation workshops. AI and VR unlock the ability for people anywhere in the world to be able to put on a headset and be able to have conversations, look at potential products, and talk about them. Right now, you can go into metaverse stores in Monaco with your avatar, and try on clothes to see how they look and fit, and order those clothes. It’s as simple as that.”

In Heal’s view, a whole new economy is coming: the virtual reality economy. “A year ago, McKinsey published a report saying that, within five years – just four years from now – 15% of all corporate revenue will come through the metaverse. Think about that. Not 15% more, but 15% of existing revenue that companies have.” 

This marks a major shift in the way we consume, the way we live, and the way we work – as well as the way we procure. As evidenced by the work DPW does, AI is on the forefront of all procurement professionals’ minds, and it’s being applied in many exciting ways. But there’s always scope for more.

“AI is the thing of the moment; it’s everywhere,” Heal continues. “But I don’t think people realise the opportunities and impact. For me, the most important thing is embracing the technology. Vitally, AI can get you one step ahead of everyone else if you’re not afraid to branch out with what you’re doing with it. Using AI to improve procurement creates opportunities in the race to be the first to new insights, unlocking a competitive advantage.”

Author

Sean Galea-Pace

Published

25 March 2024

Estimated Read time

4Mins

N-SIDE VPs Amaury Jeandrain and Charlotte Tannier discuss their organisation’s partnership with Sanofi and look ahead to a brighter future.

Transparency. Good partnerships need it to survive.

For N-SIDE and Sanofi, it has been a key ingredient to what has made the partnership successful for the past eight years.

Since late 2015, N-SIDE has established and built on a strategic partnership with France-based pharmaceutical company Sanofi, aimed at optimising the firm’s clinical trial supply chain. The partnership helped digitalise Sanofi’s clinical supply chain while driving greater performance and waste reduction.

Harnessing efficiency

N-SIDE is a global leader in increasing the efficiency of life sciences and energy industries by providing software and services that optimise the use of natural resources, facilitating the transition to a more sustainable world. Founded in 2000, N-SIDE has built deep industry knowledge and technical expertise to help global pharmaceutical and energy companies anticipate, adapt, and optimise their decisions. In the life sciences industry, N-SIDE reduces waste in clinical trials, leading to more efficient, faster, and more sustainable clinical trials.

Amaury Jeandrain, Vice President Strategy of Life Sciences at N-SIDE, has witnessed first-hand the development of the partnership since he joined the company in January 2016. “Very quickly, the value of risk management and waste reduction was perceived internally and this partnership ended up growing to become one of our largest. Today, Sanofi is the company at the forefront of a lot of the innovation co-created with N-SIDE.”

Amaury Jeandrain, Vice President Strategy of Life Sciences at N-SIDE

Pharmaceutical companies of varying sizes use N-SIDE solutions to avoid supply chain bottlenecks in their clinical trials, decrease risks and waste, control costs, reduce time-to-market and speed up the launch of new trials. N-SIDE’s focus is on four key pillars to bring high levels of efficiency into Sanofi’s clinical supply chain: best-in-class supply chain, people, analytics and innovation.    

Charlotte Tannier, Vice President of Life Sciences Services at N-SIDE, adds that the key differentiator is the transparency between her organisation and Sanofi. “We trust each other and know that we can be fully open with them,” she explains. “We like to build new things together and co-develop innovative solutions.”

Charlotte Tannier, Vice President of Life Sciences Services at N-SIDE

Teaming with Sanofi

Having defined a clear route to success through the Sanofi partnership, Amaury is keen to point out that the relationship has acted as something of a catalyst for future business collaborations with other companies. “There are a lot of good practices that were initiated with Sanofi that now became a standard in our industry,” he discusses.

Looking ahead, the future of the partnership looks bright and is showing no signs of slowing down. Charlotte explains that the next step is all about “integration.” “For the moment, we have multiple teams and departments that are using the N-SIDE solutions, and many other software are used as well within the organisation. The focus in the short term will be to enable a unified IT landscape and environment,” she reveals. “The objective will be to be fully integrated and to increase the impact of the data they own. Because we believe, with Sanofi, that the way forward is through data. We are also planning to help Sanofi leverage more of the data that we’re generating together to increase its impact.”

As technology continues to evolve and organisations become even more digitally mature, partnerships built on transparency and trust will be in demand. N-SIDE and Sanofi already have that head start.

Click here to read more about how Sanofi is driving data-driven performance, resilience, agility and operational excellence within the clinical supply chain.

Author

Sean Galea-Pace

Published

14 March 2024

Estimated Read time

5Mins

In this innovative partnership, the whole is greater than the sum of its parts as the two companies focus on taming tail-spend with an on-demand platform with embedded change management.

Businesses have been leaving money on the table for years. For most organisations, (indirect) tail spend flies under the radar because of the large number of lower-value transactions, a fragmented supply base, and a poor user experience. This results in process inefficiencies and lost savings opportunities that can be eight to 13 percent higher than with more competitive sourcing.

Simfoni and Kearney set out to solve this problem, joining forces on solutioning tail spend management. The partnership pairs Kearney’s rich heritage and expertise in procurement transformation and change management with Simfoni’s composable analytics and spend automation technology. The result is a comprehensive global delivery model that significantly improves tail spend management, which until now has been a major problem for large and smaller organisations alike.

“We started our journey over three years ago,” says Stefan Dent, co-founder of Simfoni. “It takes some time to form a bond. You get to know one another working together on client engagements and then you realise that the relationship is really working, so you double down on the commitment.”

Simfoni helps businesses “see spend differently” leveraging data analytics to gain a deep understanding of user needs across everyday ‘tail spend’. Founded in 2015, Simfoni is a leading provider of tail spend, spend analytics, and e-sourcing solutions for large and midsize businesses around the globe. Simfoni’s platform uses machine learning and AI to accelerate and automate tail spend management, saving time and money. Its solution quickly ingests and organises complex data to uncover opportunities to optimise tail to higher value spend. Simfoni emphasises rapid value delivery through on-demand spend automation solutions that are operational in weeks rather than months.

Remko de Bruijn, senior partner at Kearney

The Kearney–Simfoni partnership delivers a unique and powerful proposition, combining Simfoni’s digital tail spend solution with Kearney’s know-how and ability to launch a transformation and unlock the promised value, says Remko de Bruijn, a senior partner at Kearney. “There are many digital procurement solutions around, but frankly, many of them aren’t delivering the promised value, typically because of challenges with user adoption and change,” he says. “Kearney continuously assesses solutions in the market, with one of our other partners, ProcureTech, and together, we concluded that Simfoni is leading in tail spend. This is how we found each other.”

Kearney is a leading global strategy consulting firm founded in 1926, with more than 5,700 people working in more than 40 countries. The company works with more than three-quarters of the Fortune Global 500 as well as with the most influential governmental and nonprofit organisations. Kearney is a partner-owned firm with a distinctive, collegial culture that transcends organizational and geographic boundaries—and it shows. Regardless of location or rank, the firm’s consultants are down-to-earth and approachable, with a shared passion for doing innovative client work that realises tangible benefits for their clients, in both the short and long term.

“We see Simfoni as a powerful solution to realise savings in indirect tail spend. It’s about not only data and spend automation, but also the customer experience,” De Bruijn says. “This is crucial when dealing with everyday spend as most users are non-procurement professionals.”

Kearney aids businesses in implementing Simfoni’s solution quickly, mitigating risks associated with unmanaged spend and vendors. “The attractive thing about Simfoni is that the solution manages tail spend—optimising both spend and vendors—with the savings funding the digitisation. It’s a tail spend solution that delivers a comprehensive service,” De Bruijn says. “Simfoni will even pay the tail suppliers with Simfoni becoming the ‘One Vendor’ for the tail, which creates additional benefits in accounts payables and working capital.”

Simfoni and Kearney both operate globally, which is important since their customers often operate in multiple regions around the world. “It’s a very interesting and powerful proposition,” De Bruijn says.

Stefan Dent, co-founder of Simfoni

Simfoni designed its tail spend platform from the ground up. The company founders came from the procurement domain, having worked in a variety of procurement leadership roles and at other procurement technology providers. “Let’s face it, existing solutions never solved tail spend, which accounts for around 80 percent of your vendors and transactions and around 20 percent of spend value,” Dent says. “Until now, the only options were BPOs, where you effectively outsource your tail to be managed by humans in a lower-cost country, or you use self-service bidding platforms. These solutions deliver some value, but it’s like putting a plaster on a wound.  You never properly cure the problem.” 

Simfoni’s platform is unique in that it is first and foremost a software-as-a-service (SaaS) solution with integrated buying services and digital procurement content components that connect with a client’s existing systems, or Simfoni can operate autonomously. Dent says that’s not even the best part. “The user experience is the most important element because, as Remko pointed out, most tail spend users are not procurement professionals,” he says. “Our users are in R&D, IT, plant operations, or marketing. They want an intuitive, easy-to-use solution to source and buy goods and services to support the everyday needs of their business. This is where traditional eProcurement systems fail.”

Dent says Kearney is an ideal partner being a trusted advisor to many of the world’s largest organisations. Kearney’s expert knowledge of procurement and transformation are a vital part of the offering. “Kearney’s input and expertise is crucial as Kearney helps our clients scope their tail spend program and update their procurement operating model while Simfoni frees up resources, allowing the client to focus on higher-value activities,” he explains. “At the end of the day, technology alone doesn’t solve tail spend. It’s about change. Kearney helps our clients make that digital shift. That’s why our partnership is so powerful because together we provide a comprehensive change and a digital solution as a package. The opportunity for our clients to finally control and optimise tail-spend is huge.”

Author

Dan Brightmore

Published

6 March 2024

Estimated Read time

3Mins

Read in brochure format

Our cover story this month focuses on the work of Arianne Gallagher-Welcher. As the Executive Director for the USDA Digital…

Our cover story this month focuses on the work of Arianne Gallagher-Welcher. As the Executive Director for the USDA Digital Service, in the Office of the OCIO, her team’s mission is to drive a tech transformation at the USDA. The goal is to better serve the American people across all of its 50 states.

Welcome to the latest issue of Interface magazine!

Welcome to a new year of possibility where technology meets business at the interface of change…

Read the latest issue here!

USDA: The People’s Agency

“We knew that in order for us to deliver what we needed for our stakeholders, we needed to be flexible – and that has trickled down from our senior leaders.” Arianne Gallagher-Welcher, Executive Director for the USDA Digital Service reveals the strategic plan’s first goal. Above all, the aim is to deliver customer-centric IT so farmers, producers, and families can find dealing with USDA as easy as using an ATM.

BCX: Delivering insights & intelligence across the Data & AI value chain

We also sat down with Stefan Steffen, Executive Leader for Data Insights & Intelligence at BCX. He revealed how BCX is leveraging AI to strategically transform businesses and drive their growth. “Our commitment to leveraging data and AI to drive innovation harnesses the power of technology to unlock new opportunities, drive efficiency, and enhance competitiveness for our clients.”

Momentum Multiply: A culture-driven digital transformation for wellness

Multiply Inspire & Engage is a new offering from leading South African insurance provider Momentum Health Solutions. Furthermore, it is the first digital wellness rewards program in South Africa to balance mental health and physical health in pursuing holistic wellness. CIO, Ndibulele Mqoboli, discusses re-platforming, cloud migrations, and building a culture of ownership, responsibility, and continuous improvement.

Clark County: Creating collaboration for the benefit of residents

Navigating the world of local government can be a minefield of red tape, both for citizens and those working within it. Al Pitts, Deputy CIO of Clark County, talks to us about the organisation’s IT transformation. He explains why collaboration is key to support residents. “We have found our new Clark County – ‘Together for Better’ – is a great way to collaborate on new solutions.”

Also in this issue, we hear from Alibaba’s European GM Jijay Shen on why digitalisation can be a driving force for SMEs. We learn how businesses can get cybersecurity right with KnowBe4 and analyse the rise of ‘The Mobility Society’.

Enjoy the issue!

Dan Brightmore, Editor

  • People & Culture

Author

Sean Galea-Pace

Published

16 February 2024

Estimated Read time

4Mins

Could generative AI be the answer to procurement’s problems: fewer workers, more work, and a rising bar for digital literacy.

It’s news to no one that the nature of the procurement industry has changed.

Spurred by the COVID-19 pandemic, an industry-wide surge in digital transformation, and the rising immediacy of the climate crisis, procurement has never been more important, or more complicated. However, as the industry’s demands grow and evolve, many procurement teams find themselves in need of skilled individuals that simply aren’t there.

A recent study conducted by Gartner found that just one in six procurement teams believe they have “adequate talent” to meet their future needs. That means just 15% of CPOs were confident in their future talent pools and ability to recruit skilled individuals, even if they believed their current staffing was sufficient to meet demand today.

Concerns over “having sufficient talent to meet transformative goals based around technology, as well as the ability to serve as a strategic advisor to the business,” were the primary cause of skill shortage stress, according to Fareen Mehrzai, a Senior Director Analyst in Gartner’s Supply Chain Practice. Essentially, the changing nature of procurement means not only that today’s procurement teams are unprepared for the discipline’s continued transformation from back office buyer to “orchestrators of value” in the executive team, but face an increasingly sparse hiring market as the requirements for a new procurement recruit become increasingly complex to satisfy.

Generative AI: Making digital accessible

Generative AI exploded into the public consciousness in 2023 with the launch of image generation tools like Midjourney and DALL.E, as well as chat-bots like Chat-GPT, powered by large language models. Investment has been immediate and almost unthinkably massive. In late 2023, it was estimated that generative AI startups were attracting 40% of all new investment in SIlicon Valley, and Bloomberg Intelligence estimates that the market for generative AI, valued at $40 billion in 2022, will be worth as much as $1.3 trillion in the next decade.

In the procurement and supply chain sectors, specifically, CPOs are reportedly dedicating 5.8% of their function’s budget, on average, to generative AI, according to a Gartner report from January.

Now, whether or not generative AI has the society-spanning, epoch-disrupting economic and social impact people are predicting (personally, I remain unconvinced, and anyone who disagrees can either fight me in the metaverse or try to run me over with a self-driving car) actually manifests, there’s no denying generative AI’s potential as a useful tool if adopted correctly.

Especially in an underskilled, rapidly digitalising procurement sector.

How can generative AI help procurement?

While Generative AI will never write a (good) movie script or create a piece of art that anyone with any taste would find genuinely moving, there are some things it does very well. Namely, it is very good at not only taking in and processing huge (and I mean huuuuge) amounts of chaotic, poorly structured information and answering questions about it, but most importantly, it can understand prompts and give results in simple, conversational language. There are still limitations and kinks to work out, however.

Generative AI still deals with hallucinations. However, the ability to input huge amounts of data and analyse that data in a conversational format could alleviate a lot of the technological literacy related teething problems that appear to be at the heart of the procurement skills shortage.

An EY report notes that, in the Supply Chain and Procurement space, generative AI has massive potential to: “Classify and categorise information based on visual, numerical or textual data; quickly analyse and modify strategies, plans and resource allocations based on real-time data; automatically generate content in various forms that enables faster response times; summarise large volumes of data, extracting key insights and trends; and assist in retrieving relevant information quickly and providing instant responses by voice or text.”

The future of Gen AI

Generative AI can be a source of simplicity for procurement teams at a time when new technologies often add complexity and necessitate upskilling or new hires. EY notes that a biotech company using a generative AI’s chat function has had positive results when using it as a way to inform its demand forecasting. “For example, the company can run what-if scenarios on getting specific chemicals for its products and what might happen if certain global shocks occur that disrupt daily operations. Today’s GenAI tools can even suggest several courses of action if things go awry,” write authors Glenn Steinberg and Matthew Burton.

Adopted correctly, generative AI could not only empower procurement teams to handle the pain points of today, but also tackling the looming threat of the skills shortage in an industry facing a relentless demand for skills that may not be in adequate supply for years to come.

By Harry Menear

Author

Sean Galea-Pace

Published

6 February 2024

Estimated Read time

5Mins

Luke Abbott, Co-Founder and CEO at Equipoise, discusses the art of accelerating sustainable procurement with artificial intelligence.

In today’s rapidly evolving business landscape, sustainability is not just a buzzword; it’s a necessity. As organisations strive to reduce their environmental footprint and drive social improvements in their supply chains, sustainable procurement emerges as a pivotal strategy. With the advent of artificial intelligence (AI), the potential to revolutionise sustainable procurement practices has never been more promising.

Understanding sustainable procurement

Sustainable procurement is the integration of environmental, social, and economic considerations into procurement decisions, to reduce adverse impacts upon society, the economy, and the environment1. As businesses grapple with the repercussions of climate change, dwindling resources, and increasing stakeholder demands, sustainable procurement offers a pathway to not only mitigate risks but also seize new opportunities.

The AI advantage in sustainable procurement

AI, with its ability to process vast amounts of data, automate tasks, and identify intricate patterns, is poised to be a game-changer for sustainable procurement. By leveraging AI, organisations can:

Enhance sustainability data collection

Scope 3 is the hottest topic in sustainable procurement and many organisations are grappling with the question of how to measure the greenhouse gas emissions of their suppliers. Understanding this, especially beyond the first tier, requires extensive data collection. If you were to focus on your top 100 suppliers and ask your tier n-1 suppliers to do the same, when you get to tier 3 (which is probably nowhere near the end of the supply chain) you need to engage a staggering one million companies. At this point, manual data collection and analysis is out of the question for time-strapped organisations. AI tools, such as Avarni2, streamline this process, ensuring comprehensive and accurate data acquisition.

Predictive analytics for sustainability risk management

Managing sustainability risks in today’s intricate global supply chains presents challenges such as monitoring vast supplier networks, handling overwhelming sustainability data and rapidly adapting to sanctions, media reports and regulations, all while maintaining a pristine reputation. AI offers a solution by providing real-time monitoring of supply chains, predictive analysis of potential disruptions, seamless data integration for a comprehensive view, automated reporting for enhanced transparency, and scenario analysis for strategic planning. AI tools, like Versed AI3, continuously monitor vast amounts of supply chain data, ensuring real-time tracking of sustainability factors. This real-time monitoring allows companies to identify potential risks before they escalate, enabling procurement teams to proactively address disruptions and uphold sustainability standards.

Automation

According to Deloitte’s 2023 Global Chief Procurement Officer Survey4, over 70% of CPOs have seen an increase in procurement-related risks, and only a quarter feel equipped to predict supply disruptions timely. Furthermore, internal challenges like talent loss and organisational complexities add to the burden. By automating routine tasks, AI not only alleviates these pressures but also empowers procurement professionals to focus on high-value initiatives, such as supplier education on sustainability priorities. Generative AI tools like ChatGPT can expedite market research, strategy formulation, and contracting processes, allowing teams to be more agile and responsive in this volatile environment.

AI in action

Unilever’s Sustainable Living Plan5 has been at the forefront of leveraging AI to drive innovation in sustainable procurement. In 2023, Unilever highlighted how they have been using AI and digital technologies, from the launch of their first digital tool to the recent formulation of the world’s first green carbon detergent6. 

“We’re using AI to help identify alternative ingredients that can strengthen the resilience of our supply chain, making our formulations more sustainable and cost-efficient, and simplifying them by reducing the number of ingredients without impacting a product’s quality or effectiveness.” –  Alberto Prado, Unilever R&D’s Head of Digital & Partnerships. 

Through a data-driven approach, Unilever has been making smarter, faster, and sharper decisions to optimise its portfolio of brands and products. Their commitment to sustainability is further emphasised by their ambitious goals, which include climate action to achieve net zero, reducing plastic usage, regenerating agriculture, and raising living standards within their value chain7. 

Limitations and due diligence

While AI offers transformative potential, it’s crucial to recognise its limitations. The accuracy of AI predictions and recommendations hinges on the quality of data fed into the system. In the realm of sustainable procurement, this means ensuring that the data sources are reliable and comprehensive. Regular audits, cross-referencing with trusted databases, and continuous training of AI models are essential to maintain the integrity of AI-driven insights. 

The 2023 Gartner Hype Cycle for artificial intelligence8 underscores the significance of addressing the limitations and risks of fallible AI systems. It emphasises the need for AI strategies to consider which innovations offer the most credible cases for investment, ensuring that AI’s transformative benefits are realised while mitigating potential pitfalls.

The future of AI in sustainable procurement

As we gaze into the future, the synergy between AI and sustainable procurement is poised to grow stronger. With advancements in machine learning algorithms, natural language processing, and predictive analytics, AI’s potential to drive sustainability will only amplify. The Gartner report highlights the rise of generative AI, which is reshaping business processes and redefining the value of human resources. Such innovations, including generative AI and decision intelligence, are expected to offer significant competitive advantages and address challenges associated with integrating AI models into business processes.

However, a conservative outlook suggests that while AI will be a significant enabler, the onus remains on organisations to embed sustainability into their ethos and operations.

In conclusion, as the business landscape becomes increasingly complex, the fusion of AI and sustainable procurement offers a beacon of hope. By harnessing the power of AI, organisations can not only navigate the challenges of today but also pave the way for a sustainable and prosperous future.

Luke Abbott, Co-Founder & CEO @ Equipoise

Author

Sean Galea-Pace

Published

5 February 2024

Estimated Read time

5Mins

From cost-containment to carbon emissions, here are the 10 things that should be top of mind for every chief procurement officer in 2024.

In the year to come, procurement will continue to transition from a back office function to a boardroom value-driver. Chief Procurement Officers and other leaders will need to increasingly reevaluate their relationships to the rest of the business as procurement not only becomes an increasingly vital source of business wins, but also a central piece of the puzzle when it comes to emissions reduction and resilience throughout the supply chain.

From generative AI to the skills shortage, there’s a lot that CPOs could be focusing on in the year ahead. We’re kicking off the new year with our list of the top ten things CPOs should be prioritising in 2024.

1. Drive significant value for the business

That’s why the first priority of all CPOs in 2024 is to apply technology, new operational organisation, hiring practices, sustainable strategy, cost containment, and every other trick and technique in order to create value for the business. Increasingly, CPOs are transitioning from logistical and cost-cutting functionaries to “orchestrators of value” and that will only become more apparent as the year (and decade) wears on.

2. Drive digital transformation

As mentioned before, procurement is a process that’s reinventing itself before our very eyes, embracing new digital technologies and ways of working that increase efficiency and drive value for the business. CPOs are increasingly important integrators of technology into the business, and should all be prioritising ways to implement technology over the coming year. However, it’s important to beware that technology for technology’s sake is even more dangerous than sticking it out with a legacy system… 

3. Reduce environmental impact

Knowing may be half the battle, but once CPOs have an understanding of the environmental impact their S2P process has, they must prioritise finding ways to mitigate that impact. From a stricter regulatory landscape to a more perceptive and angry public, a meaningful environmental sustainability strategy is no longer “nice to have” or even necessary: it’s long overdue.

4. Understand your Scope 3 emissions

More than 60% of procurement leaders in the US, UK, and Europe surveyed in a recent report say that their Scope 3 emissions reporting process is more of a “take your best-guess” approach than a process of gathering concrete, reliable information.

The S2P process is one of, if not the, biggest source of greenhouse gas emissions for every company on earth, and understanding the consequences of working with one supplier or another (and then accurately reporting that information) is a huge part of the journey to net zero. CPOs who fail to prioritise transparency in their S2P process will find themselves actively hindering their organisations’ environmental ambitions at a time when procurement has the potential to be the biggest driver of positive environmental impact in many organisations.

5. Cultivate your supplier ecosystem 

As much as technology is playing a bigger and bigger role in the procurement process, no CPO should discount the importance of building genuine, strategic relationships within their supplier ecosystem. Obviously, some industries are doing better than others, but in many areas (like the fashion industry, where “Those in charge of contracting suppliers for fashion brands say they are investing in longer-term strategic partnerships,” but their suppliers “tell a different story”) there’s still need for improvement. 

6. Don’t buy into the hype (too soon)

In 2021, it was self-driving cars. In 2022 it was the metaverse. And last year saw the world get absolutely bent out of shape over the promise of generative artificial intelligence. However, much like NFTs and blockchain (another thing everyone was spending a lot of money trying to figure out how to make money from for a while), the promised trillions of dollars of economic impact from these technologies has yet to translate into meaningful business applications. Even the hyperloop was abandoned this year.

Procurement is an area with a huge amount of potential for digital transformation, and adopting the right technologies for the right reasons is what’s going to separate industry-defining success stories from all those dudes who went blind at the Bored Ape Yacht Club convention.

7. Mitigate risk to the supply chain

In the wake of the COVID-19 pandemic, the global source to pay (S2P) process has transitioned from a “just in time” approach to a “just in case” one. As climate change disrupts agriculture and manufacturing across the global south, and events like the Yemeni blockade of the Suez canal in order to hinder Israel’s occupation of Palestine hinder the movement of goods between regions, CPOs should prioritise diverse buying strategies that mitigate risk to their S2P processes.

8. Be a source of cost-containment

Inflation was a defining characteristic of the economy in 2023, as corporate price gouging (amid other factors) caused cost-of-living to spike. In a world of rising prices, and supply chain unpredictability, controlling costs will fall increasingly to CPOs in 2024. Cost reduction targets have been hit less consistently across the industry in the last few years, thanks largely to inflation and the pandemic’s disruption of global supply chains. Going into the year ahead, CPOs who can find a way to successfully meet their cost containment targets will find themselves with a serious leg up over their competition.

9. Don’t lose existing talent

The world is in the midst of a growing resurgence in the power of labour, as class consciousness and anti-capitalist sentiment rise. The old propaganda about loyalty to companies that would replace that employee in a heartbeat doesn’t work anymore, and workers are increasingly understanding (and demanding) their true worth, and it sent shockwaves through the service, autoworker, and entertainment industries in the US last year alone.

With the tech sector still leading the world in brutal mass Q4 firing and rehiring strategies, and labour movements within massive logistics firms like Amazon growing stronger by the day, 2024 promises to be defined by more strikes and other examples of direct action, not less. CPOs in the middle of a talent shortage should prioritise giving their employees reasons to stay beyond gym memberships and company pizza parties.

10. Hire top talent

The nature of procurement is changing. As the discipline becomes increasingly digitalised, not to mention plays a more strategic role within the modern enterprise as a whole, the skills that make for a good procurement professional aren’t the same skills that were on job listings ten, or even five, years ago.

In 2024, CPOs should constantly reevaluate the skills necessary not only to do the job now, but to tackle the procurement challenges of the next few years when hiring.

Author

Sean Galea-Pace

Published

31 January 2024

Estimated Read time

4Mins

Data is the key to unlocking new opportunities and managing risk, but capitalising on the opportunities of data in procurement is not without challenges.

Over the past few years, the procurement sector has been thrust into the limelight, as CPOs are increasingly being identified as drivers of value creation, cost containment, and risk management.

In addition to business and process innovations, a lot of the changes in the role of procurement are due to a wave of digital transformation sweeping the industry. If digital transformation is the engine driving this elevation of the procurement function, then data is the fuel powering it.

Effectively capturing, organising, and utilising data to generate meaningful insights can produce significant benefits for the procurement process. However, costly investment into data analytics, flawed adoption strategies, and oceans of bad data can turn all the potential for wins into a whole new source of risk for the business. This week, we’ve gathered our top 3 challenges CPOs face when incorporating big data into their operations.

1. Bad data

No, I don’t mean Lore from Star Trek: TNG. Bad Data is a fundamental and pervasive risk to procurement professionals looking to empower their analytics. It’s also a far more widespread problem than many executives would like to believe. Last year, a report by SpendHQ found that 75% of procurement professionals doubted the accuracy of their procurement data, leading to almost 80% of executives outside the procurement function lacking confidence when it comes to making decisions based on that data.

In order for it to make any meaningful contribution to reducing costs, mitigating risk, promoting sustainability and driving meaningful change within the business as a whole, the data used by procurement has to be accurate. Pierre Laprée, chief product officer of SpendHQ, noted in the report that “procurement teams must do more to build and maintain influence within their organisations, including removing the dependency on spreadsheets to become more efficient.”

2. Choosing the right technology

Collecting, managing, and drawing insights from your procurement data is a matter of using the right digital tools. However, choosing the right digital tools—especially with CPOs often facing pressure from stakeholders to transform their operations digitally—can be a complicated prospect with potentially severe negative consequences ranging from sub-par outcomes and wasted budgets to catastrophic data breaches.

A report by Productiv found recently that, while “procurement and IT are being inundated with software access, vendor intake and renewal requests,” the number of applications and subscription services being managed by the average business has risen by more than 30% in the past two years. Combined with growing workloads, skill shortages, and an unclear vision for handling these growing technology stacks, Productiv’s report notes that “this patchwork of tools across various steps of the vendor management lifecycle has created technology, team and data silos. Instead of increasing efficiency, these tech stacks start adding up to a lot of manual work to bring everything together.”

3. Creating spend data visibility

Dark purchasing refers to the phenomenon of procurement expenses incurred outside a business’ defined procurement process. It’s uncontrolled spending that procurement can’t see, but that still gets added to their numbers at the end of the quarter.

Big data and procurement is often thought of in terms of its ability to help understand the world outside the business’ walls—logistics, pricing, supplier behaviour throughout the market in response to market changes—but effectively deploying data analytics to understand why dark purchasing is happening, when, and by whom is a vital step in figuring out how to reduce its impact on the company.

Unfortunately, this presents a serious challenge, as many procurement departments lack a cohesive data organisational strategy; data is often scattered throughout multiple silos in the organisation, hidden from procurement in much the same way that unapproved purchasing hides until quarterly expense reports. Overcoming this challenge and creating a holistic, accurate view of company spend—both within the procurement function and outside it—is one of the greatest opportunities and challenges presented by the infusion of big data into procurement.

By Harry Menear

Author

Sean Galea-Pace

Published

29 January 2024

Estimated Read time

2Mins

The assistant will use natural language processes and AI to perform “thousands of procurement tasks”.

The latest in a small flurry of generative AI-powered virtual procurement assistants is hitting the market. Earlier this month, Relish, a B2B app developer based in Ohio, announced the release of its new procurement assistant—a virtual assistant product powered by generative artificial intelligence and designed to intuitively interact with users while performing “thousands of procurement tasks”.

“What we’re offering is a solution that truly frees users from the menial to engage in the meaningful,” said Ryan Walicki, Relish CEO, in a statement to the press. He added that the Relish Procurement Assistant would revolutionise the way businesses handle their procurement systems and processes, claiming: “By leveraging large language models, this single interface spans all procurement systems and platforms and can be custom fit to any enterprise solution ensuring workflows are never interrupted.”

The rise of generative AI

Relish isn’t the first company to utilise a combination of generative AI and large language models, like ChatGPT, to create a more naturalistic interface between users and complex systems for managing data. In November, Californian tech firm Ivalua released an Intelligent Virtual Assistant powered by generative AI as part of its platform, making similar claims that the technology would eliminate busy work, freeing up employees for more strategic activities.

Relish works in a similar way, plugging into an existing procurement management platform, and using artificial intelligence and natural language processing to “intuitively interact” with users in a conversational way, giving them detailed insight into their workflows.

According to Relish, the technology can perform numerous tasks, including supplier management, sourcing, contract management, supply chain, and purchasing.

Where Relish differs from other offerings on the market is in its alleged ability to “[adapt] to any platform and workflow preference.”

According to Jeremy Reeves, Relish Senior Vice President of Product: “The adaptability helps users get the most out of their procurement enterprise software, maximising their return on the investment… It brings a new dimension to how users will go from being taskmasters to being conductors of their enterprise systems.”

By Harry Menear

Author

Sean Galea-Pace

Published

24 January 2024

Estimated Read time

3Mins

AI and Machine Learning-powered analytics could help security teams flag and prevent fraud in their procurement functions.

Procurement fraud is costly and hard to prevent, but with the right tools, organisations could see red flags earlier and respond in time rather than too late.

According to the Association of Certified Fraud Examiners (CFE), organisations lose 5% of their annual revenue to fraud, with the median loss per case totalling $117,000, and the average being $1.7 million.

Supply chains and procurement functions are especially vulnerable to fraud—often comprising long and winding networks, intricate webs of relationships, vast inventory assets, and multiple transactions along the S2P journey. The procurement and supply chain functions of retailers and manufacturers are especially vulnerable.

Frequently, procurement fraud is the result of a malicious individual within the organisation, although vendors and partners can also be responsible. Bid rigging, intellectual property infringement, inventory theft, and product counterfeiting are all examples of occupational fraud within the procurement process.

To address these challenges, companies must implement proactive measures. The CFE report noted that nearly half of fraud cases occurred due to a lack of internal controls, or an overriding of insufficient existing controls. It also found that anti-fraud controls were effective, resulting in lower losses and quicker fraud detection.

Fraud is prone to thrive in the procurement process, and can have devastating consequences, but the fight against the threat isn’t hopeless, and new technologies are proving especially effective in stamping out the issue.

In addition to traditional anti-fraud measures like strengthening internal controls, performing due diligence, and conducting regular quality checks, organisations can fight fraud in their procurement and supply chain functions by harnessing the power of AI and Big Data.

Fighting fraud with Big Data

AI analytics of Big Data sets can do more than improve efficiencies and predict trends in the movements of goods; these types of analytics excel at pattern recognition and, once correctly trained, can identify subtle changes in activity within the procurement function and supply chain that could point to fraud.

According to Isabelle Adam, an analyst at the Government Transparency Institute in Budapest, and Mihály Fazekas, founder of the Institute and assistant professor in the School of Public Policy at Central European University, “With the increasing use of electronic and online administrative tools — such as e-procurement platforms — making administrative records readily and extensively available in structured databases, public procurement has become a data-rich area.”

This wealth of data, if improperly handled, can become a place for fraud to hide, but if big data analytics are applied, they argue, it “can serve as a tool for auditors to identify and prevent fraud and corruption.”

By Harry Menear

Author

Sean Galea-Pace

Published

12 January 2024

Estimated Read time

6Mins

Blockchain promises added transparency and security for the procurement process, but are the benefits worth the price of admission?

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.

By Harry Menear

Author

Sean Galea-Pace

Published

8 January 2024

Estimated Read time

5Mins

Keith Hartley, CEO of LevaData, discusses why procurement’s golden age is now amid the rise of transformative tech solutions.

“This is the golden age to be in procurement.”

Keith Hartley, CEO of LevaData, doesn’t hold back.

Similar to his passion for surfing, he is constantly on the lookout for the next challenge to tackle. The company he leads is an integrated, AI-powered supply management software platform that is transforming direct material sourcing by helping companies reduce costs, mitigate risk, and accelerate new product development.

Given the trajectory of the procurement function’s journey over the past 10 years, few could doubt the change the space has seen. Indeed, procurement was once a back-office function siloed out of sight, but today it stands front and centre in business operations as a key cog in the machine. Hartley recognises that while it is an exciting time, procurement is still a laggard and restrained. “I would say we’re woefully behind in procurement,” he admits.

“The function’s teams are typically not ones to raise their hand and demand the tools they need to do their job. If you’re a salesperson and you work in a Customer Relationship Management system, it’s a given you need a system to do your job, and if you’re in finance, it’s a given you need an ERP system. When you turn to procurement, there’s not widespread acknowledgement that you need a tool like LevaData to do your job.”

Keith Hartley, CEO of LevaData

Powering smart supply chains

LevaData powers the smartest supply chains in the world by constantly analysing business objectives against real-time market activity and community intelligence. The company is trusted to deliver improved margins, control risks, generate new product velocity, and achieve multi-tier supplier engagement with purpose-built tools for quick collaboration and decisive actions. LevaData creates a competitive advantage with transformational and predictive insights. “What we are replacing are spreadsheets and emails, but some major companies are still 100% reliant on them,” discusses Hartley. “It’s an antiquated way of doing business. Macroeconomic shocks aren’t new, and obviously Covid was a significant one. With these shocks in the global supply chain, you must understand the impact on your specific business.”

Hartley speaks to how at the end of the day, companies still need to make a profit. “It’s about finding alternative sources of supply and buying the parts at the right price. These are challenges that don’t go away; in fact, they were heightened during Covid and have continued with ongoing geopolitical tensions. The reality is there are always macroeconomic shocks that cause supply to be constrained and prices and lead times to be variable. This has a direct impact on how organisations deliver results and drive revenue growth. Covid really heightened the need for companies to get this workflow in order, and that’s what LevaData has been addressing. The procurement people have been thrust into the light. If they don’t have the tools they need, then they’re stuck. The job is incredibly complex, and procurement needs all the help it can get in today’s world.”

The arrival of generative AI

As generative AI continues to emerge in conversations in procurement and beyond, its rise has caused much excitement within organisational structures. Indeed, OpenAI’s ChatGPT’s launch in late 2022 has only amplified this conversation, with many eager to harness the benefit of efficiency and cost savings as quickly as possible. But just because it’s new, does it make it right?

“It’s early days. It’s mostly hype so far in terms of how it’s being adopted and brought forward, but I’ve never seen a faster accelerated hype cycle than gen AI [has] right now,” explains Hartley. “LevaData is a leader in AI and is using it in two areas of our product. We’re still in the early infancy of AI and what it can do. We use AI to help us contextualise all the different data sources. We take over 154 data sources and blend them. This is data that doesn’t make sense together. Most data-heavy people tap out at about 12 or 14 data sources because the mathematics gets so complex. The complexity has kept the indirect procurement providers away from this space.

“The second part where we use AI is where we identify parts based on savings potential. There’s a lot of potential for the generative piece incorporating an even larger number of data sources. This is huge. AI is going to change a lot and will take some time, but I’ve never seen such a rapid hype around AI before.”

Procurement’s golden age

Looking ahead, Hartley is full of optimism and enthusiasm for procurement’s future and believes we are entering the “golden age.” “The best part is that we’re just at the very start,” he explains. “If you’ve been in indirect procurement for the past 50 years, you’ve been wowed by Coupa, JAGGAER and Ariba, as they have sold the world on the benefits of source-to-contract and procure-to-pay workflows. That works well for indirect procurement, when you are buying pencils, chairs and laptops in volume. But the more complex workflow of sourcing direct materials, the very materials that you turn into products to sell in the market, has largely gone unnoticed. Fortunately, companies have realised the direct sourcing opportunity, and started investing in AI-powered tools like LevaData.

“Legacy spreadsheets and email should no longer be the de facto standard for direct material sourcing. With the convergence of AI, big data, and analytics platforms, procurement professionals can be the heroes they and their company deserve. The next decade is going to be a wild ride in procurement.”

Author

Sean Galea-Pace

Published

5 January 2024

Estimated Read time

7Mins

At DPW Amsterdam 2023, we chat with procurement leaders to find out why the conference is regarded as one of the most influential tech events in procurement today…

Koray Köse, Chief Industry Officer, Everstream Analytics

“When you go to events that are this disruptive that are actually giving you an environment like a concert where people have a very positive vibe, that’s when the best experiences are shared and people open up. If you listen, you now understand what the real challenges are. If you’re at a conference that is very formal, then you get a very different feeling. It is the casualness of DPW that helps the authenticity of every company and its challenges.

“It’s a unique environment where you get very authentic, bold, blunt, but truthful statements of perception of actuals, desires, future vision, and also conversations about how can we as a community do things differently? How can we as potential future partners do things differently? And how can tech concatenate value and how can we actually now do that in a partnership with companies that we don’t even consider clients at this point? They’re not clients, but they share exactly what they want and those are benefits. 

“I think it’s almost like an incubator environment because a lot of ideas are formed here. Lots of connections are made and a lot of deals for vendors are done too. You look at the floor and there are about 120 vendors all here for the same reason, it’s amazing. To get that concentrated over 48 hours, a lot of people will walk away and need to process what happened and the conversations they had. Then we look forward to next year.”

Koray Köse, Chief Industry Officer, Everstream Analytics

Ashwin Kumar, Vice President, GEP

“DPW has given me some insight into what kind of options there are. Sometimes I go through the booths and I see two solutions and question how they’re different. At first, I think they’re doing the same thing. And then once they start explaining, you find out the nuance. Now I understand this may not be applicable for this client of mine that I’m working with maybe this is for a company that’s growing at 30%, not for someone who is already there and growing at 2% or 3%. 

“I think that way DPW has helped me understand how do you stitch different things together and then take it to a client and say, ‘this is the ecosystem you need at this point in time. It could change in six months, or three months, we don’t know. Go with it for now and you don’t have to worry about being married to that solution for too long.’”

Ashwin Kumar, Vice President, GEP

Kathryn Thompson, Partner, Deloitte

“I think DPW shows us the art of the possible in digital procurement. It shows us if you were unconstrained and you could do anything, what would you choose and build? You don’t have that in some of the other tech conferences that are a bit tied into an infrastructure they need to build. I love this what if idea we have here. I think it’s fabulous we have this confluence of organisations that need these tools, all the different startups and solutions to bounce ideas off and work out the future. DPW has real energy and passion like no other. You must get your message across in three minutes or it’s gone, that passion is brilliant because there’s nothing similar.”

Kathryn Thompson, Partner, Deloitte

Scott Mars, Global Vice President of Sales, Pactum

“This to me, especially for Europe, is the premier procurement technology event. All the main vendors, our competition as well as our peers are here. There’s many CPOs in attendance alongside procurement and digital transformation leaders so for us as a vendor, it really is a great audience. We love having the ability to network with our peers or other vendors, potential partners and these procurement leaders and visionaries so it’s definitely a great opportunity to do that. It is certainly one of the best procurement events I’ve ever been to. They do a great job here at DPW.”

Scott Mars, Global Vice President of Sales, Pactum

Karin Hagen-Gierer, Chief Procurement Officer, Scoutbee

“Whenever I go to conferences, I get to see the latest technology exhibited. I can have conversations with many people in a very short period of time. Number two, for me as a CPO, I come here as well to meet my peers and have good conversations. Amsterdam is always a good place to come and maybe combine business with pleasure.”

Karin Hagen-Gierer, Chief Procurement Officer, Scoutbee

Gregor Stühler, CEO, Scoutbee

“Procurement people are incredibly busy and getting a hold of them is quite difficult. Having them all in one spot is super helpful. One key challenge for procurement software providers is that the buying centre is not the same. If you sell sales software or whatsoever, it’s usually the same buying centre. You approach the Chief Revenue Officer or something like that. In procurement, it’s not always the CPO that decides on the tech. But DPW is filtering out and attracting the talent that is making those tech decisions and it’s extremely valuable for the startups and for the tech companies as well.”

Gregor Stühler, CEO, Scoutbee

Alan Holland, CEO, Keelvar

“This event has actually been a catalyst for some of the transformation we’re seeing in procurement. Matthias and his team have grown together best-of-breed vendors and they realised early on that change is afoot and legacy systems are going to become part of the history of the space. He embraced these vendors which are coming up with exciting new developments and provided us with a venue to put our best foot forward and present ourselves to other large enterprises with an appetite for understanding what innovation was required. We’re very grateful to Matthias, we’ve worked with him from day one and we think he’s done fantastic work here.”

Alan Holland, CEO, Keelvar

Prerna Dhawan, Digital Lead, Procurement, The Smart Cube

“I think DPW raises the profile of procurement. DPW has elevated the function because procurement is no longer seen as the industry that thinks of digital at the end. It’s not a laggard anymore. I attended the first DPW event pre-Covid and thought it was brilliant then but it’s got bigger and better since. We talk about this in procurement, you get innovation from your suppliers but if you think about innovation when it comes to technology you have to be open to talk to vendors and that doesn’t happen in other conferences the way it does here. I think DPW has created that platform for learning from each other to happen.”

Prerna Dhawan, Digital Lead, Procurement, The Smart Cube

Author

Sean Galea-Pace

Published

4 January 2024

Estimated Read time

6Mins

CPOstrategy explores this issue’s big question and uncovers what the impact of gen AI is in procurement.

The true possibilities of what can be achieved via AI is still being unearthed.

Indeed, the influence of new technology will only grow from here and new digital tools are being introduced all the time.

When it comes to generative AI, there is perhaps a misunderstanding that it is a new innovation. But the history of gen AI actually dates back to the 1960s. Among the first functioning examples was the ELIZA chatbot which was created in 1961 by British scientist Joseph Weizenbaum. It was the first talking computer program that could communicate with a human through natural language. It worked by recognising keywords in a user’s statement and then answering back through simple phrases or questions, in likeness to a conversation a human would have with a therapist. While ELIZA was seen as a parody and largely non-intelligent, its introduction has paved the way for later advancements in Natural Language Processing (NLP) and the future of generative AI.

Fast forward to today and the gen AI conversation and wider tech landscape looks very different. In late 2022, OpenAI launched ChatGPT – technology which has shaken the procurement function and beyond. ChatGPT interacts in a conversational way with its dialogue format making it possible for users to answer follow-up questions, admit mistakes, challenge incorrect answers and reject unsuitable requests. As such, the chatbot has created quite a buzz which has been felt across the globe.

Generative AI’s misconception

Speaking to us exclusively at DPW Amsterdam, Gregor Stühler, CEO at Scoutbee, believes there are some misconceptions around ChatGPT and the nature of how accurate the data it provides actually is. As is the case with any new technology, these things take time. “It’s always the same. It happened with electric cars, nobody thought that would solve the battery issue,” he discusses. “I think we are right at the peak of the hype cycle when it comes to those things and people have figured out what they can use it for. With wave one of gen AI, it is fine to have hallucinations of the model and if something is spat out that is not supported by the input. 

Gregor Stühler, CEO at Scoutbee

“But by the second use case, hallucinations are not okay anymore because it’s working with accurate data and should not come up with some imaginary creative answers. It should be always supported by the data that is put in. This is very important that people understand that if you train the model and if you have the right setting, those hallucinations will go away and you can actually have a setting where the output of the model is 100% accurate.”

Data security

Michael van Keulen, Chief Procurement Officer at Coupa, agrees with Stühler and despite obvious benefits such as time and cost, he stresses caution should be used particularly when it comes to valuable tasks. “If you look at ChatGPT, it’s fine if you’re looking for recommendations for something low-risk. I need something for my wife’s birthday next week, you input three things that she loves and ask it to help. It’s great,” he tells us. “But it comes from data sources on the web that aren’t always governed, controlled or trustworthy. It’s whatever is out there. What about the algorithms that come with ChatGPT? I don’t know what’s influencing the search criteria. On Google, if you pay you are at the top of the search bar. But I don’t know what ChatGPT is governed by.”

Michael van Keulen, Chief Procurement Officer at Coupa

Managing data leakage

Danny Thompson, Chief Product Officer at apexanalytix, explains that one of the biggest challenges with generative AI is being aware of a leakage of sensitive information combined with a contamination of important data. “We have a database of golden records for 90 million suppliers who are doing business with Fortune 500 companies and that is the best information we’ve been able to accumulate about the suppliers and their relationships as a supplier to large companies,” he tells us.

Danny Thompson, Chief Product Officer at apexanalytix

“We want to make sure we’re not loading sensitive information into a generative AI function that might allow just random people to access that data. Ultimately the customers in the space that we’re operating in are serious companies moving around large amounts of money and facing real risks that they have to manage. It’s really important that the data that they have is either highly accurate or at least they understand the degree to which it’s accurate. This means if you’re using the solution that you don’t understand the level of trust you can have in it, then you shouldn’t be using it yet.”

Can generative AI bridge the talent shortage?

Amid talent shortages in procurement, there are some sections of the procurement space questioning to whether AI and machine learning can plug the gap and reduce the necessity of recruitment. Naturally, this raises the debate of whether robots will replace humans. Stefan Dent, Co-Founder and Chief Strategy Officer at Simfoni, adds that while AI and machines won’t replace humans, it will mean people will need to find new forms of work and take on higher-value roles.

Stefan Dent, Co-Founder and Chief Strategy Officer at Simfoni

“The shape and structure of the modern procurement function will change quite dramatically and people will need to upskill,” he discusses. “A lot of the work will be taken over by the machine eventually either 20%, 50%, and then a hundred percent. But the human needs to have that in mind and then plan for that next three to five years. The procurement function of the future will be smaller, and they should purposely be doing that, to then look at solutions to find a way to enable it to happen naturally.

Future proof procurement

“For someone who’s joining procurement now, you’ve got this great opportunity to embrace digital. Young people can question ‘Well, why can’t it be done by a machine?’ They’re coming in with that mindset as opposed to fighting being replaced by a machine. I think for graduates coming into procurement, they’ve got the opportunity to play with digital and actually change the status quo.”

As we look to the future, gen AI and new forms of technology will continue to change the world and the way we work. In the short term, work is expected to continue to upgrade the user experience and workflows through gen AI in order to build greater trust for the end user. As transformation continues to happen, businesses and wider society must embrace new types of AI to thrive and stay ahead of the latest trends. The potential that gen AI tools possess is expected transform the workplace of tomorrow while delivering value-add such as time and cost savings on a day-to-day basis.

Given the speed of evolution and development, it is yet unimaginable exactly what form the digital landscape will take in years to come. However, that horizon brings with it fresh opportunity and excitement revolving around a whole new world of technology at our fingertips. The future is digital.

Author

Sean Galea-Pace

Published

27 December 2023

Estimated Read time

5Mins

As AI continues to emerge in a big way, Vicky Kavan, Vin Kumar and Nicolas Walden explores what the AI opportunity is in procurement?

Procurement is a hard function to impress. Other parts of the business can afford to get carried away now and then, but not procurement. Everything in procurement comes down to finding value and then making sure you don’t overpay for it.

Artificial intelligence (AI) might seem like just the kind of emerging new technology that procurement would shy away from. But, as many procurement leaders already understand, this would be a big mistake. In our work with the world’s largest companies, we see two kinds of major emerging AI opportunities you won’t want to miss. The first group – how we execute our procurement using, for example, new autonomous sourcing systems – can save millions today. While the second – the advent of AI-driven automation and enhancements across almost every industry and areas of spend – will help save you even more tomorrow.

Savings today

In terms of the impact of AI, procurement executives predict that supply market intelligence (50% of respondents), contract management (43%) and bid optimization (37%) will be some of the greatest opportunity areas for AI technology.

Despite this, and even as most AI and generative AI systems remain pilot projects, autonomous sourcing systems are already transforming how procurement functions operate at large multinationals. Many procurement executives have told us that they find these systems, which can automate execution in either tactical or strategic areas and provide enhanced decision support, extremely valuable:

  • Clients tell us these systems are helping them reduce cycle times dramatically – from months to weeks or weeks to days – and cut costs by 10% or more. Supplier discovery?  Shorter. E-sourcing? Shorter. Contract development? Shorter. While it is in the early days, time savings of 30% or more can be possible.
  • When MTN Group, an African multinational telecommunications giant, installed its Procurement Cockpit platform, the system paid for itself in four weeks because the AI-enabled software quickly identified new opportunities, consolidated pricing insights from around the sprawling corporation and accelerated negotiation preparation.
  • These systems are now making themselves useful across a range of sectors. Procurement executives at a major U.S. retailer, major European telecom and major European energy company all told us that these systems have saved time and money. Use cases include replacing the need to write detailed requirements, sourcing questions and even contracts through the use of modified templates through to tactical price negotiations.

Strategic drive

From strategy to insights, sourcing and negotiating ­– to contract drafting and supply risk management – AI-enhanced systems will make procurement faster and simpler. Although feature sets and value propositions vary from vendor to vendor, promising  autonomous sourcing systems fundamentally change how technology engages with stakeholders using chatbot-style interfaces to summarise requirements as an output of discussions; search and identify providers of products based on a variety of market, process and business considerations; prepare request for proposals and contracts; and maintain a higher degree of compliance with regulations. Some of these systems can even execute simple one-round negotiations. At the moment, Globality, Fairmarkit and Pactum (for negotiations) are three of the biggest names in this space.

Savings tomorrow

Eventually, we expect that AI-enhanced functionality is likely to yield major cost savings in almost every spend area, business function and industry sector.

Contact centres or marketing services, for example, could already send out automated posts and even voice responses that mimic the voice of your choice. A travel agency might be able to supplement human customer service with a robot concierge, making it possible to achieve a much greater level of service than ever before. Such changes won’t happen immediately – implementing them is not a quick win – but AI enhancements will be a huge source of value and service improvements down the line.

Category managers, be advised: the general consensus among purchasing executives we polled recently is that fleet, digital tech, advertising and general equipment are the categories that will benefit most from AI-enabled technology.

Of course, as with most powerful tools, AI-powered services also create new sets of potentially considerable risks. For example, you will need to make sure that your contracts are clear about what your vendor can do with your data – can it be aggregated in a large language training model? If that model leads the company to develop a more advanced service, do you want to be compensated for your contribution? Are you covered for potential liabilities if you transfer customer data to your AI vendor and your customer’s information is somehow revealed? If you work with an AI vendor and create intellectual property on its platform, who owns that new product? There are many new angles and issues that you will need to consider.

Looking ahead

Over the next five to 10 years, AI is likely to transform many aspects of business, including procurement. Based on The Hackett Group’s analysis of 44 Level 2 processes across the source-to-pay, end-to-end process – for a company performing at the median of our database – there is a potential to reduce staff by up to 46% over the next five to seven years.

Clients have told us they see digital technology (including AI) as the most transformative trend facing procurement in the next few years (71%) – more important than data (51%) or environmental, social and governance, and sustainability (47%). For procurement professionals, how the work is done and where they will find value are both likely to change dramatically. Given the speed with which we expect these opportunities and their attendant risks to develop, now is a good time to start thinking about the opportunities AI can create for your team.

By Vicky Kavan, Vin Kumar and Nicolas Walden

Author

Sean Galea-Pace

Published

26 December 2023

Estimated Read time

4Mins

Just how much of the procurement process can be automated, and who does it help?

It’s hard to argue that 2023 will be remembered as the year that generative AI exploded into the public consciousness. Image and text generation in the form of ChatGPT and Midjourney ignited excitement, controversy, contempt, and a fervour to adopt in equal measure. The generative AI industry is predicted to be worth more than $660 billion per year by the end of the decade.

But while there’s no denying that generative AI will be a part of the economic landscape of 2024 and beyond, it’s not yet clear what that will look like. More importantly, it’s no guarantee that generative AI will, uh, generate any ways for the technology to make back the hundreds of billions already spent to develop it. 

It wouldn’t be the first major trend to be backed to the hilt by big tech firms, only to dissolve into nothingness like that racoon who drops his cotton candy in a puddle. In stark contrast to 2022, this year’s tech roundups and trend predictions have put a conspicuous lack of emphasis on the metaverse. Now, to be clear, the fact that Yahoo Finance calculated that “Mark Zuckerberg’s $46.5 billion loss on the metaverse is so huge it would be a Fortune 100 company” is great news for those of us who didn’t want to spend our thirties attending meetings in a glowing virtual mallscape surrounded by cutesy, animated versions of our bosses and coworkers. Huge relief. It’s also quite funny. More relevantly to the topic of generative AI is the cautionary tale that, unless big, expensive technological developments can be monetised, they will disappear.

So, how do we monetise generative AI?

How to make generative AI useful

Technology is most valuable when it solves problems, and saves time and money, or at least improves people’s quality of life—when there’s a measurable benefit of some kind, sometimes to humanity, and usually to shareholders. That’s the stuff that sticks around.

While its applications and capabilities—especially when it comes to creative tasks or just the ability to make something actually original—are limited, generative AI may actually be a good fit for the procurement sector, potentially solving a major issue the industry is currently experiencing.

Generative AI and the Procurement Skill Shortage

The procurement sector is short on talent—with five out of six procurement leaders claiming they will lack skills, staff, and other vital human resources in the near future. This is the case for several reasons, but primarily: an ageing workforce is starting to retire faster than new hires can skill up; also, the requirements of the job are becoming more technology centric as procurement digitally transforms, leaving departments underskilled even if they’re no understaffed; and lastly, the amount of work for procurement functions is increasing overall, as it becomes more of a driver of business efficiency and innovation.

If generative AI could be used to reduce procurement teams’ workload by automating certain aspects of the job, it could be a key piece of the puzzle when it comes to solving the skill shortage.

Retail giant Walmart has been successfully running pilot projects using its AI-powered Pactum solution to automate supplier negotiations. According to Deloitte, not only did Walmart find it “helpful for landing a good bargain, three out of four suppliers prefer negotiating with AI over a human. This strongly indicates that the ecosystem is ready to embrace this disruption.” While I’m not sure if this example is an endorsement of AI or an indictment of Walmart’s procurement team, the ability for generative AI to take over routine communication, negotiation, and other interactions in the source-to-pay process could free up huge amounts of time to focus on more strategic activities.

Gen AI’s future

It’s not hard to imagine that both buyers and suppliers could input their desired results and parameters into a generative AI negotiator and outsource the relationship management entirely. Out of curiosity, this morning I set up ChatGPT in two windows and had it conduct an RFP, tender negotiation, and sale agreement for the sale of an order of self-sealing stem bolts between O’Brien Enterprises and Quarks. It was a very civil, if slightly roundabout affair, and everyone seemed to come away happy—hacky business journalists especially.

Goofy demonstrations aside, there’s real potential for significant elements of routine communication and relationship management in the procurement process to be automated, or at least assisted by generative AI. If correctly combined with data analytics on contextual information ranging from weather patterns, commodities pricing, and supplier behavioural history, a generative AI could offer useful insights to procurement professionals while its generally low threshold for usability allows less tech-savvy procurement professionals to harness more powerful digital tools.

By Harry Menear

Author

Sean Galea-Pace

Published

25 December 2023

Estimated Read time

3Mins

How Big Data can increase resilience, mitigate disruption, and help procurement teams spot danger before it’s too late.

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.

By Harry Menear

Author

Sean Galea-Pace

Published

22 December 2023

Estimated Read time

5Mins

Jamie Ganderton, Vice President at Proxima, examines the future of sustainable procurement going into 2024.

As we step into a new year and inch closer to the global sustainability targets set for 2030, the spotlight on sustainable procurement will only continue to intensify. The aftermath of COP28 has placed an even greater emphasis on the role that large corporations play in global decarbonisation. This, coupled with incoming rules and legislation across Europe and the United Kingdom, such as the European Corporate Sustainability Reporting Directive (CSRD), has underscored the critical need for agile and proactive approaches to corporate sustainability action.

The Scope 3 Benchmark, a tool developed to enable organisations to collaborate to advance progress on sustainability targets, has shown that Scope 3 still remains a challenge and 2024 will be a pivotal year in addressing some of the fundamentals as we move within just two short contract cycles away from 2030. Looking ahead, the focus will sharpen on bridging the gap between sustainability objectives and procurement strategies, with an emphasis remaining on translating lofty sustainability goals into actionable procurement strategies. As we navigate 2024, collaborative advancements, data-driven insights, and the proactive evolution of procurement practices will be critical drivers, propelling sustainable procurement into a new role of implementing purposeful action.

Embedding sustainability targets into procurement strategies

Whilst it seems like an obvious starting point, many procurement teams have not yet fully embraced the need to translate sustainability requirements into procurement strategy. Even for those that have, challenges remain to translate sustainability language into effective procurement strategy. There is a tendency for organisations to panic and jump straight into supplier engagement, without first planning who they are going to engage and what are they going to need from them.

The goal for many in 2024 should be to plan out how the next six years are going to look and begin progress as soon as possible, because we know that change takes time and never happens as quickly as we intend. Sustainable procurement transformation is going to require focus and investment to get right. The core focus areas should be measuring emissions to drive action, developing the functional enablers to support the change, and developing the strategic levers for decarbonisation.

Leveraging emissions measurement to drive action

The primary starting point is to understand your emissions, in detail. Embrace carbon emissions measurement and start reporting them, ideally across all categories of Scope 3, but at least the core supplier-related areas. Following the GHG Protocol’s spend-based methodology is an adequate starting point, provided the outputs you develop allow you to drive insights into your emissions “hotspots” and start evolving greater accuracy as data quality and supplier maturity improves. Procurement teams can then begin to develop the strategic decarbonisation levers they will need for their categories.

Making procurement functional enablers

Building a sustainable procurement function requires the right support pillars, but evidence coming from the Scope 3 Benchmark suggests that some key foundations are missing. Firstly, there is a lack of directly invested resources, and there are also limited numbers of support team members. The volume of interaction with suppliers on Scope 3 is high, therefore you need someone to set the strategy and have an effective team to enact it. Even medium-sized businesses will have a reasonable number of material emitting suppliers who need engagement and management, which creates an increased workload for supplier management teams.

Additionally, many organisations have limited Scope 3 learning and development capability plans to support team members in developing their carbon literacy and bridging the skills gap.

At some point procurement needs to be bold and make carbon a key consideration throughout decision making, from up-front category planning, through to RFx and sourcing processes, negotiations and contracting, and post-contact supplier management. If there is no consideration given to carbon with equality to the classic cost, quality and service evaluation, then we will never make different decisions. There will never be a commercial incentive to suppliers to support decarbonisation efforts and we will inevitably fail. In 2024, we will begin to see more forward-looking CPOs begin to build carbon pricing into their decision-making, paving the way for processes to change.

Developing policy to help suppliers face reality

Traditional procurement policies are usually written once and then set in stone without the need to revisit them any time soon. Over the coming years, the old Procurement Policy is a tool that has the power to make a huge impact and one that needs its own evolution. This policy development will enable a blanket application of sustainability to be adopted without procurement intervention in every sourcing decision. Between now and 2030, we need to strengthen the requirements annually to allow suppliers to gradually get used to the changes and ratchet up the pressure over time. At some point in the future, there will be a decision not to trade with some companies if they have not met minimum standards. This tough line should motivate those to change or risk losing business.  

Once procurement teams get to grips with what is driving carbon emissions in the supply chain, they then needs to develop the right approaches to motivate, encourage, and sometimes force suppliers to act. Some suppliers will be on board with the need to decarbonise and happily support the process, whereas others will need significant levels of ‘encouragement’. Some categories will be relatively straightforward to plot a pathway to decarbonisation, whereas others have more complex challenges and require more strategic levers. Category teams will need to build a comprehensive picture of their suppliers and in many cases begin the co-development of solutions to tomorrow’s problems. Research and innovation, product reengineering, and demand management can all play a significant role in reducing emissions, but release of value may be some time in the future, which places a greater emphasis on 2024 being the year to truly put weight behind the efforts.

A green future

As we look to 2024, a lot needs to change if we are going to meet the looming global sustainability targets. Many procurement teams are still grappling with integrating sustainability into their strategies. The next few years mark a critical juncture and demand meticulous planning and swift action. Transforming procurement practices to align with sustainability goals requires measured steps, starting emissions measurement and building a strategic decarbonisation plan from there. Whilst there is a lot to be done, with the right strategies in place, procurement teams are poised to play a pivotal role in accelerating organisations’ progress towards net-zero.

Jamie Ganderton, Vice President at Proxima

Author

Sean Galea-Pace

Published

20 December 2023

Estimated Read time

2Mins

A consortium of volunteers from California have slowly restructured their state schools’ digital procurement process. Next year, it plans to go national.

Procuring digital goods and services for public schools in the US has reportedly been a fraught process for decades. A fractured landscape between underfunded public institutions and a private tech sector has struggled to even accurately assess students and regulators’ needs, let alone finding the right edtech (education technology) to meet those needs. 

This is all made harder by an increase in the amount of technology being integrated into schools—whether that’s good, bad, or maybe both, it’s undeniably expensive. The global education technology market was valued at $123.40 billion in 2022 by Grand View Research. It’s expected to expand at a rate of 13.6% between now and the end of the decade.

The power of education for procurement

Edtech is also a wide umbrella, with examples ranging from apps, overhead projectors, and chromebooks for students to thousands of screens, digital signage, and “content management platforms” like those found in Christopher Columbus High, an all-boys prep in Miami which the South Korean tech giant Samsung has transformed into a “connected campus”. In the US, procurement functions working for individual school districts are often forced to work with smaller budgets, fractured regulatory landscapes, and to compete with private schools with larger budgets that drive overall prices in the sector up.

Tired of inefficient processes and uneven contracts, a consortium of procurement professionals working in the California public school system are looking to change the edtech procurement process in the US.

The Education Technology Joint Powers Authority (Ed Tech JPA) was formed “out of frustration” with the existing system, or lack thereof, in 2019. The volunteer group, made up of procurement specialists and school purchasing professionals, has spent the past four years streamlining procurement for digital products and services, leveraging the buying power of multiple schools to negotiate prices, buy in bulk and save money.

From a grouping of school districts located in Irvine, San Juan, San Ramon Valley, Fullerton, Clovis, El Dorado County and Capistrano Unified districts, the consortium has grown to include 163 member districts that educate around 2.3 million students. The organisation has been awarded 23 procurement contracts to date, and is growing rapidly in education.

At the California IT in Education (CITE) conference, held in Sacramento during November, JPA President Brianne Ford, predicted that next year would see the program expand beyond California and make group bargaining procurement for edtech a national feature of the US school system.

By Harry Menear

Author

Sean Galea-Pace

Published

19 December 2023

Estimated Read time

2Mins

Ask Procurement—a generative AI procurement solution—is being developed for the market by IBM using Dun & Bradstreet’s “huge data cloud”.

In order to develop more effective and market ready digital solutions for supply chain and procurement professionals, IBM is partnering with Dun & Bradstreet, a data-dealer with access to vast quantities of raw information gathered from a wide variety of sources, as well as cutting edge analytical tools. Together, the companies will work on expanding the capabilities of IBM’s watsonx to expand their use of generative artificial intelligence (AI).

Through the collaboration IBM and Dun & Bradstreet intend to develop multiple offerings for clients to incorporate into their AI workflows, leveraging IBM’s AI and data platform, and fueled by Dun & Bradstreets’.

Ask Procurement

The leading solution in development, according to an IBM press release, is Ask Procurement, a generative AI-powered procurement solution that will “help empower procurement professionals to unlock new data and insights with a 360-degree view into all aspects of a company’s business relationships to help increase savings, reduce time, and mitigate the potential for risk.”

Ask Procurement is expected to use Dun & Bradstreet’s platform, but feature watsonx supported models and other generative AI capabilities “fueled by Dun & Bradstreet’s vast Data Cloud.” The solution is expected to be available to procurement teams in the second half of 2024, integrated with Dun & Bradstreet solutions or an enterprises’ existing ERP or procurement solution.

“At Dun & Bradstreet, being a trusted data partner and a responsible AI partner to organisations are synonymous,” said Ginny Gomez, President, North America, Dun & Bradstreet. “As two trusted brands that bring nearly 300 years of combined experience to the businesses we serve, Dun & Bradstreet and IBM are ideally suited to help companies responsibly navigate the rapidly evolving generative AI space because we know their business environments and processes well. And with hundreds of thousands of organisations globally relying on us every day, we believe there is no better company than Dun & Bradstreet to lead the industry and our clients into the future.”

By Harry Menear

Author

Sean Galea-Pace

Published

14 December 2023

Estimated Read time

2Mins

A closer look at some of the best tools to help your procurement function capture the potential benefits of a world powered by big data.

Procurement is becoming an increasingly data-driven field. Correctly gathered, organised, and analysed, Big Data sets can help a procurement department do everything from increase efficiency and reduce costs, to make more ESG-conscious decisions or shore up their supply chain against unexpected disruption. However, managing huge amounts of structured, unstructured, internal, and external data can present a significant challenge for procurement staff. This is especially true when procurement professionals haven’t needed to also be data analysts until recently. This means there might be understandable skill gaps in your team.

Luckily, there exists a wealth of digital tools designed to capture, analyse, and generate insights from massive amounts of data. This is all specifically catered towards enhancing and elevating your procurement function. Here’s a closer look at five digital tools to help maximise the potential of Big Data in your procurement function.

1. GEP Smart

With AI-powered spend analysis, as well as strategic sourcing, purchase order processing, and invoice management, GEP Smart is one of the more broadly capable and robust procurement tools on the market. The platform is capable of absorbing, collating, and converting large data sets into everything from compliance procedures to supplier management strategies.

2. Kissflow

For smaller organisations still in the process of growing their procurement teams, Kissflow can help bridge the gap between a legacy or underdeveloped procurement function and where it needs to be with less emphasis on learning complex new digital tools. Kissflow is all about being simple, accessible, and customisable. The platform handles basic procurement functions natively, but integrates with a huge variety of other tools and programs.

3. Coupa

Focused largely on spend management, Coupa unified, streamlines, and empowers the source-to-pay process. The firm uses Big Data analytics to manage working capital and forecast budgets, giving procurement professionals more visibility over finances.

4. Tamr Procurement Analytics

Tamr Procurement Analytics specifically targets the problem of siloed data within the supply chain, helping procurement professionals quickly unify their data sets and start using artificial intelligence to generate insights at speed. The AI and machine learning decision engine underpinning Tamr’s platform enriches user data while also curating it against a rigorous set of standards to ensure quality.

5. TARGIT Decision Suite

TARGIT is a business intelligence and analytics tool that can gather observations from throughout the supply chain. This allows them to be more easily converted into actionable insights. The platform embeds directly into internal and external-facing portals, allowing a procurement team to share dashboards with the entire supply chain network. By creating a holistic impression of the entire supply chain, TARGIT improves the results of its predictive analytics, increasing efficiency and resilience.

By Harry Menear

Author

Sean Galea-Pace

Published

13 December 2023

Estimated Read time

4Mins

At DPW Amsterdam, Kathryn Thompson and Fraser Woodhouse, Partner and Director at Deloitte, discuss the rise of generative AI and the impact on procurement.

Procurement is changing.

That’s something that isn’t lost on Kathryn Thompson, a Partner at Deloitte.

As part of her role, she leads the Sourcing and Procurement Market Offering within Deloitte’s Consulting division in Europe, Middle East and Africa. Originally from Australia, Thompson has worked in procurement since 1996 and has observed quite the evolution over the past two and a half decades.

Procurement’s transition

Over the years, procurement has shifted from a traditional back-office function to an entity operating at the fore of a company’s strategy. Having been involved in the industry for more than 25 years, Thompson has had a front-row seat to procurement’s digital transformation. While she affirms that AI has changed procurement, she isn’t convinced that generative AI is changing the space – yet.

Kathryn Thompson speaking at DPW Amsterdam 2023

“We see lots of AI tools pulling from different data sources to apply intelligence to different decisions,” she explains. “But the generative part, beyond contract summaries or pulling together draft RFPs, remains to be seen at scale.  One of my more sophisticated clients has run 300+ Proof of Concepts in AI across their business, including and beyond procurement, and admits they are yet to scale or drive meaningful ROI from any POC. At the moment, the generative AI side for us, isn’t getting past proof of concept or the pilot stage yet.”

Fraser Woodhouse is a Director at Deloitte and has been with the firm since February 2019. He believes that procurement and sales teams will use gen AI for RFPs over the next six months. “I think they’ll do it without telling anyone,” he explains. “It will eventually get to a point where I think that sort of crutch will become a necessity. When it’s built into the enterprise platforms, people will forget how to write contracts because the AI does it automatically. People will even use it to write their emails.”

The AI dilemma

AI on its own is pointless – it simply doesn’t operate the way you need it to. That’s why the importance of making tech work in a way that creates efficiency has never been more important. For Woodhouse, he insists it’s about putting a human at the right place in the process. “One of the solutions I saw was a gen AI assistant helping write an RFP built in, but then the supplier has a gen AI assistant helping do the response to the RFP as well,” he tells us. “Very quickly you’ve got two AIs negotiating with each other, and that doesn’t work unless a human is curating stuff at that point in the middle.”

Given the ease of AI usage, there is a discussion as to whether tech implementation could go too far the other way. Could humans lose the ability to perform simple tasks they previously wouldn’t have thought twice about? But Woodhouse is quick to dispel that myth and believes that despite the growing reliance on technology, people won’t be rendered useless. “People didn’t forget how to communicate when spellcheck came around, they could communicate better,” he explains. “If you are a supplier and are responding to an RFP and you’re pressing their generative AI button to build the response and five of the other suppliers are doing the same thing, who’s going to stand out? The ones who wrote it themselves or at least edited it and had meaningful input.”

“You can use AI for the transactional, easy stuff but there must be a value underpinning it,” adds Thompson. “The winners are going to be the ones that are human about things.”

Fraser Woodhouse and Kathryn Thompson speaking to CPOstrategy at DPW Amsterdam 2023

Procurement’s place

With such significant innovation happening, it is seen as a transformative time to be in procurement. As automation speeds up, the necessity to upskill new graduates coming into the workforce and encourage them to learn higher-value work earlier in their career journeys is becoming increasingly important.

“Covid and the following work from home attitude has a lot to answer for,” explains Thompson. “Pre-Covid, you would rarely work from home. Consultants, suppliers, delivery partners always went to the client’s site. That’s where innovation, creativity, results that are more than the sum of their parts happen. That’s not replicable by generative AI. We need to get everyone back out there and doing things. Rather than replacing jobs, we’re replacing tasks. The tasks that we’re replacing are the likes of data analysis, synthesising, and summarising. Hopefully, it means we’re doing real-life negotiations, brainstorming and innovation instead which are the things that people love to do. Fingers crossed, it just means the bar goes up.”

Author

Sean Galea-Pace

Published

12 December 2023

Estimated Read time

2Mins

Automotive supplier Continental has chosen to work with JAGGAER to implement its global purchasing strategy while driving digitalisation.

Spend management firm JAGGAER has announced it is working with automotive supplier Continental to push its digitalisation agenda.

In a press release published on Monday (December 11), it was revealed the manufacturer will use JAGGAER’s spend management tools to implement its global purchasing strategy. The JAGGAER ONE suite will counteract previously isolated solutions and harmonise the areas of purchase-to-pay, source-to-contract and business partner management.

A multi-stage rollout is set for launch, beginning in Germany and the United States before being slowly expanded globally.

The release detailed that one of the most important factors for Continental choosing JAGGAER was due to the extensive and highly standardised range of functions of JAGGAER ONE, which already covers many existing requirements. In addition, this not only ensures a quick time-to-value, but also ensures a low implementation risk. Continental confirmed it found JAGGAER’s multi-ERP capability “particularly impressive”, with a total of 30 ERP systems needing to be connected.

Following the project’s launch earlier this year, the implementation of JAGGAER solutions within Continental will take place in several stages. Initially, the company will focus on the procurement of non-production materials and raw materials. It will start with the optimisation of the source-to-source contract process. In the next project phase, Continental will focus on the procure-to-pay process to ensure security of supply for employees globally. This is done via predefined catalogues and to optimise follow-up processes.

As well as the global rollout and digitalisation, there are also plans to expand the use of software to direct purchasing.

Author

Sean Galea-Pace

Published

8 December 2023

Estimated Read time

2Mins

Only one in six procurement teams have “adequate talent” to meet their future needs, as industry demands grow and evolve.

Fewer than a fifth of procurement directors and executives believe that their teams contain “adequate talent” to meet the future needs of their organisations’ procurement functions.

In a recent survey of 111 procurement leaders, analyst firm Gartner found that, while procurement leaders remained fairly confident in their current talent pools, when asked about their ability to meet future demand, confidence plummeted.

“Procurement leaders are generally confident in the current state of their talent and the ability to meet their near-term objectives,” commented Fareen Mehrzai, Senior Director Analyst in Gartner’s Supply Chain Practice. “However, our data shows that chief procurement officers (CPOs) are worried about the future and having sufficient talent to meet transformative goals based around technology, as well as the ability to serve as a strategic advisor to the business.”

The threat of an industry-wide talent shortage has been looming for several years, and isn’t constrained to the procurement and supply chain sectors.

In the UK, half of all employers expect to face talent and skills shortages when recruiting procurement and supply chain professionals—something 20% of firms believe will be exacerbated by Brexit. In Europe, firms say they already lack “highly qualified procurement personnel”, with 78% of procurement leaders surveyed as part of a recent Accenture report “increasingly confronted with skills shortages in their procurement departments.”

A Different Beast: Procurement Professionals’ Key Competencies “Shifting”

One of the key reasons that procurement leaders lack confidence in their industry’s talent pipeline to meet future demands is reportedly the shifting nature of the modern procurement function.

“Procurement leaders are aware that the competencies required to drive transformation are different from traditional procurement skills, and that there are significant gaps between their current and future needs for the most important competencies,” Mehrzai said. Only 4% of surveyed leaders said that no gap existed between their current capabilities and their need for technology and data skills, with 68% of leaders saying technology and data skills had become more important to the operation of their procurement function in the past year.

Increasingly, procurement is a data-driven, technology-focused sector, but it appears the development and recruitment of available talent lacks behind the sector’s need to not only drive transformation within the business but also serve as a strategic advisor to its key decision makers. As generative AI and data analytics are adopted in greater concentrations across the sector, the demand for professionals who are primarily equipped with technology and data-centric skillsets — at the potential expense of a traditional procurement background — will only increase.

By Harry Menear

Author

Sean Galea-Pace

Published

7 December 2023

Estimated Read time

5Mins

At DPW Amsterdam 2023, Prerna Dhawan, Chief Solutions Officer at The Smart Cube (a WNS company), tells us about the importance of remaining focused on fixing the problem and not leveraging technology for technologies sake.

“You don’t need AI or even gen AI for the sake of it.”

In today’s world, everyone is obsessed with what’s new and fresh. Like in most other functions, in procurement, the latest craze is generative AI, with ChatGPT being one prominent example. Despite new technology’s clear benefits, such as cost and time savings, it’s important to keep the problem you’re trying to solve and the business impact you’re looking to make front of mind.

Prerna Dhawan is the Chief Solutions Officer at The Smart Cube. Like many of her peers, Dhawan recognises the potential that new technology brings but also shares concerns. “Like everyone else, we’ve been on that bandwagon as well,” she tells us. “For us, there have been two key learning so far. We have already done one live deployment of gen AI. We went live with our gen AI model earlier this year, which enables users to skip the stage of manually searching for content on Amplifi PRO, our on-demand procurement intelligence platform. You just ask the question and our platform leverages a custom NLQ framework and gen AI to provide a natural language response. Using a combination of our own AI models and gen AI provides a more dependable, accurate response as pure Gen AI isn’t fully functional for all types of analysis and can’t be trusted completely.”

Navigating AI adoption

Indeed, there has been criticism from some sections about ChatGPT providing hallucinations and making key data up. For multi-million pound organisations responsible for high levels of spend, this isn’t good enough. A second learning Dhawan is keen to get across is that she believes that gen AI is being dominated by hype. She explains that with any “new shiny object”, it should be treated with caution.

“I’ve tried to explain this a little bit, but everyone is excited about new things. A recent example is another use case where we were experimenting with our digital assistant,” she explains. “There was a point where we used a 100% gen AI approach, and we were still getting issues and hallucinations where the queries weren’t being answered correctly. The team said we needed to make it work and I explained that, ultimately, a client needs to solve the problem, they’re less hung up on how this is done. Sometimes people get lost with the technology and the approach. You have to ask yourself, are you solving the problem? If the answer is to just input a human and you don’t need AI, then do that.”

Prerna Dhawan, Chief Solutions Officer at The Smart Cube, sits down with CPOstrategy at DPW Amsterdam 2023

The journey

Armed with more than 16 years of experience in developing client solutions, managing strategic relationships, defining product strategies and driving profitable growth, Dhawan has worked with procurement, supply chain and corporate strategy teams across many global 2000 companies. Throughout her career, she has helped them embed intelligence and analytics as enablers of competitive differentiation and business transformation, along with The Smart Cube’s co-founders Gautam Singh and Omer Abdullah.

The Smart Cube is a WNS company and is considered a trusted partner for high-performing intelligence that answers critical business questions. The Smart Cube works with clients to figure out how to implement answers faster through customer research, advanced analytics and best-of-breed technology. The firm transforms its data into insights – enabling smart decision-making to improve business performance at the top and bottom line. Together with WNS, expert resources are combined with leading digital technologies, merging human intelligence and AI with innovation.

Digitally-enabled future

While AI’s challenges should be acknowledged, Dhawan is in no uncertain terms about the importance of stepping out of comfort zones and meeting fear head-on. Change can be a divisive topic with human nature being to cling on to what’s familiar. However, this can result in becoming reactive and failing to keep up with competitors.

Prerna Dhawan, Chief Solutions Officer, The Smart Cube

“As leaders, if we want to change the game of procurement and redefine the value we create for a business, we have to be more open to embracing new things,” she explains. “If you learn what the capabilities of new technology are and where you can actually use it, everything has strengths and weaknesses. Ask yourself – do you want to be an early adopter or do you want to be a laggard in your industry? All of this has the potential to give you that competitive advantage. It’s about being open, experimenting at pace, but also not being blinded by the magic and assuming everything will just work. There will be changes needed to your processes and people’s mindsets.”

Procurement’s future

With the future of procurement set to continue to be digitally-enabled and full of innovation, Dhawan believes the function now has its seat at the table and is ready to thrive.

“If I look at my journey from when I started in procurement, clients were asking questions like ‘Who are the suppliers in the market? How do I get the best price?’ Procurement is now getting involved at the new product development stage and is even advising the business on what ingredients to use while taking a more total value approach,” she discusses. “When you’re thinking about the product, do you want to put in palm oil or sunflower oil based on sustainability considerations, and how can you justify additional costs of a sustainable supply chain? Procurement isn’t just supporting the bottom line but also influencing the broader business goals of sustainability, innovation and resilience. It’s a great time to be here.”

Author

Sean Galea-Pace

Published

6 December 2023

Estimated Read time

4Mins

Conrad Smith, Founder and CEO at Graphite Systems, discusses the similarities between Formula One and procurement amid significant digital transformation.

“Our business, like the F1 driver, knows to go fast.”

You’d be forgiven for thinking that procurement and Formula One are worlds apart at first glance. However, to Conrad Smith, Founder and CEO at Graphite Systems, they are actually a lot closer than initially meets the eye. A petrolhead by his own admission, Smith shared the stage with Haas Team Principal Guenther Steiner at DPW Amsterdam 2023. As a purchaser with almost 30 years of experience, Smith has overseen quite a transformation during his procurement career. He says that with everything going digital, you would assume that purchasing would accelerate. But it is, in fact, the opposite.

The pace of purchasing

“Over these 30 years, you would think purchasing would be getting faster,” he tells us. “Business is speeding up, but purchasing is slowing down – that’s stunning. When you think about it, where else in the world is slowing down when everything’s going faster and faster? Even though we’re investing in Coupa and Ariba and all of these expensive purchasing tools, it’s still slowing down. Our business stakeolders know business is speeding up, and so their tolerance is going away. In the nineties, when you onboarded a supplier, you just needed commercial data, name, address, tax, and banking.”

Conrad Smith (left) with DPW founders Matthias Gutzmann and Herman Knevel

Having been founded in February 2019, Graphite Systems is the premier supplier life cycle and risk management solution. The emergence of risk and due diligence has become a primary function within procurement. Vendor due diligence during the procurement process ensures users can identify and mitigate the risks present with a vendor they want to do business with during the contracting process. For Smith, he believes that this transformation has been 15 years in the making.

“I think that it was typical that a purchasing leader would point to other stakeholders and say it’s legal that’s holding this up, privacy or security. They’re the ones stopping the process from happening,” he explains. “And quite frankly, I’ll admit, those were my early thoughts. This is like a hot potato – I don’t want to be owning it. I look stupid because of the slowness I described. Think how stupid the business thinks we are when they come and say, I’m working on a project, I need this consultant here on Monday. And our best response is that it’ll take weeks or months to onboard the supplier”           

“Weeks matter, and we need to go through all this risk and due diligence. It’s really important to do the risk and due diligence, but we can’t do that at the expense of the speed of business. While business is quicker, in every measure that you look at, purchasing is going slower. It’s dumb, and the business knows that, and it means we lose credibility. It needs to happen, but we need to be very intelligent about it and not just do things the same ways we’ve always done them.”

Conrad Smith with Haas Team Principal Guenther Steiner at DPW

Procurement’s changing

Smith explains that one of the reasons he can relate to the F1 analogy is that while cars are going faster than ever, the drivers are far safer today. “Every year, we see massive accidents take place,” he tells us. “I think last year, a car that was flipping head over heels tumbling and hit the fence before slamming into the ground but the driver was okay,” he explains. “There’s this principle that is very important in almost any situation where somebody says, you can have this or you can have that. It’s a false choice.

“You have to pick speed, or you have to pick safety. If you go in with a requirement that says it has to be fast and it has to be safe, that’s the F1 example. You have to go into purchasing and say it’s a non-negotiable. It has to be fast and safe. How can we rethink the design so it can go fast and be safe? That’s really my passion, and it’s possible. It doesn’t mean it’s easy, but it’s possible. Frankly, in the case of this purchasing problem, it’s way easier than it should be. But we’re still stuck on passing paper back and forth instead of just saying, there’s my profile. Everything you need is in my Graphite profile – just like everything you need to know about me [as a professional] is in my LinkedIn.”    

The future of creation, management, and sharing of data and documents between buyers and suppliers absolutely needs to evolve from emails, spreadsheets, and PDFs into a modern social network architecture. This transformation of information sharing has already proved its speed and efficiency in most other aspects of our lives. It’s time to quit wasting time and money on supplier onboarding and embrace modern technology in this critical procurement process.

Author

Sean Galea-Pace

Published

5 December 2023

Estimated Read time

5Mins

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

Author

Sean Galea-Pace

Published

4 December 2023

Estimated Read time

4Mins

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.”

Author

Sean Galea-Pace

Published

1 December 2023

Estimated Read time

6Mins

In this article, Veridion’s CEO unveils the exciting world of AI in Supplier Discovery, shares the company’s journey into data enrichment, and concludes with some behind the scenes of how the company is enhancing its Search API with natural language capabilities, paving the way to data-driven future in procurement and beyond.

In today’s world, global supply chains are facing persistent volatility and disruptions, leaving procurement companies extremely exposed to the fluctuations of markets and the associated risks from vendors. This unstable environment highlights the necessity of innovative approaches in procurement management, particularly the adoption of AI-powered intelligent data.

Deloitte’s 2023 Global Chief Procurement Survey reports that 89% of companies worldwide have been negatively impacted by inflation-related cost risks in the last year, with 79% also facing substantial supply shortages. These figures underscore the critical need for innovative strategies and technologies to address these challenges in procurement.

Embracing AI for supplier discovery: A game-changer in procurement

Perspectives from Veridion’s CEO, Florin Tufan

As procurement firms aims to master the complexities of the evolving supply chain landscape, artificial intelligence (AI) emerges as a transformative solution that promises significant benefits, especially in enhancing supplier discovery.

Veridion, a company at the forefront of data enrichment and innovation, is leveraging AI to streamline data-driven growth across many areas within industries. Florin Tufan, Veridion’s CEO, offers candid perspectives on the opportunities and challenges presented by AI in procurement, with a special focus on its capacity to refine the supplier discovery procedure.

Tufan talks about how leveraging AI for supplier discovery is transforming procurement from a process constrained by limited information and relationships to one that is dynamic, informed, and resilient. AI-enabled data allows companies to comprehensively understand the supplier landscape, enabling them to analyse and evaluate a vast array of suppliers quickly and efficiently.

“We come from a world where it wasn’t possible to learn everything about the entire universe. If you had three suppliers for one highly important thing, you’d much rather spend a lot of time strengthening that relationship and putting better protection in place. There was no easy way to ask about others and question whether you were working with the right ones while finding out if you had enough resiliency. No, you want to work with the best ones so that you’re covered and get on with the work no matter what.”

However, Tufan also highlighted that while AI has the potential to significantly cut down the time companies spend searching for new suppliers, it’s not a magic wand that instantly fixes all procurement issues. There are still things to be fixed in the supplier discovery process.

CPOstrategy speaking with Veridion CEO Florin Tufan at DPW Amsterdam

Veridion’s approach:  Addressing the need for a more proactive and comprehensive approach in supplier risk management

Tufan’s insights suggest a pressing need for a more proactive and comprehensive approach in supplier risk management.

Tufan pointed out a critical shortfall in the procurement strategies of many large companies—they lacked sufficient redundancy in their supply chains. When the pandemic struck, these companies scrambled to identify and connect with the best possible suppliers in various regions. However, the process was fraught with inefficiencies. “The discovery phase alone took weeks, and that was before even determining if those suppliers were a suitable match. By the time companies could establish redundancy, it could be two years later, and that’s simply too late,” Tufan explained.

He observed that the focus in procurement has traditionally been on what is known about the top suppliers based on past interactions, often neglecting the broader, more holistic view of a supplier’s status and potential risks. “There are numerous instances where companies face downturns or disruptions due to economic or political factors, and their clients often find out too late,” Tufan noted.

Who is Veridion? The company’s journey to data enrichment in procurement

Veridion, a Romania-based company, operates in the segment of source-of-truth business data, providing comprehensive and up-to-date insights on private companies. The company’s solutions are addressing particularly procurement, insurance, and market intelligence data challenges and are powered by AI and machine learning capabilities. This technology enables Veridion to extract maximum value from data, enabling efficiency and innovation for their customers.

One of Veridion’s earliest projects in procurement, which significantly contributed to its exploration of data enrichment solutions, involved collaborating with semiconductor companies seeking to diversify from China and US manufacturers planning to onshore to South America. This experience gave CEO Florin Tufan and his team deep insights into the complex challenges of global supply chain relocation. Tufan described this journey as both humbling and enlightening, particularly in understanding the significant impact of supply chain shifts on everyday products.

The company’s approach to addressing these challenges has been methodical and innovative. By leveraging AI and machine learning, they have developed more efficient ways to harness data, enabling businesses to make informed decisions in rapidly changing environments. This approach is not just about providing data but enriching it to offer meaningful, actionable insights.

Veridion has become a key player in transforming how companies approach procurement and supply chain management. By focusing on data enrichment and leveraging advanced technologies, they have positioned themselves at the forefront of this critical industry, offering solutions that are as dynamic as the markets they serve.

This “incredible journey”, as described by Tufan, exceeds the goal of business expansion. It’s about comprehending and effectively responding to the complex challenging of global with real-time, accurate data.

Looking forward: Veridion’s CEO perspectives on latest technology innovations

“I’m 99% percent excited! At the core, we’re an AI company.”

Florin Tufan’s vision for the latest cutting-edge technologies and innovations such as generative AI is one of optimism and excitement. He sees it not just as a technological leap, but as a tool that will become integral to daily life and business operations, enhancing efficiency and connectivity across the globe.

When asked what big news is coming soon, Florin announced an upcoming enhancement to their Search API, set to launch this year. This significant update introduces semantic search capabilities, leveraging natural language processing to enable more intuitive, human-like search experiences. With this advancement, users will be able to conduct searches that closely align with their specific needs and queries.

Veridion’s Search API is modernising multiple procurement processes from supplier search to enrichment, setting a new standard of excellence with first-class vendor data. By incorporating advanced AI capabilities, this intelligent search engine has made significant strides in deduplication, cleansing, and enriching master data, addressing a critical challenge many companies face. Organisations often struggle to understand the full potential of their existing supplier networks for sourcing opportunities. Veridion’s data-centric approach ensures that companies can now leverage their current supplier base more effectively or find new ones, uncovering hidden opportunities and driving efficiency in procurement strategies.

It looks like Veridion is reshaping the procurement landscape, turning complexity into clarity and offering an unparalleled user experience. The company is marking a paradigm shift towards a more efficient, data-driven future in procurement and beyond.

Author

Sean Galea-Pace

Published

27 November 2023

Estimated Read time

6Mins

At DPW Amsterdam 2023, Alan Holland, CEO of Keelvar, tells us about the acceleration of digital transformation in procurement and what it means for the next generation of the workforce.

Keelvar’s mission is simple – to help procurement teams globally to scale sourcing excellence.

Keelvar is powered by unique artificial intelligence, designed by category experts, to deliver significant savings and operational improvements for global enterprises such as the likes of Siemens, Coca-Cola, Samsung, Novartis and more. The company was founded in Europe’s largest AI research lab by a team of computer scientists and engineers specialising in AI, optimisation and game theory applied to strategic sourcing. Keelvar has raised $42 million to date in funding to accelerate product development and global growth.

The company is led by Alan Holland who has served as CEO since the company’s foundation in September 2012. Indeed, in his first year, he led the organisation to win the Cork Company of the Year in the small company category, and the firm has more recently been awarded a Gartner Cool vendor.

Having previously served as a lecturer in artificial intelligence in University College Cork’s Computer Science Department, Holland specialised in Optimisation, Game Theory and Algorithmic Mechanism Design. Such experience has helped give Keelvar an edge in terms of innovating with offerings that exceed competitors’ technical capabilities. This enables Keelvar to define an entirely new category of the solution, putting Keelvar in an ideal position to lead this new category that Keelvar has called autonomous sourcing.

CPOstrategy sitting down with Alan Holland, CEO at Keelvar, at DPW Amsterdam 2023

Evolution at scale

Procurement is in a state of flux. The industry is experiencing unprecedented amounts of innovation and change in a way which has ripped up the playbook of what went before it. However, Holland believes it is only in the past half decade or so where transformation has really started to take place. “If we look at the last 10 years, the first five of those procurement was very slow to change,” he discusses. “What we saw were technology landscapes dominated by a small number of large suites vendors who had acquired many companies, but most enterprises were satisfied in buying all the modules they would need to run their procurement function from one vendor. Rarely was it the case that the various modules did what their customers needed. Some of them might have worked in some ways, but others just didn’t serve the need at all.

“In the second five years of our being, things started to change. We did start to notice an increasing acceptance that best-of-breed was the way forward and that enterprises needed to accept that if they were to get the buy-in from their stakeholders, then they needed to work with a combination of best-of-breed vendors and piece together their specific technologies landscape rather than just buying it in bulk from one. I would say it was gradual at first and then suddenly, but it’s only been suddenly in the last couple of years. The pandemic likely accelerated some of that change.”

Trust first

Holland explains that in recent years, large multinationals are placing an increasingly important level of trust in smaller, best-of-breed vendors such as Keelvar to allow them to run their sourcing events and meet niche demands. He believes that in the past it simply wouldn’t have happened and strives to prove that faith right. “I suppose that’s a process where enterprises are gradually increasing their trust in what are smaller vendors, but these smaller vendors are becoming bigger because we’re serving hundreds of large enterprises,” he explains. “We’re gaining in strength and momentum and the barriers to adopting best-of-breed at scale are lowering and the market willingness to jump those barriers is increasing. That momentum is just gathering more and more force.”

Alan Holland, CEO at Keelvar

Using tech as an enabler for talent

Procurement’s talent shortage and the ways to bridge has been a hot topic for years. Whoever you speak to within the industry, everyone will have a different viewpoint. Some say procurement needs a rebrand, others say it’s a lack of education while others think technology could hold the key. For Holland, he believes it’s about making tech work and freeing up people in procurement’s time to focus on more value-add work that will help solve strategic goals.

“What is attracting graduates to procurement now is working with intelligent systems that are powered by AI and that allow them to be strategic and not working on routine or tactical tasks because machines are taking over the data-intensive areas of processing these workflows,” he tells us. “Our second product, which we launched about three years ago is autonomous sourcing. These are sourcing bots that are intelligent software agents that you can now design, build, and operate your own sourcing bots. If you’re somebody who understands best practices in sourcing, you can now build automated workflows so that instead of having to run sourcing events one by one and get through 15 or 20 a year, now you could design bots that are running hundreds of these events per annum.”

Procurement’s bright future

While not only opening up people’s day, using technology as an enabler to make life easier also acts as a way of encouraging the next generation into the industry. “What you’re doing is freeing up many other people’s time to spend on relationship management or innovation discovery and talking to the market, finding out what new suppliers you should be dealing with, visiting suppliers to check things are in order,” he says. “And that is the type of work that people enjoy doing. Machines are taking more of the data-intensive work off their tables, and machines are not good at work related to establishing trust. Machines have no empathy, but people do. The soft skills in procurement are becoming ever more important because the machines are taking over the harder skills. That is leading to a transformation in the type of work that procurement is doing.

“It’s also leading to a transformation in the interest levels that graduates emerging from universities have for this sphere. When it used to be that they were first introduced to a legacy system and told that this is what they needed to use to do their job. Young workers are coming with higher expectations about software and rightfully so, and enterprises are reacting to the need to satisfy the technology requirements of younger recruits now, which is a very good thing. It’s accelerating that digital transformation that we are seeing.”

The next step

Looking ahead, Holland is full of positivity for the future and believes decision-making in procurement is easier than it’s ever been. He believes tomorrow is “very bright” as procurement enters an era with intelligent software agents which can automate workflows and make the human workday more efficient. “There’s a whole new range of possibilities where creative and thoughtful planning will provide a competitive advantage for organisations and procurement can be far more influential in how successful their companies can be. It’s a game-changer.”

Author

Sean Galea-Pace

Published

24 November 2023

Estimated Read time

5Mins

At DPW Amsterdam 2023, Brandon Card, Co-Founder and CEO at Terzo, discusses the rise of his organisation amid the COVID-19 pandemic and how it used the disruption to its advantage.

Terzo means third in Italian.

With the two founders having Italian heritage, they chose to describe what they set out to build – a platform that brings third parties together.

Terzo uses powerful AI technology to extract, analyse, and visualise its customer’s contract data. Terzo’s AI data extraction capabilities also reach beyond contracts and can solve an organisation’s document problems, from invoices to POs and more. Its platform was designed on the foundation of contract intelligence, providing business teams the necessary data to improve productivity, optimise spend, reduce costs, and manage risk and governance across their entire supplier ecosystem. Terzo is the first solution to provide critical data and terms to both legal and business teams to make decisions together.

Terzo’s journey

Brandon Card is the Co-Founder and CEO at Terzo. His company’s journey’s start was an interesting one, having been founded days before the onset of the COVID-19 pandemic and the lockdowns that then ensued. But, reflecting on the disruptive nature of the situation, Card believes it actually helped get Terzo up and running quicker. “It just accelerated our timeline because we wanted to build fast,” he reveals. “When we put the team together, we had this concept that we wanted to get the product out as fast as possible. We knew that with Covid happening there was going to be a huge shift in how people were working. People were going to need to buy new solutions faster and it’s going to be harder to control spending. We knew procurement was going to have a host of challenges across the supply chain with this interruption with Covid. Our team on the engineering side believed we need to build faster.”

This led to Terzo’s team on the engineering side of the house to work diligently throughout the rest of 2020 and into 2021 on building code and new releases with the vision of getting the Terzo product into the industry quicker. “We thought we might be able to help procurement given the challenges they have now with all of these new needs that the business is going to bring,” he says. “We probably built the product about 50% faster just because there were no distractions so there’s pros and cons when everything happens in life. Our team really worked well together and they buckled down and they took that time to focus on Terzo. It’s something I’m very proud of this team for doing that.”

Brandon Card speaks with CPOstrategy at DPW Amsterdam 2023

Developing relationships

A big part of what Terzo does revolves around strengthening relationships by uniting teams to unlock insights so organisations can make smarter decisions and maximise value from suppliers, customers and partners. Card believes this mantra holds the key to long-term success in procurement.

“It’s critical for us because when we think about whether we’re doing spend analytics or contract intelligence, it’s all about understanding the relationship with these different entities you’re working with,” discusses Card. “We’re not there yet but my big vision in the future is to build an enterprise relationship intelligence platform to understand every single business that you’re working with, whether it’s a customer, a supplier or a partner. The truth with these big organisations, a lot of their suppliers are also partners or customers. These relationships are very complex and they’re very critical to innovation.

“If you’re doing anything in the cloud right now, if you’re doing anything with AI or even autonomous driving, you need partners to get this done. You can’t build it in-house. And years ago, people would build in-house. When we were young growing up in the nineties, everyone had to build their own data centres and build their own software. We’re in a world now where you can go and turn things on online in a few minutes, and that’s where we want to be so you can push product out faster, competitive advantage, and I think these relationships are critical to procurement having a competitive advantage and driving value for the whole business.”

Procurement’s place

In today’s world, procurement is in the driving seat. The function isn’t siloed anymore, stuck in a back-office room and out of the way of everyone else. Despite such significant innovation, there is sometimes a perception that procurement is still boring. For Card, he believes one of procurement’s biggest challenges is changing that age-hold mentality of procurement within a c-suite.

“It’s about educating the CEO or the Chief Financial Officer (CFO) of large organisations just how critical procurement is. A lot of them just don’t understand,” he tells us. “That’s the challenge we have, and that’s something we want to change. In the future, the CFO is going to treat the head of sales the same they treat the CPO. Right now, the chief revenue officer gets special treatment in every organisation. If you run sales, you’re treated differently because you bring in revenue. If you’re procurement, you’re lucky if you’re at the table. But I do see that changing.”

While Card believes this shift is already beginning to happen with younger CFOs, change such as this doesn’t happen overnight. “By doing this, you’re going to have a really balanced organisation and reduce risk while optimising their costs,” he discusses. “Ultimately, they’re going to be more efficient, and the teams are going to be working a lot better together. There’s going to be a better culture when leadership buys in because then procurement feels valued. They work harder, and that vibe carries throughout the organisation. That’s something that we want to help push for procurement but we know it’s going to take time.”

Author

Sean Galea-Pace

Published

22 November 2023

Estimated Read time

5Mins

At DPW Amsterdam 2023, Daniel Barnes, Community Manager at Gatekeeper, discusses the evolution of the procurement function and the influence tools such as generative AI are having in the space.

“It might sound harsh, but people just won’t have a job if they don’t change.”

For Daniel Barnes, Community Manager at Gatekeeper, his thoughts are clear. Technology is here and it’ll only get more advanced.

Barnes has been the Community Manager at Gatekeeper since June 2022. The company he works for is a next-generation Vendor & Contract Lifecycle Management (VCLM) platform that was born in the cloud and works on any device. Gatekeeper has a strong focus on collaboration, clear actionable data, obligation and compliance tracking, email alerts and most of all ease of use. The firm has a ‘zero training’ mantra driving a fanatical focus on usability that results in an application internal stakeholders and suppliers can use effortlessly.

The Gatekeeper Platform provides a suite of vendor management, contract management, kanban workflow, collaboration and reporting features. Customers can extend the functionality of Gatekeeper with additional modules to meet their required use cases, as well as integrating with over 220 third-party solutions.

Technology potential

Since joining the company, a key consideration for both Barnes and Gatekeeper has been the influence of generative AI. However, Barnes explains that while the potential of the technology is exciting, they are being strategic about how to leverage AI.

“We’re probably taking it a little bit more of a slower approach,” he tells us. “We have a contract summary function at the moment which means for any contract we summarise it so that anyone in the business can get a really quick understanding of that contract. We’re also exploring whether we’re going to bring in a Gatekeeper bot that allows us to get insights analysis in a very conversational manner. One thing we really believe is that contract and vendors aren’t just for procurement or legal. Everyone in the business has to contribute to make these successful. A lot of the issues, data and information behind these are legally complex. Procurement language is difficult when you’re talking about RFPs or you’re talking about risk. Someone in the business doesn’t care about that, they just want to get whatever they have brought, they want the service, they want it performed, they want it on time and they want a good relationship. We’re trying to figure out how to use AI like that.”

CPOstrategy speaking with Daniel Barnes at DPW Amsterdam 2023

The rise of Gen AI

Generative AI isn’t exactly new. In fact, it actually dates back to the 1960s. Among the first functioning examples was the ELIZA chatbot which was created in 1961 by British scientist Joseph Weizenbaum. It was the first talking computer program that could communicate with a human through natural language. But, given the introduction of a far more advanced model – ChatGPT – gen AI is the name on not only procurement’s lips but the wider world too. Barnes questions what you need to make AI successful at implementation.

“You get data and most procurement and legal teams have an issue with data because they don’t have it in one place,” he explains. “We fundamentally believe in this three-pillar approach. It’s to restore visibility and to have all your vendors and their contracts in one place. From there, you take control of that by digitalising all of your processes. Once they’re digital, you can track and automate them from various data points that you have in your vendor and contract records. That allows you to safeguard compliance, whether that’s regulatory, legislative or by contractual obligations. They’re all different forms of compliance that you need to track. Most teams are really struggling just with those. When we talk about gen AI, the reality is most teams are still so far away from even being able to realise those benefits. Today, gen AI looks powerful once you have the pillars in place and I’m really excited about its future.”

Procurement’s evolution

Indeed, procurement stands at a unique moment. With some in the space used to operating a certain way through legacy systems and others embracing a digital transformation and the technological innovation that brings with it, Barnes recognises that people who are reluctant to change could be left behind. “I think there has to be a willingness to change,” he tells us. “I’ve been talking about change in procurement since 2019, and I would say 80% of people who are engaged are hesitant and don’t want to change. That’s a really big concern. But my biggest worry is they don’t want to know in the first place. One of my fears is you’ve got so many solutions that genuinely can eliminate work in procurement teams. I’m worried for those people who don’t want to change because what are they doing when their work’s automated?”

The future

Barnes, who also hosts the World of Procurement podcast and YouTube channel, believes there is a current cultural divide in procurement and the industry is at a make-or-break moment. He affirms procurement will go “one of two ways”.

“You’ve got people who are stuck in the past that are archaic with what they’re doing. Then there’s those who are really pushing the profession forward,” he explains. “I see it as a moment in time where procurement kind of goes one in two ways. It’s extinct in terms of how it used to be. There’s solutions that I’ve seen which have automated workflows and are doing the work that traditional procurement people used to do. We can pull people along, but there has to be an initial willingness to change too or it’s not going to happen. That’s why I think it’s great to see people that are showing that willingness. They may not have the answers, but they want to learn.”

Author

Sean Galea-Pace

Published

20 November 2023

Estimated Read time

7Mins

Michael van Keulen, CPO at Coupa, discusses the emergence of gen AI and whether procurement is in a golden era amid technology transformation.

Generative AI, or gen AI for short, is one of the hottest topics in procurement today.

Indeed, the introduction of ChatGPT has only accelerated its prominence into wider consumption. Gen AI allows its users to quickly generate new content based on inputs. These models could include text, images, sounds, animation, 3D models or other types of data. One of its biggest draws is the ability to understand different learning approaches and allows organisations to move quickly to leverage large quantities of data.

But despite obvious benefits such as time and cost, Michael van Keulen, Chief Procurement Officer at Coupa, stresses caution should be used particularly when it comes to valuable tasks. “If you look at ChatGPT, it’s fine if you’re looking for recommendations for something low-risk. I need something for my wife’s birthday next week, you input three things that she loves and ask it to help. It’s great,” he tells us. “But it comes from data sources on the web that aren’t always governed, controlled or trustworthy. It’s whatever is out there. What about the algorithms that come with ChatGPT? I don’t know what’s influencing the search criteria. On Google, if you pay you are at the top of the search bar. But I don’t know what ChatGPT is governed by.”

Van Keulen is a passionate and seasoned procurement evangelist with a comprehensive track record of driving value through business transformation at global companies. Since March 2020, van Keulen has been the Chief Procurement Officer at Coupa, a leader in cloud-based business spend management software, where he is responsible for driving best-in-class procurement practices across the company, supporting business development and being a source for peers looking to elevate and transform procurement. Van Keulen is especially passionate about building teams, driving value, organisational transformation, CSR, and diversity and inclusion.

CPOstrategy speaks with Michael van Keulen, CPO at Coupa, at DPW Amsterdam

The rise of AI

In the case of Coupa, the firm has been conducting its community.ai platform for the past decade which has been at the heart of the company’s strategy. Community.ai analyses real-time spend data, applies AI to compare company’s metrics against others and offers ways for organisations to be more efficient, profitable and sustainable. Van Keulen believes that the biggest difference between what Coupa offers and what gen AI provides is the trust factor.

“At Coupa, we measure information based on real spend, data and suppliers that are doing real business together – the internet isn’t doing that,” he discusses. “We’ve got nearly $5 trillion of spend under management from real transactions and real suppliers. That number continues to grow as customers and suppliers join the Coupa community. Pretty much all of our customers have trusted us with access to their sensitive data which we anonymize and then share back with the entire Community.  As a member of the community I know I can trust it because it comes from a source that is reliable, sanitised, relevant and well-governed. As well, we have certain standards and algorithms that we built-in all based on outcomes that our customers are looking to receive.”

Van Keulen believes there is a misconception in procurement that ready-made data sets are out there that are capable of meeting customer requirements. “The truth is most tech companies out there today don’t have access to customer data because their customers won’t let that happen,” he explains. “But at Coupa, our customers have already given us access to their data. This means we now have a real, reliable, accessible, governed and structured data set that has been anonymized.  When we then apply AI, you actually get prescriptions that are meaningful and relevant to procurement. I think the misconception is that this type of data set is easily found, but it’s not, we’ve been building this for over 10 years. There’s no other company out there that has the same level of spend data as Coupa.

“It’s the same as Google Maps. The only way that Google Maps works is because everybody uses it.  It allows me to get from A to B to C to D, back to A in the quickest time and with the least amount of disruption. The only way that that works is because we’re all using it. And I look at AI no differently in spend as I do with AI in my private life.”

Michael van Keulen, CPO at Coupa

Bridging the talent gap via AI

The need for fresh talent in procurement has never been so important. Procurement, like many industries, is lacking a defined path to welcome the next generation of talent, a feeling which has only been amplified on the back of COVID-19. This means the need to find ways to meet that shortage head-on, whether that’s through education, an industry rebrand or via AI. In van Keulen’s mind, he believes developing the correct tech landscape could hold the key.

“I’ve actually said this for a while,” he explains. “For too long, we brought in super smart people and then we would let them work in some antiquated old-school ERP, in Excel and run RFPs in emails. Nobody wants that, especially the current workforce because they’re used to and have been raised with Amazon, they all have TikTok accounts and are used to all these other e-commerce websites which have very seamless systems. If they come into the workforce and I let them work in some outdated ERP environment with email as the means of communication, that talent is either going to leave procurement because they think it’s boring or they’re just going to leave the overall organisation and work somewhere else. We don’t want that to happen, so you need to have the right tech landscape in place.”

Once the strategy is formed, van Keulen explains that is where the fun of procurement begins. “Then procurement’s the coolest function in the world and we will close the talent gap,” he says. “The talent is out there, they’re just not coming to procurement. They’ll go to finance, marketing, legal or IT instead. If you execute procurement properly, it’s the best because you’re right at the heart of everything. But you need the right people, operating model and operationalisation of your procurement process as well as the right technology. You need all of those elements or it’s never going to work.”

The greatest time in procurement?

Given the disruptive nature of global challenges and its ripple effect on procurement and the supply chain over the past few years, organisations are increasingly waking up to the importance of developing greater strategic relationships with suppliers. COVID-19, inflation issues, natural disasters and wars have meant today’s CPOs have been forced to firefight and think more strategically than ever before. Van Keulen recognises the turbulent nature of recent years and believes major transformation is already underway in procurement. “Historically most executives in any company would pay very little attention to their supply chain,” he reveals. “Due to recent events, companies are realising that they need to be closer to their suppliers. Perhaps in the past, the CEO would only spend a small fraction of their time with suppliers but those metrics are changing rapidly.”

As the ground lies in procurement, some sections of the industry now believe it is the industry’s greatest era given the level of possibilities. Widely considered a back-office function tucked in a corner and working in a silo, procurement is a totally different beast in today’s world. For van Keulen, he likes the variety.

“I wear so many different hats every single day,” he explains. “I always say sometimes I’m an accountant, others I’m an environmentalist. Sometimes I’m the treasurer or a finance person, but I’m also sometimes a psychiatrist. Sometimes I’m a doctor, a nurse, a lawyer, a judge, an environmentalist and yes even a wizard. I never know what my day looks like. I can plan it, but something may happen where everything goes out the window. Procurement will always be going through some type of disruption and it’s about how you drive the competitive edge and how you drive value despite that. Procurement really is the best gig in the world and it’s great that more people have started to see that now too.”

Author

Sean Galea-Pace

Published

17 November 2023

Estimated Read time

5Mins

Giorgio Sarno, Senior Data Scientist at Stratio, on how AI and ML can unlock data from both internal combustion and electric vehicles to reduce their carbon footprint and hasten the transition to zero-emission transport.

A single bus journey pollutes 82% less than the same journey by car.

For this reason, a small decision like taking public transport instead of driving is a big step towards lowering emissions. If we then consider the significant reduction in greenhouse gas emissions that transport operators can achieve by implementing eco-driving solutions or by transitioning to electric vehicles, choosing the bus over personal vehicles becomes an even more sustainable choice. Transport operators are already moving in the right direction in terms of minimising the environmental impact of their services, and they’re doing so by leveraging vehicle data.  

The bus is essentially a black box, where vehicle technical data is locked and remains largely inaccessible to transport operators. However, by automating the collection and analysis of this data, fleet managers can rely on artificial intelligence (AI) and machine learning (ML) algorithms to implement a predictive maintenance approach. This means that vehicle sensor data can be turned into actionable insights to help reduce the carbon footprint of internal combustion engine (ICE) buses, hasten the transition to zero-emission transport, and minimise breakdowns and downtime, resulting in a more reliable public transport service.

Car vs Bus

With cars representing 72% of EU road transport emissions, it’s key to make public transport the preferred form of travel. However, in order to create a push towards shared mobility and leverage the environmental benefits of public transport, operators and public transport agencies need to ensure it can live up to the promise of reliability, getting passengers where they need to be, when they need to be there. To guarantee reliability, it is necessary to turn our attention back to the most crucial component of public transport: the vehicle. 

AI predictive maintenance is like a digital stethoscope for buses, enabling operators to tune in to the state of health of their vehicles’ critical systems and components. By collecting the data from built-in vehicle sensors and analysing the patterns that indicate the condition of components, maintenance managers can leverage real-time, actionable insights to inform their decisions. AI can identify tricky faults that humans could overlook – tracing leaks in the compressed air system or the wear and tear of brake pads, for example. 

With such a system in place, bus operators can depend on real-time monitoring to assess whether their vehicles’ brake pads need to be replaced, meaning that parts can be ordered in bulk and that maintenance can be scheduled during off-peak periods to avoid service disruptions. Maintenance and repairs can be scheduled automatically and more accurately, contributing to better fleet utilisation and cost savings. More importantly, by preventing equipment failure, vehicle breakdowns can be pre-empted to reduce downtime and protect both revenue and customer experience.

Reduced resource consumption & enhanced asset lifecycle management

The data on equipment behaviour, failure modes, and degradation patterns can also inform asset management strategies, including engineering decisions related to repair, replacement, or refurbishment of components and systems. By extending the useful life of assets and maximising their performance, operators can minimise waste generation, reduce the need for new equipment production, and lower the environmental impact associated with resource extraction, manufacturing, and disposal. 

Moreover, early identification of sub-optimal operating conditions enables engineers to fine-tune equipment settings, adjust operational parameters or identify faulty components, reducing energy consumption and resource waste. By optimising resource utilisation, operators can function at higher energy efficiency, reduce carbon emissions, and enhance the overall sustainability of their operations. 

Curbing ICE emissions

Predictive maintenance solutions can also be used to inform eco-driving strategies to further reduce the carbon footprint of ICE bus road usage. By analysing driver patterns, optimal RPM and idling time, operators can implement strategies to lower fuel consumption and put in place a range of continuous improvement processes. Arriva Czech Republic has recorded a saving of 942 litres of diesel per vehicle per year using this approach. This equates to 2.6 tons of carbon dioxide emissions avoided per vehicle, per year. 

Speeding the transition to EVs

For transport operators, new EV technology poses challenges as well as opportunities. It comes with new breakdown patterns and failure modes and requires a new knowledge-set to minimise life cycle costs and optimise battery maintenance and route management. Additionally, the greater up front, maintenance and infrastructure costs of the transition mean that operators must have a detailed strategy in place to minimise the impact of the shift on their bottom line.

Just as with their ICE counterparts, by combining the granular collection of vehicle data and large-scale data processing with autonomous AI systems, public transport operators can gain valuable insights from the new EV data they have access to, creating a continuous feedback loop that constantly increases the ways in which data can be leveraged. The performance, faults, and range of EVs can be analysed and used to inform the planning of smooth, efficient, and profitable operations. 

Predictive battery analytics for example can provide an accurate, comprehensive view of the battery health evolution of an EV bus, allowing for effective route planning and charging requirements, as well as usage optimisation metrics to extend the lifespan of the vehicles. This is crucial given the high proportion of the overall cost of an electric bus that the battery represents. By leveraging State of Charge (SoC) and Depth of Discharge (DoD) data, fleet managers can understand if the operation profile can be changed to maximise battery life, reducing the total cost of ownership of electric buses. This type of analysis is fundamental for an operationally successful and profitable EV fleet deployment. 

The future of AI and ML for public transport

By onboarding next-gen AI and ML predictive maintenance technology, the future of sustainable, affordable, and highly efficient public transport is promising. The actionable insights on potential component failures, fuel consumption and operational efficiency offer full control over the health of both ICE and electric buses. This can be harnessed to enhance reliability, encourage passengers to move away from private car usage, curb emissions and wastage through inefficient driving and maintenance strategies, and pave the way for a smoother and faster transition to EV usage. 

AI is constantly learning, picking up data about different categories of vehicle and enabling fine tuning for improved operations. It is a system that will keep on growing with huge benefits and impact, contributing to the goals of sustainable and reliable public transport. With some operators already implementing predictive maintenance, the approach will become more ubiquitous in 2023 and beyond, representing the new frontier when it comes to smoother, more efficient and environmentally friendly operations. 

By Giorgio Sarno

Author

Sean Galea-Pace

Published

16 November 2023

Estimated Read time

7Mins

Matthias Gutzmann, Founder of DPW Amsterdam, discusses the conference’s rise to prominence, reflects on challenges and reveals future plans.

“Our challenge is always around asking ourselves how can we make DPW Amsterdam better every year?” 

It’s fair to say Matthias Gutzmann, Founder and CEO of DPW Amsterdam, doesn’t believe in standing still and resting on his laurels. 

​​Since launching DPW in 2019, the conference has grown from strength to strength and is now widely regarded as the biggest and most influential tech event in procurement and supply chain on the planet. And despite welcoming over 1,250 procurement professionals with more than 2,500 virtual attendees watching along at home in its 2023 edition in October, Gutzmann is eyeing continuous improvement. 

​​In 2018, Gutzmann was researching procurement conferences to showcase his then-employer, Vizibl, a startup. He was frustrated by the options. The existing conferences were prohibitively expensive for a limited startup budget, lacked investors, and failed to attract an audience of startup businesses, which is critical for the development of digital capabilities and to drive innovation. Identifying this gap in the market, Gutzmann left his job in New York, moved into his parents’ house in Germany, and invested his entire personal savings to launch DPW Amsterdam.​​     ​​ 

“As soon as one conference finishes, we’re already thinking about the next one,” he explains. “We all sit down and think about how we can improve the experience and what new technologies we can bring in next time. It really is a 12-month process to bring it all together.”  

Bringing DPW to life

Held at the former stock exchange building, the Beurs van Berlage in Amsterdam, this year’s theme was “Make Tech Work” which focused on turning digital aspirations into a reality. There was a deep dive into discussions surrounding AI and machine learning in procurement, digital transformation strategies, sustainable procurement, supplier collaboration, risk management as well as innovation and disruption. The two-day event was centred on ensuring the vision of digital procurement happens now and how organisations can be challenged to deliver results instantly instead of only concepts and theories. 

Despite significant success, Gutzmann maintains that there are some difficult aspects to get right in order to make the magic happen on the day. DPW ​Amsterdam ​builds client booths themselves instead of allowing sponsors to bring them themselves. “That’s a massive undertaking to get this done because we need all the design elements from the sponsors,” he says. “It’s that quality standard but we know it comes with more work instead of just allowing people to bring their own stuff. We have Simone Heeremans, Head of Production, who is amazing and oversees logistics such as catering to the suppliers. 

​​“There is also the sales part of the conference which is selling the tickets and sponsorships. We have created this pull for the conference that we didn’t need to build a proper sales team around it. That said, there’s always a stress factor to get the numbers we want every year and grow it. So far, so good.”​     ​​  

​The uniqueness of the conference, the problem it solves, and the timing of the launch in 2019 were the basis for today’s success and fast growth.  
 
WHAT MAKES DPW AMSTERDAM SO UNIQUE?  

​Matthias Gutzmann:​​  

​​​1. THE AUDIENCE​​ 

​​​Traditional procurement conferences only attract procurement professionals. But, DPW Amsterdam recognised the need for breaking this silo and for more collaboration in order to harness the potential of new digital technology, targeting an audience of procurement professionals, business leaders, suppliers, startups, data scientists, investors, and young talents No other procurement conference brings this variety of people together.​​ 

​​​​ 

​​​2. WORLD’S BIGGEST STAGE FOR PROCUREMENT STARTUPS​​ 

​​​DPW Amsterdam is built to bring startups into the procurement ecosystem. In 2023, we displayed over 50 startups, giving delegates a unique insight into procurement innovation.​​ 

​​​​​ 

​​​3. ATTENDEE EXPERIENCE 
I always thought procurement events felt boring – and I felt lost in a sea of guys wearing suits and ties. So, at DPW, our goal is to make procurement cool and sexy. Not an easy feat, I know. Our dress code at DPW Amsterdam is strictly “startup casual.” You’ll see t-shirts, hoodies, and sneakers from attendees, exhibitors, sponsors, and speakers alike. This dress code embodies our entrepreneurial spirit. But it also breaks down barriers– and levels the playing field between big-shot enterprise CPOs and 20-something startup founders. 

​​​Better than ever

A large focus for Gutzmann and his team has been tweaking the formula of the virtual experience. Due to the impact of COVID-19, DPW was forced to cancel its 2020 conference before offering a virtual-only event in 2021. The experience, although different, was praised for its ‘TV feel’ and still created a buzz for those watching at home. However, with day-to-day life returning to a new normal, DPW Amsterdam reverted to an in-person conference in 2022 but offered a hybrid solution for those keen to watch the action from afar. “There wasn’t really anything special about it,” he discusses. “If you run an eight-hour live stream from only one stage, you aren’t likely to keep people watching. That’s why this year we asked ourselves: what can we do to increase the virtual experience? So we did just that.” 

This year, Gutzmann and his team set about creating a pop-up broadcast studio to generate a television feel with live coverage from podcaster and host of Let’s Talk Supply Chain Sarah Barnes-Humphrey, as well as a reporter conducting interviews on the expo floor. “Now we’ve got cameras moving around which helps bring the whole conference to life,” explains Gutzmann. “We’ve really ramped it up this year and turned it into a large production.” 

Up until this point, DPW has run solely in Amsterdam which Gutzmann believes has acted as his organisation’s competitive advantage. It is this approach that has enabled DPW to allow it to reach the level it is today. Hosted at the Beurs van Berlage, Gutzmann is full of admiration for the historic building which was built in 1896. According to Gutzmann, he believes it is what sets DPW​ Amsterdam​ apart from other conferences operating in the space.

“We love it here, it’s unique and I feel it’s a key part of the experience,” he says. “But we’re becoming bigger and we might need to build something completely from scratch. Every year, we think about how we can do things differently. I don’t know if bigger is necessarily better, it’s also about the quality of the solutions we bring in. My goal is to map out the entire end-to-end tech ecosystem and bring in that diversity of solutions.” 

Bright future

Procurement, like many industries, is suffering from a talent shortage. The need to find ways to plug that gap, whether that’s through education, industry rebrand or AI, has never been so crucial. With an eye on the future, Gutzmann believes in procurement’s workforce of tomorrow and gave out around 100 free student passes this year. “When we talk to CPOs everyone’s talking about talent shortages so we understand the need to bring in that next generation and show them that procurement could be the way forward for them,” he says. “I think in the context of digital, who better to do digital than the next generation? They are more tech savvy so we need them and it’s a great opportunity for both sides because they can meet CPOs and it’s also becoming a place for recruitment too. We are doubling down on young talent 100% and it’s a win-win.” 

Gutzmann is candid about the future of DPW ​Amsterdam ​and is always open to feedback while striving for continuous improvement. He believes in the value of innovation and shaking things up in order to best meet attendee’s needs. “I always think we can always bring in new speakers, but this year’s agenda was incredibly strong,” he discusses. “It’s really about listening to the people. Ultimately how can we be more relevant around the solutions as well here? How can we better matchmake people? I was wondering about how we can work pre-event with some of the corporate attendees that are coming to the conference around mapping out their challenges to then have more meaningful matchmaking at the event because it’s an innovation showcase here as well. There’s more value to be had but we know that also comes with more work. There’s always more we can think about.” 

With an unprecedented amount of technology at procurement’s fingertips today, Gutzmann is in no uncertain terms about what the next chapter of the space holds. “It’s the best time to be in procurement,” he explains. “It’s the most exciting era to be in procurement and supply chain. We need to get loud about it and celebrate that fact.” 

Author

Sean Galea-Pace

Published

13 November 2023

Estimated Read time

3Mins

CPOstrategy examines why replacing legacy systems could hold the key in procurement to achieve long-term success.

As technology evolves, modernising legacy systems in procurement becomes essential.

Change management is never straightforward or linear. Indeed, legacy systems are familiar to an organisation and the workforce might be reluctant to embrace a new way of working, or at least at the very beginning.

But how much damage is clinging to outdated processes doing to an organisation?

Replacing legacy systems

“For many organisations, legacy systems are seen as holding back the business initiatives and business processes that rely on them,” according to Stefan Van Der Zijden, VP Analyst at Gartner. “When a tipping point is reached, application leaders must look to application modernisation to help remove the obstacles.”

People often like their routines and a preferred methodology of how something is completed. This can lead to pushback from the workforce about the purpose of ‘fixing something if it isn’t broken.’ And the point of change for the sake of change is a valid one, up until an alternative which is going to demonstrate tangible benefits. The truth is that most legacy systems don’t allow for growth with older technology often not able to interact with newer systems and processes. In ‘7 options to modernise legacy systems’, Gartner pointed out six main drivers of application modernisation with three from a business sense and three from an IT perspective.

These are business fit, value and agility as well as cost, complexity and risk. If a legacy application isn’t meeting new requirements needed by a digital business, it needs to be modernised to fit properly and should be enhanced to offer greater value to the business. Without agility, a digital business will struggle to keep pace with the latest trends or craze and put the organisation at risk of falling behind competitors. Whereas from an IT side, if the total cost of ownership is too high or if the technology is too difficult to use, then modernising could be vital.

Overcoming resistance to change

Ultimately, change management is an essential component of any Chief Procurement Officer’s role. It can range from a small swap, such as a change of supplier, to wide-scale amendments such as altering the way goods and services are acquired or implementing a procurement or software transformation. According to data from group purchasing firm Una, 70% of change management efforts fail. In order to combat this, there are three key steps to overcoming resistance to change. These are engagement, managing resistance and not neglecting training.

Market disruptions, evolving customer demands and the necessity for a digital landscape has forced businesses’ hands. They are now faced with the task of completing legacy modernisation as a matter of urgency to deliver innovative products and services quickly and efficiently. Failure to do so could lead to being reactive instead of proactive – a risk that in today’s fast paced and ever-changing world that should be taken with caution.

Author

Sean Galea-Pace

Published

9 November 2023

Estimated Read time

2Mins

CPOstrategy compiles five ways that ChatGPT can transform procurement amid the rise of generative AI in the space.

ChatGPT is seen by many as a catalyst for the next wave of technology transformation.

The technology, which was developed by OpenAI, has quickly become the buzzword of the year and one of the hottest topics on the c-suite agenda.

And its promise extends to procurement – an industry that relies heavily on the need for achieving efficiency, transparency and cost savings. Having already made its mark on a variety of industries already, procurement hopes that by embracing ChatGPT it will allow teams to make greater strategic decision-making to drive long-term value.

Here are five ways ChatGPT can transform procurement.

1. Rapid research

Through ChatGPT, time-consuming and cumbersome tasks such as research can now be completed almost instantly. Generative AI tools such as ChatGPT can analyse significant amounts of data and provide insights on market fluctuations while also searching for new suppliers, products and capabilities to secure better deals.

2. Automated procurement processes

ChatGPT can be used to discover patterns and identify trends which will allow procurement teams to make data-driven forecasts. Through leveraging predictive analytics, organisations can anticipate demand, optimise inventory levels and manage their supply chain more effectively.

3. Easier communication with suppliers

Tools such as ChatGPT can improve supplier performance tracking through automating data collection and analysis. Its focus on cooperation and transparency throughout the procurement process allows for stronger supplier relationships and more innovative thinking.

4. Enhanced risk management

A major benefit of generative AI in procurement is improved risk management and the ability to foresee potential dangers. Through identifying potential hazards such as financial instability among suppliers or non-compliance with procurement processes, ChatGPT can help businesses manage and reduce risks.

5. Cost savings and increased efficiency

ChatGPT can help organisations to save costs by automating operations, increasing stakeholder participation and allowing real-time data analysis. By reducing the amount of time and effort for tasks like evaluating bids and selecting a vendor, ChatGPT could shake up the procurement process immeasurably.

Author

Sean Galea-Pace

Published

8 November 2023

Estimated Read time

7Mins

At DPW Amsterdam, Gregor Stühler, CEO and Co-founder of Scoutbee, and Karin Hagen-Gierer, CPO and Strategic Advisor at Scoutbee, discusses the rise of chatbots and their influence in procurement.

Scoutbee was created with the idea of improving supply chain resilience through AI and big data to transform the way organisations use supplier data to discover and connect with suppliers.

The company, which was founded in 2015, offers an AI-powered Scoutbee Intelligence Platform (SIP) which uses graph technology and predictive and prescriptive analytics to deliver holistic supplier visibility that helps procurement make confident supplier decisions, drive cross-functional efficiency and optimise existing technology investments.      

Scoutbee’s AI-driven data foundation connects teams to any data point, internal, external, third-party and more, as well as any data combination necessary to orchestrate a resilient, competitive and sustainable supply base.

Gregor Stühler is the CEO and Co-founder at Scoutbee. He believes that waiting to invest in AI tools and underlying data training will be companies’ greatest sustainable disadvantage of the next decade. “AI is not an off-the-shelf product, so you can’t buy AI unless it’s a pre-trained AI on a specific use case but then it’s not a competitive edge,” he tells us.

“A competitive edge only emerges when you have a clear use case and training on top of that. The companies that start using those AI solutions sooner with their data have much better training in place. As a result, they’ll always be ahead of the game quite significantly. Companies that use off-the-shelf AI products will do well, but the ones that actually take it meaningfully and start trading on their own use case and their own data will be the ones that will be accelerating.”

Gregor Stühler, CEO and Co-founder and Karin Hagen-Gierer, CPO and Strategic Advisor, at Scoutbee

AI – Changing the game?

Karin Hagen-Gierer is CPO and Strategic Advisor at Scoutbee. She explains that there are a multitude of ways in which tools such as generative AI are having an impact on procurement to change the game.      

“AI is great to help with mundane and boring tasks,” she discusses. “It can help us with vendor requests that come in and can be appropriately channelled. It can help your colleagues to navigate procurement. When they have questions, they can interact with a chat solution and be guided in a much better way to find what they want much quicker. I think if we look at how it can enhance our teams’ effectiveness, it is really in market analytics, supplier searches, supplier evaluations, and ChatGPT that could help us broaden the spectrum. If you then look to more tailored solutions like Scoutbee then it’s a very different ball game that procurement professionals have at their fingertips. I’m noticing a drive on both efficiency and effectiveness in this space.”

Despite AI’s draws, Stühler is well aware of the challenges and hesitations around digital technology. As far as he is concerned, there are two waves of generative AI to be aware of.  “Wave one is about having a prompt and how tools such as ChatGPT can help with that,” he says. “For example, what are 10 RFI questions for aluminium cans?

“Wave two is where I merge and synthesise all of my data into our large language model and it has reasoning to drive decision-making and scenario planning. You do have to be careful though because you have to give the system all your critical data but you don’t want to input this into an open model. This means the use case has to be that you deploy a large language model in your own infrastructure, and own your own graphic card that will never actually leave your organisation.

Gregor Stühler, CEO and Co-founder at Scoutbee

“This is the biggest concern that we’re seeing because ChatGPT has brought a lot of progress but also a lot of questions. Now, when people hear that we want them to merge their data into a large language model that’s completely private, we’re met with some resistance when we explain to them that their large language model is running on their very own graphics card that we don’t have access to. That tends to give them more comfort to put their data into it,” he continues.

Stühler adds that he believes there are some misconceptions around ChatGPT and the nature of how accurate the data it provides actually is. As is the case with any new technology, these things take time. “It’s always the same. It happened with electric cars, nobody thought that would solve the battery issue,” he discusses. “I think we are right at the peak of the hype cycle when it comes to those things and people have figured out what they can use it for. With wave one of generative AI, it is fine to have hallucinations of the model and if something is spat out that is not supported by the input.

“But by the second use case, hallucinations are not okay anymore because it’s working with accurate data and should not come up with some imaginary creative answers. It should be always supported by the data that is put in. This is very important that people understand that if you train the model and if you have the right setting, those hallucinations will go away and you can actually have a setting where the output of the model is 100% accurate,” he further emphasises.

Procurement’s potential

According to Karin Hagen-Gierer, there is an incredible opportunity to create value in procurement today. Following unprecedented global challenges over the past few years, CPOs have never been in the boardroom so often – something she’s keen to stress.      

“The value of procurement through crisis has been proven,” she says. “We tend to say, it’s not a core business, but very often if things don’t go right, it becomes core very quickly and you are in the CEO’s office more than you might like. It’s the breadth of the role that allows to drive value: You impact the P/L impact, topline, and the ESG agenda to name a few. But then there is a need to future-proof your team’s skill set around how you can drive more impact from being more effective in the respective tool sets you’re using, the questions you’re able to solve solutions for. Additionally, you have to work on improving your efficiencies. Teams are not getting bigger, so you need to be enabled in a very different way to really drive all this value.”

Karin Hagen-Gierer, CPO and Strategic Advisor at Scoutbee

Stühler reflects on the past and admires the transformation procurement has undergone in the past decade since he joined the industry. “I came to procurement in 2012 and even then I remember this function being solely responsible for paying invoices and calling trucks to arrive sooner – at first glance,” he says. “Combined with the crises that now happened over the last couple of years, post-Covid has proven procurement’s value – and the impact organisations such as Scoutbee can make.    

“I think two key things will happen in the future. Firstly, the tech landscape is exploding so quickly that there must be a consolidation that will happen. Secondly, when it comes to generative AI I think those pragmatic use cases will become the new normal. ChatGPT will be like Google today to get insights. Generative AI and large language models will get increasingly powerful over time and will help if you feed it the right data and connect it to different data streams that you have internally. It can become this true copilot and help you with complex scenario planning and make you aware of weak spots in your supply base while helping you to strategically take the right steps. The future is exciting,” he concludes.

Author

Sean Galea-Pace

Published

7 November 2023

Estimated Read time

6Mins

Stefan Dent, co-founder at Simfoni, and Richard Martin, CEO at Thinking Machine, discuss the power of data in procurement and the future of AI.

“See spend differently”.

Simfoni is revolutionising how businesses spend their money – via data. In today’s ever-changing world, everything is underpinned by data at Simfoni.

Founded in 2015, Simfoni is a leading provider of spend analytics, Tail Spend and eSourcing solutions to global businesses. Simfoni’s platform utilises machine learning and AI to accelerate and automate key parts of the procurement process which saves time and money while creating a pathway for supply chain sustainability. Its solution quickly distils and organises complex spend data to help discover opportunities and savings. It also gets up and running in days with an on-demand spend automation solution.

Indeed, Simfoni aims to take the hassle out of procurement through its automated, fluid platform that offers a unique pay-as-you-save pricing model which reduces barriers to technology adoption. Through fused revolutionary technology with AI-enabled content and deep expertise to automate, streamline and simplify procurement. Simfoni’s composable platform provides a selection of advanced automation modules that help customers sky-rocket savings and achieve sustainability objectives.

Stefan Dent, co-founder, Simfoni

Stefan Dent co-founded Simfoni and now serves as Chief Strategy Officer. He tells us his organisation was created ‘with a purpose to be different’. “A lot of customers have been working on full suite solutions for some time, which was seen as a sort of panacea for all ills that would solve everything,” says Dent. “It solved some areas such as direct spend, but these are large, mega expensive solutions that aren’t particularly agile. Ultimately, we came up with our own solution which is purposely different. We launched as a composable, agile solution that works with existing systems to boos ROI on tech spend. We apply next-gen technology to procurement that democratizes access to digital procurement tools – opening-up digital solutions to organizations of any size and across any sector. It means we can open our solution up to the masses and not just for large organisations.”

Relationship with Thinking Machine

Simfoni is powered by analytics. Its analytics solution informs spend, as well as watching how change is measured and performance is tracked over time. Now eight years old, Simfoni has fostered alliances with several younger companies offering specialist tools which have been embedded within the Simfoni platform. One such company is Thinking Machine, led by CEO and Founder Richard Martin.

Thinking Machine was founded in 2019 by Martin after he discovered the industry needed to find a better use of data to address ‘complex spend’ such as in Telecoms where you have multiple vendors, manual and frequent billing, changing tariffs and users. Martin explains that he witnessed all types of companies going through the same problems instead of only large companies. “Thinking Machine was developed as a way to give customers a single source of revenue across all services, pricing and demand but in a way that can be done at the very lowest level,” says Martin. “We would take all that complexity and be able to roll it up into actionable evidence that could be reconciled against their top-level financial numbers. It gives procurement directors the tools they need to actually be in the driver’s seat when it comes to their procurement operations.”

Developing key, strategic relationships with partners that can be depended on is an essential component to the success of any long-term business relationship. Simfoni relies on Thinking Machine to help manage its load and enable customers to go deep with Thinking Machine to extract even more value from their data. “We offer our clients the opportunity to go deep within certain domains,” discusses Dent. “We can then bring in Thinking Machine to help extract even more value from the data on complex spend.

Stefan Dent and Richard Martin speaking to CPOstrategy at DPW Amsterdam

“Thinking Machine’s application will ingest a large quantum of complex data. Their tools work like magic and allows data to be put into a readable format so they can make sense of the actual spend and quickly identify optimisation opportunities. This is part of our philosophy to work with niche technology partners because we shouldn’t do everything, so we need to put our resources where it counts. Resources like Thinking Machine work well by plugging into us, which means we offer incremental value to our clients without them going to market separately.

“It can also be very hard for a young company to work with large corporates because they’re untried or untrusted. This means for a company like Thinking Machine to connect with Simfoni is a win-win for everyone.”

Procurement’s bright future

Given the space procurement finds itself in today, the future is set to continue to be transformative. For Martin, he believes the introduction and influence of generative AI tools will help meet challenges in procurement head-on. “For the first time you see how it’s actually possible to be a unicorn with a 10-person team,” he explains. “The scales of efficiency are just out of this world. In terms of the procuretech industry, I think we’ve had a problem for a while now because there’s been all these best-of-breed solutions that are doing bits and pieces but is very difficult to stitch together into one cohesive platform that customers can make use of without having to know how to use 50 different tools.

“I think Gen AI offers a path to helping to smooth over some of those challenges and figuring out how to bring these things together. I think enterprises are going to start finding a lot more value in having all these best-of-breed solutions, such as Thinking Machine and Simfoni, while being able to use AI as a way to put this together into more of a single common layer that they can access. It is a very exciting time.”

For much of the past decade, Dent explains that he has believed that machines will take over mundane and outdated ways of working. Now, with the influence of tools such as Open AI’s ChatGPT, that digital future has only been accelerated and change the workforce of tomorrow. “Most CPOs of today are saying they need more headcount but I think they will soon be thinking very differently,” he discusses. “We predicted some time ago that Procurement departments will get smaller in headcount, maybe by even up to 50%. The procurement function of the future will be a lot smaller, leaner, and meaner.  Procurement teams will be more intelligent and strategic, in terms of both the people employed, and the digital tools used to manage spend.”

While Dent believes AI and machines won’t replace every human in procurement, it will mean forward-thinking teams need to embrace new technology with humans taking on higher-value roles. “The shape and structure of the modern procurement function will change quite dramatically, and people will need to upskill,” he discusses. “A lot of the work will be taken over by the machine eventually either 20%, 50%, and then a hundred percent. But the human needs to have that in mind and then plan for that next three to five years. The procurement function of the future will be smaller, and they should purposely be doing that, to then look at solutions to find a way to enable it to happen naturally.

“This is arguably the best time for people to join procurement, as you’ve got this great opportunity to embrace digital and make it happen. Young people can question ‘Well, why can’t it be done by a machine?’ They’re coming in with that mindset, as opposed to fighting being replaced by a machine. I think for graduates coming into procurement, they’ve got the opportunity to play with digital and change the status quo which is a wonderful thing.”

Author

Sean Galea-Pace

Published

Estimated Read time

4Mins

Scott Mars, Global Vice President of Sales at Pactum AI, discusses his organisation’s solution amid procurement’s digital transformation.

AI. It’s everywhere, all at once.

Procurement is one of the leading industries when it comes to embracing new solutions and ways of working. The space is waking up to the massive value that can be created through autonomous negotiations. And making a name for itself in the procuretech ecosystem is Pactum.

Pactum is an AI-based system that helps global companies to automatically offer personalised, commercial negotiations on a significant scale. The system adds value and saves time for both the Pactum client and their negotiation partner by aligning values to determine win-win agreements via easy-to-use chat interface that implements best-practice negotiation strategies.

Scott Mars has been the Global Vice President of Sales at Pactum AI since December 2022. He explains that his organisation is always striving to grow and expand its service offering. “At Pactum AI, we’re defining the space,” explains Mars. “We’re a creator for autonomous negotiations, we work with some of the world’s largest organisations and we’re really looking to expand the pie. The name Pactum originates from the Latin definition of an informal agreement between two parties. We can do up to 10,000 negotiations at once and unlock hundreds of millions of dollars of savings for our clients. We’re typically looking at tail-end suppliers and tail-end spending that no one’s touching. In many cases, that represents 80% of the negotiations.”

Exponential savings

Mars highlights a recent example of incredible savings achieved through Pactum AI’s solutions in a short space of time. Recently, Pactum worked with a travel and leisure firm in the UK to introduce its autonomous procurement solution. “We conducted a very brief implementation over two weeks, which led to a much larger enterprise rollout,” he discusses. “The CPO was actually on holiday while we implemented the autonomous procurement solution with his team. This involved optimizing payment terms with some of his long-tail suppliers.

“When he got back from holiday, there were 50 DocuSigns sitting in his emails, all related to extending payment terms. Many of them were remarkable successes, resulting in an average extension of negotiated payment days by more than 30 days and a 3% average gain from negotiated discounts and discount periods. This means we secured an average discount of 3% on each invoice when paid within the agreed-upon discount term. Our unwavering commitment to enhancing overall value not only positively impacts our clients but also extends to their suppliers, creating a win-win scenario for all involved.”

With AI having such a transformative effect on procurement, achieving efficiency and cost-effectiveness is more streamlined than ever through digital tools. But being alert to new threats, particularly in a space that is so open to innovation, does bring data security concerns. Mars recognises the challenge of cybersecurity and affirms Pactum ensures the safety and confidentiality of sensitive procurement data remains secure in chatbot interactions.

Digital future

“Everything is hosted in a private cloud, so each customer has a private instance. It means all of our data is secure from a generative AI perspective,” he tells us. “Large language models (LLMs) are great, they’re creative but they have their problems which means we’re only using safe LLMs. All of our negotiation design is kept in-house, and we use rule-based explainable AI which means all the data is secure per each customer. We have the largest repository of behavioural science, so those learnings are shared across our customer base, but all the customer data and all their negotiations are private to each customer.”

Looking ahead, Mars is excited about procurement’s digital future and explains Pactum AI’s vision is to transform global commerce. “At the moment, we’re only doing buying, but we are looking to move into the sales side as well,” he discusses. “Large companies have a huge footprint. For example, the Fortune 500 is 66% of the US economy. The plan is for us to move into selling which will give us the scale to transform global commerce. It’s definitely a grand vision, but we do feel that we’ll move from buying into selling and transform global commerce.”

For procurement generally, Mars is adamant that the space is in its “golden age” with the magnitude of vendors within the procuretech ecosystem hitting unprecedented numbers. “I was speaking with a CPO recently and he said 10 years ago you could name the procure to pay and ERP vendors on one hand, now there’s hundreds of them and all these periphery vendors for AI and spend,” he reveals. “The most visionary procurement leaders aren’t just looking at these all-encompassing solutions, they’re bolting on niche solutions into their ecosystems to make their teams more efficient. I think we’ll start to see a consolidation in the coming years of all these little companies into a few larger players to do really an end-to-end type solution. I expect someone to come up with a solution to close the loop in procurement.”

Author

Sean Galea-Pace

Published

3 November 2023

Estimated Read time

6Mins

Shaz Khan, CEO of Vroozi, discusses why AI is the great equaliser for companies to optimise procurement.

In today’s ever-evolving business landscape, companies are facing a multitude of challenges when it comes to managing and controlling their spending. From global supply chain disruptions, outdated technology solutions, labor shortages and much more, these challenges have an immense impact on a company’s financial health and overall efficiency. Additionally, procurement teams are regularly tasked with new responsibilities beyond spend management and purchasing, such as managing supplier risk, building, and implementing CSG and ESG initiatives, studying economic trends to determine price elasticity, finding new sources of supply, and cleaning up disparate and dirty data. Yet most companies simply do not have the human capital or bandwidth to execute these areas with quality and control.

When it comes to bridging the gap between the obligations that procurement teams are tasked with and efficiently executing on these tasks, AI may be the great equaliser to help solve these problems. While AI has turned into somewhat of a buzzword in today’s market, there’s no doubt that the technology has powerful capabilities to truly transform procurement in the foreseeable future. For those changes to take place, it is important for procurement professionals to continue to articulate the problems they are facing on a daily basis, as this will force the industry to evolve and adopt the proper solutions for better business outcomes.

Shaz Khan, CEO and co-founder, Vroozi

The problems: Unchecked spending, outdated tech, and lack of governance

Irresponsible spending can wreak havoc on a company’s financial well-being. With non-managed indirect and direct spend categories, companies experience up to a 40% increase in costs, consequently eroding their gross margins and increasing operating expenses. This usually stems from lack of visibility into non-payroll spend categories, combined with old and antiquated technology solutions within enterprise infrastructure that makes it difficult to extract data, analyse spending patterns, and generate meaningful reports on total addressable spend (sound familiar?). Poor data quality and the need for data cleansing can impede effective spending management, leading to faulty decision-making that hinders procurement efforts.

Unchecked spending can also foster a culture of mistrust and overall decreased morale among employees. When employees perceive that their hard work and dedication are being undermined by wasteful spending practices, workers begin to feel disengaged — which leads to reduced productivity. When spending is not carefully managed, there is a risk that critical projects or departments may not receive the resources they need to thrive. This not only causes anxiety about the organisation’s financial health, but it also can lead to concerns about resource allocation and fairness. Therefore, it creates broader mistrust in organisational leadership.

One of the biggest culprits in inefficient spending management comes from a lack of visibility into supplier contracts, which stifles a company’s ability to identify cost-saving opportunities. Hidden fees, price escalations, and unexpected cost structures can be buried in supplier contracts. A lack of visibility can result in unexpected cost overruns, impacting the organisation’s budget and profitability. Departments may also struggle to fully understand the terms and conditions within these contracts, including performance expectations, delivery schedules, and penalty clauses. This lack of clarity can increase the risk of contract breaches, quality issues, or delivery delays.

The long-term benefits of incorporating AI into procurement

With more at stake within procurement departments than ever before, AI serves as a turbocharged catalyst for procurement teams to optimise their processes. Procurement leaders are increasingly delegated additional responsibilities and AI offers an invaluable assistant that can process, predict, and deliver information and outcomes without exhausting human resources. For example, predictive and smart reordering can keep items that require ongoing restocking on a regular purchasing cycle. AI can also help identify alternative sources or suppliers for this item that may offer additional cost-savings and attractive incentives. As this technology becomes increasingly more capable, it’ll save procurement departments hours of time — freeing up employee bandwidth to then focus on optimising supplier relationships and other strategic tasks.

Earlier, we discussed how unchecked spending leads to mistrust and disengagement within an organisation. AI can help re-establish morale and an engaged staff by gamifying the procurement process. For example, a company can create a scenario where employees and teams are rewarded with soft benefits for complying to procurement policies, reducing maverick spend, improving supplier relationships, or negotiating a new deal with a strategic supplier. These soft benefit rewards can be programmed into the system to track and signal when teams are hitting these goals. Gamification, particularly when entire teams are rewarded together, can foster camaraderie and a dynamic culture built around the thrill of victory, aligning employees with the company’s procurement strategies.

Ensuring a smooth transition to AI-driven procurement processes

When beginning the transition towards an AI-infused process, it requires an honest assessment of existing processes, data quality, and technology infrastructure to identify pain points and areas where AI can provide the most value. Integration will require some level of customization to meet the specific needs of your business, such as custom algorithms, workflows, or user interfaces. This is an ongoing process. Optimisation requires the continuous gathering of feedback from users and stakeholders to identify which areas are working well and which features need improving. Be prepared to adapt as you go along. AI is a rapidly evolving field, and we are in the very early stages of realising the true potential of this technology.

As the AI revolution takes place in procurement, employees need to be introduced to new technologies to understand the strengths and more importantly the limitations. However, when thinking of the big picture, Procurement teams must be prepared to upskill their talent pool and recruit new talent to maximise AI’s potential including investing in certifications in data science, cloud platforms, supply chain management, and data analytics. To reap the benefits of automation, data-driven insights, and enhanced decision-making, leadership requires teams that have skills to use and interpret AI tools effectively — particularly when it comes to data management. AI solutions rely heavily on data and procurement teams must know how to effectively manage this data, including data cleansing, integration, and analysis to ensure that the algorithms receive high-quality input data and large language models for accurate results and the promise of real predictive analytics.

The promise of a brighter future

This is also why collaboration between departments is essential. For AI technology to be implemented effectively, it requires synchronisation and cross-functional collaboration between IT, data science, corporate procurement, finance, and other departments. Companies that cultivate these collaborative ecosystems within their departments gain a strategic edge in terms of stability and future growth.

It’s important to note that while AI is a productivity and enablement tool, it is not a replacement for human intellect, willpower, and execution. Therefore, it’s essential to seek knowledge and expertise from insights from companies, networking groups, and individuals with practical experience in AI and GenAI capabilities. Remember, it’s important that you do not let AI drive your business, but rather let your business needs drive AI adoption. Define the specific problem that you aim to solve and determine if AI is the right tool to boost these areas.

Ultimately, the incorporation of AI into procurement processes holds the promise of a brighter, more efficient future for businesses. Procurement departments face many challenges but if they address these pain points with a strategic approach that involves the adoption of modern technology solutions while upskilling their workforce, businesses can expect to soon see enhanced visibility into their spending and gain a strategic edge in a competitive market.  One thing is certain, AI will transform the procurement professional and function into a data analytics and supplier relationship mastermind.

By Shaz Khan

Author

Sean Galea-Pace

Published

2 November 2023

Estimated Read time

3Mins

ORO Labs has announced it has raised $34 million in Series B funding led by Felicis with participation from existing investors.

ORO Labs has announced it has raised $34 million in Series B funding led by Felicis with participation from existing investors including Norwest Venture Partners, B Capital, and XYZ Venture Capital.

The move will see increased support for ORO Labs, which is a global SaaS provider and creator of the world’s foremost smart workflow orchestration platform for procurement, as it scales international and platform growth.

This latest round closes at the one-year milestone of ORO’s launch and the company’s November 2022 $25 million Series A, bringing total investment raised to $60 million.

ORO orchestrates company spend and supplier management across siloed systems and data to improve procurement workflows, increases visibility and makes it easier for business users.

ORO Labs co-founders Sudhir Bhojwani and Lalitha Rajagopalan

Humanising the procurement experience

The innovative platform helps companies quickly create intake workflows, build an integrated and orchestrated procurement tech stack, and dramatically simplify user engagement with purchasing throughout the organisation.

“We’re on a mission to humanise the overall procurement experience, simplifying and guiding end-to-end supplier engagement for efficiency and compliance,” said Sudhir Bhojwani, CEO and co-founder at ORO Labs. “Our Series B financing is further validation, not only of our success in executing, but also the opportunities as we continue to develop and scale ORO for international expansion and a host of new use cases – bringing incredibly easy start-to-finish procurement to even more organisations for agile operations and happy employees.”

“Our 2023 CFO survey identified procurement as the top pain point for CFOs and the number one spending priority,” said Victoria Treyger, general partner at Felicis Ventures. “ORO’s platform approach to orchestrating and simplifying workflows is driving adoption with global Fortune 1000 companies across a range of industries from financial services to pharma. Sudhir, Lalitha, and Yuan share a rare combination of deep procurement knowledge with the passion and insight to transform the category.”

ORO Labs co-founder Lalitha Rajagopalan noted, “I’m personally thrilled to have a woman investor joining the ORO board. Victoria brings keen go-to-market insight and a genuine love for procurement that will help us continue to scale our business, as well as a diverse perspective that aligns with important supplier inclusivity imperatives for our enterprise customers.”

Tackling the future

In use by leading global Fortune 200 enterprises, ORO provides organisations with a next-generation platform that streamlines procurement and reduces supplier cycle time using workflow automation. From intake to spend control, and contract management to supplier relationships, ORO’s smart procurement workflows empower organizations to optimize efficiency and drive success.

“Coordinating a global procurement organisation effectively and holistically with all stakeholders involved is a constant challenge for any enterprise,” noted Matthias Dohrn, President of Global Procurement for BASF. “ORO allows us to better do our part as procurement and orchestrate and scale thousands of value-generating procurement and business measures across the globe, understanding KPIs from a global perspective to streamline our processes, better engage employees and to generate EBIT. The low-hanging fruits are gone, and to manage thousands of improvement ideas, you need a tool to deliver – this for us is ORO.”

The news comes after ORO Labs was announced as the growth stage track winner of DPW‘s DEMO 2023 competition at DPW Amsterdam last month.

Author

Sean Galea-Pace

Published

1 November 2023

Estimated Read time

5Mins

At DPW Amsterdam, Ashwin Kumar, vice president at GEP, discusses procurement transformation and what tomorrow’s challenge could look like.

Transformation. Procurement has witnessed quite a bit in recent years.

Given the widespread adoption and acceleration of AI and data-driven processes over the past decade, change has been a necessity rather than a nice to have.

Evolution of AI transformation

Ashwin Kumar is not unfamiliar with change. Having worked at GEP since May 2008, he has had a front-row seat to the transformation and change procurement has overseen. Now Vice President, he tells us about the evolution of the procurement function and how the landscape is shifting to meet future market demands.

“I think the way we see the industry evolve over time is because we started with web 1.0, simple ERPs that were fragmented with no easy way to connect systems,” he tells us. “Data was all behind firewalls and it was very expensive to manage or mine data. Then we had a big technology breakthrough in cloud systems where the people who were managing the storage said they had a solution. You can just simply push data out of the cloud and what we saw was a lot of that control that the CIOs had on data architecture and the software systems and solutions was being given to different functions.

“A lot of that enrichment of data happened because of the cloud platform that enabled it. Back in 2010, we made the decision to move away from a SaaS platform because even then we believed the future was cloud and that’s where data is going to be which could mean a gold mine. Our CEO made a very conscious decision to basically stop a really good product that was working and move to the cloud platform.”

Ashwin Kumar, Vice President, GEP

The GEP difference

Today, a global leader in AI-driven procurement and supply chain transformation, GEP helps enterprises take the lead and, using the power of data and digital technology, to stay ahead in the connected global economy. More than 1,000 engineers have spent the last 7 months to design and launch GEP’s new AI-native, low-code platform for sustainable procurement and supply chains, GEP QUANTUM. This new platform, launched last week, powers GEP SMART, the industry’s leading source-to-pay procurement application, GEP NEXXE, its next gen supply chain solution, and GEP GREEN, enabling companies to track, measure and achieve their ESG goals.

With the transformative power of AI, GEP enables businesses to operate with greater efficiency and effectiveness, gain competitive advantage, boost profitability and maximise both business and shareholder value. GEP helps global enterprises across industries and verticals build high-performing, resilient and sustainable supply chains.

Investing in dedicated spend analytics and solutions has become an essential part of the procurement process. Data is king and ultimately the more companies know and can predict, the better off they’ll be. However, some companies are still lagging behind when it comes to adopting digital tools created for better visibility and transparency. Kumar questions the reason for this and points to the possibility that there could be a perception that digital tools were hype or a fad – but affirms spend visibility is the real deal.

“If you look at spend data, if I’m the business stakeholder, you’re coming and showing me things that happened six months before,” he tells us. “One of the things we actively tell customers is to understand that there is a difference between spend and cost. Spend is basically the last AP data that you get, which means it’s not even current.”

Procurement’s greatest time?

Given the disruptive nature of the past few years, procurement has had to stand up and be counted. For Kumar, he reflects on global challenges such as Covid, a war in Ukraine and inflation and its knock-on effect on procurement and the supply chain. He maintains that it’s a “difficult time” to be in the industry at the moment given the hurdles procurement and the wider world has faced head-on recently.

“We started off with Covid where we went and told suppliers, sorry, I don’t have money to spend so I’m going to stop spending,” he tells us. “Two months later, you tell them there’s a supply shock and since I’m your preferred customer, can you do something for me? Make sure my products are getting to me on time. Then six months later, there was a war in Ukraine where you were testing suppliers to see which side they were on and questioning whether or not to do business with them. After that, there were inflation concerns so things are constantly changing and you’re pivoting from one problem to another.

“It now means you need to have a platform ecosystem with multiple solution options so that there isn’t a single point of failure and avoid the need for a “transformation” every two years. Given the pace at which things are changing in the macro environment, those single points of failure are quickly going from lack of supply to resilience to risk to people to visibility. It could be something else tomorrow, it could be ESG tomorrow, we simply don’t know. I could have a really good risk assessment tool, but that might not be my focus six months from now – it could be something else. So resilience in the form of digital ecosystem housing different point solutions is paramount.”

Author

Sean Galea-Pace

Published

30 October 2023

Estimated Read time

5Mins

Koray Köse, Chief Industry Officer at Everstream Analytics, speaks to us exclusively at DPW Amsterdam and discusses the importance of leading from the front in the supply chain

Everstream Analytics sets the global supply chain standard.

Through the application of AI and predictive analytics to its vast proprietary dataset, Everstream delivers the predictive insights and risk analytics businesses need for a smarter, more autonomous and sustainable supply chain. Everstream’s proven solution integrates with procurement, logistics and business continuity platforms generating the complete information, sharper analysis, and accurate predictions required to turn the supply chain into a business asset.

Koray Köse is a supply chain expert, futurist and multi-lingual thought leader, CPO, researcher, and published author. He specialises in working with CSCOs, CPOs, CIOs and other c-level executives while possessing more than 20 years of success in developing global supply chain and sourcing strategies, re-engineering and transforming business processes, and maximising financial resources. Köse is experienced in designing new business frameworks, risk and governance processes and deploying full-scale ERP and procure-to-pay systems to drive efficiencies through digital transformation. He is an expert in industries such as automotive, pharma, life sciences, IT, electronics and FMCG and has served as Chief Industry Officer at Everstream Analytics since June 2023.

Koray Köse, Chief Industry Officer, Everstream Analytics

World’s first Slave-Free Alliance

Recently, Everstream became the world’s first Slave-Free Alliance (SFA) validated modern slavery and forced labour technology provider. Everstream’s collaboration combines the firm’s multi-tier supplier discovery and AI-powered risk monitoring and analytics with SFA’s proprietary forced labour intelligence to expose unknown risks and protect global supply chains from modern slavery and exploitation.

“We’ve had issues in supply chain before, like conflict minerals for instance was a big topic,” Köse tells us. “Legislation came that was rather weak, where companies can say we can’t confirm nor deny that we have conflict minerals in our products. Modern slavery takes it to a whole different level. In essence, you may get import issues the moment that you might be suspicious, or the government import controls may say, ‘this comes from a specific region that has general exposure’. You basically have a disruption in your supply chain.

“If you forget about the business side, your business is actually promoting ethics that your own company in its statement and the way you live don’t align with and you didn’t know about it. So unknowingly you have actually incremented the issue that you are tackling on your own and within your environment. For us it was important to live up to the promise and look for an NGO that is impactful, has a mindset that is all about partnership and not blaming or shaming, it’s about changing the environment.”

Breaking down barriers

Around 50 million people worldwide are living in modern slavery. It remains a serious problem in nearly every region, with over 40% occurring in upper-middle to high-income countries. Due to the opacity and complexity of today’s global supply networks, companies are increasingly vulnerable to the risk of forced labour. According to a study cited by Slave-Free Alliance, 77% of companies expect to find modern slavery somewhere in their supply chain. Through this alliance, Everstream will actively contribute to enhancing capabilities and eradicating modern slavery and forced labour from global supply chains.

“We started that partnership to transfer our knowledge and also get insights from their end and understand what the upcoming issues were in the arenas of modern-day slavery that we should keep an eye on and how to help our clients to be informed and avoid getting exposed,” says Köse. “That’s where I started to talk with Hope for Justice and have collaborated with them during my time at Gartner as well. Then legislation is pushing the matter to the forefront of supply chain issues.

“Now, there is also financial impact and disruption and there’s the ability to do good and live up to the promise of your own vision and the way you want to conduct your business. Then I wanted to put our product to test and make sure that it lives up to the promise and if it doesn’t then we fix it. We went through a validation process and we got 90% plus accuracy in the feedback, which is important as it’s another confidence boost that we’re doing the right thing and we should continue on that path. We are the first world’s first validated modern-day slavery solution to tackle the issue – we’re very proud of that.”

The value of due diligence

In today’s fast-paced world, due diligence has become more important than ever. Companies must ensure they are generating the best value for money and that the product that they’re purchasing actually meets their needs. Köse believes companies almost have no choice in 2023.

“It’s an element that is not only preserving value, but it also creates it too,” he explains. “In the past it was more like a checkbox exercise that you conducted because everyone thought it was the right thing to do. Meanwhile, you had spillovers that you didn’t know about. It’s almost like what I don’t know, I don’t care. Since transparency requirements have been augmented significantly and the realisation of transparency as a value driver has dropped through Covid almost instantaneously in the c-level boardroom, compliance has become a value driver.

“It’s not just a checkbox exercise where you say that you are compliant. It is an affirmation of your product quality, brand and innovation that speaks to the customers and the choice they make. If you are concatenating beliefs and values to your product in that moment, you just have created a customer and that customer will be retained throughout the lifetime that you actually care about what they care about.”

Author

Sean Galea-Pace

Published

26 October 2023

Estimated Read time

2Mins

Zip has been named as the most innovative fintech solution after being recognised with an award.

Procuretech firm Zip has announced its platform was chosen as the Most Innovative Fintech Solution by the 2023 Tech Ascension Awards.

The awards evaluate the top innovations in fintech, judging applicants based on technology innovation, market research and competitive differentiators.

Class-leading vendors recognised by the awards deliver technology that solves critical industry challenges and produces valuable business outcomes for customers.

Zip, which delivers an industry-leading intake solution, provides enhanced spend visibility, integrations into a company’s tech stack and new AI capabilities to accelerate workflows and identify savings.

The company’s platform modernises procurement workflows with a single front-door for employee purchases.

Setting the standard

“Our intake-to-pay solution is a revolutionary approach to procurement, and we’re thrilled to be recognised,” said Rujul Zaparde, co-founder of Zip.

“Zip not only improves efficiency across every business function but contributes to a new, highly improved employee experience by solving first for employee adoption of spend controls.

“We’re on a mission to continue setting the gold standard for procurement. Zip is the only platform that seamlessly streamlines procurement processes from intake all the way through to payments.”

The Tech Ascension Awards applicants are judged based on technology innovation, market research, hard performance stats and competitive differentiators.

The awards acknowledge leaders in enterprise and consumer technology. Two panels of enterprise and consumer industry experts judged submissions based on factual company descriptions. They were also measured on relevant statistics and data points as well as distinctiveness in the marketplace.

“As AI, cloud and interoperability serve as the new driving forces, we’re honoured to recognise these leaders in innovation,” said David Campbell, CEO, Tech Ascension Awards.

“We look forward to continuing to recognise companies that hold the power to transform the financial landscape for the better, driving advancements that improve accessibility, security and simplified experiences for users.”

Author

Sean Galea-Pace

Published

25 October 2023

Estimated Read time

8Mins

Georg Rösch, Vice President Direct Procurement Strategy at JAGGAER, discusses his organisation’s approach amid significant transformation and evolution

Procurement is at a sliding doors moment – its direction of travel could go one way or another.

The influx of new technology makes procurement a dynamic and interesting industry in 2023. Following global challenges felt around the globe, procurement practitioners have had to step up in the face of adversity. To the industry’s credit, procurement has so far come through it but now it’s about embracing the world of today and finding ways to deal with pressing issues such as ESG and the knock-on effects of a war in Ukraine while also navigating inflation concerns. Of course, all this is on the back of COVID-19, of which the aftermath is still felt in some quarters.

In a recent CPOstrategy Podcast, Georg Rösch, Vice President Direct Procurement Strategy at JAGGAER, tells us all about how spend management giant JAGGAER is helping procurement teams overcome the challenging backdrop and discusses digitalisation strategies within the space.

Georg Rösch, Vice President Direct Procurement Strategy at JAGGAER
Georg Rösch, Vice President Direct Procurement Strategy at JAGGAER

The road in which procurement professionals end up where they do is always an interesting one. Can you tell us why procurement was the path you chose which led to your journey to JAGGAER? 

Georg Rosch (GR): “I would say I stumbled into the procurement space. Growing up, I was always a technology person and had a very early interest in computers. When everyone was playing video games, I was playing around with software and started coding. Eventually, one thing led to another, and I found myself in a small procurement startup in Vienna in development. This is really where I found out that this is interesting stuff. 20 years later, it’s crazy to think I’m still doing it because I didn’t even know this field existed and I think that is felt industry wide. But I still love it and getting to combine procurement with technology is something I’m really interested in.” 

In your view, how would you explain JAGGAER and sum up what differentiates it from other players in the space?

GR: “JAGGAER has been around for more than 25 years and came together through a lot of mergers and acquisitions. I came through from a branch that was local to Austria and the company has become one of the largest procurement software vendors out there. What I really like about JAGGAER is our vision of autonomous commerce. First of all, it sounds weird for a procurement software vendor not to have the word procurement in the tagline. But that’s done on purpose, because when you think about what a procurement software firm really does, it’s about communication and collaboration between buyers and sellers.

“For a while, JAGGAER was really good at the indirect procurement side which revolved around the whole P2P process. That’s really where a lot of our business came from. But this has evolved over the past 20 years into more of the source-to-contract process that’s being added which is proving so important. It’s not just the execution, but also the strategy of how you build everything and how you find the right sources. As part of autonomous commerce, we created four pillars. It’s networked, intelligent, comprehensive and extensible which spells NICE so it’s very easy to remember.”

Can you expand on the NICE strategy that JAGGAER has developed? What is its true meaning?

GR: “Networked basically means you collaborate with your suppliers, buyers, sellers, partners – everyone. It’s like the modern-day town square where the commerce happens – it’s the foundation of everything. Then it needs to be intelligent which means the question isn’t just about what data you have, but how do you intelligently use the data to drive the processes? Next, you have comprehensive. That encompasses all the functions you have starting from analytics, category management, supplier management, sourcing contracts, ePRO, supply chain management and quality management. It’s all of these beautiful things and how they work together. 

“Finally, extensibility means a lot of different things. It means being open to communicating with other systems. With our platform, you can bring in a lot of external data – ESG and sustainability, risk, enriched supplier data, and more – from our partners into our solution. This allows you to make smarter decisions across the procurement cycle. Another aspect is that not every company is the same. Extensibility also means, ‘how can I tailor the solution to my needs?’ This completes the picture that we are working towards here at JAGGAER.”

The procurement space itself has undergone major transformation over the past decade and suddenly, it is so much more than just a back-office function out the way of everyone else. What has been the catalyst for its transformation in your opinion?

GR: “Procurement is really at a make-or-break moment. Supply chain and procurement have been really in the spotlight in the last couple of years. It’s been a case of ‘oh my, there aren’t any shipments coming anymore’ or ‘people are not buying the stuff that they bought before because our whole way of life changed.’ So, we were working from home, and we were not going out to restaurants or buying new clothes because we were all in our tracksuits all day. Society shifted. This meant procurement and supply chain management was really important because they needed to navigate all of this.


“This is why expectations and visibility of these functions rose during that time. But now we’re at a critical point. Can those functions deliver the value that they should? And can they continue this momentum? This is why I’m saying we’re at the make-or-break moment and there are a lot of companies that really made this transition and change to where procurement is an advisor to the business which is so critically important. Think about everything that’s not going away such as ESG with the environmental element, human rights and the governance of those different processes. Procurement is playing such a critical role of managing all these different agendas within our board level topics today.”

How is JAGGAER driving value to companies in a way that perhaps it didn’t before?

GR: “At JAGGAER in procurement, you want to cater to the most mature companies but many of your potential customers are not the most mature firms. It’s a challenge and that’s the balance that you need to strike. You have to be ahead of the curve and in front of the market, so we take this very seriously. We have a dedicated team that’s only working on what we call innovation to uncover questions like how do we use these new technologies? How can we bring this into the solution? How do we drive value for our customers with these things? We did this by coming up with what we call a maturity matrix, where you can see which step of the maturity scale you are on right now.


“It’s five steps in total but no one is at step five yet. The current technology that exists today is at step four, but the space is constantly changing. As a customer, they can measure where they are and say, ‘I might be a two at that process, but I’m a three at that’ and work out what needs attention. They can ask themselves the question, should I even do this? Does this make sense for me as an organisation? We really try to work with those maturity models because it helps us whenever we work with a customer to assess where they are and tell them this is where you can go, and this is what you can achieve by doing that. 

“It helps us have the right conversations with our customers which was part of the vision of autonomous commerce. We have autonomous commerce as our North Star and know where we and the industry are aiming for, so it’s imperative our customers know the way too.”

How important is it that any technology introduced actually serves a purpose instead of being introduced for technologies sake?

GR: “People love technology, I love technology. But in business, we shouldn’t use a tool just because we like it. Tools should drive value. I won’t use something just because it sounds fancy. I’ll take whatever solution can truly solve the problem. At JAGGAER, when we evaluate solutions, we always consider what really helps us as an organisation and what drives value. At the end of the day, we are here to make our customers successful.  And how is that success measured? Each customer might have different KPIs, but in the end, it’s driving valuation and value for the company. Value can look different for your organisation, whether it’s higher customer or shareholder value. We have to be very pragmatic about the means of how we help because what works for one company potentially doesn’t work for another.”

What does the future of procurement look like to you? How exciting/challenging does the road ahead look for the space?

GR: “I believe it’s continuing the path that we’re on right now which is bringing more data and market intelligence into the whole procurement process. Procurement overall has to move away from gut feeling decision-making. Success stems from bringing all the information that’s needed for procurement into a solution for data-driven decision making. What I’m seeing right now is more strategic information regarding important topics such as environmental impact and human rights. All of this should make a difference and influence the decision making in procurement. This is how procurement drives the sustainability agenda of the company and reliability across the supply chain. This is really where I see procurement going. It’s about taking in all this information, being the advisor to the business, and making the right decisions to drive the company strategy. The future is exciting.”

Author

Sean Galea-Pace

Published

23 October 2023

Estimated Read time

4Mins

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.

Author

Sean Galea-Pace

Published

20 October 2023

Estimated Read time

2Mins

Global research and advisory giants Deloitte and DPW has announced a partnership to bring procurement innovation to organisations.

Deloitte and DPW has announced a partnership to bring procurement innovation to organisations.

Under the terms of this strategic alliance, DPW LABS, the consulting arm of DPW, and Deloitte will work together to refine the boundaries of innovation in procurement.

From problem and strategy definition to proof of concept and deployment, through the DPW LABS innovation capabilities and digital ecosystem and Deloitte’s global transformation capabilities, the move allows for impact to be delivered at scale.

Deloitte is a global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services.

The firm, which is a member of the Big Four in professional services, currently has about 330,000 employees in more than 150 countries and territories. 

Founded in 2019, DPW stands as a global leader in procurement innovation. DPW LABS empowers organisations to identify and seize collaborative innovation opportunities with DPW’s line-up of pioneering startups, scale-ups, and tech innovation experts.

Herman Knevel, co-founder and co-CEO at DPW, said: “We are excited about this strategic partnership with Deloitte.

“This partnership will enable us to join forces and make tech work, expand and complement our impact at global scale.” 

Michiel Junge, partner of sourcing and procurement at Deloitte, added: “We are united in our mission to make procurement awesome.

“The partnership with DPW will enable our clients to tap into DPW’s capabilities and ecosystem and define their procurement future.”

The move comes after DPW welcomed over 1,250 procurement professionals to Amsterdam for its annual conference.

DPW Amsterdam has quickly made its name as a hub of innovation and collaboration. It is one of the biggest and most influential tech events in procurement and supply chain.

Author

Sean Galea-Pace

Published

19 October 2023

Estimated Read time

3Mins

CPOstrategy travels to the Netherlands to soak in the atmosphere of one of the world’s biggest and most influential tech events in procurement and supply chain – DPW Amsterdam 2023

“You are the reason why DPW exists.

“It’s been my mission from day one to break procurement out of its silo and create what I call the end-to-end ecosystem and that is you.”

Digital Procurement World (DPW) Founder Matthias Gutzmann’s first address to the crowd gathered before the main stage had a clear tone of appreciation.

The rise of DPW Amsterdam

Today, DPW Amsterdam is one of the world’s biggest and most influential tech events in procurement and supply chain. Its exponential rise in a relatively short space of time is undeniable. Its story began with a frustrated Gutzmann having discovered a lack of procurement conferences to showcase his previous employer. This led to Gutzmann finding a gap in the market and set about solving the issue himself. He left his job in New York, moved into his parent’s house and invested all his savings to launch DPW. Months later, DPW’s launch conference in September 2019 welcomed 400 industry leaders while being praised from across procurement. Under the watch of Gutzmann and co-CEO Herman Knevel, DPW’s influence and pull has only grown since.

This year’s event was located at the historic former stock exchange building, the Beurs van Berlage. Built in 1896, the building breathes character and history. Its architecture and rich past, alongside its central Amsterdam location, showcases its sense of place and being.

DPW Conference, Amsterdam 2023

Innovation

DPW Amsterdam has quickly made its name as a hub of innovation and collaboration. This year, more than 1,250 procurement professionals gathered to connect, learn and innovate, while over 2,500 virtual attendees watched along at home. The buzz and hum of chatter was audible, the sense of excitement evident. And the attendees were certainly in for a treat. This year’s theme was “Make Tech Work” which focused on turning digital aspirations into a reality. There was a deep dive into discussions surrounding AI and machine learning in procurement, digital transformation strategies, sustainable procurement, supplier collaboration, risk management as well as innovation and disruption. It was all centred on ensuring the vision of digital procurement happens now and how organisations can be challenged to deliver results now instead of only concepts and theories.

Speakers across the two days included renowned experts and visionaries including the likes of Dr. Elouise Epstein, Partner at Kearney, Yossi Sheffi, Director of Massachusetts Institute of Technology and author David Rogers, among dozens more. Sarah Barnes-Humphrey led superb virtual coverage of the event and allowed those unable to make it to still feel a part of such an important conference in the procurement calendar. There were book signings from Sheffi and Atif Rafiq, eye-catching tech innovations showcased on stage and even an appearance from F1 legend and Haas Formula One team principal Guenther Steiner.

DPW's founder Matthias Gutzmann

Digital future

To sum up, in comedian and host of DPW Amsterdam Andrew Moskos’ opening speech he reflected on procurement’s evolution and transformation. “Procurement used to be boring but now we’re all rockstars. We run the company, we’re in the c-suite, we run ESG, sustainability, risk, and 80% of the spend of a company goes through us.”

Change is here and procurement holds the cards. Let’s Make Tech Work.

Author

Sean Galea-Pace

Published

18 October 2023

Estimated Read time

4Mins

CPOstrategy examines 10 of the best ways to use artificial intelligence (AI) in procurement

Artificial intelligence (AI) is one of the biggest buzzwords in procurement. Everyone wants to get their hands on it and introduce it into their strategies.

Particularly in procurement, AI is often talked about being the answer to all challenges. It can be used to overcome complex problems and deliver efficiency while also being introduced within software applications such as spend analysis, contract management and strategic sourcing.

In this article, we will list 10 of the best ways to use AI in procurement.

1. Machine learning spend classification

AI algorithms can help categorise, clean and classify data automatically. Machine learning spend classification helps detect patterns and uses them for prediction while allowing for better decision-making. Examples of spend classification techniques include supervised learning, unsupervised learning in vendor management and classification reinforcement learning. 

2. Natural Language Processing (NLP)

National Language Processing (NLP) is the branch of artificial intelligence focused on understanding, interpreting and manipulating human language. It can be used to gain valuable data and information to streamline time-consuming processes. Information contained in legal documents can be interpreted through AI for the procurement of relevant data. It allows procurement professionals to get ahead and use an AI assist engine to receive alerts to proactively monitor progress. It also allows for compliance over the life of multiple agreements with the same or several vendors.

3. Robotic Process Automation (RPA)

Robotic Process Automation (RPA) mimics human actions to eradicate repetitive tasks. While not strictly AI in the traditional sense, RPA does provide procurement with opportunities to improve process efficiency and is part of the wider family of AI. It can assist with the likes of contract management, input identification as well as purchase request and order submission, among more benefits.

4. Anomaly detection

With AI being able to process vast amounts of data quickly, it is able to stay up to date on the latest developments and changes in the procurement space at speed. Automated notifications on things such as anomalies, new opportunities and recommended activities allows for immediate action to be taken and provide suggestions on what should be done instantly. Rapid detection will ensure risks are mitigated and resolved before they become problems.

5. Purchasing

AI can be utilised to automatically review and approve purchase orders. Chatbots can be used to check the status of acquisitions or automatically approve virtual card payments. AI can analyse data and assess the reliability and quality of suppliers based on predefined criteria. This helps the purchasing team select the best suppliers quickly and accurately.

6. Contract management

Contract management can benefit through using AI to create, store, review, index, retrieve, analyse, negotiate and approve agreements. A big benefit delivered by contract management solutions that use AI is standardised metadata reporting which eliminates the need for category managers and legal counsels to manually read contracts to gain insights into the commercial part of their supplier relationships.

7. Supplier risk management

Supplier risk management is an important part of the procurement process and is around understanding what happens if a supplier fails to meet its obligations. To combat this, AI can be used to monitor and work out potential risk position through Big Data. Millions of different data sources are screened in order to provide alerts on potential risks within the supply chain.

8. Accounts payable automation

AI can automate most manual tasks in accounting such as data entry and invoice routing. Using AI for this substantially reduces procure-to-pay cycles, minimises the need for humans to get involved and integrates multiple workflows into a seamless process.

9. Strategic sourcing

Using AI in strategic sourcing is a key tool in a procurement practitioner’s arsenal. AI can be used to manage and automate sourcing events while also leveraging machine learning for the recognition of bid sheets, as well as specialised category-specific e-sourcing bots such as raw materials and maintenance.

10. Automated compliance

AI can also be used as a valuable tool for compliance officers to help work out potential risks, monitor employee behaviour, generate reports, provide recommendations as well as educating employees about the importance of compliance. For organisations without a source-to-pay system, compliance is a useful alternative and allows procurement teams to seamlessly compare payment terms, identify duplications as well as determine non-compliance.

Author

Dan Brightmore

Published

11 September 2023

Estimated Read time

5Mins

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Doug Laney is Innovation Fellow at West Monroe and a leading Data & Analytics strategist. We caught up with the author of Infonomics and Data Juice to talk tech and how companies can measure, manage and monetise to realise the potential of their data

Our cover story explores the rise of data and information as an asset.

Welcome to the latest issue of Interface magazine!

Interface showcases leaders aiming to take advantage of data, particularly in a new world of AI technologies where it is the fuel…

Read the latest issue here!

How to monetise, manage and measure data as an asset

Our cover star is pretty big in the world of analytics… We meet the guy who defined Big Data. Doug Laney is Innovation Fellow at West Monroe and a leading Data & Analytics strategist. We caught up with the author of Infonomics and Data Juice to talk tech and learn how companies can measure, manage and monetise to realise the potential of their information. In his first book Laney advised companies to stop being fixated on hindsight-oriented analytics. “It doesn’t actually move the needle on the business. In the stories I’ve compiled over the last decade, 98% have more to do with organisations using data to diagnose, predict, prescribe or automate something. It’s not about asking questions about what happened in the past.”

Canvas Worldwide: A data-driven media business

Continuing this month’s data theme, we also spoke with Alisa Ben, SVP, Head of Analytics at full-service media agency Canvas Worldwide. Data has transformed the organisation, and what its clients do. “We look holistically at the client’s business and sometimes the tools we have might be right for them, sometimes not. It’s more about helping our clients achieve their business outcomes.”

TUI Musement: from digital transformation to digital pioneer

At travel giant TUI, handling data effectively is paramount when communicating consistently and meaningfully with up to 25 million customers annually. David Garcia, CIO for TUI Musement, talks about the tech evolution driving the travel giant’s provision of experiences, transfers and tours. It’s a big part of its operational shift from local to global. “As a CIO, I’ve always been interested in how the tech innovations we drive can support the business and add value.”

Hiscox: making cybersecurity more accessible

Liz Banbury, CISO at Hiscox and president of (ISC)² London Chapter, talks to us about how cybersecurity can become a more accessible, realistic career path for almost anybody. “When I was at school, topics like computer science didn’t even exist,” Banbury explains. “In one of my first jobs, over in Hong Kong, we were still using a typewriter! A lot has changed. My key point here is that there’s a lot of cybersecurity professionals who are really good at their job. They are inspiring, and have come from all walks of life. Crucially, they don’t have a maths, computer science, or technological background at all. But they still make great cybersecurity professionals.

Portland Community College: Risk vs Speed in Cybersecurity

Reet Kaur, former Chief Information Security Officer at Portland Community College, discusses the organisation’s transition to the cloud amid a digital transformation journey. “I don’t want to work with people who just say yes all the time. I want my ideas challenged to help forge the excellence in the security programmes I help build.”

DBHDS: Cybersecurity in healthcare

The Virginia Department of Behavioral Health and Developmental Services (DBHDS) exists to create ‘a life of possibilities for all Virginians’ and transform behavioural health. Its focus is on supporting people across the entire commonwealth. It helps them get the support they need in order to take wellness and recovery into their own hands. In an area like healthcare, sensitive information is all over the place, meaning cybersecurity is a priority – and this is where Glendon Schmitz, CISO at DBHDS, comes in. “The security team exists to help the wider organisation achieve its objectives with data. We’re there to protect the business, not the other way around.”

Also in this issue, we schedule the can’t miss tech events and get the lowdown on IoT security from the Mobile Ecosystem Forum.

Enjoy the issue!

Dan Brightmore, Editor

Author

Sean Galea-Pace

Published

1 August 2023

Estimated Read time

2Mins

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Welcome to issue 42 of CPOstrategy!

This month’s cover story sees us speak with Brad Veech, Head of Technology Procurement at Discover Financial Services.

CPOstrategy - Procurement Magazine

Having been a leader in procurement for more than 25 years, he has been responsible for over $2 billion in spend every year, negotiating software deals ranging from $75 to over $1.5 billion on a single deal. Don’t miss his exclusive insights where he tells us all about the vital importance of expertly procuring software and highlights the hidden pitfalls associated.

“A lot of companies don’t have the resources to have technology procurement experts on staff,” Brad tells us. “I think as time goes on people and companies will realise that the technology portfolio and the spend in that portfolio is increasing so rapidly they have to find a way to manage it. Find a project that doesn’t have software in it. Everything has software embedded within it, so you’re going to have to have procurement experts that understand the unique contracts and negotiation tactics of technology.” 

There are also features which include insights from the likes of Jake Kiernan, Manager at KPMG, Ashifa Jumani, Director of Procurement at TELUS and Shaz Khan, CEO and Co-Founder at Vroozi. 

Enjoy the issue! 

Author

Andrew Woods

Published

23 June 2023

Estimated Read time

2Mins

CPOstrategy-Magazine-41
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Welcome to issue 41 of CPOstrategy!

This month’s exclusive cover story features a fascinating insight into the procurement function at lighting giant, Signify.

A forward-thinking enterprise constantly reevaluating and adapting its operations against an ever-changing landscape, Signify has recently transformed its procurement function. And so we join Luc Broussaud, Global Head of Procurement/CPO and Arnold Chatelain, Transformation Program Director for Signify’s Procurement Organization to see why, and how, they have evolved procurement at the company.

Signify is a global organisation spread over all continents and Luc heads up the procurement function. According to Luc, he and his team no longer engage in traditional transactional procurement, but instead leverage digitalisation to deliver competitive prices as well as what they call ‘concept saving’, “Which is how we redesign or improve our product; leveraging the knowledge of our suppliers to make it cheaper, more efficient, easier to manufacture and install, and more sustainable for the planet.”

CPOstrategy - Issue 41

Luc joined Signify in 2018, after being the CPO of Nokia (based in Shanghai) and has always been working within procurement. He joined Signify with a broad skillset and a wealth of experience. “I joined because the people I talked to, from the COO to the CEO and CFO were all incredibly knowledgeable and passionate about procurement,” he reveals. Read the full story here!

Not only that, but we also have some incredible insights from procurement leaders at Heijmans, Datadog, HICX, DPW, ProcureCon Asia and SourcingHaus Research! Plus, the very best procurement events of 2023.

Enjoy the issue!

Author

Sean Galea-Pace

Published

17 May 2023

Estimated Read time

1Min

We explore the transformation of sustainability in procurement & visions of a future where sustainability & procurement are fully integrated.

Dr Carsten Hansen, Founder of SourcingHaus Research and Consulting Group, explores the transformation of sustainability in procurement and envisions a future where sustainability and procurement are fully integrated and mainstreamed.

Author

Sean Galea-Pace

Published

2 May 2023

Estimated Read time

5Mins

Mike Randall, CEO at Simply Asset Finance, discusses how to build a people-first strategy that enables growth.

As the UK economy continues to balance on the edge of a recession, employee retention is quickly being pushed to the top of CEOs’ lists. Over the past couple of years, the job market has shifted dramatically with previously unheard terms such as ‘the great resignation’, ‘quiet quitting’ and ‘hybrid working’ becoming commonplace. People are rightly prioritising their working situation and job satisfaction levels, questioning whether they believe in the organisations they are committing so much time to.

Consequently, there has been a power dynamic shift in favour of the workforce. Reportedly in the third quarter of 2022 businesses witnessed over 365,000 job-to-job resignations across the UK. In similar fashion, the phenomenon of ‘quiet quitting’ – doing the bare minimum required of a job – has become a growing concern but its rise is prompted by a growing number of employees feeling disengaged in their roles.

Against this backdrop of a highly turbulent job market, and increasingly difficult macro-economic pressures, it’s vital for CEOs to prioritise a people-first strategy to ensure healthy growth for their business in 2023. Data from Deloitte has even revealed that experts believe how engaged a workforce feels can directly correlate to overall business output, with 93% of HR and business leaders in agreement that building a sense of belonging is crucial for organisational performance.

Mike Randall, CEO at Simply Asset Finance

However, creating the right environment and recruiting, maintaining and nurturing the right talent to ensure a people first approach can be daunting. With this in mind, here are four learnings CEOs might want to consider when approaching this challenge:

1. Define your beliefs

Before CEOs and founders can hope to attract the right talent, it is critical to first distil and translate the business vision into something that can be understood by employees. Put simply, this means defining the business’ beliefs.

Some business leaders may already refer to this as an ‘employer brand’, and it can be key to not only securing better talent, but also saving a business money in the long-term. Data from LinkedIn for example, recently found that a strong employer brand can help to reduce employee turnover by as much as 28% and cost-per-hire by 50%. Defining these beliefs – or the tenets a business does and doesn’t stand for – is therefore the perfect exercise to put a vision onto paper, and clearly communicate it to its prospective talent.

2. Build a solid culture

Once these beliefs have been defined, they must be reflected, and built into a strong culture. A business’ beliefs should permeate through the whole organisation – from customer communications, to how staff are treated, to how leaders run the business. Culture should essentially be a representation of a business’ beliefs being put into practice.

Building a strong culture in a business, however, is not solely about these beliefs but also extends into how employees are equipped with the tools they need to succeed. Companies that invest in learning and development for example, have been found to benefit from a 24% higher profit margin than those that don’t, according to the Association of Talent Development. Training and development should therefore be seen as a worthwhile and necessary investment that can solidify your culture and ensure profitability, not just an unavoidable cost.

3. Invest in retention

With research from Oxford Economics estimating the average turnover per employee earning £25,000 a year to be £30,000 plus, there is an evident cost to businesses that fail to invest in retention. Tackling this will mean regularly taking the time to truly understand what makes employees tick – and more specifically, understanding their motivations, attitudes, behaviours, strengths and weaknesses.

As the past few years have evidenced, individuals are no longer deciding where they work solely based on salary, but are also thinking about employer values, flexibility, and benefits. To avoid employee churn, businesses should regularly take time to understand what drives their employees and implement retention strategies to address these drivers. Gathering and analysing employee data will play an important role here over the coming years, and should be built into a long-term strategy to optimise employee satisfaction.

4. Build for the future

A common challenge encountered by modern businesses and startups wanting to take a people first approach, can be their ability to stay committed to it. As a business grows in size and becomes successful, it can be all too easy to let external factors dictate its purpose and for it to lose sight of what it initially stood for. The reality is that when this happens, a business is in its most vulnerable state – as its beliefs become increasingly distant, and worse, employees no longer understand what it stands for.

When creating a people-first strategy its therefore important to think long-term. If there are external factors that will potentially put this strategy at risk in future, it’s crucial to identify them, and put in practical steps to mitigate them where possible. The pandemic, for example, is a prime example of an external factor that interrupted the status quo of many businesses – disrupting employees, customers and operations in general. While they can be unpredictable in nature, having a plan to get through these times can help to get you back on track and reassure talent that a solution is in place.

In this economic climate, defining beliefs, building a solid culture, and retention plan should be at the core of every business’ strategy. It’s only when these things are in place that a business can hope to attract and retain talented people that exude the same passion and values built into the heart of a business. As while a business’ growth may be defined by its leaders, it is delivered by its people who are putting that vision into practice.

Mike Randall, CEO at Simply Asset Finance.

Author

Sean Galea-Pace

Published

5 April 2023

Estimated Read time

7Mins

Procurement is in a state of flux. Against a backdrop of economic uncertainty, the procurement landscape is volatile and requires…

Procurement is in a state of flux.

Against a backdrop of economic uncertainty, the procurement landscape is volatile and requires agility to navigate turbulent waters. But, despite significant disruption could there still be opportunity?

Simon Whatson, Vice President of Efficio Consulting, is optimistic about the future of digital procurement and despite a challenging few years he is confident of a successful bounce back. He gives us the lowdown on the direction of travel for digital procurement in 2023. 

As an executive with considerable experience in the space, we’d love to learn more about your background and how you ended up in procurement. Why was this the specialism for you and how did you get involved to begin with?

Simon Whatson (SW): “I think the one-word answer of how I came into procurement was accidental. I studied maths at university, with a year in France, before I began looking for different roles to apply for.

“Eventually, I was offered a position with a big plumbing and heating merchant with global operations. I worked in that supply chain team for two and a half years. Although it was called supply chain, a lot of the work was procurement, which involved negotiating with suppliers. It was after that stint there, that I discovered consulting and joined a boutique procurement consultancy. Now I am onto my third consultancy and I’m very happy here!

“In terms of why I’ve stayed, one of the success factors in procurement is being able to work cross-functionally. Procurement doesn’t own any of the spending that it is responsible for helping to optimise. It must work with other functions and the spend owners. I quite like the people side of that, building relationships, almost selling internally to bring teams together. That really appeals to me and is a key reason why I’ve been very happy in procurement.”

As we move into exploring procurement today in 2023. The space is filled with challenges and complexities. You only need to look at the last few years. Covid, war in Ukraine, inflation – how would you describe the world’s recent challenges and their effect on the industry and what do you feel CPOs and leaders can do to combat these issues?

SW: “I would flip it around and say that these are not so much challenges but rather opportunities for procurement. When I started my career 18 years ago, procurement was often fighting to get a voice and there were complaints that procurement was not represented at the top table, but the war in Ukraine, inflation, COVID and ESG, these are things which are now on the C-suite agenda and procurement is ideally positioned to help companies face those challenges. If you think about COVID and the war in Ukraine, procurement is in a privileged position to help with this.

“I see some procurement functions that prefer to do what they know, which focuses on the process and transactional side. However, there are also many forward-thinking CPOs and procurement professionals out there, that have really seized this opportunity of being on the C-suite agenda and drive the thinking and the solutions to some of these big challenges we’re seeing.”

Although new technology in procurement has been around for well over a decade, digitalisation has become so much more of an important topic. How would you sum up where procurement and supply chain are in terms of digital transformation today?

SW: “It’s a bit laggard, but digital transformation is difficult, and we have to recognise there are some real trailblazers. There are some firms doing some fantastic things in digital to produce better outcomes. If you contrast your experience when you’re buying something in your private life, it’s much easier than 20 years ago. You can get access to a wealth of pre-sourced things, whether it’s food, a holiday, a car, or a book. You can see reviews of what other people think of these things.

“But when you go into your workplace as a business user and you want to buy something, it doesn’t quite work like that yet. You often have to fill in a form, send it off and wait for them to come back to you. They might come back a little bit later than you were hoping and might tell you that they don’t have that part on the supply frameworks. I think people sometimes get confused about how it can be so easy to buy something as large as a car or a holiday on their sofa at home, but when they want to buy something at work, it seems to be quite cumbersome. Digital can help a lot with that, but it is incumbent on organisations and procurement functions to figure out how to recreate that customer experience that we’ve become accustomed to in our private lives.”

With a new generation of leaders growing up with technology, some might say that it could be a key driver in helping to speed the adoption in procurement along. Is this something you would agree with or what would you point to as a key driver?

SW: “I do think that it will act as one of the catalysts for further digital transformation in organisations, because if procurement doesn’t manage to recreate that customer experience that the new generation expects, then they won’t use procurement going forward and will look to bypass it.

“The analogy that I’ve used previously in this case is one of travel agents. I remember as a child, my parents were able to take us on holiday and I remember the whole process. We would walk into town to the travel agent, and look at some of the brochures of options. They often then had to phone the various airlines or resorts on our behalf. They might not be able to get through, so we’d have to come back the next day. I remember as a child being quite excited by the whole process but actually, thinking back, it was quite cumbersome. You compare that to now, with being able to review online, and you can get instant answers to your questions. It’s not a coincidence that travel agents don’t really exist anymore.”

How much of a challenge is it to not get caught leveraging technology for technologies sake? How important is it to stay true to your approach and be strategic?

SW: “We conducted a study of many procurement leaders and CPOs a few years ago, and one of the things that we found was that about 50% of procurement leaders admitted to having bought technology just on the basis of a fear of missing out, without any real understanding of the benefits that technology was going to bring. That was a real shock and a revealing find because technology is not cheap, and its implementation is quite disruptive. If you’re purchasing a system because everybody else is using it, then there could be some pretty costly mistakes. It is really important to make sure that when buying technology, it is because the benefits are fully understood.

“My advice to companies when looking to digitalise is own your data, visualise that data, and manage your knowledge. If you can focus on getting those things right in that order, and make your technology decisions to support that goal, then that’s a much better way of thinking about it rather than just jumping in and buying a piece of technology.”

It’s clear that the procurement space is an exciting, but challenging, place to be. What do you think will play a key role in the next 12 months to push the digital conversation further to take procurement to the next level?

SW: “Looking forward, one thing that procurement needs to do and continue to do is attract the best people. Ultimately, people are what makes an organisation, and it is what makes a function successful. I think procurement has often not looked for the right skills in the people that it employs. Traditionally, it’s looked for people with procurement experience and while they are valuable and required, we also need leadership potential. People who think a bit more outside the box and aren’t so process driven. A lot of what procurement has done in previous years has been process driven, so if you’re just limiting your search of people to those that have had procurement experience, you’re inevitably going to end up with a lot of people who are process driven.

“I think being bolder and recruiting people from different backgrounds with different skill sets is the way to go. If procurement can ‘own’ the ESG space, that will help with the younger generation see procurement make a difference. I think that’s one thing that will be key to success going forward.”

Check out the latest issue of CPOstrategy Magazine here.