Author

Nell Walker

Published

10 July 2023

Estimated Read time

5Mins

CPOstrategy is a proud partner of ProcureCon Asia Transformation is on the lips and minds of every procurement and supply…

CPOstrategy is a proud partner of ProcureCon Asia

Transformation is on the lips and minds of every procurement and supply chain professional right now. Procurement is increasingly being recognised for its vital role at the core of any business, thanks to the fact that CPOs and other supply chain professionals are executing enormous changes for the benefit of their organisations. 

Set to be a major theme at ProcureCon Asia this year, running between the 11th and 13th of July at the Equarius Hotel in Singapore is the topic of transformation. Procurement professionals from all over the globe will come together to share ideas, make connections, and learn more about the profession through interactive learning and keynote speeches from experts.

All hands on deck

Ter Long Tay, Group Director at JTC Corporation, is one of the event’s illustrious speakers. For him, procurement transformation is a necessity, and requires the full support of the entire business.

“Procurement needs to reimagine its purpose and the role it plays,” says Tay. “It must go beyond the traditional efficiency, productivity, and management of procurement lifecycle. Successful transformation entails understanding the business and partnering with stakeholders on the decision-making process and the strategy of the company. It means being able to create value and have a seat at the table.”

Tay himself has a long history of victories in the procurement sphere. Years of experience in the real estate industry and centralised procurement at JTC gave him and his team the opportunity to understand each element of the business and their considerations better, and procurement – hand-in-hand with digitalisation – has been able to offer added value through the knowledge and experience gained from this involvement. Alongside insights gleaned from data, the business has been able to evolve through informed decision-making.

“For example, in a review of our procurement policies for infrastructure development, we were able to achieve a good ratio of partner vendors supporting our business while maintaining a healthy share of new entrants,” says Tay. 

“This allows us to achieve a balanced outcome of value for money, business continuity, and industry development. We had intentionally used procurement as a lever to achieve other strategic outcomes, leveraging procurement to test or nudge the market in terms of specific sustainable solutions and investing in R&D for long-term benefit.”

CPOstrategy is a proud media partner of ProcureCon Asia 2023. Quote “CPOSTRATASIA15” for 15% off tickets here.

Woodlands North Coast, JTC

Meeting challenges head-on

Of course, there are often hurdles for procurement professionals to jump in order to successfully implement transformation. No big change is without its challenges, and Tay is experienced enough to understand where the pain points lie. For him, procurement has always been viewed through a certain lens, regardless of whether that lens still fits, and that can hold some businesses back. However, increasingly, the department is being looked to as a value-add creator of change.

“Traditionally, procurement has been viewed as transactional,” Tay explains. “Supporting operations while helping businesses reduce costs and increase profits. Now, companies are looking at procurement to achieve long-term business objectives. Arising from the pandemic,  businesses are actively reviewing their supply chains and changing from a ‘just-in-time’ mindset to ‘just-in-case’. 

“There is also significant traction regarding sustainability, and procurement is the department supporting new objectives more than ever.”

Seletar Aerospace Park, JTC

Business-procurement collaboration

Tay is bringing all of this expertise to ProcureCon Asia 2023, in order to share his knowledge with his peers and discuss solutions with other procurement professionals. The reason he wanted to speak at the event came from a ‘pay-it-forward’ mindset; he’s benefited enormously from speakers at previous summits sharing their own wisdom, and hopes to help others by sharing his own knowledge.

“I’ll be discussing the aspects of good business-procurement alignment,” Tay says. “Plus, the value procurement brings, how procurement can support the wider business through managing tensions – such as profits, governance, and risk management – as well as sustainability, and whether procurement is a leader or a follower.”

Tay hopes that focusing on business-procurement collaboration will achieve added value for those attending the summit. “Through collaboration within the procurement community, we can cross-pollinate ideas across different industries, encourage each other through success stories and learn from mistakes. We never walk alone in our procurement transformation journeys.”

For himself, Tay hopes to have the opportunity to network with his peers and continue gaining useful information and insights, as he has at previous events. “I want to learn from the best-in-class in the procurement community,” he concludes.

Read our other ProcureCon Asia preview here.

ProcureCon Asia is the leading procurement summit gathering and connecting CPOs and Heads of Procurement from the biggest companies in Asia. ProcureCon Asia 2023 will be happening from 11 – 13 July at the Equarius Hotel, Singapore. To learn more, click here.

Author

Sean Galea-Pace

Published

26 January 2023

Estimated Read time

5Mins

Here are five of the best procurement schools in Europe.

As procurement becomes an increasingly vital and strategic function within many organisations, people are beginning to realise the full potential of turning it into a career for themselves.

This has subsequently led to many universities noticing the demand in the industry and offering courses which equip students with the relevant qualifications and skills needed to succeed in the supply chain space.

With this in mind, here are five of the best procurement schools in Europe.

1. CIPS

Course: Various
Where: Across England

procurement schools

Run by Oxford College of Procurement and Supply, there are 10 Chartered Institute of Procurement and Supply centres in England offering several different qualification levels to choose from. The courses are recognised throughout the world as harnessing leading edge thinking and professionalism across the procurement and supply chain management space.

CIPS offers courses such as level three, four, five and six in procurement and supply with each qualification created to reflect current, emerging and best practice in procurement and supply chain management. Classes focus on exploring legacy purchasing and supply methods as well as techniques and theory to the application in a business environment.

CIPS doesn’t just offer in-person studying as courses are designed to suit individual lifestyles with virtual classrooms, part-time and weekend options to choose from.

2. Politecnico di Milano

Course: MSc in Supply Chain and Procurement Management
Where: Milan, Italy

Politecnico di Milano
Politecnico di Milano offers an extensive portfolio of programmes

Renowned as being one of the best scientific and technological universities in the world, Politecnico di Milano offers an extensive portfolio of programmes in a variety of different spaces. Its supply chain master’s degree is a 12-month course aimed at equipping students with vital knowledge and skills needed to succeed in the industry.

The course also includes a number of practical activities in the programme such as lessons with international lectures, workshops on soft skills, company presentations, projects with companies, company visits and an international study tour in Rotterdam.

According to Politecnico di Milano, 86% of students were employed three months after graduation while 55% were also working abroad during the same period.

The course was ranked third in the TOP 2021 Eduniversal Best Masters Ranking (Global) and eighth in the QS Supply Chain Management Masters Rankings for 2023.

3. SKEMA Business School

Course: MSc (and MS) Supply Chain Management and Purchasing
Where: Lille and Paris, France

Skema offers two supply chain management (SCM) and procurement masters: The premium international MSc Global Supply Chain Management in Lille taught in English, and the MS in SCM and Purchasing in Paris and Lille mainly taught in French. France’s highly-rated supply chain and procurement program has been designed with a progressive shift from theory to practice. The degree covers the entirety of supply chain activities from planning, purchasing, receiving, production, storage to delivery through nine compulsory and six elective courses.

The global MSc has a new cooperation with the leading prestigious business school, MIT in the US, plus another cooperation with Politechnico from Milano. The MSc master’s degree provides soft skills in supply chain and purchasing management as well as going into future trends in digitalisation, AI, sustainability, ethics, globalisation, risk management and agility. The course’s primary goal is to find future leaders who are seeking to make a positive impact on the world of supply chain management and procurement. The MSc is a full time program, complemented by paid internships in the area of the student’s choice, while the MS alternates weeks of classes with professionals at the forefront of their fields.

4. Audencia Business School

Course: MSc in Supply Chain and Purchasing Management
Where: Nantes, France

Audencia Business School

Created in 2009, Audencia Business School’s programme will cover topics such as procurement, global sourcing and supply chain strategies. Other topics to feature includes green logistics, Big Data, digital transformation, negotiation and commercial law. The course will provide expertise from industry insiders as business executives visit and share professional insights during the programme.

The school works closely with the corporate world and is recognised for its responsible management practices. Audencia is triple-accredited, highly ranked and internationally oriented and according to its website, 79% of course graduates are employed before graduation. The course is available as a one-year or two-year master’s programme.

In autumn 2024, the course is set to be renamed to the MSc in Responsible Procurement and Supply Chain Management.

5. Cranfield School of Management

Course: MSc in Procurement and Supply Chain Management
Where: Cranfield, United Kingdom

Cranfield School of Management provides students with specialist knowledge and skills in procurement needed to progress their careers

Cranfield’s Procurement and Supply Chain Management course has been co-designed with senior industry executives. This purchasing postgraduate course provides students with specialist knowledge and skills in procurement needed to progress their careers. Possessing one of the largest facilities in Europe, the course places considerable emphasis on how to overcome real-world challenges.

Students will gain an in-depth understanding of supply chain strategy and sustainability, procurement strategy, supplier selection and evaluation, negotiation and contact management. They will also be taught how to use data, models and software to solve problems and inform decisions, inventory and operations management and how to design effective supply chain operations.

Students will have the opportunity to attend a study tour and experience a different supply chain perspective elsewhere in Europe.

The course was ranked 11th in the world on the QS Supply Chain Management Masters Rankings for 2023.

Author

Nell Walker

Published

16 July 2021

Estimated Read time

1Min

According to The News, Pakistan’s largest oil refinery – Byco – has signed an agreement to implement SAP Ariba DSN…

According to The News, Pakistan’s largest oil refinery – Byco – has signed an agreement to implement SAP Ariba DSN (Digital Supplier Network) and Sourcing Suite – the first in its nation.

Byco stated: “The initiative will automate the procurement process enabling a paperless process, significantly eliminating errors and unnecessary delays, as encountered in traditional procurement to the payment process.”

Fayaz Ahmad Khan, Vice President Commercial Byco Petroleum, added: “Byco has always been at the forefront of innovation and implementation of processes that are in line with global best practices.

“The deployment of SAP ARIBA DSN and Sourcing Suite will be another first by Byco as an industry leader in Pakistan.”

Fayaz Ahmad Khan, Vice President Commercial Byco Petroleum

He stated that, not only will this move improve efficiency in procurement, but also create better transparency and visibility across the business for all stakeholders.

Author

Tracey Harris

Published

23 February 2021

Estimated Read time

4Mins

New research found that 43% of UK businesses say that the rate of digitalisation within procurement is low, which is impacting agility and preventing businesses from minimising risk…

If we’ve learned anything from 2020, it is that we cannot predict the future. The COVID-19 pandemic significantly disrupted many supply chains, as businesses became dependent on procurement teams to help mitigate the impact by identifying and onboarding new suppliers in different regions. 

However, a significant number of organisations have been hindered by a lack of procurement process digitalisation. New research found that 43% of UK businesses say that the rate of digitalisation within procurement is low, which is impacting agility and preventing businesses from minimising risk. 

The importance of process digitalisation goes beyond navigating the immediate effects of COVID-19. Businesses that are reliant on manual processes are not only wasting an average of £1.94m per year in staffing costs, they are also preventing procurement teams from focusing on high value tasks. Savvy businesses have digitised procurement processes as a springboard to create a competitive advantage for themselves, as they can better identify new revenue opportunities, unlock innovation and improve profitability. Over the coming years, UK businesses need to move quickly to digitally transform procurement and ensure they are not left behind.

Procurement process digitalisation remains in the slow lane

As things stand, organisations still have a long way to go, with many failing to digitalise procurement processes. Just over half (55%) of UK businesses have digitalised invoice processing, while less than half have digitalised purchasing (42%) and budget management (33%). Businesses are even further behind in digitalising strategic processes such as spend analysis (32%) and risk management (26%). Clearly, there is significant room for improvement for organisations looking to make informed decisions, identify opportunities to create revenue, or collaborate with suppliers.

Worryingly, most businesses have not digitalised supplier onboarding or sourcing processes. Identifying and bringing on new suppliers is critical for businesses searching for new opportunities to collaborate and innovate or react to a potential disruption, so digitalising the process should be a top priority. This is particularly true in times of crisis, as one of the biggest challenges UK businesses faced in reducing the impact of COVID-19 was identifying alternate suppliers.

Procurement teams are prevented from adding value

This lack of procurement process digitalisation is creating frustration for UK businesses, and holding them back from adding value. Eight-in-ten (81%) UK businesses say a lack of digitalisation is preventing them from collaborating with suppliers and internal stakeholders, while a further 83% believe it is preventing them from innovating and executing on new revenue streams and opportunities. Without the ability to collaborate or execute on opportunities to drive new revenue streams, businesses stand little chance of getting ahead of the pack.

However, when it comes to digitalisation, UK businesses face a number of challenges. The most common obstacles to digital transformation for UK businesses were their suppliers, technology, and processes. Clearly, collaborating with suppliers is still tough. But, as supplier visibility continues to be vital to innovation and identifying revenue opportunities, it is not a problem that businesses can leave unsolved.

A smarter approach to eliminate manual processes

Most businesses understand and recognise that digitalising procurement will help them gain a competitive advantage. Furthermore, UK businesses recognise the importance of digitalisation beyond this, with one of the biggest benefits being reducing their environmental impact. Sustainability continues to become a key differentiator, allowing for greater efficiency and waste reduction, while turning being ‘green’ into a competitive advantage for eco-friendly businesses. 

But to reap these benefits, it is clear a new approach is needed. Organisations need to adopt a smarter approach to procurement that can enable effective digital transformation, helping them to move away from managing processes over email, phone, or paper, to instead capturing everything digitally. This can free capacity for more strategic projects, improve access to insights for better decision-making and foster better collaboration by connecting internal stakeholders and suppliers. As a result, businesses are better able to identify opportunities to innovate, collaborate and grow revenues, giving them the chance to build better products and service offerings that will differentiate them from the competition. 

Digitalising procurement to combat uncertain times

n today’s uncertain and evolving landscape, procurement has become a much more strategic part of every business, but a lack of digitalisation is holding teams back. To create a competitive advantage, businesses need to digitalise manual and strategic procurement processes to provide teams with the tools they need, and give them back time to focus on creating value for the business.

Making procurement smarter can create an all-encompassing digital view of procurement and supplier management. This is increasingly important for businesses looking to restore growth post-COVID and ensure resilience for the next crisis.

Author

Robin Agarwal

Published

18 January 2021

Estimated Read time

3Mins

Three key areas where procurement and supply chain should look to invest in 2021 and has a good business case to do so…

The Brexit debate is over with the UK and EU finally agreeing on the trade and cooperation terms after Brexit. A lot has been mentioned about the negative impact of Brexit on the UK and EU business supply chains. However, I think it is an opportunity for businesses to review their supply chains and turn this change into a competitive advantage. In my opinion, the following are 3 key areas where procurement and supply chain should look to invest in 2021 and has a good business case to do so.

1. Sourcing capabilities

Most of the organisations I have worked with over the last several years go back to the same set of shortlisted suppliers and look to conduct negotiations and auctions to achieve short term goals. This could be working with the same pool of suppliers either in the UK or EU suppliers or in a particular global location, i.e. China. However, there have been significant changes over the last few years whether it’s in currency, new emerging supply markets, existing supply sources losing advantage, or even the overall cost of managing offshore supply chains vs. local changing dramatically. Brexit and Covid have further accelerated or exacerbated some of these changes. Having some dedicated resources now to understand market options and a full evaluation will really help understand organisations options they have and plan their future supply chains accordingly.

2. Strategic partnerships

With the unprecedented disruption in demand and supply over the last year, organisations have never more realised the need to have a different relationship with their suppliers. As the long-term changes from Brexit and Covid come into effect, organisations having close strategic partnerships with their suppliers will be the ones who will mitigate issues better or benefit from the opportunities. Strategic partnerships don’t have to be just long-term commitments but communication, transparency, and both parties working towards shared goals. Also, the key is to look at the criteria for selecting partners. While on a short-term basis, working with a supplier who can fulfil your immediate needs at the best price makes sense, unless you look at long term fit, you will never have true partnerships in place.

3. Supplier assurance and development

With Brexit, there will be significant regulatory and standard changes over the years and suppliers will need support to transition to new standards and procedures. Also, to allow the sourcing team to find new sources and locations, they need appropriate support to be able to assure and develop new suppliers. Too many businesses, see the role of supplier assurance team as limited to assurance only and have an auditor mindset, however, the key is that they are working more as a development team and helping develop suppliers to contribute to the business.

The deal agreed is described as a narrow deal as it allows the UK to gradually move away from the EU sphere of influence if that’s really what the UK wants to pursue. While the current relationship with the EU is the starting position, full changes from this deal will only be visible over the next couple of years. Businesses who will be making the right investments in their supply chain and procurement capabilities will not only mitigate issues as the changes come into immediate effect but also find themselves in a better place vs their competitors.

Author

Kevin Davies

Published

24 September 2020

Estimated Read time

3Mins

A shortage of digitally savvy talent, and a lack of training for technical and soft skills, hinder digital procurement initiatives

Research from Ivalua, a leading provider of global spend management cloud solutions, has shown that a majority of UK businesses (86%) face significant barriers developing digital skills in procurement. The findings reveal that a shortage of digitally savvy talent (31%), a lack of training for technical and soft skills (28%) and a lack of understanding of the skills required (13%), are some of the main barriers preventing UK business from developing the digital skills they need. Additionally, over half (55%) of UK businesses say that digital skills in procurement are less advanced compared to other departments

The research, conducted by Vanson Bourne on behalf of Ivalua, surveyed 200 UK-based procurement, supply chain and finance professionals about the true nature of digital skills within procurement, and the challenges businesses looking to digitally transform will face. More than eight-in-ten (84%) UK businesses believe that the skill set required of procurement professionals has shifted from procurement-first to digital-first. The study also highlighted that most respondents believe that greater digitalisation (84%) and better digital skills (83%) in procurement would have enabled UK businesses to mitigate the impact of the COVID-19 outbreak more effectively.

“Over the last decade, the role of procurement has transformed from one of cost-cutter to a vital ally that can help inform and enable a business’s strategy. The global COVID-19 pandemic accelerated this trend even further, reinforcing the importance of procurement as businesses adapt to the new normal,” commented Alex Saric, smart procurement expert at Ivalua. “However, for too long, procurement has been seen as a digital laggard, with technology adoption trailing behind other departments. In order to keep its seat at the table in strategic discussions, procurement must ensure it has people with the right skills in-house, as well as easy to use technologies, or risk being unable to offer significant strategic value.” 

Challenges in hiring digital skills in procurement

As part of ongoing digital transformation efforts in procurement, the report found that UK businesses have started to introduce new technologies such as data analytics (55%), cloud-based platforms (53%), automation (35%) and AI/machine learning (30%) in the last 12 months. 

But when it comes to deploying these technologies, UK businesses are finding it difficult to complement them with the digital skills required. The study found that 88% find it challenging to hire the right digital skills to work with technologies such as AI, cloud-based platforms or data analytics, while 76% say they are concerned that existing procurement teams will struggle to work with new technologies. Developing digital skills is vital for businesses, as 91% of respondents say that improving digital skills can make procurement more strategic, while 94% say it will help them gain a competitive advantage.

“In a rapidly evolving business environment, digital skills are essential for procurement teams to analyse and mitigate risk, identify new opportunities and collaborate with suppliers. However, procurement teams are struggling to both attract digital talent and upskill existing teams, which puts them at risk of falling behind competitors, losing market share, and struggling to identify risk and opportunities ahead of time,” comments Saric.

“To address the digital skills gap in procurement, UK businesses need to ensure they are focusing on adopting tools that are easy to use and improve access to actionable insights. By making procurement smarter, businesses are giving teams the tools and skills needed to thrive in the new normal, allowing the business to react and proactively address the shifting sands of a post-COVID world.”

To download the full report, “Bridging the gap – how smart procurement technology can help companies overcome the digital skills shortage”, please visit: https://info.ivalua.com/uk/report-digital-skills

Author

Mark Ellis

Published

23 June 2020

Estimated Read time

5Mins

Mark Ellis, Managing Partner at 4C Associates, award-winning European procurement consultancy, on procurement’s role in transforming the way to post-Covid recovery.

Over the past few months, how many times have you heard “we are living in unprecedented times” or “living in a different normality”? We are experiencing global factory labour shortages, supply chain disruptions due to travel and transport lockdowns, Force Majeure disagreements, suppliers running out of cash, realisation of our dependencies on global supply chains that we cannot control, disruption to ways of working due to lockdowns and the uncertainty over the length of current restrictions making effective forward planning extremely difficult.

Fortunately, for many, technology has enabled people to work from home and continue working and provide some normality to their day to day lives through the Covid-19 epidemic. However, even though many organisations have digitalised their customer front end services, sadly back office services have been woefully underinvested in (hardware, software and technology products) and many organisations have primarily spent time, effort and money to ensure that staff can continue to work during these difficult Covid-19 times by providing the tools and infrastructure to support home working.  

Supporting the global challenge

Over the last few months, procurement as a function has stepped up to support this global challenge. Not quite like the NHS, social care staff and the millions of health workers across the world, however they have listened to the ‘call to arms’ and mobilised their teams and their supply chains. On the other hand, unfortunately, many supply chains have failed, and business continuity plans have not delivered, as the procurement function has simply not been able to cope. This is after those organisations’ procurement functions invested heavily in sophisticated systems for tracking and managing their supply chain.

When Covid-19 hit, many UK based Utility organisations found out that their business continuity plans were not resilient against the unprecedented challenges it faced e.g. accommodation changes, systems switch over and consumer interface. Furthermore, many offshore BPO organisations struggled with home working due to bandwidth challenges of everyone on the internet and fitting for connection.  Whereas some ‘Challenger’ banks had invested in understanding and mapping their supply chains, and were able to instigate a quick and comprehensive review with their suppliers concerning financial viability, delivery capabilities and capacity during these challenging times.    

Did the technology fail or was it the ability of individuals and teams to take the data and make valuable insights to ensure they could deliver for their organisations? As a procurement professional, I am constantly reminded that data for data sake is not enough, you need to be able to use that valuable information to move the conversation forward, to support your organisation to innovate and, in the current crisis, to save lives.

As a function, we know that technology and understanding of the organisation’s needs is powerful and that we should utilise it to drive strong bonds with the individuals that work within our organisations and how this can deliver through our supply chains. Procurement technology combined with human knowledge is the mandatory combination to an effective classification and segmentation process and ensures businesses can quickly collate, visualise and action insights from existing data sources.

Connecting procurement technology and people

Connecting people and information guided by intelligent procurement systems can fundamentally change how companies buy and sell and can open broad visibility into the interconnected operations of buyers and suppliers. This also means reduced operational uncertainty as businesses can prevent bottlenecks in the supply chain before they arise. In the long term, it also enables procurement professionals to increasingly focus on strategic priorities as automated procurement solutions can take over their day-to-day tactical activities.

What these times are showing us is that we must do more to work on building better understanding of our own organisations’ demands, build sustainable relationships and appreciate new and innovative product and service development. It will make organisations stronger and ensure continuous service and reliability within the supply chain.

Now is the launch pad for great things for the procurement and supply chain function. We need to take the technology, data and insights to build strong and long-lasting relationships that can survive through the good and bad times.  We need to stress test our internal and external relationships and drive value and not cost, deliver new products and be the vanguard for change.

Ultimately, what Covid-19 is highlighting is the good that can be done, and we shine a light on the poor performances, poor process and inability to work collaboratively with people.  I sincerely hope that Covid-19 can make us stronger and build on some of the great and good that has been done over the past few months – as this proves we are all human.

Author

Daniel Ball

Published

20 January 2020

Estimated Read time

5Mins

By Daniel Ball, business development director, Wax Digital As a new year gets in full swing, there’s no better time…

By Daniel Ball, business development director, Wax Digital

As a new year gets in full swing, there’s no better time for businesses to refine processes in need of improvement, and procurement shouldn’t underestimate the power of bolstering its own processes. Any attempts to make buying operations smoother, more efficient, and cost-effective are likely to play a part in wider business success.

When it comes to achieving personal goals, the key is to break it down into more manageable steps, and the same is true in business. Here are some targets procurement should set itself to get 2020 off to a blinder:

  • Get your contracts in order: The average organisation has 20,000-40,000 contracts, but what happens when the agreement needs to be reviewed or renewed quickly? How easy is it to obtain files regarding these arrangements as and when you need them? What’s more, businesses that are unaware of renewal dates or don’t have full visibility of supplier T&Cs risk putting themselves at serious financial and legal risk. Procurement teams should make a business case to introduce contract management software so that they have a single, secure portal that they can use to quickly access information such as expiry dates and service level agreements (SLAs). Not only that, the software will alert the procurement team when contracts are due for renewal, enabling the business to check if prices will go up and whether alternative suppliers should be found. The software is also crucial for verifying that contractors have the necessary certifications in place to ensure the business remains compliant.
  • Stop late payments: UK SMEs with late paying customers now have to wait on average 23 days to receive funds, doubling from early last year, according to finance company MarketFinance. The government is cracking down on late payments to SMEs, for example by empowering trade bodies to highlight organisations that are good or bad at paying promptly. To ensure invoices are paid on time, businesses should introduce a system, for example purchase-to-pay software; which automates the procurement process from ordering products or services through to making the payment.
  • Build better relationships with suppliers: Every procurement professional knows that supply chains can be complex and risky due to the uncertain economic landscape we currently operate in, particularly due to Brexit. That’s why it’s crucial to form close relationships with suppliers to mitigate the impact of unpredictable scenarios such as financial crises, weather disasters or political unrest. Using supplier relationship management software, the business will have a clearer view of the supply chain and is more likely to spot potential issues before they escalate into something catastrophic.
  • Bolster digital transformation programmes: Businesses will only reap the benefits of new procurement software if it’s underpinned by a clear digital transformation strategy. We surveyed 200 senior figures across many businesses and found that 72% of procurement professionals feel that the training they received after new technologies have been implemented was insufficient. Procurement should consult with senior managers and the IT department when new technology is introduced. They should work together to embrace the technology and ensure all users receive the training and guidance they need to use it effectively.

There is a lot of scope in procurement to take advantage of technologies that digitise laborious processes and increase visibility on costs and operations. With some clear goals that aim to improve different aspects of buying activities, businesses can make 2020 the year they free themselves from the shackles of paper-based spreadsheets and supplier contracts and use their time to add greater value to the business.

Author

Kevin Davies

Published

15 November 2019

Estimated Read time

5Mins

Ivalua, a global leader in spend management, today announced the release of an enhanced third-party risk module, called Risk Center,…

Ivalua, a global leader in spend management, today announced the release of an enhanced third-party risk module, called Risk Center, available as part of its latest product release. The latest innovations extend the existing strength of Ivalua’s Supplier Management solution, which had already been recognised as a Leader by Forrester Research Inc. in the most recent The Forrester Wave™: Supplier Risk And Performance Management (SRPM) Platforms, Q1 2018.

Ivalua’s Risk Center offers customers a holistic solution to actively monitor and mitigate third-party risk and compliance. Customers are able to consolidate real-time information spanning supplier performance evaluations, transactional data, spend data, contractual information and external risk information from major third-party data providers.  This combined picture is visible in actionable dashboards to provide a comprehensive and timely picture of risk and the potential impact on the business.

“Organisations are increasingly dependent on their suppliers, who can be sources of tremendous value but also increased risk,” said Pascal Bensoussan, Ivalua Chief Product Officer at Ivalua. “Ivalua’s Risk Center brings actionable data and insights from across the supplier lifecycle together with complimentary external data so our customers can effectively manage supplier risk. When combined with the extensive supplier collaboration capabilities embedded in Ivalua’s platform, our customers can unlock the full potential of their supply chains.”

Risk Center’s ability to integrate with third party data providers in real time allows it to meet the unique needs associated with various regulatory environments, industries, and customer compliance models, in an automated fashion. For example, Risk Center can aggregate data on supplier financial health, sustainability, adverse media, sanctions lists, supply chain disruptions and more. Ivalua maintains an open and rapidly expanding ecosystem, including new and updated out of the box integrations with leading providers such as:  EcoVadis – A long-time partner of Ivalua and leading provider of sustainability risk and performance ratings for global supply chains. Backed by a powerful technology platform, the industry’s most-trusted methodology and a global team of domain experts, EcoVadis sustainability scorecards provide insight and engagement tools to mitigate risk, drive improvements and create value across 198 purchasing categories globally.

EcoVadis – A long-time partner of Ivalua and leading provider of sustainability risk and performance ratings for global supply chains. Backed by a powerful technology platform, the industry’s most-trusted methodology and a global team of domain experts, EcoVadis sustainability scorecards provide insight and engagement tools to mitigate risk, drive improvements and create value across 198 purchasing categories globally.

“The global supply chain is a breeding ground for hidden sustainability and CSR risks. Our  partnership with Ivalua enables procurement to see where they are exposed and the steps they need to take to reduce their risk,” said Pierre-Francois Thaler, Co-CEO of EcoVadis. “The integration of EcoVadis Sustainability Ratings with Ivalua Risk Center brings our mutual customers a powerful combination of insights to optimise procurement decisions, improve supply chain performance and create value.”

  • riskmethods – A leader in supply chain risk management, riskmethods empowers businesses to identify, assess and mitigate supply chain risk. By using artificial intelligence, riskmethods helps customers automate and accelerate threat detection, enabling them to gain competitive advantage with a well-managed approach to meeting customer demands, protecting reputation and reducing total cost of risk.

“The integration of holistic supplier risk information within the Ivalua platform is a great opportunity for Ivalua customers,” says Heiko Schwarz, founder and managing director of riskmethods. “With riskmethods available via the Ivalua Risk Center, customers will be able to get a complete view of all types of risk, giving them the tools, they need to avoid the cost of disruptions and respond faster to risk events than their competition.”

  • Global Risk Management Solutions (GRMS) – In an upcoming release, GRMS, a recognised leader providing innovative supplier risk management solutions, will also be available. GRMS combines highly configurable software, premium data streams, and continuous human interventions to reduce exposure to global risk and liability.  GRMS delivers risk-management-as-an-integrated-service on fully private networks and serves clientele covering suppliers across more than 120 countries. 

Author

Joonus Jantunen

Published

29 October 2019

Estimated Read time

5Mins

By Joonas Jantunen, CEO Cloudia Middle East & Africa, Cloudia. Former Hewlett-Packard CEO, Lew Platt, once famously said: “If HP knew…

By Joonas Jantunen, CEO Cloudia Middle East & Africa, Cloudia.

Former Hewlett-Packard CEO, Lew Platt, once famously said: “If HP knew what HP knows, we’d be three times more productive.”

Managing knowledge, or knowing what you know, and being able to apply it to core decision-making is key to business success now and in the future. In procurement, knowledge management already has the potential to drive productivity gains across the business. And emerging technologies like AI and RPA look set to play an outsized role.

What do we mean by knowledge management?

Every day, every moment, organisations and their operating environments are creating, using and sharing, huge amounts of information, or knowledge. Knowledge management, most simply put, refers to the process of collecting, maintaining and managing everything that a company ‘knows,’ in all its forms. But knowledge management is also about using that knowledge to help leaders make more informed decisions. In this article, we are considering knowledge management in this wider sense.

In any organisation, knowledge is power but only when it is well managed and usefully applied. In procurement, knowledge becomes power when it’s effectively managed for the purpose of driving decision-making. That means, identifying what information is critical to operations, analysing it, then sharing the findings with key decision-makers across the company.

What does this mean in practice for procurement?

In procurement today, knowledge management typically begins with process automation, aimed at reducing routine administrative work and freeing up procurement people to focus on innovation and productivity. Automation also equips organisations with the capacity to adapt and take advantage of new technologies as they develop. 

The vast majority of data management applications currently available focus on storing and presenting historical data – telling us ‘what happened’. Naturally, it’s important to know about past events to aid future management strategy, but all too often the data analysis and interpretation itself is left entirely to humans, with our limited capacity for processing large amounts of information. Also, it’s not possible to effectively exploit even the most basic historical data in practice unless the organisation’s procurement systems and processes have been digitised, and an adequate amount of historical data accumulated.

Emerging technologies assist knowledge management in multiple ways

When artificial intelligence (AI) is mentioned, often the first thing that comes to mind is robots making decisions on our behalf or undertaking roles previously performed by humans. Indeed, it has been predicted that robots are likely to replace many service-sector jobs, among other things. However, it’s worth remembering that predictions are based on assumptions of what might happen in terms of advances in AI and it’s challenging to predict the pace at which these advances would take place.  

In the short term, the situation looks less exciting. At the moment, the most significant strength of AI is its ability to handle huge amounts of data from various sources and to establish links among different factors. Another remarkable aspect of AI is the speed at which it is able to identify and produce text, sound and image. As it stands, AI is best suited for optimising existing processes and behavioural models on which an organisation already has plenty of high-quality data.  

AI helps manage, cultivate and discover procurement knowledge

AI and its various applications, especially robotic process automation (RPA), can significantly speed up data collection and assembly. In addition to the information that’s entered into the system and generated during the daily procurement activities, RPA is also able to cultivate new information. Useful information can be gathered about various relevant factors, such as the market, operating environments, pricing, currency fluctuations, any changes to contracts or suppliers, as well as other operators or events within the same business sector.

With the help of automation, the data can be assembled, categorised according to context, and merged and stored without human interference.  As a result, the process of data discovery will be significantly quicker and more straightforward. Technology can also be harnessed to keep different levels of management up-to-date with the latest information regarding, for example, various organisational units, or changes to contracts or consignments. As a result, management will always have access to real-time knowledge of any breaches of contract or disruptions in the supply chain. 

Diagnostic analytics explains why something happened

The next level of knowledge management is reached when technology is exploited to help understand the causes of events and certain behaviours. Diagnostic analytics examines data or content to answer the question ‘Why did this happen?’. When there is a better understanding of what happened, information can be used to find and detect a variety of recurring formulas and patterns, which help control and redirect operations more accurately.

For example, if the same suppliers always succeed or fail to fulfil the terms and conditions of specific product categories, the valuable information provided by diagnostic analytics can help target investment toward the most reliable suppliers. Similarly, understanding the changes in supply and demand, under certain conditions in different product categories, will help schedule the procurement process more efficiently. Diverse procurement procedures and market fluctuations have an impact on the price level of bids, but by analysing trends and past events, it is possible to get both the procedure and the timing right.

Predictive analytics explains what’s going to happen

Any organisation wishing to succeed needs to have foresight. Predictive analytics is a level up from analysing the past, as the focus is on developing and automating forecasts and probabilities based on current events. Those in charge of procurement can use the knowledge to predict and prepare for various outcomes and direct their actions accordingly. 

Once the analytics has discovered why something happened, it will be able to draw conclusions and predictions about what is going to happen next. As an example, it’s possible to predict that when certain changes occur on the market, certain suppliers will perform better (or worse) in relation to certain contractual terms, or if the price or availability of a certain product category is projected to reduce.

Prescriptive analytics explains what should be happening

A high level of procurement knowledge management is achieved when technology can be employed to tell what should be done next. AI and its various applications can efficiently simulate human behaviour and learn to make draft measures and proposals based on predictions. Even the decision-making process can be fully automated with the help of various approval stages.

Based on facts and probability-weighted projections, the system can give recommendations to management about different areas of procurement. For example, it might be advised to avoid certain suppliers at certain times of the year due to projected shortages in supply, or to order extra goods in advance to prevent stock from being exhausted.

Choose an experienced and competent partner

AI is a very useful tool for optimising performance and streamlining processes where the cost of human error can be high. In order to make the best use of technology in procurement knowledge management, it’s essential to be able to identify and collect the type of data that matters most to your organisation. Since the projections and recommendations are based on existing data, the sooner the process of data collection and storage in your organisation commences, the better.

Author

Eman Abouzeid

Published

14 October 2019

Estimated Read time

6Mins

Written by: Eman Abouzeid, Global Procurement and Supply Chain Professional Negotiation is a two-way communication skill. One person has one…

Written by: Eman Abouzeid, Global Procurement and Supply Chain Professional

Negotiation is a two-way communication skill. One person has one price or idea in mind, while the other person has a different price or idea. Therefore, negotiation is defined as a discussion with the aim of ultimately agreeing on a price or outcome that is acceptable to both parties.

It may be that both parties get 100% of what they set out to achieve, or that one person gets exactly what they want and the other person does not, or that a third outcome is agreed that goes some way to meeting the requirements or expectations of both parties. Of course, there will also be situations where the parties cannot agree and the deal is not done.

As a procurement professional, you would probably associate negotiation with commercial negotiations of price and other contract terms (payment, delivery, quality, and so on). However, negotiation is a fact of life, everyone negotiates something every day. Negotiation is a basic means of getting what you want from others, it is a back-and-forth communication designed to reach an agreement when you and the other party has some interests that are shared and others that are opposed.  

Negotiation is partly an internal process (e.g. when buyers negotiate with user departments over the details of a requisition), and is partly external process (e.g. negotiations between buyers and external suppliers).

In this article, we will explore the process of negotiation and some of the techniques that can be implemented, in order to ensure having an effective and successful negotiation process with different parties.

Negotiation typically follows a set process with the following five key steps:

1. Preparation and planning

Both parties will prepare and research the information needed to confirm their position. They also need to consider the history of the negotiation – how they got to where they are today. It is important to consider what the desired outcome will be but also to consider the starting position for the negotiations – price, terms, etc.

2. Defining ground rules

Each party needs to know what is expected of them, for example, by deciding:

  • Where the negotiations will take place.
  • If there are any time constraints.
  • If there are any issues not for considerations or off limits.
  • What will happen if an agreement is not reached.

3. Exchange information: clarification and justification

Each party explains their position. In the case of a supply contract negotiation, the buyer will describe what they want to purchase, and the seller will describe what they offer and what the benefits will be for the buyer. Having prepared thoroughly for the negotiations each party should have all the information required to educate the other party.

4. Bargaining and problem solving

This is where the ‘give-and-take’ of negotiation happens. It needs to be an open exchange with both parties seeking a solution that will be worthwhile for each other.

Eventually, they should agree on an outcome.

The ideal solution should be a ‘win-win’ situation where each side feels they have achieved something that satisfies both parties’ interests; in this case, they may build a lasting and productive relationship.

However, where the buyer has the power and there is an alternative supplier that will fully meets the buyer’s needs then there is nothing wrong with a win-lose for the buyer. Not all transactions require collaborative and long-lasting relationships.

5. Close: commitment and implementation

This step is about clarifying the agreement and starting to put in place what has been agreed by recording the details, including the timescale, and how it will be implemented.

In a business environment there is likely to be a contract which each party will need to sign. There may be some further negotiations over detailed terms of the contract that may not have been covered in the main negotiation process.

Negotiation personalities:

In your negotiations with others you will encounter several different approaches, which may be related to the negotiator’s personality, or related to the context and circumstances of the negotiation. You can consider these as being on a scale of hard and soft, and open and closed as demonstrated below:

  • Hard: tough and challenging negotiator.
  • Soft: easy to get along with but may say ‘yes’ just to avoid conflict.
  • Open: very trusting and open – and assumes others to be the same.
  • Closed: may be cautiousandapprehensive about sharing any information.
  • Open, hard: will listen to the other party, but may still stick to their position.
  • Open, soft: will trust and follow the other party.
  • Closed, hard: may stick to a rigid stance.
  • Closed, soft: cautious but willing to listen.

It is important to be aware of your own style as well as that of the person you are negotiating with, when you are willing to adapt, you will achieve the best rapport.

How to handle negotiations successfully:

When negotiating, keep in mind the following advice and tips on how to deal with the negotiation process.

Listen:

  • Listen carefully and observe the other side’s point of view.
  • If you do not listen carefully, you could miss opportunities.

Analyse:

  • Analytical skills are helpful for assessing the situation as negotiation progress.
  • They are also useful when problem solving if negotiations reach a blockage.

Be professional:

  • Keep careful control of your emotions even if other negotiating parties become upset or annoyed.
  • Never promise something that cannot be achieved.

Communication:

  • To succeed you must be able to clearly and effectively put across your position to the other party.

Patience:

  • Always respect the other party and be patient with them, even if they are not patient with you.
  • The other party may need to take more time than you would like to consider your proposal.
  • Remain calm and in control of the situation to maintain a good business relationship.

Problem solving:

  • Identify problems, issues, risks and challenges when they arise.
  • Do not try to evade them – work out a solution.

Persuasion:

  • Getting someone (or a group) to do something that you want them to do.

The main criteria of effective negotiations:

Negotiation is considered as an “effective negotiation” if it has the following four criteria:

1. The negotiation has produced “a wise agreement” – one that is satisfactory for both sides, and divisive issues are satisfactorily resolved.

2. The negotiation is “efficient” – no more time-consuming or costly than necessary.

3. The negotiation is “harmonious” – fosters rather than inhibits good interpersonal relationships.

4. “Working relationships or business partnerships” are preserved or even enhanced.

In conclusion:

Negotiation is “the art of letting the other person have it your way!” you should get the deal you want whilst making your opponent feel the same.

Short-term victories will not create long-lasting business relationships. Both sides must leave the negotiation table believing that they have gained. Therefore, no skill is more central to your professional career than the skill of negotiation, and as negotiations expert Chester L. Karrass famously put it, “In business, as in life, you do not get what you deserve, you get what you negotiate”.

I hope this has been of interest to you and furnished you with some knowledge to consider.

Author

Dale Benton

Published

1 October 2019

Estimated Read time

5Mins

With constant innovation and marketplaces changing faster than ever before, procurement is undergoing its own transformation. Increasingly, companies are looking…

With constant innovation and marketplaces changing faster than ever before, procurement is undergoing its own transformation. Increasingly, companies are looking to support faster, decentralised procurement functions that will in turn allow for decentralised decision making. Here we look at 5 key shifts in procurement for 2020, as detailed by Gartner

Value Drivers: From risk mitigation to leveraging knowledge

Businesses have been investing in new technologies in order to better understand their operations. Data capture and analytics have allowed companies to make informed business decisions, based on insights from data analysis. In recent years, the focus of this analysis has been on risk mitigation and cost reduction. Over the next year, business will begin to leverage the knowledge it has gained on spend, suppliers and markets in order to better identify new sources of value and eliminate inefficiencies.

 The role of procurement: transactional to strategic

The very perspective of procurement has changed radically over the last decade. Companies have almost begun ‘waking up’ to the notion that procurement is no longer a simple cost centre and in recent years, more and more of them have placed procurement at the heart of their operations. Over the next year, procurement will continue this evolutionary journey as businesses will shift it further, taking on more high-value work and focusing more and more on ‘top-tier’ buys. This will see experienced category managers spending more time developing category managers throughout the business, with the skillsets changing to include process expertise and coaching others.

 Business role: business partners enter the game

With the role of procurement becoming increasingly strategic, the lines between traditional procurement professionals and separate business units are blurring. More and more business units are aligning to the procurement function, taking on more responsibility and combining their specific expertise with that of the procurement role. As a result of this, procurement will enhance its training and coaching capabilities to help ease business partners into a position where they can source on their own. New tools and processes will be defined in order for business partners to execute sourcing events independently and mechanisms will be put in place for evaluating sourcing discipline executed by the business.

Delivery model: a centre of excellence

The very model of procurement will change, shifting towards a model defined by a CPO, Category Manager and Procurement process experts. What this ultimately means is that experienced procurement managers will conduct the most important purchases/buys and the procurement process experts will provide guidance to the business units. Overall, procurement will develop a better understanding of the varying levels of business partner sourcing discipline, meaning that the overall team will focus on process excellence and less on specific category knowledge.

Resources:  investing in people and technology

Investing in people, skillsets and talent is nothing new, but the way in which procurement will invest in its people and its technology will change. Reallocating budgets from outsourcing and corporate overhead will see procurement look towards professional and analytics skillsets. Technology investment on the other hand will shift to include robotic process automation software and customer experience technology. This will see greater use of customer experience experts and an increase in professional advisory skill sets.

Author

Jon Hansen

Published

20 June 2019

Estimated Read time

6Mins

In this article, Jon Hansen examines two opposing elements of the digital procurement paradox, including what organisations can do to…

In this article, Jon Hansen examines two opposing elements of the digital procurement paradox, including what organisations can do to begin to address the stalemate… 

You are likely familiar with the phrase about irresistible force meeting an immovable object.

When it comes to procurement in the digital age, the same paradox applies to technological advancement and the need for greater security. In other words, technological advancement is the irresistible force that promises to transform procurement and business in general.

While there are several obstacles to the adoption of technologies such as the absence of “clean data” within an enterprise, security is the immovable object that executives cite as being their greatest concern.

The current lay of the land

In my paper Digital Transformation in Procurement, I referred to a McKinsey survey of 1,600 incumbent global companies. In the survey, 23% of the responding executives report having a digital strategy in place. Of those, just 2% have a strategy that includes their supply chain.

While the above numbers are in and of themselves noteworthy, in the context of the 2%, the results of a second survey are even more surprising. In that one, 70% of the respondents say that the supply chain is essential to delivering on the digital promise.

Think about this revelation for a moment. Respondents to a second survey state that the supply chain is essential to realising their company’s digital aspirations. With the first survey, only a small number of organisations have a strategy for digitising their supply chain.

The obvious question is, why?

The risk side of reward

Earlier this year, I had a chance to sit down and talk with the Director, Cyber Security for Cisco Michael Tryon. The focus of our conversation was on how organisations must have a “sure and safe pathway” towards achieving their digital objectives. 

It was an interesting discussion on many levels. What stood out to me the most was Tryon’s reference to an article he had written in which he discusses a report from North Carolina State University.

According to Tryon, the findings from the University’s report show that the top concern of executives in the study was an inability to manage a new risk. The risk to which they are referring to is those associated with rapidly evolving technological advancement.

What is it about evolving technologies that have executives stuck in a holding pattern between the recognition of digital’s importance and the realisation of its promise?

The Amazonisation effect

From the standpoint of procurement, concerns with risk start and end with the Amazonisation of the supply chain, including increasing decentralisation.

One of the great things about Amazon is the ease at which someone can buy a product online with little to no difficulty. Purchasing is a simple exercise that is becoming progressively easier as the platform leverages RPA and AI to provide a seamless and intuitive experience for the buyer at home.

The Amazon experience at home raises the question; why can’t the same buying process exist in the work environment? The answer; decentralisation and independence and the potential risks associated with each.

Independence on the Edge

In another interview I did with the President of Hewlett-Packard Enterprises, there was the suggestion that the success of a digital strategy was dependent on going beyond the cloud to work at the edge.

HPE President Paula Hodgins referred to a study indicating that by 2020, each person globally will have up to 10 IoT devices at their disposal. We are no longer talking about a BYOD to work scenario. We are talking about individuals having incredible computing power at their fingertips all the time – buyers included.

According to Hodgins, this personal digital capability provides tremendous opportunities to maximise efficiency. By dealing with data (or requests) at the point of capture as opposed to pushing everything back to the cloud for processing saves time and money.

Like the Amazon experience, the consumerisation of the procurement process in business is a reality that all organisations need to recognise and embrace. Otherwise, they may not remain competitive in a demanding global economy.

But through the above decentralisation, the vulnerability of working on the edge, i.e., having many access or entry points to a company’s internal information through a myriad of personal IoT devices poses some risk. How do you control access? How do you protect against unauthorised breaches?

Based on the findings of the North Carolina State University report, the best way to address these as well as other concerns regarding securing the supply chain is to wait.

But is this the best option?

Getting to the reward of risk

Overcoming the above challenges comes down to two things.

The first is a willingness on the part of executive leadership to change their way of thinking about how procurement “works.” The second is the development of a viable security strategy.

A January 18th, 2019 Clint Boulton article in CIO magazine sums up the need for executives to align their thinking with the realities of an emerging digital world. In the article, Boulton writes; “your digital transformation is doomed unless you empower employees to succeed in the digital era.” He then goes on to say you must “craft a workplace that boosts engagement and agility.”

Engagement and agility come with decentralisation. It is providing all buyers (not just procurement people) with the ability to conduct transactional business at “the edge” leveraging new technologies. The new technologies to which I am referring include mobile devices, computers and personal analytics.

Once executive leadership not only recognises the tremendous competitive advantages of a digital procurement strategy but that they have to take action to make it a reality, they can then turn their focus to securing their supply chain.

A sound strategy

Securing the supply chain is critical. Especially in an age where with increasing frequency organisations are already sharing more and more information with third parties such as suppliers, business partners, and even customers.

Referring, once again to my talk with Michael Tryon, you need to respond to the “pervasive threats that are inherent in this exciting new world.” The best way to do that is through “a comprehensive cybersecurity strategy. One that focuses on prevention, detection, response and recovery.”

It is in this area that the CIO can take the lead. Within the framework of a collaborative environment that includes the key stakeholders, the CIO can create a strategy that adapts to the new technologies and the way they work.

For example, one organisation suggests using a distributed Security model in which they deploy and interconnect security controls at “points of digital engagement,” i.e., on “the edge.”

A final thought

When it comes to procurement working on the digital edge, it is important to recognise that all buyers do not have to be procurement professionals. Nor should they be.

In other words, people at a department level can leverage RPA and AI technology capabilities to do direct purchasing. Procurement professionals can then focus on the more strategic and complex supply chain acquisitions.

From a procurement standpoint, the effective utilisation of resources both within and external to the procurement department is how organisations will realise the greatest return on their digital strategy.