There were many inspiring themes on peoples’ lips at DPW Amsterdam 2024, including collaboration. One of the major reasons procurement…
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There were many inspiring themes on peoples’ lips at DPW Amsterdam 2024, including collaboration. One of the major reasons procurement professionals flock to DPW is the opportunity to learn from their peers, strategise with them, and make connections in order to partner up and grow. We sat down with Dr Matthias Dohrn and Sudhir Bhojwani, business collaborators of several years who prove the benefits of coming together for growth.
Dohrn is the CPO of BASF, a global chemical company, making him responsible for direct, indirect, and traded goods. Prior to this role he headed up a business unit – and things weren’t going well. It got to the point where the question of how to drive performance became a priority. The business needed to consistently drive value, not just be, in Dohrn’s words, a “one-hit wonder”.
“I’ve been in a lot of meetings where people come together and say, ‘we should do something’ – but the next month, you have the same meeting and nothing has changed,” Dohrn explains. “Structuring an organisation in a manner that really drives and extracts value, that’s key.”
This eventually led to meeting with ORO Labs and asking how it could help BASF build a solution that enabled the growth it needed. Sudhir Bhojwani, CEO and Co-Founder of ORO Labs, knew Dohrn already from his SAP Ariba days He even credits him with explaining what ‘supplier management’ means. When he co-founded ORO Labs, his team wanted to focus on being a procurement orchestration platform and build smart workflows.
“When Matthias was running his business unit, as he mentioned, he had this Excel-based process where he was running thousands of measures,” Bhojwani explains. “It was an interesting process. We let him know that our workflow could solve his problems way more efficiently. So we worked with this business unit at that time and saw some positive results. Roughly a year later, Matthias took over as CPO and wanted to bring in the same structure that we’d implemented at the business unit, but on a bigger scale.”
Kicking off the project
Getting this project off the ground meant having a business case, first and foremost. This required actually sitting down with the people who do the ordering, because procurement needed to understand the options it had. “So, with every plant in BASF – all approximately 150 of them – we had to talk to them, and look at the individual spend of each plant,” Dohrn explains. “This included direct procurement of raw materials, energy, logistics, indirect spend for services, and so on. Then we had brainstorming workshops, generating between 30 and 50 improvement measures per workshop.
“Then, because it’s bottom-up, you bring in the performance management tool to prioritise the measures. Then you go through the business case and confirm the value. As these measures go through the implementation levels, it’s very satisfying because you can see how you’re making progress in driving value every day. The people who own the measures set the timeline themselves, and there are incentive schemes behind the best ideas.”
Driving value to motivate people was a priority from the start, and something BASF discussed with ORO Labs early on. People are able to see the status of their measures thanks to ORO Labs, which means they’re able to see the results and also see other peoples’ great ideas. “You create a wave of people who are driving value, much faster,” Dohrn adds.
Addressing the challenges
From Bhojwani’s perspective, there were multiple challenges when approaching BASF’s requirements. Fundamentally, ORO Labs was building a brand new workflow, as BASF required a very different take on what that means. ORO understanding how that translated to what BASF needed was the first challenge.
“We needed to understand the structure Matthias has, and what the work streams should look like,” Bhojwani explains. “We had to figure out how to model these work streams within our tool in a way that made sense. An indirect work stream is not the same as something in direct material; those things are very different. So here’s where our workflow tool worked quite well. We could customise how direct material work streams should behave, compared to indirect work streams, how country A should behave compared to country B, and so on.
“It was important that we could bring flexibility, and that we could solve workflow problems in innovative ways. Another challenge was the user experience part. We had to make sure that the system worked for everybody, otherwise nobody would participate in the system. We had to keep working on it, keep fixing it, and that took a good 18 months of tweaking. The biggest thing has been understanding how BASF actually generates value, and how a workflow can help. It’s been very interesting.”
Identifying the value
Collaborating with ORO Labs has unlocked an enormous amount of value for BASF. Dohrn has seen the business come together thanks to the work that was put into communicating and collaborating with every site across businesses and functions, and BASF is continuing to conduct workshops for further improvement. There’s also, of course, the EBIT being gained from the business cases, putting BASF on track to generate sustainable savings.
“There’s been a real mindset change,” Dohrn states. “We’re now really focused on value, and we’re using this ORO Labs tool to hold each other accountable. You can see the progress every day. We call it the iceberg because you can see below the implementation levels. Everything starts off below the water line – no value created yet, just potential. Then you see it moving beyond the zero line into the positives, and every day I can see the difference between now and yesterday with just a click. It’s so fulfilling to see what we have created.
“We’re able to see the interaction with the plants, the interaction between people, and interaction with the requisitioners, and we can create something positive together. I think that’s huge. It’s only going to bring more and more value over the next few years. People are used to the tool now, they find it easy. It has created value and everyone’s happy because the cost pressure on the plants has gone down.”
Tonkean is built differently. Tonkean is a first-of-its-kind intake and orchestration platform. Powered by AI, Tonkean helps enterprise internal service…
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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.”
When we’re talking about technology in procurement, the importance of partnership is a major component for success. No business is…
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When we’re talking about technology in procurement, the importance of partnership is a major component for success. No business is an island, and joining forces with experts is, increasingly, the direction many move in for the sake of growth.
At DPW Amsterdam 2024, we met many businesses who were looking around at the procurement sector in search of either what direction to move in next, or who they can help. The event is one that brings people together to learn, to teach, to discover the cutting edge of procurement, and be inspired by it. So when we sat down with the CEO of Fairmarkit, Kevin Frechette, it wasn’t surprising that he brought Nick Wright, who leads bp’s Procurement Digital Garage, into the conversation.
For Frechette, one of the best things about working in the advanced procurement technology sphere is joining forces with other businesses to help them keep improving, and vice versa. “Having the chance to work with people like Nick, who are pushing the envelope when it comes to autonomous sourcing, is amazing,” he explains. “We’re fired up to be at DPW, absorbing this atmosphere.”
While it’s something of a running joke in the procurement world that most professionals in the sector don’t deliberately choose it, Wright actually did. “I went to university and thought ‘wow, I fancy a career in procurement or vendor management’. I know a lot of people don’t have that story, but I’ve been doing something I’m passionate about from the beginning. I love making deals, whether I’m buying a car, a house, or something for BP.” The Procurement Digital Garage he leads exists to look at problems being faced across procurement, and figuring out possible solutions.
For Frechette, the intention wasn’t to start a company in the procurement space, but his team quickly saw the opportunities within it. “We had this ‘aha’ moment,” he says. “It was a tough pivot. There was a lot of debate, a lot of late nights. I’m super glad we made it because we got to be in a space where people can be forgotten about, and we’re able to give them centre stage.”
The realistic approach to 10X
DPW itself exists to put procurement under the limelight. Each event is themed in a way that gets conversations flowing around the next big thing in procurement. For Amsterdam 2024, this theme was 10X – something Frechette believes isn’t achievable right off the bat.
“It’s something to strive towards,” he says. “It’s something where you work on getting a little better every single month, every quarter. You keep getting those small wins, and you build credibility. There’s no silver bullet. You just have to start the journey and learn as you go.”
For Wright, it’s about not getting caught up in the hype, but figuring out what’s realistic. “There’s a lot of hype out there, and the beauty of something like my team at the Procurement Digital Garage is to weed out that hype, because what’s right for us might not be right for someone else. Having a team that’s out there in the market, testing and figuring out what’s real, will put you in good stead.”
“There’s a leap of faith element that can be challenging to achieve, before you can really strive for 10X,” Frechette adds. “It’s like Amara’s Law: humans typically overestimate the value of technology in the short term, but underestimate it in the long term. So the hype is needed. We have to help people on that journey and sometimes, a leap of faith is needed. For the people that risk it, it’s exciting, and they’re then well positioned for the future.”
However, again, managing expectations is important. “People might be on the sidelines expecting a 10X solution,” says Wright. “But the reality is, you’re going to get 5% here, 10% – smaller pockets of improvement.”
The benefits of advanced technology are absolutely being seen at this stage, but being realistic about the future outcomes is important. “The benefits are there – not at the scale of 10X – but if you just make a start, you’ll achieve wins,” says Frechette. “You broadcast those wins across the organisation. That generates excitement, and then you can work on the next thing because you have ground swell.”
How ‘the future’ has changed
What’s interesting is that this 10X focus, this drive towards incremental wins, has reframed the way businesses plan for the road ahead. ‘The future’ used to mean having a three or five-year plan. Now, the future is only 12 months away.
“The thought process right now is ‘what can we do that’s super optimistic in just 12 months’?” says Frechette. “Then you can put in realistic time frames and set off on a sprint to get there. You have to be able to move fast. We have launches every two weeks now, and we have to be flexible with our roadmap along the way. But we always know where we’re going – we have a north star.”
“To me, that’s the only way to do it,” Wright adds. “I don’t have a crystal ball. Nobody knows what’s going to happen in two or three years. So what’s the point of creating a plan that’s going to get you to a certain point in those two or three years? You have to work on small iterations, make adjustments, change direction as necessary.”
It’s part of what makes Fairmarkit and BP an active partnership – the ability to be flexible and open up discussions at every point. It’s all about real-time feedback and trust-building, to the extent that both parties feel like they’re on the same team.
The right people in the right places
Because ultimately, it’s the human element that makes transformation happen. Having the right people in place is one of the elements that’s key to making sure implementing advanced tech for the sake of business strategy works at all. “It’s about access to talent and making sure you’ve got a capable user group that can make the most of that technology,” says Wright. “You don’t need to be a data scientist, but you do need to have the right mindset to take advantage of the tools you’ve got.”
“I agree – you have to get the right people on the bus,” adds Frechette. “You all have to be committed to going on the journey together. Prioritise where you start and where you’re going to have the most value with the lowest risk, and have people on your side who can give suggestions and ideas.”
While the much-discussed talent shortage can create challenges there, DPW as an entity proves that not only does procurement keep becoming more appealing and exciting, but where there are gaps, there are digital tools. “I’ve noticed a lot of folks under 30 who are here at DPW Amsterdam, and they’re genuinely interested in procurement,” says Wright. “We’re at a tipping point that makes me really excited about the profession I’m in.”
‘Digitalisation is just the beginning’ according to Crowdfox, a business which aims to improve procurement by bettering the ordering process…
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‘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.”
Certain procurement pain points can prove debilitating for a business, freezing it in its tracks when it’s trying to grow…
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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.”
The buzz of DPW Amsterdam draws in the most innovative minds across the industry. They’re there to have riveting conversations…
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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.”
Making procurement slicker, more streamlined, is the name of the game right now – and this is precisely why Globality…
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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.”
“I’m overwhelmed,” are Matthias Gutzmann’s first words when asked about DPW Amsterdam 2024. At the end of the bustling two-day…
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“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.”
It’s impossible not to be inspired by the energy at a DPW event. DPW Amsterdam 2024 was buzzing with that…
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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.”
Whether we’re talking about gen AI, 10X, or any other kind of advanced tech solution, data is at the core…
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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.”
We caught up with Shachi Rai Gupta from ORO Labs to discuss the importance of orchestration in procurement.
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Simplifying procurement in smart ways is the ultimate goal for ORO Labs. Utilising the best of AI, ORO Labs aims to implement procurement orchestration across sectors, creating an experience that is simultaneously automated, augmented, and humanised.
Shachi Rai Gupta is VP Strategy at ORO Labs, with a wealth of transformation and technology experience behind her. Rai Gupta’s sharp eye on procurement has allowed her to witness the rise and fall of various trends, and understand what the sector needs as it – along with technology – evolves.
We caught up with Rai Gupta at the DPW NYC Summit back in June, a special North American version of the event. Procurement trends, especially AI and orchestration, were very much the theme of the day, prompting lively conversations amongst some of the world’s most influential procurement leaders.
Procurement as a net positive experience generator
For Rai Gupta, the trends right now are guided by the fact that procurement has more of a strategic and evolved role than ever, giving the function the opportunity to have a great impact on the enterprise bottom-line and the environment and community at large
“Procurement is morphing into a function where one of its biggest responsibilities is to be a net positive experience generator,” she explains.
“Procurement really is a service function for the whole business stakeholders. We, as procurement professionals, need to see things through the lens of the business. This includes what issues the business is trying to solve, and meeting the business where it’s at for good collaboration.
“It’s also important to make this experience as easy as possible, rather than cumbersome and time intensive. That needs to be catered and customised to the individual business segments.”
Prioritising the planet
Another area Rai Gupta is seeing talked about a lot is sustainability. This topic has, for some, been sidelined a little in favour of advanced technology. But it’s just as important as it’s always been, and it’s vital to keep the discussion alive – especially in procurement.
“More and more, companies are realising the impact they’re having on the environment,” Rai Gupta explains. “It’s an increasing priority on all our agendas. The technology is still nascent in that space, in the sense that there aren’t good ways to do benchmarking or tracking. That’s going to be an interesting space to watch out for.”
The next generation
Another hot topic of the DPW NYC Summit was the talent shortage. We at CPOstrategy discuss this topic a lot with procurement professionals, and there’s no one answer for fixing the issue.
“There’s a dearth of good digital talent,” Rai Gupta states. “The skillset you need today in procurement is very different from what we’ve had before. To be able to leverage that, to really make use of the procurement teams you have and the operational model you want, it’s a different challenge. The structure of your team is more important than ever.
“While that shortage is there, when you do have the right people in place in procurement, that’s where the department shines,” Rai Gupta adds. “That’s where procurement becomes a group of trusted advisors for the business, providing proactive opportunities. We wear a lot of hats in procurement, and we’re stepping up to a new level of evolution.”
Advanced tech for good
And, of course, AI and orchestration are terms on everyone’s lips right now – procurement included. AI is, in Rai Gupta’s words, “a solver”. Many of the blockages and challenges procurement is experiencing as it evolves can be solved, or at least aided, by AI and orchestration. “There’s so much tech out there,” Rai Gupta states. “AI is one such possibility. Every segment of procurement comes with its own risks and requires its own expertise and tool sets.
“To manage that whole ecosystem is where that orchestration comes in. There’s a real beauty in this because it’s collaborative. It makes the whole bigger than its parts.”
For a company like TealBook, data is king. The organisation helps businesses to navigate the complex supplier landscape by offering…
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For a company like TealBook, data is king. The organisation helps businesses to navigate the complex supplier landscape by offering a foundation of high-quality data. This is something that’s often sorely missing in procurement.
“We have a data problem,” Stephany Lapierre, CEO and Founder of TealBook, told us when we caught up with her at the DPW NYC Summit in June. “It’s always been my view that we don’t have a software or people problem – it’s data. If we could achieve better data – no matter the data stack, no matter the maturity, no matter the vertical – it would be truly transformative.”
Creating a data foundation
Lapierre has watched procurement’s attempt to tackle advanced technology without good data. Simply buying software is the easy part. Some have even tried to build their own architecture around that software. However, that’s often unsuccessful and highly manual. This is what led to the creation of TealBook.
“We’re in this pursuit of how we can deliver to the market,” Lapierre states. “We’ve been building a trusted data foundation for eight years.” More recently, the second version of TealBook’s service is significantly more powerful than the first. This allows it to ingest data at speed and set up new data sources within a couple of hours. “The more data sources, the more suppliers we’re covering, the more attributes per supplier. And, the more signals to improve the TrustScore and the confidence behind the quality of our data.”
Never ignore the fundamentals
The fact that quality data is all too often overlooked in procurement in favour of advanced technology was something of a theme at the DPW NYC Summit. The opinion of Lapierre is that there’s little point in implementing advanced tech without first having usable data in place. Many others at the event felt the same.
“It’s like buying a house because you love the house, but paying no attention to its foundation, plumbing, or electrics,” she explains. “Procurement has been buying up technology solutions, wanting to see the workflow, the UI, what it can do. However, people aren’t asking where that data comes from. How is it being evaluated? What about the compliance side of having suppliers populating a portal?
“Procurement has more and more requirements to get more and more data, so filling the gaps becomes more difficult. There are also increasing demands for transparency, and for regulators to have better quality information. When you’re reporting something, you have to really trust that information. That’s how you give confidence to your board or leadership team.”
A shift in focus
The upside of this disconnect is that Lapierre fully expects the pursuit of better data to be a key trend in procurement over the next few years. “I’ve found that no-one talks about the data layer in procurement,” she states. “They brush it under the rug or underestimate how critical it is to use data to feed large language models for better insights. As data becomes more accessible, the need for a trusted data foundation becomes more important. You need good data posture.”
With this very topic being discussed openly at prestigious events like the ones DPW hosts, procurement professionals and leaders are actively working towards solving this blockage. “The problems have to be solved in order to leverage the exponential value of Gen AI, automate workflows, and bring intelligence in across all these functions,” Lapierre continues.
“Consider: what would it mean to your business if you could actually solve that data problem, drive better outcomes, and truly digitise the procurement function?”
We caught up with Danielle McQuiston from Candex to discuss why procurement is risk-averse, and how the business can help.
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Candex, a B2B fintech company, has been going through some exciting changes recently. In the five years that Danielle McQuiston – its Chief Customer Officer – has been with the business, it’s gone from its venture round to A series in 2021 and into B series, which it closed out in 2023. Its goal is to make life easier for procurement professionals across sectors. This is because having trusted services at their disposal is one step towards changing procurement’s risk-averse reputation.
Candex’s value proposition is as a tech-based master vendor that helps enterprise buyers engage and pay small and irregular vendors through an easy, quick, streamlined process. The obvious ‘low-hanging fruit’ use case at most enterprise organisations is to use Candex to avoid setting up new vendors for small, infrequent purchases.
While tackling this low-hanging fruit demonstrates an immediate benefit, Candex is now taking it a step further. It’s helping enterprise clients understand the additional benefits and value that they can get from the solution. We caught up with McQuiston at the DPW NYC Summit in June, an event which featured innovative solutions in procurement. In particular, AI.
Creating and avoiding risk
“The companies that only go for the easy wins still have tens of thousands of suppliers that they hold in their vendor master. They don’t closely manage them and really don’t know them,” McQuiston says. “At some point, these companies have onboarded a supplier to make a small purchase. When they do, they do minimal checks on the vendors since the purchase is small or one-time only. But now that ‘small’ vendor is in the company’s system for anyone to engage with – sometimes forever. These companies are left with little-known and unmanaged vendors taking up 80% of their vendor master. This, in turn, creates risk for the enterprise.”
Candex can mitigate this risk and empower companies to focus more on strategic relationships. It does this by helping companies offboard their non-strategic vendors, and engage vendors only as needed. Businesses can do this with the confidence that Candex applies robust compliance screening and third-party diligence to all vendors as part of its standard processes.
As a result, Candex has started helping clients realise how they can reach their initial objectives of deriving more value by lowering risk exposure. By helping them focus on strategic suppliers, they can increase their working capital, accelerate the speed of doing business, and support their supplier diversity programs.
“All those aspects are where my focus is currently,” McQuiston explains. “Along with that, over the next few years, we will continue to make the process even more user-friendly. We’ll also further develop our solutions to meet the ever-changing commercial, compliance, and security landscapes. We can make the system even more intuitive, and help our customers streamline internal processes so things are faster and more cost-effective.”
The roadblocks
Implementing technology solutions to improve procurement is the name of the game across the sector, after all. It was talked about extensively at DPW NYC in June, where we spoke to McQuiston about Candex and trends. Unfortunately, there’s a roadblock for the sector, which is that procurement is risk-averse.
McQuiston explains. “We work primarily with Fortune 2000 companies, and I can’t tell you how many I’ve met up with who have outright told me they’re risk-averse. They all think that’s unusual, but they all say it and most of them are the same. It doesn’t matter if you’re in pharmaceuticals or consumer goods or banking – everyone is in the same boat regarding risk.”
This is because, as a function, procurement was created to ensure security of supply, controlling both quality and cost. “Procurement was born out of the supply chain world with a focus on direct spend. Out of the need to make sure prices don’t go up – and, in fact, go down,” McQuiston continues.
“Procurement has always been the enforcer of the financial rules. That’s the only way they were able to have an impact on the business initially. Now, procurement wants a seat at the table and is able to more broadly bring value to the business. In return, businesses are asking procurement to ease their role as the enforcer in order to have that seat. This is tough for procurement because, by nature, they’re nervous about losing control since that is how they have added value in the past.”
Hope is here
This may be a challenge, but the march of change isn’t stopping. There’s hope in the air. This is thanks to companies like Candex, as well as the arrival of new technologies. For example, artificial intelligence, which the business world is increasingly looking to leverage.
“AI is the whole theme of this conference,” McQuiston said of DPW NYC. The event spawned many fascinating conversations, not to mention encouraging ones. As the business world utilises technology better, procurement is only going to get better. And AI can help support procurement teams as they look to calibrate their solutions and right-size their approach to risk, efficiency, and value-add for the business.
“I’m very interested to see how innovative solutions like Candex, as well as AI solutions, become disruptors – in a good way,” says McQuiston. “A lot of other solutions that have tried to enter the procurement space have struggled to really break in and push for significant change.
“However I believe that if you solve a real problem and have good technology, you will be successful. AI may be able to really help further support technology solutions in their mission to simplify the procurement stack and positively address user experience challenges,” McQuiston concludes.
Welcome to the latest issue of CEOstrategy where we highlight the challenges and opportunities that come with ‘the’ leadership role
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Our cover story focuses on the work of Nigel Vaz, the CEO of Publicis Sapient – a digital business transformation company that partners with organisations globally to help them create and sustain competitive advantage – and his approach to change management.
Welcome to the latest issue of CEOstrategy!
Tasked with accelerating business growth, while building the synergies across an organisation that can drive innovation to meet diverse customer needs and keep revenues on track, the modern CEO must be mentor, marshall and motivator on the journey to success.
“I lead Publicis Sapient with a set of principles to keep me on track, and which I offer to fellow CEOs as a guide,” says CEO Nigel Vaz. “Embrace change, and view challenges as opportunities for growth and innovation; Foster a culture of continuous learning within yourself and your organisation; Advance the organisational capabilities that will enable your company to deliver on your brand promise; Adopt a data-driven approach to decision-making, utilising analytics and advanced technologies and Stay rooted in purpose to realise your competitive advantage.”
EMCS: Leading a small fish making a big impact
“If you look after your people and you have the right people in place, the customer experience takes care of itself,” explains EMCS Industries CEO Trevor Tasker. “A lot of entrepreneurs say the same, but you don’t always see it in action. If I have to micromanage somebody, I’ve made a hiring mistake. When I’ve found the right person, all I have to do is support them and trust them. If I can’t trust them, I can’t lead them. And being trusted makes my employees so much better at their jobs. It makes choosing the customers you deal with very important as well…”
Moneypenny: People at the heart
We are consistently listed in the best places to work rankings and have created a happy and fun working environment,” says Moneypenny CEO Joanna Swash. “We strive to be authentic, and that starts at the top. If the leadership team walks the walk and talks the talk, then trust is built. Trust fosters a culture where employees are motivated, engaged and empowered with a culture of transparency and honesty…”
Bupa: Choice, care and compassion driving digital transformation
“In a fast-changing world, it’s essential that we harness the power of technology to keep improving health outcomes for our customers,” says Global & UK CEO Carlos Jaureguizar of the digital transformation journey helping Bupa become the world’s most customer-centric healthcare company. “We give our people the tools to give customers the best care, streamline the customer experience and drive innovation.”
Also in this issue, we hear from Rachel Youngman, Deputy CEO at the Institute of Physics, on how organisations can leverage ESG targets to meet the Net Zero challenge; we get the lowdown on a fintech success story from RTGS.global CEO Jarrad Hubble; discover the importance of Strategic Thinking with Institute for Management Development Professor Michael Watkins and count down ten reasons why integrity is key to business success with Serenity In Leadership CEO Thom Dennis.
Global cloud services point-of-sale provider, GK Software, was founded over 30 years ago in Germany. For most of its existence,…
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Global cloud services point-of-sale provider, GK Software, was founded over 30 years ago in Germany. For most of its existence, its focus was on expanding across Europe. However, in 2015, GK broke into the US when its partnership with SAP helped it drive into that vital market. The business has been thriving stateside ever since. Its core business is a point-of-sale software platform – CLOUD4RETAIL – which features the OmniPOS solution. Today, GK is ranked highly in global POS installations and has been among the top three for the last five years.
GK is an organisation committed to continuous improvement and customer engagement. It is evolving, getting into newer technologies like AI in a big way. It’s leveraging its expertise to improve insights into what its retail customers and their shoppers need. This includes everything from price optimisation to loyalty to self-service technologies.
Its ability to provide these services, through its expertise, is what attracted Virginia ABC to GK Software. Virginia ABC was a previous user of SAP’s point-of-sale (POS) solution, but as the authority evolved, it required an updated POS.
GK Software meets Virginia ABC
Enter: GK Software. “As a result of our relationship with SAP and with Paul Williams at Virginia ABC, we were shortlisted in their new point-of-sale solution selection,” explains Max Francescangeli, Regional Sales Director at GK Software.
“With Virginia ABC, we went through quite an extensive selection process. It’s a government agency, so the rules are very strict,” says Francescangeli. “But we were able to prove that we could use our expertise to address and solve all of their problems in spite of the unique environment they operate in. They needed a flexible solution that would interact well with their legacy platforms during implementation. We were certainly able to provide that. So, we were eventually awarded the business and the project has been extremely successful.”
The approach GK takes with its customers during these projects highlights just how much out-of-the-box capability its solution has. GK’s team spent a lot of time with Virginia ABC. The organisation examined its business requirements and using a consultative approach to show how its software could be configured. This was so it could meet the end-state business requirements and take advantage of best-of-breed capabilities that exist within GK’s platform.
“Rather than going there and trying to do a lot of customisation, we wanted to help them take advantage of the software as it exists,” Francescangeli adds. There were also other areas where GK was able to provide a lot of value and expertise to Virginia ABC. These include payment processing and its partner ecosystem. Virginia ABC was previously using a payment provider with limited capabilities, but GK was able to step in and expand the technology set. “We gave them more hardware choices, expanding what they could do with their in-store devices.”
Virginia ABC also needed more advanced reporting and analytics within its environment. So, GK introduced a solution called Advanced Central Electronic Journal and Reporting. Francescangeli continues: “It saved them a tremendous amount of effort, and gave them a lot of flexibility. We implemented that very quickly and they gained business value from it immediately.”
An evolving partnership
GK Software and Virginia ABC worked on initial deployment for the first 12 months of the project, and GK has continued to supply its services ever since. Each year after the first, Virginia ABC has expressed interest in something else GK offers. As a result, the relationship has remained close and Virginia ABC continues to expand the partnership.
“Paul and his team have been champions of ours and we’re champions of theirs as well,” Francescangeli states. “Due to the relationship we have with Virginia ABC, we have been able to secure business from other retailers in the same space because they have confidence that we know how to handle the market.”
“GK checks a lot of boxes retailers are looking for,” Bill Miller, North American VP of Sales at GK adds. “We’re in this inflection point where we offer modern technology that also has a lot of functionality out of the box, and that’s what people want. That’s what Virginia ABC wanted, and that’s what we supplied.”
CPOstrategy explores five ways CPOs can attract (and retain) top tier talent and why there is no one simple solution.
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Only a small fraction—less than one-fifth—of procurement directors and executives are confident in the ability of their current talent pool to meet the future demands of their organisations’ procurement functions. While these leaders were relatively confident in their current talent pools, the survey revealed a significant drop in confidence levels when considering their ability to address future demands.
The industry-wide talent shortage affecting procurement teams is driven by the compound forces of an increasing procurement workload, and the increasingly strategic nature of the field. Procurement is not just purchasing anymore; procurement professionals are expected to have greater business acumen, technical knowledge, and be “orchestrators of value” within the business. It is vital that the procurement leaders of today attract, retain, and develop the procurement professionals of tomorrow if they want to leverage the strategic potential of procurement beyond simple cost-containment.
1. Competitive salaries
Offer competitive salaries and benefits packages to attract top talent. This is while demonstrating the value placed on procurement expertise within the organisation. There’s plenty of content out there focused on company values and work-life balance to attract talent without paying for it. But just as cost is still at the heart of procurement you still need to pay people what they’re worth.
2. Professional development opportunities
Provide opportunities for continuous learning, skill development, and career advancement through training programs, certifications, and mentorship initiatives. Old attitudes concerning employee loyalty are disappearing faster than the housing market. Jobs that don’t provide room to grow will be vacant before long.
3. Embrace flexibility
Remote and hybrid jobs attract seven times more applicants than in-person roles. Despite what some opinion columnists at Business Insider and Bloomberg say, no one wants to live and die in a cubicle. Casual Fridays are hell on earth, and managers who resist flexible working arrangements need to face up to the fact that they are not only fighting a losing battle, but also hindering their company’s hiring potential in the process.
4. Foster a collaborative environment
Create a collaborative and inclusive workplace culture that encourages teamwork, innovation, and open communication. It is about fostering an environment where top talent can thrive and contribute their best. Businesses that practice DEI give themselves access to new and diverse perspectives. This is especially essential in an era of increased supplier diversity and nearshoring.
5. Use tech and make a big deal out of it
Getting the chance to apply cutting edge digital solutions to real-world problems is what people get excited about. By highlighting your organisation’s commitment to leveraging cutting-edge technologies and innovative procurement practices, your procurement roles will seem appealing to those eager to embrace new tools and methodologies. Successfully (and visibly) leveraging technology will also help combat the fact that, when it comes to recruiting younger staff, procurement’s reputation as a back-office function can hold it back. Leveraging AI, big data, and automation successfully can be highly impactful in boosting the function’s profile.
Technology and training are working together to lighten the administrative load faced by procurement teams.
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Over the last 18 months, attitudes towards ongoing economic (and political, oh, and climate) uncertainty seem to have finally pushed past a tipping point. Discussions of a return to some pre-2020 normal baseline appear to have been replaced by a more honest interrogation not of how we get back to where we were, but how we learn to deal with how things are.
Geopolitical, economic, and climate instability aren’t going anywhere, and the organisations that learn to adapt to this new state of affairs will be the ones to generate real value from their functions. “Procurement and finance teams are increasingly tasked with enhancing their organisation’s spend management,” writes Ruth Orenstein, Senior Director of Product Management at Tipalti. “This is crucial to ensure financial stability and resilience against fluctuating macroeconomic conditions.”
The growing trend, Orenstein notes, is a shift towards a “streamlined, decentralised P2P process, emphasising the importance of employee experience and the adoption of procurement-related processes.”
Rather than centralising procurement decision-making within a single department, decentralised procurement takes a freer hand, allowing individuals to make purchases for their own departments, instead of pushing all purchasing through a centralised team. Procurement, even for a mid-sized organisation, can encompass a huge variety of purchases., which can range from which ergonomic mouse pad to buy for a remote contractor to sourcing thousands of tonnes of raw material weighed against cost, time to delivery, and ESG goals.
When different teams specialise in different product categories, or when handling smaller and less impactful purchases, decentralising the procurement process can increase the speed and agility of an organisation’s spending.
Decentralised procurement: risk vs reward
There are obviously risks to adopting a more decentralised procurement strategy. Handing over purchasing autonomy to department buyers or individual employees carries an increased risk of overspend, fraud, and more dark purchasing throughout an organisation. There is also a risk that teams will spend an outsized amount of time monitoring spend, chasing down policy violations, and generally not saving any time.
However, the advantages can be significant, and procurement teams that successfully create strong procurement guidelines and parameters (digital marketplaces that allow department buyers to make acquisitions from a pre-approved list of goods can be a functional halfway point between centralised and decentralised procurement), as well as effectively educate non-procurement personnel in good buying strategies can successfully lighten their load, create greater agility, and overall improve the overall process throughout the organisation.
If every company in 2015 was a tech company that required employees to have a basic knowledge of the IT stack, by 2025, every company might just be a procurement company.
With cyber attacks on the rise, Chief Procurement Officers need to take a more active role in protecting their organisations.
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The number of attacks against supply chains is rising at an alarming rate, and increasingly it is the case that a business’ most common vulnerability is their supplier ecosystem. “If your company were to get breached, there is a 70% probability it will be through one of your vendors,” noted Norman Levine, a senior manager at Omnicom in a 2021 webcast. By 2025, Gartner predicts that 45% of organisations around the world will have been the subject of a cyber attack on their software supply chains.
Increasingly, then, CPOs have a meaningful role to play in standing between potentially risky suppliers and their organisations.
Robust cybersecurity
However, the increasingly complex and digitalised nature of the procurement sector isn’t making this job any easier. Baber Farooq, a senior VP at SAP Procurement Solutions wrote in a recent op-ed that “As companies and consumers increasingly rely on global, interconnected supply chains, procurement operations are now a favourite target for cybercriminals.”
According to a 2023 survey of CPOs by Deloitte, fewer than 3% of procurement leaders felt they had “high visibility” beyond the first tier of their supplier network.
“If enterprises don’t know who they are doing business with—directly and indirectly—it is almost impossible to manage risk proactively,” Farooq writes.
Setting the standard
Only by setting standards for their suppliers that garner real visibility deep into their supplier ecosystems, and then supporting that visibility with periodic monitoring is essential.
“For procurement leaders to avoid risks, they need to start from square one. That means performing due diligence during the supplier selection process and implementing continuous monitoring across their extended supply chains throughout their relationship,” argues Farooq.
“Risk Ledger reports that over 20% of organisations do not conduct cybersecurity due diligence before entering a contract. On top of that, 23% of suppliers do not have formal agreements in place with their third parties regarding security clauses. These situations compound the risks of cyberattacks and make an organisation increasingly vulnerable to a breach.”
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.
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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.”
Linda Chuan, Chief Procurement Officer at Box, discusses the value of delivering effective and long-lasting change management in procurement.
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Being at the forefront of change requires a specific type of person – it’s not for everyone.
But for those that are equipped to deal with the volatile and at times, disruptive, nature of change, that’s where the rewards can be uncovered.
Knowing this all too well is Linda Chuan. She is a seasoned sourcing and procurement operational excellence executive with a public accounting background and a strong ability to execute from vision and strategy. Her innovative experiences with organisations large and small have culminated in a unique, but practical end-to-end view and understanding of business processes. Chuan’s approach to problem-solving is holistic, mixed with a blend of discipline, creativity, agility and resilience. She has demonstrated successes in her execution and delivery with real results time and again, while also leading successful transformational digitisation strategies.
Procurement’s transformation
The industry she serves has undergone quite an evolution in recent times. Having transformed from a back-office function into a dynamic, exciting, enterprise division at the forefront of change. Procurement and its professionals have been on quite the journey in recent times. As such, Chuan explains that the space is, in fact, so unrecognisable that even its definition has changed. “Procurement started out as purchasing for primarily manufacturing companies decades ago,” she discusses. “Then it evolved from purchasing to procurement where the practice and the profession required more skills around understanding contract verbiage and how the commercial terms would impact the business. There was a little bit more skillset required, legal terms, understanding contracts, all the way to what we know today as strategic sourcing.”
Fast forward to 2020’s Covid pandemic and procurement was forced to shift again amid significant disturbance to supply chains. As a result, procurement was swiftly elevated to the c-suite and became front of mind for most CEOs globally as businesses looked to tighten their belts while urgently finding alternative methods of supply.
“Following Covid, I think we, as procurement professionals, are now mandated to be even more than strategic sourcing and add value to the company,” affirms Chuan. “We’re asked to look ahead and think about the macroeconomics as well as the microeconomics and how it could impact the company and get that translation to direct company impact earlier. This is all while being able to help either prevent large risks or promote opportunities within the company so they can then maximise what’s happening out there in the marketplace versus where everyone was reacting to what has already happened and trying to be prepared for what was coming.”
Tech disruption
Disruption has meant procurement was propelled to become even more strategic and forward-facing following a recent surge of black swan events as technology takes a firmer grip on the space. “The whole profession has evolved, especially over the last 10 or 15 years, where we’re becoming increasingly more strategic and important to a company.”
The company Chuan serves is a cloud content management company that empowers enterprises to revolutionise how they work by securely connecting their people, information and applications. Founded in 2005, Box powers more than 115,000 businesses globally, including AstraZeneca, JLL, Morgan Stanley, and Nationwide. Headquartered in Redwood City, CA, Box has offices across the United States, Europe and Asia. Chuan joined Box over four and half years ago and was recruited to help with establishing the firm’s procurement function and building it from the ground up.
“Any engagement or relationship with a third-party provider, whether it’s buying widgets, purchasing services or even SaaS across the entire company is under my scope,” she explains. “Box has grown globally to reach new regions such as Japan and Poland to UK and Australia. We’ve continued to grow even throughout the pandemic. It’s my third role to establish and build out a sourcing and procurement organisation from the ground up. I find that to be so rewarding and every company’s a little different. What might’ve worked in my previous roles may not work at Box. I love having to tailor and think about which processes and what systems could work that would fit each company’s specific and unique culture, executive level preferences as well as the employees. It’s very exciting.”
Blank canvas
For Chuan, her passion is to make things as easy as possible for the end user. She likes to think about a procurement organisation as a service firm. “We’re like a small entrepreneur company within an enterprise,” she tells us. “Our customers are our internal employees. As the company and the employee base grows, the customer base increases too. To me, it’s really imperative that we think about the user experience because every company has policies to check off, but who really ensures that we are compliant to those policies? A lot of other larger companies find it’s easier to make the policy a mandate where employees must follow, but I find that with high-tech companies, it’s more of a case of “influencing” rather than “mandating” in that kind of environment.
“In order to establish more of a centralised process where all of the employees would have to come through this one system and one intake, it has to be so user-friendly or else people are not going to want to come to you. If you make it easy for them and design the process in such a way that the policy is already incorporated, then employees will want to utilise the process. It should feel like they’re just going through the process, but they’re walking through the actual compliance policy and ensuring that we’re doing all the right things to protect the company, but they shouldn’t have to feel the burden of it.”
The Box Advantage
According to Chuan, unless she can show her people a new process or system that’s guaranteed to be more efficient, she understands there will be a degree of reluctance to accept change initially. “I’m already thinking about the whole change management programme at the beginning of when I need to select a solution, especially if there was an RFP involved, rather than waiting until we’ve selected a solution and are in the implementation phase. To me, that’s too late,” she explains. “Change management happens when a project has been approved for you to go find a solution or when the project has been initiated by your senior executives through an investment committee meeting or via a software review committee. That’s where change management actually starts.”
Chuan is passionate about harnessing a positive company culture. She stresses within Box operating with a mentality of collaboration, transparency and inclusiveness holds the key to success. Chuan explains that one of her best strategies is to imagine herself as an owner of a company as it leads to better decision-making. “It’s about always trying to think about doing the right things by the right people,” she discusses.
Secret sauce
“The culture is so special and it’s truly about walking the talk versus just talking the talk. It’s about making that culture real and living every single day like our two founders, Aaron Levie and Dylan Smith. The culture itself makes it easy to collaborate and build that relationship and that trust with my fellow employees, knowing that the procurement sourcing organisation is there to help protect them and make the company better. Doing it together is so much easier than trying to push through by yourself, and I call it with every deal that ‘it takes a small village’. We have a really, really good relationship with our legal department and with our vendor trust department. I am enjoying a level of engagement and utilisation of my function more than any other company I’ve been blessed to be a part of. The culture at Box is our secret sauce.”
Given the speed at which the procurement function is shifting, being proactive to the latest trends in transformation could be the key between success and failure. Indeed, one of the most highly anticipated innovations of the past few years ChatGPT has captured the imagination of procurement professionals globally. The race to explore the technology and examine how the natural language processing tool could be introduced into processes is already underway. However, its arrival brings with it fresh fears that AI is here to replace humans.
Future-facing
According to Chuan, that couldn’t be further from the truth. “I don’t see it as taking jobs away, I see it as improving our job and work life,” she explains. “Most people don’t want to do those mundane, low-level data entry, tactical tasks anyway. But if you don’t have people or the right system checking that the data going in is of good quality, then you can’t count on the reporting and the analytics on the backend. But the problem is that people don’t want to do it. Wouldn’t it be perfect to have a replacement with AI, robotics and machine learning that could do all of the things that people don’t really want to do anyway?”
Looking ahead
Having said that, Chuan is clear that there must always be some form of human influence and oversight over AI. One of procurement’s biggest challenges in 2024 and beyond is making new tech work for each respective organisation. Chuan believes procurement, and indeed the world, isn’t to be ruled by technology, but instead used as a tool. “There has to be some kind of monitoring and human judgment to QC/QA the results,” she says.
“I don’t think we’re at the point where machines can replace judgemental thinking. I think we need to have an eye on ensuring we’re doing the right thing ethically by people and making sure that we’re using technology responsibly. Let’s say we do all of that, the increase in the level of job productivity that AI could bring to many people should outweigh people’s fears. I don’t think we should be fearing it. I think we should be looking at it from an analytical and strategic view and get excited about the prospect of having all the time to be more innovative and forward-thinking. To me, that’s where the fun and rewarding work is.”
Hear more about Linda Chuan’s passion for delivering change management in procurement in our CPOstrategy Podcast.
This issue’s Big Question explores whether procurement would be better prepared should a similar situation occur.
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COVID-19 affected everyone in different ways.
It caused death, illness, chaos and disruption the world over. It shut down airports, overwhelmed the NHS and left our streets empty. With March 2024 marking four years since the UK announced its first national lockdown, how ready would procurement and our supply chains be in the event of a similar scale this time around?
To go forward, unfortunately, we must look at the chain of events last time around.
Having been declared a global pandemic on 12th March 2020 and with cases of coronavirus accelerating to uncontrollable levels, many businesses’ supply chains collapsed. When the pandemic hit, businesses were left footing the bill for billions of pounds worth of unsold goods, causing inventory-to-sales ratios to rise high.
As a result of lockdowns, organisations were left with no choice but to cut their activity or shut down entirely for a brief period as guidance continued to change at little to no notice. As such, production was halted in factories across the world causing mass layoffs and redundancies across the majority of industries, particularly in manufacturing and logistics, resulting in a reduction in shipping which affected delivery times globally.
Consumer demands also shifted significantly. The demand for personal protective equipment (PPE) as well as the likes of toilet paper and pasta rose dramatically. There was an increase in office furniture amid a surge in demand in remote working. This, alongside the likes of government help such as furlough, helped enable a surge in demand for e-commerce as consumers bought online in record numbers. The shift in demand for goods led to a reduction in experiences such as attending events, eating at restaurants or going out to pubs.
In order to meet this increase in demand, factories pumped out goods quicker than ports could handle them. US ports were full of exports from Asia with too small of a workforce to unload them and too few truck drivers to transport the goods. While ports were full, compounding the issue was a labour shortage, especially truck drivers. And talent remains a concern to this day to procurement and supply chain.
But COVID-19 is only one of procurement’s fires. There’s been the Suez Canal disaster, wars in Ukraine and Israel and inflation concerns to contend with too.
So if the worst were to happen and another ‘black swan’ event was to take place, what lessons has procurement learned?
As a result of the generative AI boom, Jack Macfarlane, Founder and CEO, DeepStream, believes that the industry is in a much stronger position to overcome a future pandemic. “It proved that procurement needed to brush up on its ability to adjust to black swan events swiftly by investing in the right technology and training for the industry to respond to sudden challenges and changes,” explains Macfarlane. “With the growing use of generative AI, the industry is now in a much stronger position to contend with a future pandemic. Generative AI can scrape vast datasets regarding global trends, using the data to predict shortages, price fluctuations and supplier risks before they happen.
“Regardless of the industry you’re in, procurement leaders should always focus on ensuring the right policies are in place to prevent declining quality control in a future black swan event.”
Omer Abdullah, Co-Founder and Chief Commercial Officer at The Smart Cube, agrees that procurement finds itself in a more secure place than that of four years ago. “Procurement is undoubtedly readier than it was prior to the COVID-19 pandemic. CPOs and their teams have learned where potential value drivers are, and they also understand supplier relationships and supply chain intricacies more intimately,” he reveals. “Procurement has also moved further along the digital spectrum. Organisations have tools at their disposal to operate effectively, and on a dispersed basis, should a similar event take place. Additionally, there are now far more risk management solutions in place versus before the pandemic – allowing practitioners to identify problems, and potentially risky situations, before they arise. Add to this more diversified supply chains and established alternative sources for essential categories, and the function is far more prepared than pre-2020.”
However, Abdullah went on to explain that while “no one would be absolutely ready for another unexpected pandemic”, he insists the industry did learn lessons from COVID-19. “It must be noted that there’s still a recency effect at play – procurement professionals tangibly remember the pandemic’s impact,” he explains. “As time progresses, though, this may change but for now, the industry knows how to operate if a comparable scenario were to unfold soon.”
Bindiya Vakil, CEO and founder of Resilinc, believes the pandemic has showcased how better prepared companies are for the next global disruption. “Fortunately, the COVID-19 pandemic taught businesses some valuable lessons. Not nearly as many companies are flying blind in the face of disruption,” explains Vakil. “Many organisations learned that having visibility into their entire supplier network is the foundation for mitigating disruptions. Mapping their supply chain down to the part-site level and then using AI-powered technology to monitor it 24/7 for potential threats gives procurement leaders an early-warning system with actionable insights to make mitigation plans within hours.”
While Vel Dhinagaravel, CEO and President Beroe Inc, reveals that COVID-19 “took the mask off” procurement and exposed the true character of teams. “Some were much more partnership-oriented and some a lot less. Some of these memories endure and will either help or handicap their responses to future disruptive events,” Dhinagaravel reveals. “During 2020-2022 as different countries and regions were in varied states of lockdown there were tremendous constraints on supply chains. As a result, procurement got an opportunity to be part of discussions around product mix optimisation and product pricing which previously had been largely off limits to them.”
He adds that while the future is uncertain, he believes the function is in a healthier position to thrive should the worst happen again. “Post-pandemic, these relationships have endured, and we have also seen these teams consciously building agility and resilience into their operating models and supply chain,” he discusses. “They’ve been using data and analytics as key levers to get visibility of their supply chain and suppliers – identifying points of failure, assessing scenarios, and proactively running simulations to develop diversification strategies. While these actions don’t give procurement a crystal ball to predict the next disruptive event, it puts them in a much better position to be able to handle another pandemic or major supply chain shock.”
And Betsy Pancik, Senior Vice President at Proxima, says that the pandemic was procurement’s “time to shine” with business leaders recognising the importance of a robust procurement function to keep business running smoothly. “COVID-19 caused major supply shortages, which drove price surges and quality issues – many procurement teams had to quickly mobilise capability and capacity to support immediate business needs,” she explains.
“Some companies learned this the hard way by not having the right processes and teams in place, which led to insufficient inventory, spend increases, and strained supplier relationships. Many companies realised the need for alternative suppliers to prevent these issues in the future and started proactively seeking additional sources of supply. Others realised the need for emergency buying procedures, systems, and processes that enable quick action, automated buying, supply chain visibility, and investment in talent – all of which will help businesses respond in a more organised and robust way if a similar situation were to happen again.”
In truth, procurement teams learned a lot from the events of March 2020. Procurement and supply chains can’t be complacent. The function can’t afford to let the mistakes of the past define its future. Supply chains must have alternative methods of supply and Chief Procurement Officers must be agile and ready to respond. Procurement can’t drop the ball and must stay ready.
Edmund Zagorin, Founder of Arkestro, discusses his company’s rise as a predictive procurement orchestration platform.
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“What if there was a better way to compare quotes from suppliers?”
This question led Edmund Zagorin down a road of discovery which culminated in turning an idea into a start-up.
While working as a procurement consultant, Zagorin observed how much time his sourcing teams spent building Excel pivot tables. The problem? Category experts needed to identify potential errors in supplier submissions at the item level before an award scenario could be properly evaluated. Together with childhood friend Ben Leiken, who had risen to become an engineering and product leader at SurveyMonkey, the idea was to find a way to automatically pre-populate text in a sourcing project with little to no manual data entry required from procurement users of suppliers. Leiken had seen firsthand the impact that so-called “smart defaults” could have on survey completion. And Zagorin knew that in procurement, more completions would mean more supplier offers, which could yield better commercial outcomes for the procurement team. Arkestro, then Bid Ops, was born.
Studies show that when procurement is able to predict a plausible range of commercial outcomes ahead of a supplier offer, there is enormous leverage created when the buying entity names the price. Summarising the past decade of research, Lewicki et al.’s 2007 “Essentials of Negotiation” states that “…whoever, the buyer or the seller, made the first offer… determined the final selling price, with higher final prices when a seller made the first offer than when a buyer made the first offer.”
For this reason, Arkestro customers began delivering material higher cost savings outcomes than traditional RFPs and RFQs, a fact that caught the attention of Ariba co-founder Rob DeSantis. Together, Zagorin and DeSantis brought together an experienced management team, led by IBM and Ariba alum Neil Lustig as CEO. Lustig’s experience as CEO of Vendavo, a predictive pricing company used by sell-side teams to achieve better negotiated outcomes, made him ideal to scale Arkestro into a global juggernaut.
Edmund Zagorin, Founder, Arkestro
Today, Arkestro is the leading predictive procurement orchestration platform that enhances the impact of procurement’s influence, especially for large manufacturing enterprises across any procurement activity and spend category that involves collecting a quote from a supplier. Arkestro turns the traditional procurement process on its head: instead of the supplier creating a quote or proposal and then a procurement analyst using competitive offers and benchmark data to decision the desirability of that offer or action an approval, Arkestro customers use a predictive model to benchmark a potential quote before contacting suppliers, putting procurement in a position of leverage to either ask for their desired outcome using an AI-generated Suggested Offer or generate an Instant Counter-Offer to any quote.
Arkestro then helps customers persistently monitor the changes in quoted price for this item across all procurement activities, tracking trends and changes and helping teams proactively uncover the optimal procurement configuration for each item and basket with respect to timing, geography, quantity, lead time and other attributes.
By embedding game theory, behavioural science and machine learning models directly into the procurement process, Arkestro enables customers to dramatically accelerate cost reduction projects, often with existing preferred suppliers and attain their best available cost outcome for every unique item more frequently and at greater scale across their spend. This predictive procurement approach is especially helpful for technical procurement categories such as highly engineered components, materials and capital equipment, as well as categories like metals, chemicals, food ingredients, MRO, packaging, logistics and even IT.
Enterprises who are on a journey to create sustainable and antifragile data quality for their procurement function are turning to Arkestro as the predictive approach eliminates the two manual steps that tend to introduce errors into item-level identifiers: the step where the supplier creates a quote, and the step where procurement analysts have to validate, correct, give feedback and approve it. By using a predictive model to generate and validate supplier offers, Arkestro offers a continuous improvement path for enterprises whose digital procurement journey includes cleansing item-level data to create a true item-based “data foundation.”
Transformation journey
And since its founding in 2017, Arkestro has been on quite the transformation journey. The company has expanded rapidly and scaled its product – as well as for spend categories and industries served – globally. In a little over half a decade, Zagorin, Leiken and their team have created a true enterprise grade AI infrastructure platform that can be embedded into the likes of spend management giants SAP Ariba or Coupa or used as a standalone database and application.
Despite significant success in a relatively short space of time, Zagorin is keen to stress that his initial vision was to solve a problem that he was also experiencing in the market. “Our growth has corresponded to a great degree with a widening of the aperture of where we feel predictive technologies can make an impact for procurement teams,” he discusses. “I think one of the other things just from a paradigm standpoint is that procurement processes involve a lot of manually created data. There’s a lot of data entry on the supplier side, procurement side and on the stakeholder side throughout the process. Every keystroke in every process introduces the possibility of human error.”
Predictive procurement is a new approach that suggests the data before a human user enters it. What Arkestro has introduced is the idea of predictive and working with customers to apply that at different stages of the procurement process through AI. “One of the things that’s also been interesting, and you’ve seen this in other areas of AI, is that you can cross a threshold where at some point in the model it gets good enough that it really provides exponentially more value as it’s being used,” he says. “As opposed to software, which traditional software degrades over time, it gets stale and the interface feels clunky. As new interfaces come out, AI has almost the opposite dynamic where it actually gets better. It’s smarter by itself just by people using it. That’s also been pretty exciting to see.”
Procurement’s evolution
Indeed, the procurement space is in a state of flux. Amid significant transformation driving the function forward, it has never been such an exciting time to be involved in the industry. The rise of AI and machine learning is having a seismic impact with there also being hopes that new technology could reduce the need to bridge talent gaps.
“If you asked five years ago what’s holding procurement back from digitally transforming the operation and living out your full potential, I think a lot of procurement professionals would’ve said how hard it was to hire,” Zagorin explains. “People were saying: ‘Oh we have data quality issues where it’s really hard to actually know what we’ve spent, what our spend per supplier looks like for our core geographies, let alone what we paid for each individual item. We went out and bought a bunch of digital platforms and we’re struggling to gain adoption which is related to the data quality issues.’ This is what I heard from executives when I was working in procurement. Because traditionally, if you have a process and it’s not being consistently used, then it’s not going to accurately represent the most important attributes or business logic of the data that’s moving through it.”
Despite the positive introduction of tech innovation, procurement has also had its challenges. Supply disruption as a byproduct of COVID-19, wars in Ukraine and in Israel as well as inflation concerns, it is fair to say the function has never been more talked about in the C-suite.
“Boom, there’s the next wave of Covid, or suddenly there’s a war somewhere in the world,” he shares. “It has felt like there’s always something and it really creates context switching for procurement teams which is stressful, plus being bad for productivity. This is especially the case for digital transformation projects in procurement, and it’s also demotivating because it makes people feel like they’re not making progress. This then means that the length of the project elongates and you have this kind of stuck-in-the-mud feeling that it’s hard to get quick wins and generate momentum. That’s what customers are thinking about as they are looking in the market to find a true partner not just for their digital journey, but for their AI journey.”
Given the speed of procurement’s evolution, there are voices that believe the function requires a rebrand. Gone are the days of procurement being regarded as a back-office function hidden away out of sight, today it stands as an exciting, dynamic force at the forefront of innovation. “I live in California where job titles are a little bit looser generally,” explains Zagorin.
“If we look at procurement needing a rebrand, the big challenge that I see with procurement is that the structure of a lot of these categories doesn’t necessarily correspond with either the activities associated with them or with the relationships with the suppliers within those categories. What we have in procurement with ‘category management’ is we’re frequently asking procurement professionals to be a jack of all trades and master of none within their categories. Perpetual ‘crisis-mode’ is not a recipe for letting up-and-coming procurement professionals develop the category knowledge and domain expertise that are traditionally necessary.”
Procurement’s bright future
Looking ahead, Zagorin believes there has never been a better time to be working in procurement. “The profession has a lot to offer, and it really is this huge engine of value creation at most big companies,” he explains. “Arkestro serves enterprise manufacturing companies typically with multiple plant locations which buy at both the corporate and the plant level creating a lot of item-level data quality issues. What we’re seeing is the ability for companies to get live on Arkestro in a matter of days and often deliver a payback period for their entire solution costs in a matter of weeks.
“If you look at deployments of enterprise technology five years ago, that’s a stark difference in terms of what procurement’s promising versus what it’s delivering and the time-to-value. We have a new generation of startups, from intake to tail spend to what Arkestro does, more on the strategic side and or on technical procurement categories and direct materials, often starting with a bill of materials and handling all the back-and-forth with the suppliers up to allocation, awarding and the purchase order. You have this cohort of startups that’s just getting bigger and more people are using us to run large physical manufacturing operations. There’s not a lot of direct competition in the space of these growth-stage startups.
“I think what’s going to happen is more and more companies are going to say if it makes business sense and we think there’s tangible value in doing it, then let’s find a way to test and learn. Let’s find a way to try it out to implement it in one geography or for one business unit or category and just see how it works. Five years ago, it was always easy to say we’re too busy or we have other stuff going on. What’s changing today is if you’re not testing and learning constantly from new technology, you’re going to miss out because the stuff that’s happening right now is world-changing.
“Generative AI and novel technical approaches to on-demand superintelligence are going to be as impactful to many enterprises as the development of the internet, not to mention human society at large. The people who are playing around with it and staying curious and running experiments are going to create a lot more value. They’re going to have a lot more fun, and they’re going to build great teams and organisations that lay the groundwork for the next generation of procurement professionals.”
Changing requirements, shifting demographics, and new technologies are conspiring to create a procurement talent shortage.
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Two of the biggest challenges facing procurement leaders are recruitment and retention. Staffing issues were identified as one of the biggest risks facing procurement in the next two years by Amazon Business’ 2024 State of Procurement Report, as the procurement function “broadens in scope while facing staffing shortages”.
It seems as though the more critical procurement becomes to the modern enterprise, the more the cracks in the talent pool begin to show. With increased technological adoption and a growing emphasis on strategic operations (compared to a traditional transaction-focused approach) in the procurement function, solving the talent shortage is more critical than ever.
As we’re still in early 2024, we’ve put together the top five factors driving the talent shortage, as well as how procurement leaders can address them in order to capitalise on the opportunities in the industry and meet the strategic objectives of the business as a whole.
1. Digital transformation
Ironically, the very trend that’s driving the rise in procurement’s fortunes is also one of the biggest factors fueling its talent shortage. As digital transformation reshapes the procurement function from top to bottom, it also means that the skills necessary to succeed in procurement roles are changing. Even a few decades ago, a procurement job was a mixture of relationship management and sending invoices. Now, there’s AI to grapple with, big data analytics, and an expectation that the department will be a key strategic driver of efficiency, sustainability, and supply chain resilience. The skill sets that make a successful procurement team today aren’t the same as they were even a few years ago.
How to fix It: Education and development should be at the forefront of anyone’s mind looking to build a successful procurement function. Upskilling and growing the team’s knowledge base is almost always more cost effective than hiring externally, but you should also know when to look beyond the department to fill a talent shortage, even if that just means sniffing around the IT department for anyone not nailed down.
2. Competition (internal and external)
If (almost) every procurement team is short on staff (well, 86% of them, according to Amazon Business), then it’s no surprise that competition for top talent is fierce. Salaries are rising, and the fact the talent shortage is affecting departments other than procurement means that procurement is in competition, not only with other procurement teams, but with other departments in its company for talent and the money to pay that talent.
How to fix It: Smaller firms without the resources to compete might consider outsourcing their procurement functions, engaging third parties like a business might engage a legal team or a management consultancy.
3. Messaging and awareness
Or lack thereof… Seriously, procurement may be the exciting new frontier of digital transformation and strategic optimisation, but traditionally the department has largely existed as an afterthought—a place where purchase orders go to be rubber stamped. The nature of the role may be changing, but perceptions are harder to shift. If the preconceived notion is that procurement is a stodgy, backwards profession, then it’s unlikely to attract the best and brightest graduates, let alone funnel MBAs into a procurement-specific pipeline early on in their education.
How to fix it: Take a leaf out of the broader supply chain discipline’s book and go on a two-pronged charm and educational offensive. By working with educational institutions and recruiting heavily from adjacent industries with transferable skills (increasingly easy to do given the increasingly digital-first nature of the discipline), new talent can be enticed into the procurement space and developed from there by existing veterans.
4. Demographic shifts
Tied into Number 5, the natural changing of the guard is a large part of what’s ushering in a more discerning labour force. It’s also seeing Boomers and Gen X either exit the workforce into retirement or be promoted up into senior management, where the skills that made them an asset to the company on a day-to-day basis are less important to their roles.
Also, as Millennials age up towards middle management there aren’t as many members of Gen Z entering the workforce to replace them. It’s the same further up the chain as the populous Baby Boomers are replaced with the relatively sparse Gen X.
How to fix it: One way to encourage a smoother transition from one generation to the next—especially in an industry where relationship management plays such a huge role—is to encourage mentorship and development aimed at transferring skills and key knowledge from senior staff to lower (even entry level) positions.
5. The Great Resignation
Sparked by the COVID-19 pandemic, as well as a general rise in pro-labour sentiment across the economy at large, the last few years have seen a spectacular rise in employees quitting the roles that couldn’t be bothered (or afford) to pay them enough or treat them fairly. The consequences for mismanaging teams are much higher in a world where the stigma over changing roles regularly for better pay, hours, and working conditions has more or less evaporated.
How to fix it: It should be obvious, but people keep quitting their jobs, so the message must not be getting through. The age of pizza parties and casual Fridays are over. Employees expect more from their employers, whether in terms of wages, benefits like healthcare, work-life balance, and other meaningful contributions to quality of life. In addition to benefits on paper, fostering positive cultures, creating opportunities for development and salary advancement are all a big part of not only attracting new talent but keeping it as well.
Our cover story this month focuses on the work of Arianne Gallagher-Welcher. As the Executive Director for the USDA Digital…
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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…
“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’.
Could generative AI be the answer to procurement’s problems: fewer workers, more work, and a rising bar for digital literacy.
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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.
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.
Public sector purchasing stands to gain the most from data-driven procurement, and so far has done the least.
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Data-driven analytics have the potential to empower CPOs with greater understanding of their ecosystems, value chains, and internal operations. Big data can shine a light on places where there’s room to create efficiencies, contain costs, and mitigate risk.
In the June 2023 issue of Government Procurement, Steve Isaac notes that analytics can create significant benefits in areas like negotiation, vendor segmentation and yearly planning. He goes on to note, however, that “advanced analytics and data science haven’t exactly broken into the public procurement zeitgeist. It isn’t the subject of keynotes at the annual conferences and meetings … It isn’t a qualification line on most procurement job listings. For most agencies—even large ones—introducing advanced data science is not a priority.”
It’s not altogether shocking that, while the private sector is investing heavily in the potential benefits of data analytics and other digital procurement tools—with the global procurement software industry predicted to exhibit a CAGR of over 10% between now and 2032—public sector procurement lags behind. Isaac notes that it’s a “chicken and egg” issue with the case for a robust data science function hinging on the benefits of that investment being understood, which requires them to be felt, which can’t happen until investment, but… and so on.
However, there’s a case to be made that this delay in data science investment by public sector procurement agencies is one of the critical stumbling blocks also preventing public sector procurement from adopting artificial intelligence, machine learning, and other cutting-edge technology with the potential to solve a lot of the recurring public sector pain points.
Raimundo Martinez, Global Digital Solutions Manager of Procurement and Supply Chain at bp, noted in a recent interview with the MIT Technology Review that “everybody talks about AI, ML, and all these tools, but to be honest with you, I think your journey really starts a little bit earlier. I think when we go out and think about this advanced technology, which obviously, have their place, I think in the beginning, what you really need to focus on is your foundational [layer], and that is your data.” Martinez stresses the importance of building a strong data foundation that allows CPOs to take advantage of emerging technologies in their supply chains.
It’s not as though public procurement departments are short on data either. Isaac argues that, “if data is a precious resource, governments are gold mines.” Governments collect huge amounts of information all the time. The widespread adoption of digital ERP systems, eProcurement, supply chain management software and vendor performance sites is now doing a great job of mining that data.
As noted in a report by researchers from the Government Transparency Institute, a European think tank, “The digitalisation of national public procurement systems across the world has opened enormous opportunities to measure and analyse procurement data. The use of data analytics on public procurement data allows governments to strategically monitor procurement markets and trends, to improve the procurement and contracting process through data-driven policy making, and to assess the potential trade-offs of distinct procurement strategies or reforms.”
From compliance to being an efficiency driver, there are more benefits to sustainable procurement practices than environmental ones.
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The main obstacle cited by procurement leaders (as well as those outside the procurement and supply chain functions) to adopting sustainable procurement practices is cost.
According to Edie’s “The Business Guide to Sustainable and Circular Procurement” report released in November 2023, “Costs and Finances” was considered one of the biggest barriers to “Improving Sustainable Procurement For Your Operation”. In a survey of procurement leaders, 76% considered cost to be one of the biggest issues, compared to the distant second and third options: “Lack of Data” (54%) and “Lack of Understanding on Sustainability (38%).
However, in addition to the fact that the benefits of collective climate action dramatically outweigh its short term costs (existential threats are like that), there are sound arguments to be made for sustainable procurement practices from a business point of view as well.
The sustainability benefits incurred by reducing environmental impact in the supply chain can, according to the Edie report, be a catalyst that helps respond to a plethora of issues and considerations.”
Closing the loop to create a more circular supply chain can be driven from within the procurement function, and can do a lot to protect the S2P process from pricing volatility and supply chain disruption—something increasingly on the mind of industry leaders, as indicated by Dun & Bradstreet’s Q1 2024 Global Business Optimism Insights report, which highlighted “a downturn in global supply chain continuity due to geopolitical tensions, trade disputes, and climate-related disruptions in maritime trade causing both higher delivery costs and delayed delivery times.”
There is also the fact that meaningful adoption of sustainable practice in the S2P value chain can have a meaningful financial benefit to brands as a whole. Sustainability is an issue on which consumers vote with their wallets. According to the World Economic Forum, “sustainable procurement practices can help deliver a 15-30% increase in measurable brand equity and value”. Consumers, suppliers, and partners all value sustainable practice as a meaningful demonstration of company quality, and—especially in terms of public opinion—consumers are becoming savvier when it comes to differentiating meaningful change from empty rhetoric.
There’s more economic benefit than brand value adjustment that comes along with reexamining procurement practices from a sustainability perspective. The same report by the WEF noted that “embedding sustainability into procurement practices can actually help reduce departmental costs for procurement by 9-16%.” Evaluating processes for the sake of exploring green options often exposes existing inefficiencies, siloes and poor planning that can then be rectified rather than being left unexamined.
While business leaders continue to shy away from perceived profit loss as a result of pursuing more sustainable practice in their procurement functions, when handled correctly, it can be a source of more than just emissions wins.
As procurement becomes more important, digitally-driven, and strategic, so has the role of the Chief Procurement Officer.
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15 years ago, the Chief Technology Officer role rarely appeared on a roll call of the C-suite outside Silicon Valley. If you weren’t a tech company, you had a “head of IT” or even just an “IT guy”. Now, “every company is a technology company”, and every boardroom has a CTO. (And a Chief Information Officer, and a Chief Security Officer, and probable a Chief Digital Transformation Officer, and so on).
As technology has changed the way that we do business at a near-molecular level, so too has it changed the roles of the leaders overseeing it. No longer can you have someone in your C-suite who is technologically illiterate, just like you can no longer be a tech genius without at least a little flair for business. As the role has become more integral, it has become more strategic, and the demands placed upon executives and employees have changed.
That’s all ancient history, but history repeats itself. The same thing is happening to procurement right now.
In the last several years, the procurement function has started to show genuine signs of transformation from what David Ingram, CPO for Unilever, calls a “insular, contract-and-process-heavy organisation to a wider, more insightful function that is connected to what is happening in the broader market.”
Hervé Le Faou, CPO at Heineken, goes further, stating that “Fundamentally, the CPO is evolving into a ‘chief value officer,’ a partner and co-leader to the CEO who is able to generate value through business partnering, digital and technology, and sustainability, which are new sources of profitable growth in a shift toward a future-proof business model.”
A white paper from AI procurement company Zycus points out that the role of CPO has grown to include new duties, and preexisting duties have become more important in an increasingly fast-moving, easily-disrupted business landscape. “Today, CPOs are responsible for compliance. They play an active role in merger & acquisitions and participate in strategic initiatives. This is in addition to handling supply risk management, environmental responsibility, as well as the traditional job of ensuring cost-efficiency,” the report’s authors note. “Hence, it comes as no surprise that some companies have started inducting CPOs into the board of directors. In many others, the employee- hierarchies are undergoing a change, with procurement function reporting directly into the C-level executives or the board. The CPOs of today enjoy greater autonomy and improved control over budgets than before.”
As a result, the role of CPO has transformed from a tactical, functional one to something broader, more strategic, and typically more autonomous.
Risk management has risen (almost) to the top of CPOs’ priority list for 2024. Here’s how they’re tackling it.
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If ever the world truly reached a state of “new normal”, that state is one of constant disruption.
Even by the time the COVID-19 pandemic threw the world’s supply chains into a state of utter turmoil in March of 2020, procurement teams were already dealing with a heightened state of disruption. The US-China trade war that defined most of 2019 had barely simmered down before most of Australia was on fire and a US drone strike killed Qasem Soleimani which made an escalating war with Iran look like a very real possibility. Lockdowns, protests, earthquakes, war in Ukraine, spiking oil prices, genocide in Palestine, and both the accidental and purposeful disruption of shipping through the Gulf are just a smattering of the disruptions to which procurement professionals are becoming accustomed.
“After the last few tumultuous years, procurement teams are still facing steep challenges in getting ahead of supplier and supply chain risks,” writes Greg Holt, Product Marketing Director at Interos. “Unfortunately, there are no signs that the heightened frequency of disruptions we’ve seen over the last few years will abate in 2024.”
It’s clear that the procurement teams that learn to manage risk on a daily basis will be the ones that fare best in a world increasingly defined by geopolitical instability and a collapsing climate.
Procurement risk management strategies
Risk management is not a one-time process, nor a single overhaul of policy; managing risk requires constant oversight and frequent reevaluation to ensure you avoid disruption today and are ready for problems that will arise tomorrow.
Streamline your data, break your silos
Procurement departments are often repositories of some of the best risk management data in the whole organisation, gathering large amounts of information on suppliers and other external factors. Procurement departments that take a more purposeful approach to their risk data can quickly establish themselves as repositories of “data, assessments, monitoring and alerts,” becoming “trusted partners who can maintain the risk intelligence needed to support the business with insights, trends and a common view of the risks posed across the extended supplier ecosystem.”
Automate away human error
While there is no shortage of questions when it comes to applying automation to complex tasks (not to mention new pain points and sources of risk), correctly implementing automation can create immediate benefits when used to take repetitive, resource intensive tasks out of human hands. Repetitive, menial tasks are common in procurement systems, and are the most prone to human error. Automation tools can reduce errors and free up time for procurement workers.
Use digital transformation to diversify your supplier ecosystem
There’s a limit to the amount of decision making and supplier diversification achieved by human means. There’s simply too much decision making to be juggled. However, with the help of AI, procurement departments can diversify and adjust their supplier ecosystem much more effectively and to a greater degree. For example, the South Korean government has adopted AI-powered decision making to nearshore a significant portion of its procurement spend. Now, 75.6% of the government’s total procurement spend is now awarded to SMEs through the evolution of its AI platform.
Interest and investment in generative AI has been massive, but does the technology actually have the capacity to meaningfully change the procurement industry?
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Since the arrival of large language model-powered chatbots, like OpenAI’s ChatGPT, the corporate landscape has been frantically striving to invest in and adopt generative AI.
Executives floated (I mean salivated over) the possibility that generative AI could replace a staggering number of roles throughout virtually every sector from law to content creation and entertainment. Well, just look how well that turned out. The legal backlash has, in many cases, been severe and, just over six months into the generative AI hype cycle, cracks are beginning to show.
But what about the applications? Surely all these issues and all this money is going into generative AI technology for a reason, right? Surely we all learned our lesson from the Metaverse, the crypto bubble, NFTs, and streaming and… I guess we didn’t, did we?
Well, actually, there are a few, but they won’t look like the Wild West of content generation we’ve seen so far.
In the retail sector, for example, 98% of companies plan on investing in generative AI in the next 18 months, according to a new survey conducted by NVIDIA (a company with an admittedly vested interest in selling shiny new GPUs). Early examples of adoption in the sector have included personalised shopping advisors and adaptive advertising, with retailers initially testing off-the-shelf models like GPT-4 from OpenAI.
However, many retailers are recognising that the strength (and weakness) of generative AI is that you only get out what you put in. That’s why the technology is, ultimately, useless as a way to replace creative roles like writers and artists. However, as a brand communicator meticulously trained on a specific set of data with carefully updated parameters, it could be invaluable. NVIDIA’s report notes that “many are now realising the value in developing custom models trained on their proprietary data to achieve brand-appropriate tone and personalised results in a scalable, cost-effective way.”
Generative AI trained on a company’s internal and customer-facing databases, web presence, and curated information resources could conversationally recommend, educate, and explain critical information to employees, customers, and business partners effectively and consistently. In an industry where communication relies on clarity and an understanding of large quantities of information, like procurement, the applications suddenly start to look a lot more appealing.
Chatbots and negotiation bots trained to converse with suppliers, programmed with company approved negotiation tactics and the latest pricing information, could automate a great deal of complexity out of the Source to Pay process.
I think the looming issue is the impact of generative AI adoption on a company’s Scope 3 emissions, as 2024 will unquestionably be defined by greater scrutiny on these sources of pollution. However, it seems that however many issues the more widely known aspects of generative AI have, the technology itself could still have a role within the procurement function of the near future.
Does it justify all the investment, hype, and endless industry media thinkpieces? I guess only time will tell.
An overabundance of digital solutions and a dearth of trust in procurement data presents a unique challenge for CPOs.
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The digitalisation of the procurement sector is well underway, with the global procurement software market set to grow by $11 billion over the next decade, with demand for cloud-based procurement solutions and automated and efficient procurement processes driving this revenue growth.
Procurement efficiency drive
However, a proliferation of digital tools across the procurement landscape points to the growing danger of inefficiency and lack of clarity when it comes to CPOs’ digital transformation strategies. A report by procurement software vendor Productiv found that “procurement and IT are being inundated with software access, vendor intake and renewal requests,” leading to a 32% uptick in the number of SaaS apps procurement departments are running, and a steadily growing workload for purchasing departments as they manage, on average, 700 vendors across various indirect procurement categories.
“This patchwork of tools across various steps of the vendor management lifecycle has created technology, team and data silos,” notes Aashish Chandarana, Chief Information Officer, Productiv. “Instead of increasing efficiency, these tech stacks start adding up to a lot of manual work to bring everything together.” The result is less time and less data to support generating meaningful insights to drive the necessary efficiencies that procurement needs to start producing for the business.
Frequently, it also seems, procurement spends so much time managing sprawling, disconnected tech stacks, that it doesn’t have the time to ensure its data is trustworthy either. A SpendHQ report found last year that “79% of non-procurement executives express limited confidence, or none at all, in utilising procurement’s data for making strategic decisions.” CPOs might recognise the critical nature of accurate data in driving decisions, but so far it seems as though the industry is struggling to ensure the accuracy and reliability of procurement data throughout the wider organisation.
Big Data potential
The potential of big data, effectively harnessed, is tremendous in the procurement process—potentially creating true visibility in otherwise murky or completely opaque value chains, highlighting opportunities for cost containment and efficiency, and helping flag risk factors that could preempt disruption.
Organisations looking to maximise the potential applications of data within their organisations need to be simultaneously mindful of the need for a decluttered tech stack and verifiable, trustworthy data if they are to avoid the pitfalls currently affecting the sector.
Costas Xyloyiannis, CEO of HICX, discusses why it’s time for leaders to take a fresh view of the data problem, and plan to reduce emissions.
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The start of the year is a good time for business leaders to consider their progress against net zero commitments. It also nudges us nearer to carbon-cutting milestones, the nearest of which is in 2030. By this time, businesses across the globe need to have halved their carbon emissions. So, if they haven’t already, now is the time to step up delivery.
But first, there’s a barrier to overcome. Behind every credible net zero win, is credible carbon data. The problem is it’s in very low supply. Good data relies on good emissions information from suppliers, and securing it is notoriously difficult.
As 2024 gets off to a start, it’s time for leaders to take a fresh view of the data problem, and plan to notably reduce emissions. To enable net zero success, we can assess supplier relations in three areas: the power play, digital processes, and a principle that works tremendously well in marketing.
Suppliers are in the power seat
Gone are the days when suppliers view their role as subservient. If the Covid-19 pandemic showed business leaders anything it’s just how much they depend on suppliers – and not just a strategically relevant few. In 2020, we saw non-strategic suppliers, such as PPE and IT providers, become crucial to operations overnight. Since then, businesses have continued to need a broader range of their supplier networks. When further supply chain disruptions brought continued uncertainty, that dependence deepened. Today, as businesses require increasing amounts of carbon information, the fact that we need suppliers is cemented.
Despite this, how big businesses work with their suppliers is often outdated and counter-productive to their goal of gathering good information.
Digital processes are in the Stone Age
Bringing supplier relations into the 2020s will take some serious shifts. First, it’s time to assess the digital processes for managing suppliers, which frankly are not up to the task. A hybrid setup of old and new technology, often poorly integrated, stops procurement teams and their suppliers from communicating well. It causes other friction too, like logging in and out of multiple tools just to perform simple tasks, a headache for both parties.
Additionally, the various tools are data traps. Every time a supplier uses a tool, it collects and stores their data. Siloed in this way, supplier data can quickly become duplicated and outdated, because it’s difficult to maintain. Unreliable master data is no good at fuelling automated workflows, and so procurement teams get stuck with manual processes.
These clunky manual processes together with the frustrating communication methods are not a recipe for successful relations. Given that businesses lean so heavily upon suppliers to receive data for carbon reporting, it’s fair to say that the approach to supplier relationships must change.
Friction is building
When starting a business relationship, most suppliers don’t sign up for this level of friction. What they expect is to put in their first purchase order, deliver their first product, send their first invoice, and repeat. In a perfect world, they will simply transact and renew.
In practice, however, the relationship is not so simple. Businesses need more from suppliers than just transacting – for one, they need a significant amount of information for compliance and innovation reasons and of course on carbon activity. So, businesses send their suppliers an abundance of information requests.
Suppliers, then, who simply want to transact, must field these requests. Further bugbears such as manual processes, disparate ProcureTech setups and poor communication practices, make it difficult to respond. A recent Supplier Experience survey found that over a third of suppliers are expected to login to 10 or more systems, nearly half struggle to resolve queries with their biggest customers, and 61% find it challenging to do their best work. Yet, while suppliers don’t find the situation productive, it continues. Why? Because businesses need their carbon information.
Suppliers want a partnership
An important consideration is that suppliers have agency. When they have limited stock or an idea, they can choose who gets it. When it comes to making the effort to dig up vital carbon information they have a choice. This isn’t to say that suppliers purposefully hold information back. This would be unlikely because they too want the relationship to work. But when they are swamped trying to fulfil their original mandates whilst figuring out complex tech and deciphering information requests, the little time and energy they do have to provide information might well go to a customer-of-choice.
It’s no different in the consumer world, where shoppers decide which brands to buy from. Businesses can’t force consumers to buy from them, so marketing teams get involved and work their magic. They encourage people to spend their hard-earned, limited money on products which they may or may not need, by showing them value, often in the form of an emotional appeal.
Similarly, businesses can’t force suppliers to spend their limited time giving carbon information. But they can sweeten the experience. There’s an opportunity, therefore, for Procurement teams who manage suppliers to change things up. Rather than bombarding suppliers with information requests that they will struggle to fulfil, they can borrow the principle of ‘encouragement’ from Marketing. Procurement can show value to suppliers, according to what’s important to them, with the view to receive value in return.
So, as we start a new year, business leaders can take a fresh perspective on how suppliers are engaged. By understanding the dependence on suppliers, this relationship can be improved. Ultimately, by viewing suppliers as partners, simplifying digital processes and “marketing” to them, business leaders can lay the groundwork for net zero.
Luke Abbott, Co-Founder and CEO at Equipoise, discusses the art of accelerating sustainable procurement with artificial intelligence.
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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.
From cost-containment to carbon emissions, here are the 10 things that should be top of mind for every chief procurement officer in 2024.
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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.
In our new feature, Shaz Khan takes us through a day in his life leading operations as CEO at Vroozi.
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The procurement industry is on the cusp of a golden age. The quality and breadth of software that we will have at our disposal will be able to solve pain points in ways we have never seen before. As CEO of Vroozi, every day is spent with the mission of trying to spearhead these innovations in sourcing and procurement tech forward. However, in order to keep a proper work-life balance and not burn the candle at both ends, I have to ensure that my days are organised in such a way that I can maximise productivity while leaving enough room to let my mind and body recharge.
My mornings typically look the same. I wake up every day at 6am and I spend the hour either checking emails or getting on phone calls with partners and clients who are located in different time zones. My wife and I love a great cup of coffee and she brews a mean French press every morning which I happily imbibe as we prep to take our youngest child to school.
After morning drop off, I always do some type of workout from 8am to 9am, a quick morning hike, weight training, or some type of cross-fit routine. Physical activity is important to me and I like to get my blood pumping first thing in the morning. I am based in Los Angeles and I love to take advantage of the favourable climate and conduct my daily morning leadership meetings when possible. We have built a great team and culture at Vroozi and I always want to start the day with complete alignment on our company objectives.
For the rest of the morning, I am involved in a mix of meetings with management, status calls with different departments, and direct sales calls. I try to schedule most of my meetings during these hours so that by 1pm, I can focus on my own work without distraction. I fit lunch somewhere within these time slots depending on when I find an opening, but it ranges from day to day. From 1pm to 4pm, I get to do the work I need to do to review items of importance — from various documents, contracts, or simply just game planning and overall strategy.
As a CEO, there are three major areas I am laser focused on. The first area involves evangelising the overall vision of the company, both internally and to the outside market. It is important to set a solid vision and mission statement for your team but also provide clear guidance to the market on your differentiators, value proposition, and capabilities in the simplest of terms. My second responsibility is Chief Recruitment Officer. I want to ensure that I am actively recruiting and building the best team. Of course, a big part of that involves hiring talent from outside the company, but I strongly believe in promoting from within — ensuring there is a proper promotional path for high performers within the company.
The third responsibility has two components: Innovation and Sales. I subscribe to the notion that tech CEOs should spend 50% of their energy innovating on the product and the other 50% driving sales and distribution for the product lines. CEOs need to educate themselves on the products and services that they’re selling and how to sell it. You cannot offload that responsibility to other people. You should immerse yourself in all aspects of the product and influence the roadmap of that product. That’s why it’s critical to be able to support sales efforts directly or indirectly.
After 4pm, I check in with the management team to see if there are any urgent action items or issues that need to be unblocked. I like to spend a portion of my day with core management to ensure we understand organisation goals and that we’re doing what is needed to achieve them. If we see some slips in the process, we’ll address the things we need to do to fill in those cracks. We are a tech company and much of our focus revolves around the pace and quality of innovation with our software platform. Are we responding to customer needs quickly? How quickly are we approving new features on a product roadmap that we feel is meaningful to the company mission? How quickly are we demonstrating value not only to our existing customers but to prospects in our sales cycle? Are we retaining customers and growing with them?
Shaz Khan, CEO, Vroozi
When selling software, customer retention and expansion is critical. We strive to maintain the same level of enthusiasm, service level, innovation and attention for both our long-standing customers and new customers in a consistent manner. The same way you expect a retail chain at a mall to look and feel relatively the same whether you are in Texas or California, we want our services to be consistent and world-class regardless of region and market.
As top management, you should not be the final verdict in every required key decision. You should be able to empower leadership with a framework for decision making and risk management and trust that business is moving in a continuous state of motion. You have brought leaders in for that very purpose—to lead departments, mitigate risk, and execute strategy. However, problem solving is absolutely a necessary part and art for any C-Suite executive. My approach is very action-based. If there is a problem in a department that I see is not getting addressed to the company’s satisfaction, I will actively pull up a chair and sit down with that department to ensure we don’t leave until we outline an approach to solve the issue at hand.
Leaders need to entrust the team that they have gathered around them to solve day to day problems and challenges. But CEOs also need to be active so that problems in the business can be addressed and remediated quickly.
I also draw a line in the sand where I will never go searching for problems to solve. There’s a trust that you build with your executive team to get that work done. Regardless if I’m handling the problem or one of my direct managers is handling it, I believe that if any item will take you less than 10 minutes to complete, get it done immediately. This is how you are able to streamline business operations without letting issues pile up month after month unaddressed.
Once I deal with any important matters at hand with upper management, I’ll take a break and wind down with dinner with the family or coaching my daughter’s league basketball teams. My last shift of the day is around 9pm where I will check in with our international team and partners and customers. I take any calls required from those overseas teams when it comes to product development or sales opportunities.
After 10pm, I make sure to shut down and prepare for the next day. It’s important to set boundaries when you’re off the clock. I don’t subscribe to the philosophy that you have to work all hours of the day to prove your worth. Being CEO will already require plenty of sacrifice and commitment within the title. You have to always be on and there is no real concept of a weekend or a holiday. But that does not mean that we must burn out. I always try to find time to disconnect and decompress, whether with music, art, or physical activities.
The procure-to-pay industry will see some dramatic and fantastic changes in the next couple of years and Vroozi is positioned to not only adapt to these changes but to lead these changes with our AI-based technologies. There will be an increasing proliferation of technologies within the procuretech ecosystem that will augment company resource pools with smart AI-enabled assistants. These advanced tools will streamline purchasing and payment transactions, and foster improved collaboration between buyers and suppliers, ultimately enhancing supply chain operations.
In the next three years, procure-to-pay will emerge as a vital organisational function, not only driving improved operating margins and enhancing productivity through intelligent document processing but also acting as a key catalyst for innovative supply chain developments between suppliers and buyers. This will involve capabilities that will span predictive analytics on pricing trends, supply chain scenario planning, and digital payment alternatives with AI assistants who will recommend the best course of action to take—both within the software technology map, but also with additional solutions beyond it to further strengthen your business case or outcome.
With these changes on the horizon, I anticipate shifts in my day-to-day. Before COVID, I was on the road for half the year, as I firmly believe you have to be physically present whenever possible rather than relying on management via Zoom or other video conference tools. As we continue to expand in 2024, I expect to dedicate more time to travel, engaging directly with customers, partners, and participating in key events.
As I prepare to hit the road this year, my typical day will often look different. However, regardless of my location, my routine will maintain a structured focus on developing the best possible product and getting that product in the hands of as many customers as possible.
CPOstrategy explores this issue’s Big Question and uncovers if now is the greatest time to be in procurement.
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Procurement has a unique opportunity.
Amid unprecedented digital transformation and innovation, it finds itself in a state of flux and momentum. For professionals who like change, procurement is the place for them. The years of procurement standing still are long gone, its position in the c-suite is only becoming increasingly secure and prominent.
As Covid outlined, businesses need flexible and agile supply chains that are equipped to deal with local or global disruption based on macroeconomic factors. This could be an aforementioned pandemic, wars like the ones we’ve seen in Ukraine and Israel in recent years or other external issues such as the Suez Canal disruption or inflation concerns. Procurement’s time is now.
At DPW Amsterdam 2023, the notion that procurement exists in today’s world as an exciting function that spearheads the c-suite. In comedian and host of DPW, Andrew Moskos’, opening welcome, he noted procurement’s transformation and shouted. “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.” His message was met with loud applause from a capacity crowd at former stock exchange building Beurs van Berlage.
Michael van Keulen, CPO, Coupa
According to Michael van Keulen, Chief Procurement Officer at Coupa, it’s the feeling of ‘no two days are the same’ which keeps him energised and feeling refreshed about meeting new challenges in the space. “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. It’s about how you drive the competitive edge and how you drive value despite that. Procurement is the best gig in the world. It’s great that more people have started to see that now too.”
Right now, generative AI is the latest craze causing quite the buzz in procurement. Indeed, its noise is loud with its true influence yet to be determined. But it’s worth remembering generative AI didn’t start with ChatGPT in 2022. Chatbots actually go 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 isn’t just making waves in procurement but across industries globally too.
Daniel Barnes, Community Manager, Gatekeeper
For Daniel Barnes, Community Manager at Gatekeeper, the stakes are high. As a self-confessed change agent, he believes procurement stands at a make-or-break moment. “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 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 a willingness to change 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.”
Alan Holland, CEO, Keelvar
According to Alan Holland, CEO of Keelvar, he is bullish and optimistic about procurement’s future, stressing that decision-making for the function is easier than ever before. Holland affirms tomorrow is “very bright” as procurement enters an era with intelligent software agents that 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. Procurement can be far more influential in how successful their companies can be. It’s a game-changer.”
Scott Mars, Global V
Scott Mars, Global Vice President of Sales at Pactum, affirms procurement’s in its golden age given the number of vendors operating within the procuretech ecosystem has hit soaring heights. He tells us, “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. 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.”
Stefan Dent, Co-Founder, Simfoni
While procurement, like many industries, is still plagued by talent shortages, there is hope that AI could hold the answer. But while its influence is crucial in one hand, is there a risk that the industry could go too far the other way and become over reliant on technology? Stefan Dent, Co-Founder at Simfoni, believes soon Chief Procurement Officers will soon be thinking differently about their workforce. “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. I think for graduates coming into procurement, they’ve got the opportunity to play with digital which is a wonderful thing.”
Matthias Gutzmann, Founder, DPW Amsterdam
Today, procurement, and its professionals, find itself amid meteoric change. Indeed, its future could be anything. Matthias Gutzmann, Founder of DPW Amsterdam, believes it is time for procurement to create a buzz about the profession. “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.”
For our first cover story of 2024 we meet with Lloyds Banking Group’s CIO for Consumer Relationships & Mass Affluent,…
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For our first cover story of 2024 we meet with Lloyds Banking Group’s CIO for Consumer Relationships & Mass Affluent, Martyn Atkinson, to learn how an ambitious growth agenda, combined with a people-centred culture, is driving change for customers and colleagues across the Group.
Welcome to the latest issue of Interface magazine!
Welcome to a new year of possibility where technology meets business at the interface of change…
Lloyds Banking Group: A technology & business strategy
“We’ve made significant strides in transforming our business for the future,” explains Martyn Atkinson, CIO for Consumer Relationships & Mass Affluent at Lloyds Banking Group. “I’m really proud of what the team have achieved. There’s loads more to go after. It’s a really exciting time as we become a modern, progressive, tech-enabled business. We’ve aimed to maintain pace and an agile mindset. We want to get products and services out to our customers and colleagues. We’ll test and learn to see if what we’re doing is actually making a meaningful difference.”
AFRICOM: Organisational resilience through cybersecurity
We also speak with U.S. Africa Command’s (AFRICOM) CISO Ryan Larsen on developing the right culture to build cyber awareness. He is committed to driving secure and continued success for the Department of Defence. “I often think of every day working in cyberspace a lot like counterinsurgency warfare and my time in Afghanistan. You had to be on top of your game every minute of every day. The adversary only needs to get lucky one time to find you with that IED.”
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ALIC: Creating synergy to scale at speed with Lolli
Since 2009 the Australian Lending & Investment Centre (ALIC) has been matching Australians with loans that help build their wealth. It has delivered over $8.3bn in loans to more than 22,000 leading Australian investors and businesses. Managing Director Damian Brander talks ethical lending and the challenges of a shifting financial landscape. ALIC has also built Lolli – a broker enhancement platform built by brokers, for brokers.
Sime Darby Motors: Driving digital, cultural, and business transformation together
Sime Darby Berhad is one of the oldest and most successful multinational companies in Malaysia. It has a twin focus on the Industrial and Motors sectors. The company employs more than 24,000 people, operating across 17 countries and territories. Sime Darby Motors’ Chief Digital & Information Officer Tuan Jean Tee shares how he makes sure digital, cultural, and process transformation go hand in hand throughout one of APAC’s largest automotive multinationals.
Also in this issue, we hear from Microsoft on the art of sustainable supply chain transformation, Tecnotree map the key trends set to impact the telecoms industry in 2024 and our panel of experts chart the big Fintech predictions for the year ahead.
Data is the key to unlocking new opportunities and managing risk, but capitalising on the opportunities of data in procurement is not without challenges.
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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.
B2B procurement is headed for a new, more dynamic, digitalised era defined by a more strategic approach to traditional processes and new challenges.
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The procurement industry isn’t a back-office function anymore. Much like the transition of IT departments from obscurity to the C-suite over the past 10-15 years, procurement is making its way into the limelight.
“We are entering a new era of smart business buying where senior leaders are understanding the impact procurement can have on efficiency and overall company success,” said Alexandre Gagnon, vice president of Amazon Business Worldwide, at a recent Amazon Business event attended by more than 1,000 procurement leaders across the public and private sectors.
“The procurement function is now cross-disciplinary, spanning both functional and strategic purviews as buyers are planning to invest more in technology and optimisation while future-proofing their companies and organisations,” added Gagnon.
Procurement’s transition
The 2024 State of Procurement Report released by Amazon Business in conjunction with the event points to an array of indicators that the nature of procurement is fundamentally changing. From the traditional procurement workloads concerned with day-to-day purchasing, to a more recently emerged responsibility of future-proofing the business against disruption (by another pandemic, for example), procurement’s goals are “ever-growing”.
In order to keep up, the discipline is “transforming at lightning speed,” claims Gagnon in the introduction to the report.
Data gathered from over 3,000 procurement professionals supports this inclusion. Key findings include the fact that 95% of decision-makers say their organisation currently has to outsource at least a portion of their procurement to third parties, the fact that 95% of decision-makers say their procurement function has “room for optimisation”, and 53% of respondents who say their procurement budgets will be higher in 2024 than they were this year.
Tech-driven procurement
Technology investment is expected to be high on the agenda, as procurement leaders attempt to bring increased visibility and resilience to their departments. A remarkable 98% of decision makers said they were planning to invest in analytics and insights tools, automation, and AI for their procurement operations, with the (anonymous) VP of purchasing at a major global bank in the US saying that “Making investments in the right tools and technology [is critical] because you rely on data as a procurement organisation. There is … spend data, contractual data, invoices, and more. Without the right tools in place, you can only do so much [with your data].”
Reflecting on the changing role of procurement in the modern enterprise, Gagnon added that “Ultimately, procurement not only keeps operations running, but plays an integral role in achieving key organisational goals, and with smart business buying, companies have procurement solutions to serve as a growth lever for organisations.”
The assistant will use natural language processes and AI to perform “thousands of procurement tasks”.
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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.”
Sapio Research found that just 48% of organisations are confident they are accurately reporting Scope 3 emissions through their P2P process.
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More than half of the 850 procurement leaders in the US, UK, and Europe surveyed earlier this year could not claim to be “very confident” in their organisation’s ability to accurately report Scope 3 emissions, according to a new study conducted by Sapio Research and commissioned by Ivalua.
While 48% of leaders were confident in the accuracy of their companies’ reported emissions figures, nearly two-thirds (62%) of leaders surveyed admitted that “reporting on Scope 3 emissions feels like a ‘best-guess’ measurement.”
A significant majority of the organisations were confident that they are on track to meet net zero targets. However, the report also found that many don’t have plans in place for:
Adopting renewable energy (78%).
Reducing carbon emissions (68%).
Adopting circular economy principles (72%).
Reducing air pollution (67%).
Reducing water pollution (63%).
Procurement’s role
It has long been recognised that procurement has a vital role to play in the reduction of environmental impact in organisations’ supply chains, with as much as 90% of a company’s emissions falling within the Scope 3 band.
“Organisations are aware they must urgently address sustainability and understand the cost consequences of not doing so. But this lack of confidence paints a negative picture,” comments Jarrod McAdoo, Director of Sustainable Procurement at Ivalua.
“A lack of perceived progress could fuel accusations and fears of greenwashing, so it’s important to remember that obtaining Scope 3 data is part of the natural maturation process. Many sustainability programs are in their infancy, and organisations need to start somewhere. Estimated data can help determine climate impact and contribute to building realistic, actionable net-zero plans. Over time, organisations will need to make significant progress on obtaining primary Scope 3 data and putting plans in place, or risk financial penalties as well as ruining reputations in the long run.”
Regulatory and public scrutiny continues to mount against both public and private sector polluters. A report released in December highlighted the devastating annual emissions by militaries around the world, finding armed forces to not only be one of the world’s largest fossil fuel consumers (5.5% of all global emissions), but that the US military alone has a larger environmental impact than some developed countries. The scale of military contribution to the climate crisis, in addition to the lack of transparency when it comes to disclosing those figures, is a major issue that is also echoed in the private sector of the civilian world.
Are some companies ‘unintentionally greenwashing?’
In the private sector, both activism and legislation continues to move (too slowly, but it’s a start) against corporations responsible for the climate crisis and pollution. In the UK, the High Court in London ruled that Nigerians affected by oil spills the corporation promised to clean up can bring legal action against the British multinational. The state of California is itself suing America’s largest oil companies for their role in exacerbating and covering up the effects of climate emissions for decades.
More recently, corporations that rank among the world’s largest polluters have been accused of adopting environmentally friendly rhetoric in order to make themselves appear more committed to environmental sustainability than they, in actual fact, are. The practice, known as “greenwashing”, has been criticised by politicians, activists, and members of the scientific community.
McAdoo notes that the inability to accurately report Scope 3 emissions—taking a “best-guess” approach—could be a contributor to organisations looking to avoid unintentionally greenwashing their emissions data by misrepresenting themselves.
“Nearly two-thirds of U.S. organisations agree that an inability to measure supplier emissions accurately makes it hard to turn words into action,” McAdoo continued. “There is a clear need to adopt a smarter approach to procurement. Organisations need granular visibility into their supply chains to ensure they can measure the environmental impact of suppliers but also collaborate with suppliers to develop improvement plans. Only with this transparency can organisations showcase meaningful sustainability progress and avoid accusations of greenwashing.”
Coupa Software and Acquis Consulting Group has released an eBook offering tips on how to navigate the challenges of the procurement landscape.
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A new eBook from Coupa Software and Acquis Consulting Group providing guidance on how to navigate the challenges of the procurement landscape has been released.
The eBook offers real-life success stories from the likes of Dent Wizard, Sun River Healthcare and Eyecare Partners while uncovering essential strategies for enhancing efficiency and driving growth.
Additionally, the eBook provides expert guidance on mastering procurement and compliance in today’s economic landscape as today’s leaders are forced to re-examine their internal processes, particularly when it comes to business spend management.
As a result of rising inflation, as well as the cost of capital and labour, it has meant businesses need to identify new ways to improve margins, drive sustainable growth and scale productivity. However, many existing solutions at mid-market companies are already stretched to the limit.
This led to Dent Wizard, Sun River Healthcare and Eyecare Partners coming to the same conclusion – digital transformation can take painful and antiquated processes and make them stress-free and efficient.
The new eBook is considered a must-read for leaders seeking to overcome the complexities of today’s procurement space amid a challenging economic climate.
To find out more about how Dent Wizard, Sun River Healthcare and Eyecare Partners recommend organisations can transform their business spend management, download Coupa and Acquis’s free eBook here.
AI and Machine Learning-powered analytics could help security teams flag and prevent fraud in their procurement functions.
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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.”
The top seven trends driving procurement’s transition from the back-office to the boardroom in 2024.
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The year ahead has the potential to be a watershed moment for the procurement industry, as infusions of leading edge technology and process innovation conspire to enable procurement’s shift from spend management to strategic leadership. Increasingly, leadership is recognising the potential of procurement to guard against risk, drive sustainable practice, and be a key enabler in helping the business identify and capitalise on new opportunities.
Procurement is undeniably on a journey from being a back-office cost-cutting function to a key driver of strategic wins for the business. In 2024, procurement teams should continue to capitalise and build upon existing wins as they continue their optimisation journey. For those lagging behind, the time to begin their transformation from functionary to value orchestrator is now.
2. More space strategic, value-add work
A vast majority of decision makers surveyed by Amazon Business last year revealed that they needed to outsource elements of their procurement function to a third party. It’s a known fact that the current procurement industry struggles with a lack of the necessary human resources, skills, and systems to keep pace with mission critical operational demands. With those demands only expected to get more complex in 2024, procurement teams need to find ways to spend less time on low value manual work and refocus their efforts on high-level, strategic activities. Adopting low-code platforms, AI, process automation, and other technology could be a way to execute on this necessary transformation.
3. More investment (and hype) surrounding AI, automation, and analytics
2023 was the year when generative AI exploded into the spotlight, attracting massive amounts of hype, interest, and investment. However, just a few weeks into 2024, you can see excitement starting to cool, as organisations struggle to find effective applications that justify the price of admission.
In 2024, we can expect to see massive AI utilisation in data analytics, in process automation, and other elements of the S2P process, but generative AI adoption in ways that produce meaningful benefits are likely more than 12 months away.
4. Low code, higher automation in S2P platforms
Managing the source to pay process is increasingly complex, and time consuming to orchestrate. In 2024, with pain points like this increasing complexity (due to climate instability, compliance regulations, etc.) and talent shortage, the adoption of more low-code platforms will increase the ability of procurement teams to automate significant elements of their operations.
5. Scope 3 comes under greater scrutiny
A recent report found that around two thirds of procurement professionals in the US, UK, and Europe feel that their Scope 3 emissions reporting is more “best-guess” than hard fact. With regulatory scrutiny—not to mention public opinion—growing less and less lenient with regard to greenwashing and climate inaction, procurement teams need to make 2024 the year they take meaningful action to create transparency beyond Scope 1 and 2 emissions.
This obviously represents a significant challenge. Scope 1 and Scope 2 emissions are relatively straightforward compared to the sprawling, often opaque morass of Scope 3. Inaction is not an option, however, if organisations are to meaningfully pursue their net zero by 2030 targets.
6. Mission-critical Big Data
Collecting, managing, and effectively drawing insights from big data is and will remain one of the defining challenges for the modern enterprise. A proliferation of data from IoT devices, cloud-based platforms, and a general increase in the amount of technology being integrated into the procurement process (not to mention an increase in awareness of how important it is to gather as much data as possible) is leaving some industry players overwhelmed.
Vast silos of data with no meaningful way to draw insights from the unstructured mass create more problems than they solve. 2024, then, should be the year that procurement not just recognises the importance of data, but the absolute criticality of putting systems in place to manage it effectively.
7. AI achieves greater autonomy in planning tasks
Even as the shockwaves of the COVID-19 pandemic recede from the global supply chain, macroeconomic forces still conspire to place increased pressure on supply chains and procurement teams. Forward planning is more important than ever and procurement professionals are finding themselves increasingly struggling to meet the demands of “a more complex, multi-tiered, more nuanced world.”
Using artificial intelligence to more effectively run scenario analysis could have a transformative effect on the S2P process, allowing low-touch planning driven by AI to eliminate manual work, analyse data at scale, identify and flag anomalies, and even start making suggestions to humans as to how to proceed. There is still some doubt over AI’s ability to handle tasks consistently with minimal human oversight, but the tide of public opinion is starting to change.
New data from Emergen Research suggests the procurement technology market will be worth approximately $17.9 billion in 2032.
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Increased adoption of cloud services, artificial intelligence (AI) and process automation are driving strong growth in the global procurement software market.
According to a report released this week by Canadian market research firm Emergen Research, the global procurement software market is expected to register a rapid revenue CAGR of 10.4% over the decade following the 2022 financial year—from a global valuation of $6.67 billion at the start of the forecast period to $17.90 billion in 2032.
The report’s authors found that “increasing use for cloud-based procurement solutions and rising need for automated and efficient procurement processes are key factors driving market revenue growth.”
The talent challenge
In the face of a talent shortage—exacerbated by growing demand and increasingly supply chain complexity—the report expects to see cloud-based procurement systems attain widespread adoption.
“Cloud-based procurement systems have many benefits such as easy deployment, flexibility, scalability, and lower infrastructure costs. This software allows for real-time access to procurement data, leading to better informed and timely decisions,” note report authors. “In addition, this software also makes it possible for companies to access procurement software at any time and from any location, which makes it easier to manage procurement procedures globally.”
Is automation the solution?
Artificial intelligence and machine learning will also support procurement teams in overcoming the pain points presented by the skill shortage, stricter regulations, and supply chain instability. The report suggests that the technologies—if correctly adopted—could be instrumental in “helping companies to automate increasingly complex procurement processes while enhancing decision-making.”
However, high up-front costs may present an insurmountable barrier to entry for some organisations, and a deterrent for others, the report notes. These costs include software licensing fees, implementation costs, training expenses, and any required hardware upgrades. Emergen researchers also note that concerns over data privacy and cyber security could slow adoption of cloud-based solutions.
Kathleen Anne Harmeston discusses some of the key items sitting on the 2024 agenda amid seismic digital transformation.
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Procurement, in my opinion, has experienced one of the largest direct knock-on effects of unprecedented inflation and geopolitical issues over the last two years (including supply-chain issues caused by Brexit, the US-China Trade War, and European instability of the Russia-Ukraine War).
Procurement’s challenges
We are seeing this impact in the form of cost increases across nearly all industries and challenges in securing and maintaining reliable, dynamic, and cost-effective supply partners.
Boardrooms are struggling to understand why they should invest further funds to bolster the CPO remit, including investment to help them technologically revolutionise the business and the function. Possibly this is due to a lack of visibility on how procurement can be a high performing business partner, which offers a proactive, seamless, automated and value-adding service supporting profitability and ESG efforts. CPOs are now tasked to sell the benefits of investing in procurement over and above the safety blanket of ‘cost reduction’ as the signature sell.
The above obstacles will also be underpinned by the phenomenal opportunity of integrating AI into the procurement function alongside many other digitisation opportunities. Those companies who welcome technological innovation of their P2P systems and supplier management processes are likely to have better competitive advantage and risk management as a consequence.
The general consensus I have gained from speaking with my peers are:-
Profitability (of course).
Agility and digital readiness within the P2P and business management systems.
Delivering ESG for the firm and not just giving “lip service” to the exercise.
Risk management within the elaborate complex web of supply chain networks.
Driving Innovation through the supply chain.
2023 saw the same old issues in limited control over and transparency in third-party spend. This was due to supply instability, semi manual processes, rising costs and value leakage from off-contract spend. With this in mind, boardrooms are more likely than ever to push back on the CPOs call for further investment. But this creates a circular argument of investment needed in the function, combined with business’ commitment to approved supplier compliance to meet the board challenges in 2024.
Moving to 2024
Digital readiness has become imperative as team members continue to work in hybrid or remote ways, but also because inefficient manual processes and limited digital visibility and automation of spend management causes significant lost opportunity and risk. Recent studies from KPMG and SAP show that 37% of procurement processes are still semi auto and manual and 77% of Executives complain they cannot access a good spend data real time. These studies have been further supported by research from Ivalua which states:
53% of procurement and supplier management processes have yet to be digitised.
22% of procurement teams estimate that they are wasting their time each year dealing with paper-based or manual processes.
50% of procurement leaders think the rate of digitisation within procurement is too slow.
47% say existing procurement systems are not flexible enough to keep up with constant change and market uncertainty.
Inefficient procurement processes often result in disorganised data management and reporting -ultimately leading to executive frustration. These issues further invite problems such as duplication of payments or delays in payment.
What are the technological innovations for 2024?
The shape and structure of the procurement division in the future will change quite dramatically with the ever-increasing integration of AI. When the second wave of more sophisticated generative AI software arrives – which improves its reliability of output, data leakage, and data security – AI and machine learning may well plug the gap of manual human input for certain portions of the procurement division. With AI (or any kind of automatic digitization for that matter) we will soon embrace the automation and celebrate the headcount savings in procurement, and instead ask for investment in greater strategic skills and the next level of development for our procurement staff.
AI truly has the potential to transform procurement. From specifically supply chain management, to helping with demand forecasting and inventory management to logistics optimisation, new product development cycle time improvement, and supplier engagement. AI will also help with managing our spend via creating predictive reports for cost reduction opportunities.
Specifics for CPOs look for in 2024
Advanced AP Invoice Automation Platforms
Advanced accounts payable invoice automation platforms process invoices in any format with good speed and accuracy. It means going touchless eliminates the pain of managing paper invoices. By reducing the cost per invoice, shortening cycle times, and increasing spend control, these cloud-based electronic invoicing systems offer built-in matching and automatically identify errors, duplicates, and overpayments. They ensure payments are only made for ordered and received goods. Many APIA platforms can be tailored to specific organisational needs. This is with features like cognitive OCR invoice capture, smart coding, and invoice approvals to further streamline the process. These platforms can integrate with existing financial or ERP systems for seamless digital payments. While their advanced features like duplicate invoices and fraud checks, along with integrated exception handling, demonstrate the future of invoice processing in the P2P cycle.
Mobile P2P solutions
Mobile platforms are becoming more useful and available in the P2P process by shifting to cloud and software-as-a-service (SaaS) solutions. The convenience of mobile apps allows users to manage procurement activities on the go. This is also while offering real-time access to crucial data and processes. This mobility not only increases efficiency but also enables quicker decision-making. CPOs can also integrate their P2P systems with other cloud-based applications, such as ERP, CRM, and BI, to create a seamless and holistic view of your procurement performance.
Data analytics and visualisation
Data analytics tools are the applications that enable you to analyse your P2P data in an actionable way. These tools will help you improve your decision making, performance measurement, and reporting. For example, you can use dashboards, charts, and graphs to visualize your spend patterns, savings achievements, and compliance levels. You can also use predictive analytics, machine learning, and natural language processing to generate forecasts for your P2P strategies. Visualisation software has also made huge strides in being able to share new product development ideas. This is also while helping progress the supplier collaboration and management agenda.
Integration of blockchain for greater transparency and security
Blockchain technology is rapidly transforming the P2P sector with its unparalleled transparency and enhanced security features. By integrating blockchain, businesses are able to establish immutable records for every transaction. This will significantly boosting both transparency and security within their procurement processes. This technology is particularly effective in fraud prevention and compliance adherence and supply chain tracking. It ensures that each transaction is reliably recorded and easily verifiable, underscoring its growing importance in the P2P landscape.
Supplier collaboration
Supplier collaboration is the practice of building long-term and mutually beneficial relationships with your key suppliers, based on trust, transparency, and value creation. It can help you improve your supplier performance, reduce risks, and drive innovation. For example, you can use supplier portals, e-procurement platforms, and digital contracts to communicate with your suppliers more effectively. You can also use supplier scorecards, feedback mechanisms, and incentives to monitor and reward your suppliers for their performance.
Sustainability and social responsibility
Global supply chains are complex and can be multi-tiered. This presents a serious challenge for CPOs with limited visibility into the supply chains for sustainability and social responsibility. AI-powered reporting will enable teams to keep track of supplier and product information. This is via using global data sources from different countries, regions and languages. The key is to raise the issues and gain the sponsorship to address the risks proactively. Mapping systems and technology can help but only if this policy is embedded within the business. There is movement from tier one contract management of supply chains to managing the supplier networks.
User experience and engagement
User experience and engagement with your P2P system, such as ease of use, functionality, design, and feedback is important for the function. Alongside engagement, it can help you increase your user adoption, satisfaction, and loyalty. For example, you can use mobile apps, chatbots, voice assistants, and gamification to make your P2P system more accessible, intuitive, responsive, and fun.
Concluding remarks
The P2P landscape in 2024 will be shaped by technological advancements and a shift in business priorities. From the integration of AI and blockchain to the emphasis on sustainability and mobile solutions, these trends are redefining how companies approach procurement and supplier relationships. Despite executive reluctance to engage in further investment, during periods of inflation and market stagnancy, digitisation must be embraced with the option to either pivot or perish. Adoption of new systems and processes requires training and capacity planning within procurement departments. This is so that the business-as-usual services can continue without a downturn in service levels. Businesses that adapt to these changes will enhance their operational efficiency and position themselves strategically for future growth and success.
The five most important challenges for procurement teams to meet in 2024 and beyond, according to Amazon Business.
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It’s no secret that procurement is undergoing the same backroom-to-boardroom transformation (dare I say “glow up”) that the IT department went through over the last decade. If every business in 2023 is a technology business, then by the end of the decade, it doesn’t feel unreasonable to claim every business will be a procurement business.
However, with prestige and importance comes pressure. The modern procurement function already faces challenges, from supply chain disruptions and rising prices to the existential need to reduce emissions, which will only grow more complex as the discipline moves close to the forefront of the modern enterprise. It’s no wonder that, while Amazon Business’ “2024 State of Procurement” report found that the majority of procurement budgets (54%) were set to rise next year, an overwhelming number of respondents confirmed that their procurement functions are in need of optimisation.
With 2024 still in its first month, we’ve broken down the five highest priorities for procurement leaders to focus on over the next 12 months, as well as heading into 2025.
1. Retaining and developing existing talent
Lastly, even more important than attracting new talent, the number one priority for procurement teams in 2024 will be retaining the talent they already have, and developing those procurement professionals to marry knowledge of the business and industry with an understanding of new trends, techniques, and technologies.
2. Attracting top talent
A report released by Gartner in December found that more than 85% of procurement directors and executives believe that their teams contain “adequate talent” to meet the future needs of their organisations’ procurement function. The demands placed on procurement professionals are changing, as the adoption of new technologies make the profession more data-driven and strategically focused on business value creation than ever. An evolving profession means attracting new talent will be a vital priority for procurement leaders in the coming years.
3. Reducing purchasing costs
Cost was king before the pandemic and, while procurement teams may have more than just their bottom line in mind, it’s still one of the most important differentiators for the function. Not only is procurement a key driver of efficiency within the modern enterprise, but costs are rising across the industry, with Amazon Business reporting that “Costs and Budgets” were the leading risk factor facing procurement over the next two years.
4. Refining procurement practices across organisations
Even as a newly celebrated discipline with a greater role to play in the modern organisation, a key indicator of a successful procurement strategy is that, most of the time, other departments don’t know it’s there. A successful procurement function empowers other parts of the business to make purchases with autonomy, supporting them in making decisions that are compliant, efficient, and cost effective. Developing the procurement practices that create good procurement habits across an organisation—not just in the procurement department—will be a key priority for procurement teams going forward in 2024.
5. Building more resilient, agile supply chains
If the 2020 COVID-19 pandemic taught us anything it’s that disruption is not a matter of “if” but “when”. Global supply chains—driven almost exclusively by cost-cutting parameters for decades—were decimated by the pandemic, and in the wake of lockdowns it has emerged as hard-won wisdom that the procurement departments of the future need to look at more than cost when building a supply chain. In the Amazon Business report, 81% of respondents revealed that they have internal or external mandates to purchase from different types of certified sellers.
Blockchain promises added transparency and security for the procurement process, but are the benefits worth the price of admission?
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Blockchain—the decentralised ledger technology that powers cryptocurrencies and NFTs—could be an immensely disruptive force in the procurement and supply chain management sectors. We’re going to take a look at how blockchain might impact procurement, and whether it represents a meaningful innovation or if the costs outweigh the benefits.
Blockchain: the hype
Using a combination of different technologies, including distributed digital ledgers, encryption, asset tokenization, and immutable record management, blockchain creates an unbroken and tamper-proof (in theory) chain of information.
For example, storing the entire service history of a vehicle, the transaction history of a house, or the provenance of a piece of art on a blockchain theoretically renders it trustworthy and incorruptible. A potential buyer could review the timestamped information included on the blockchain and be confident in its accuracy. In principle, blockchain could reduce or remove the need for intermediaries in highly regulated and complex transactions—like real estate, for example.
“Have you bought a house lately? Imagine if you could have transacted with the seller directly, even though you had never met, confident that the deal would be recorded in a way that neither of you could change or rescind later,” write Gartner analysts David Furlonger and Christophe Uzureau, suggesting that “You wouldn’t have to reconcile rafts of personal information with a real-estate agent, mortgage broker, insurance agent, property inspector and title company” if you were making a transaction using the blockchain.
Furlonger and Uzureau suggest that record keeping and verification is just the beginning and, once developed and combined with other technologies (characterised by lots of hyper and limited real world applications) like artificial intelligence (AI), the Internet of Things, and the Metaverse, the real potential of the technology will be unleashed, creating “whole new social and economic constructs in the peer-to-peer age of Web3.”
Blockchain: the reality
In actuality, Blockchain outside of applications for cryptocurrency isn’t actually… very interesting? It’s certainly not new. Blockchain technology not used to underpin a cryptocurrency is just a distributed append-only data structure. Often there are some users that are allowed to make additions to the structure. In the real estate example used Furlonger and Uzureau, that might include the homeowner, a surveyor conducting an appraisal of the property, the utility company providing electricity and water to the house, and professionals hired to perform maintenance on the property. A private blockchain could collect and verify the history of a property like rings on a tree, and provide an authoritative account that is, in theory, free from tampering. The thing is, that sort of verification is called a consensus protocol, and they’ve been around since before the 1960s—as have append-only data structures.
The reality is that the new, shiny applications for blockchain aren’t actually very useful. Supposedly, Blockchain technology offers up a way to verify information (or conduct a transaction) without relying on an intermediary, or blindly trusting a third party. “Trust-less” is the phrase that gets thrown around a lot. However, the result is often that you’re just trusting the technology underpinning the blockchain over a human or a public institution.
Building trust
As Bruce Schneier pointed out in an article for WIRED, “When that trust turns out to be misplaced, there is no recourse. If your bitcoin exchange gets hacked, you lose all of your money. Your bitcoin wallet gets hacked, you lose all of your money. If you forget your login credentials, you lose all of your money. If there’s a bug in the code of your smart contract, you lose all of your money. And if someone successfully hacks the blockchain security, you lose all of your money.”
One glaring example was the 2019 case of cryptocurrency exchange CEO Gerald Cotten, who died while being the only person with the password necessary to access US$145 million worth of other people’s Bitcoin. Far from being trustless, it would seem the people who lost access to their money were placing their trust in a single individual who died, leaving them no physical or legal recourse to get their money back.
There’s also the very valid criticism of blockchain-based technology that it’s an environmental disaster. NFTs caught most of the heat for this over the past few years, but all blockchain-based technology needs to be stored somewhere in a constantly active server. As noted by the NASDAQ in a report from earlier this year, “The energy consumption of blockchain technology results in significant greenhouse gas emissions, which contribute to climate change.”
So, blockchain is bad?
Not necessarily. I, personally, will stake what reputation I have on the fact NFTs and cryptocurrencies are misguided and valueless gimmicks at best and insidious, cynical techno-cults (that burn fossil fuels more enthusiastically than the UV lights at the Bored Ape convention burned out crypto bros’ retinas) at worst.
However, remember the boring version of blockchain technology? The append-only data sets we talked about before may not be new or especially sexy, but they’re an element of blockchain technology that could be incredibly useful for the procurement sector.
Blockchains in procurement
The procurement sector has traditionally struggled with opacity. Sourcing goods—especially from overseas markets—through networks of distributors and middlemen can muddy the waters and conceal vital steps in the source-to-pay process. The origin of goods, labour practices, contact with modern slavery or deforestation, can all be concealed in a murky supply chain.
Tracing the progress of an item from its raw materials through to a finished product is “often a challenge for today’s supply chains due to outdated paper processes and disjointed data systems that slow down communication. The lack of data compatibility exposes supply chains to problems like visibility gaps, inaccurate supply and demand predictions, manual errors, counterfeiting, and compliance violations,” notes an AWS report. However, with blockchain, procurement and supply chain management organisations can “document production updates to a single shared ledger, which provides complete data visibility and a single source of truth. Because transactions are always time-stamped and up to date, companies can query a product’s status and location at any point in time. This helps to combat issues like counterfeit goods, compliance violations, delays, and waste.”
Global network
If the documentation of, say, a shipment of EV batteries, can trace a direct line from a lithium mine in Australia to a factory in China through a global network of suppliers, all the way to their arrival at a factory in Ohio, the procurement department sourcing those batteries can scrutinise every piece of the value chain much more effectively for quality control, potential counterfeiting, and ESG compliance.
It’s not as flashy as Dogecoin, but it’s actually useful, especially as corporations make efforts to divest major polluters or other parties with poor ESG practices from their supply chains in an effort to reduce Scope 3 emissions and stop propping up reprehensible practices like modern slavery and deforestation.
Next generation AI tools can offer unparalleled visibility into the sustainability of organisations’ supply chains.
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There are increasing pressures on procurement departments to be a driving force in their organisations’ sustainable goals.
The process of buying, shipping, and generally moving physical products about is one of the larger sources of carbon emissions for the modern enterprise.
For consumer companies, supply chain operations typically account for more than 80% of greenhouse gas emissions, creating “far greater social and environmental costs than its own operations”, according to a study by McKinsey. The environmental impact of a company’s operations, and their extent into Tier 2 and Tier 3 emissions, is also becoming a more prominent part of the conversation, making the decision of who to partner with and for what more pertinent to an enterprise’s sustainability goals than ever before—especially as T2 and T3 emissions become the target of new ESG regulation.
The path to sustainable practice is increased visibility into procurement practices, supply chain impact, and the supply chains of ecosystem partners. Increasingly, procurement teams are artificial intelligence (AI) for these insights.
Responsibly sourced startups
The demand for AI-powered sustainability in the procurement sector is already driving investment in promising new tools. The Copenhagen-based startup Responsibly was founded in 2021, and in October 2023 managed to leverage its work on AI-driven sustainable procurement tools into a $2.4 million funding round, aiming to further develop its project of “democratising access to sustainable procurement”.
The company combines an AI model with large data sets to allow users to analyse their suppliers and potentially take action to restructure their procurement practices. The data analysed relates to suppliers’ carbon emissions and links to deforestation, but also their gender pay gap, human rights records, and more. The company has already accumulated several high profile clients, including the CERN research facility.
Data-driven, sustainable decision making
The success (and sustainability) of a supply chain is, first and foremost, an issue of visibility. Decision-making to reduce carbon emissions, cut costs, and improve resilience is almost universally a matter of understanding the factors affecting what has traditionally been a very murky, complex, impenetrable system. Using AI to maintain visibility into upstream manufacturing, purchasing, and logistics channels is critical in a world where supply chains are more complex, and the critical eyes of regulators and other organisations within a company’s ecosystem are more prone to scrutiny, than ever before.
For any organisation looking to operate more sustainably—especially in a climate of net zero commitments and increased regulatory scrutiny—the next generation of AI models, powered by advanced analytics, intelligent algorithms, natural language processing, and real-time processing of huge data sets, represents a way to understand the source to pay process on a more granular level than was previously possible, and a path to making the necessary decisions for a more sustainable supply chain.
In a press release on Tuesday (January 9th), Sphera, which is a leading global provider of ESG performance and risk management software, revealed it has purchased the supply chain sustainability software firm.
Supply chain network
Founded in 2012 and headquartered in Santa Cruz, California, SupplyShift has built a supply chain network of over 100,000 suppliers, where buyers and suppliers engage and share information quickly in order to manage risk and facilitate supplier regulatory compliance.
The solution provides supply chain transparency and supplier mapping at any tier as well as data analytics, supplier scoring and traceability.
SupplyShift has customers and business partners globally, and the company’s portal is used by a variety of customers across industries, from worldwide retailers to Fortune 500 brands.
Growth journey
Paul Marushka, CEO and president, Sphera, said: “SupplyShift has seen tremendous growth with its software solution that allows for direct communication with suppliers and customers and enables the seamless collection of their Scope 3 emissions data, which helps suppliers improve their supply chain ESG performance.
“As more regulations are passed that demand transparency, the SupplyShift solution will become indispensable in meeting global regulatory requirements and stakeholder expectations. Bringing SupplyShift’s portal into the Sphera family will expand our current offerings and enable us to provide unparalleled Scope 3 and ESG tracking and reporting capabilities. We are pleased to welcome SupplyShift’s customers, colleagues and solution to Sphera and look forward to helping our combined customer base accurately track and report their Scope 3 emissions and be compliant.”
Alex Gershenson, SupplyShift’s CEO and founder, added: “SupplyShift was founded on the idea of leveraging software to drive sustainability initiatives, and for 11 years we have been empowering companies to understand their supply chain ESG risk and performance.
“We are excited to join the Sphera family and take data availability to a new level through the combination of Sphera’s industry-leading ESG data and SupplyShift’s Scope 3 data collection abilities. Through SpheraCloud, Sphera’s SaaS platform, and its LCA solutions, we can help even more customers track their Scope 3 emissions and manage their supply chain sustainability.”
Keith Hartley, CEO of LevaData, discusses why procurement’s golden age is now amid the rise of transformative tech solutions.
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“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.”
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.”
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…
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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
CPOstrategy explores this issue’s big question and uncovers what the impact of gen AI is in procurement.
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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.
RPA promises increased efficiency, lower costs, and an end to staffing issues, but can procurement teams implement successfully?
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Though it’s less frequently associated with automation than its more robot-friendly cousin logistics, procurement is a discipline that’s undergoing a radical transformation.
“Your new procurement employee will work 24/7, never call in sick, rarely make mistakes,won’t complain, and never ask for a raise. Of course, this is not your typical worker, but a procurement software robot—or bot.”
Although it reads like the opening paragraph of an abandoned Nanowrimo project started by someone who’d just finished I, Robot, I assure you this report released in 2020 by consultancy KPMG is an entirely serious endeavour. Although the global clamour to replace employees with robots may have died down a little now that a few million professionals have been dragged kicking and screaming back to the office, the benefits that automating elements of the procurement function could deliver are hard to deny.
RPA is big business and isn’t going anywhere. In 2022, the global robotic process automation market was estimated at $2.3 billion. It’s expected to grow at a CAGR of 39.9% between this year and the end of the decade.
From multinational corporations to the US Department of Homeland Security, robotic process automation (RPA) is emerging as a popular way to manage complexity within a large supply chain, automate repetitive tasks, and enhance the capabilities of a procurement department. The US DHS’ procurement department, for example, spent just under $24 billion across about 60,000 transactions in 2022, and is increasingly handing the responsibility for contractor responsibility determinations, as well as automating tasks for the Customs and Border Protection—allegedly cutting jobs that took an hour down to just a few minutes.
As KPMG’s report stresses, “leveraging procurement bots is the next logical step as organisations look to benefit from advancements in digital capabilities.”
RPA adoption in procurement—the Benefits
Added visibility
Improved efficiency
Reduced costs
Large amounts of traditional procurement processes involve repetitive tasks like requisitioning, purchase order management, checking compliance, andanalysing spend, supplier onboarding, and more can be automated using an RPA bot. This is not only because RPA is getting smarter, but also because businesses’ procurement functions tend to be more consolidated within a single platform that is more closely integrated with the business in a modern enterprise. In a sufficiently digitalised system, there’s little to stop RPA from creating efficiencies by eliminating menial tasks.
Likewise, by integrating RPA into a company’s enterprise resource management (ERP) platform, it gains access to vast amounts of data that can then be tracked, analysed, and used to draw insights faster than a human could hope to tackle the same task. Most modern supply chains comprise several different pieces of specialised software, and making each one talk to one another smoothly can create serious pain points for procurement teams, but RPA can do a great deal to smoothe over the cracks.
RPA Risks and How to Overcome them
Data exposure
Lack of oversight
Misguided direction and overspend
As mentioned above, RPA works best when fully integrated into as much of your system as possible, with access to as much data as you can feed it—especially with modern RPA using AI to make more and more intelligent decisions based on raw and unstructured data sets. Obviously, this creates a potentially huge, glowing weak point in your company’s cyber security framework. Because RPA bots replace human workers, they need access to the privileged information that humans have, and those bots are just as—if not more—vulnerable to attack.
RPA bots can automate a great deal of tasks, but it’s easy to lose track of the fact that they’re just bots and, without proper oversight and direction, they could create inefficiencies, security flaws, and breach compliance—all costly problems, especially if the typically costly technology fails to address the original inefficiencies or issues it was bought to resolve.
Automating procurement processes could undeniably lead to increased efficiency, lower costs, and a more resilient procurement function, but only if implemented with intentionality, and given proper oversight once up and running.
Wary of overdependence on overseas suppliers, the South Korean government is investing heavily in increasing the resilience of its public procurement process.
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The South Korean government announced last month plans to establish a commission to oversee and coordinate plans to make the country’s procurement process more resilient. This announcement comes on the back of concerns over the vulnerability of South Korea’s “critical industrial” supply chains.
A state-backed fund expected to exceed 5 trillion won ($3.79 billion) is being set up to “secure stockpiles of critical supplies and support investment in relevant businesses and facilities”, with a long-term goal of divesting Korean industries from overdependence on procuring materials from single country suppliers.
Specifically, urea (like ammonium phosphate used in fertiliser manufacturing) and graphite (used in the production of batteries for electric vehicles) are both considered critical materials for Korean industrial activities, and supplies of both originate almost exclusively from China.
An Editorial published in the Korea Times noted that a recent export restriction of urea product shipments from China has caused a spree of panic buying. “What matters is that China accounts for 95 percent of Korea’s ammonium phosphate imports. Desperate to cope with a growing sense of crisis especially among farmers and relevant industries, the [Korean] government came up with a package of measures designed to secure key materials on a stable basis.”
The government will procure a reserve of 12,000 tonnes of urea in order to create a 130 day buffer to safeguard against future disruptions.
The way ahead
At a meeting of the new commission on Monday, Korean Finance Minister Choo Kyung-ho commented that “Recently, supply chain risk factors for items directly related to core industries and people’s livelihoods—such as urea, diammonium phosphate and graphite—are increasing,” suggesting that devising a national procurement strategy less reliant on Chinese exports would be essential, given the fraught economic and political histories between the countries.
Moving forward, the commission said it would designate materials and items for intensive monitoring, selected from among 200 options identified as being of critical importance and potentially vulnerable to supply chain disruption by a government study conducted in 2021. Magnesium, tungsten, neodymium and lithium hydroxide were included in the previous listing. In addition to urea products, the Korean government is expected to increase its stocks of graphite, 90% of which comes from China.
Protect your procurement function in the year ahead by avoiding the biggest risks on the industry’s radar.
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The last few years have seen unparalleled disruption to the source-to-pay process, from resource shortages and pricing hikes, to new regulatory restrictions and changes in consumer tastes. In the Amazon Business 2024 State of Procurement report released in November, researchers point out that “Many of the top risks … have the potential to disrupt procurement operations with little warning, underscoring the need for preparedness.”
1. Rising Costs and Inflation
The past year has been defined by runaway inflation in the US and beyond, and while it has translated into record corporate profits (researchers estimate now that corporate profits are responsible for around 60% of inflation, following a Kansas City study in 2021) it has been biting from the supplier side as well, with the price of everything from materials to labour rising over the last 18 months. Procurement teams should analyse their budgets and plan accordingly, in order to ensure they can secure the goods and services the business needs without compromising cost containment.
2. Supply Chain Volatility
War, genocide, unrest, and other sources of market volatility can smash a supply chain overnight. The procurement process works best when things are reliable, consistent, and predictable. The very best procurement teams know that this is a fantasy, and that geopolitical, economic, and environmental changes can all contribute to risk that needs to be met with agility and resilience.
3. (Failed) Technology Disruption
From self-driving cars to the metaverse, the last few years are littered with more examples of technological megatrends that failed to disrupt anything or really even materialise than a Phoenix, Arizona parking lot is littered with Waymo crash test dummies. Failing to adopt new and disruptive technology is a risk to your business, but overspending on hype is a much easier trap in which to stumble.
4. Cybersecurity
Data remains one of the most precious resources on the planet, and with the rise of generative AI sparking fresh debate over intellectual property and privacy, organisations will need to be more mindful of their data than ever before. This isn’t unique to procurement, but it remains a function of the business that has a lot of contact with the outside world, especially third party organisations soliciting contracts. Procurement staff should receive regular cyber security training and departments should conduct regular risk assessments in order to avoid presenting an easy target.
5. Increased Regulatory Pressure
Despite the lacklustre Cop28, record profits for the oil and gas industries, and all signs pointing towards a failure to prevent an era of “global boiling”, regulations got a little bit stricter for corporations in the last few years. Compliance will become an increasingly challenging target for corporations to hit as the decade continues. Procurement teams—as functions with some of the biggest sway over scope 3 emissions—will play a large role in keeping their organisations on the right side of the regulations, and could even be a big part of meaningful sustainability-focused change.
6. The Skill Shortage
As procurement becomes a bigger driver of innovation and profit margins for organisations, the gaps between existing skills and future requirements are showing wider and wider. Five out of six procurement leaders don’t believe they have the talent on tap to meet the challenges of the near future, and the increasingly digital-first, strategic nature of the role threatens to place demands on existing functions that they never expected to face.
Procurement leaders who recruit, develop, and retain skilled professionals will have a profound leg up over the competition in 2024 and beyond.
Procurement has the potential—and the responsibility—to go beyond switching out plastic straws for paper in the quest for Net Zero.
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Across the public sector—and increasingly in the private sphere as well—organisations are committing to the necessity of a net zero future. While emissions reduction efforts often begin with scope 1 and scope 2 emissions, analysis of holistic environmental impacts in supply chains often expose scope 3 emissions as being the source of as much as 90% of an organisation’s greenhouse gas emissions.
With the majority of an organisation’s carbon impact originating outside the organisation itself, it increasingly falls to the procurement function to make intelligent, sustainability-motivated decisions in order to draw down indirect emissions and foster a culture of sustainability within their supplier ecosystem.
However, while investment in increasingly sustainable source-to-pay processes is rising, many procurement teams describe the pursuit of net zero as a serious challenge. In Europe, companies earmarked an average of 27% of their total investment budget into improving sustainability this year, a 16% rise in sustainability investment.
Nevertheless, more than 43% of companies surveyed in a recent report had not set a net zero goal, and, within the 32% of organisations with a net zero target of 2030, many procurement professionals reported that “limited data, complex supply chains, and limited control over supplier emissions” presented serious obstacles.
The report notes that, while “procurement organisations firmly have net zero on their agenda,”, other factors like the need to keep costs low are impeding their efforts. Another report by the World Economic Forum—this time focusing on public institutions as drivers of sustainable procurement—also acknowledges the trepidation with which public and private sector organisations view the possible costs of pushing for net zero.
However, the WEF notes that “Pursuing net-zero goals in public procurement will boost the green economy,” estimating that “the private investment and new jobs triggered by greener public procurement, in aggregate, will boost global GDP by around $6 trillion through 2050 – a significant proportion of the green economy’s total GDP of $70 trillion.”
While the short term might represent an increase in costs, the long term benefits for organisations that manage to drive a successful net zero green transition, both in their own organisations, and supply chains, will be substantial. Adopting procurement practices that require green certifications from suppliers (even subsidising green activities within their ecosystems by paying higher prices for suppliers who can demonstrate their green credentials) can drive meaningful reductions in the scope 3 emissions for organisations throughout both the public and private sectors.
Incorporating SEO techniques into your procurement strategy can empower and optimise your organisation’s source-to-pay process.
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In the wake of the COVID-19 pandemic, digital transformation has emerged as a more critical strategic goal for procurement executives than ever.
Now, resilience, agility, and visibility have become vital qualities of the modern procurement function alongside the drive to lower costs and increase speed. Integrating a digital-first approach into more stages of the procurement process can, according to a Gartner study, lead to a 20% increase in revenue and a 50% reduction in process costs.
However, digital transformation needs to be considered and intentional—haphazardly adopting new tools and processes for the sake of something new and shiny will cost more than it saves, and cause more problems than are solved.
One highly effective form of digital transformation that’s often applied outside of the procurement process is search engine optimisation (SEO). Applied to the procurement function of a business, SEO techniques can help buyers reach either a wider pool of suppliers, or a more specific set of suppliers more tailored to their needs—or both, as necessity dictates.
SEO has a lot of potential to help automate routine procurement operations, allowing for procurement staff to focus on more strategic objectives and partner relationship management. Supplier discovery, as well as other elements of sourcing, can be automated with an SEO integration, and the correctly optimised online presence can be used to attract suppliers.
Four steps to SEO optimisation in procurement
Know your terms. By identifying the key phrases and terms associated with your business and objectives, you can start to define an SEO strategy.
Embed your terms. Take your chosen SEO terms and ensure they are a part of your brand identity across existing websites, social platforms, etc.
Create content. White papers, blog posts, and media placements all increase your visibility and presence within the procurement sector.
Assess, Adjust, Optimise. Constantly measure your engagement, work to understand your suppliers and partners, and iterate improvements of your strategy in response to results and the changing context of the marketplace.
By implementing an SEO strategy, procurement teams move beyond the confines of their immediate ecosystem, casting a wider net that can lead to increased competition between suppliers, lower costs, and access to new goods or resources that may have significant knock-on benefits for the business at large.
As AI continues to emerge in a big way, Vicky Kavan, Vin Kumar and Nicolas Walden explores what the AI opportunity is in procurement?
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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.
Just how much of the procurement process can be automated, and who does it help?
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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.
How Big Data can increase resilience, mitigate disruption, and help procurement teams spot danger before it’s too late.
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In the procurement sector, successfully managing risks while achieving your other strategic objectives is what sets a successful procurement function apart from those that can expect to experience disruption. Today, however, procurement teams face greater risk than ever before as supply chains become more complex, ESG goals become more ambitious, and the parameters for compliance get narrower.
Technology—powered by artificial intelligence and big data analytics—is radically digitalising the procurement process. While this has the potential to increase efficiency, revenue, and accelerate the procure-to-pay process, it has also driven complexity. Luckily, digital transformation also holds the key to managing this complexity. Digital tools, powered by artificial intelligence and machine learning, can tackle larger and more complex amounts of information than ever before. These analytical tools and their more powerful capabilities in turn have seen viable data sets balloon to include vast quantities of structured and unstructured data from throughout the supply chain, gathered together under the umbrella of Big Data.
Data source
Big Data, in gathering together vast amounts of information about every aspect of the source-to-pay process, in addition to broader contextual information ranging from economic instability to weather patterns, can help procurement professionals build up a more comprehensive, nuanced understanding of their procurement process than ever before. The level of visibility is unprecedented, even in a sector where supply chains are more complex than they’ve ever been.
Complex supply chains are more prone to disruption. More moving parts and longer distances to travel mean higher likelihoods of things going wrong. Michael Higgins, founder and CEO of Clutch, wrote recently that “risk is inherent at every step of the supply chain, from moving raw materials to manufacturers and between manufacturers and the distributor,” adding that “The added value of big data analytics is predicting potential disruptions, giving procurement managers time to make intelligent decisions.”
Procurement transformation
Advanced analytical tools can be used to track the weather, potential disruptions to agricultural or construction operations, political unrest like demonstrations or riots, and changing legislature that may affect everything from compliance to price. Because Big Data analytics are increasingly capable of collecting and analysing all of these factors and more, procurement professionals have the capacity to counteract sources of risk that traditionally would have seemed as inevitable as an act of divine wrath.
The risks to a supply chain are really representative of risks to your suppliers and their networks. Big Data analytics is also granting insight into the workings of—allowing a huge number of variables tied to each supplier to be tracked and used to make decisions. The result is a more agile and reactive procurement process that can analyse and respond to data analytics in real time, as opposed to trying to make best guesses based on past results and limited human judgement.
Procurement is truly transforming from the back office to the boardroom—becoming more strategic, digitally empowered, and complex than ever before—and Big Data analytics are increasingly a vital part of the function within the modern source-to-pay process.
Jamie Ganderton, Vice President at Proxima, examines the future of sustainable procurement going into 2024.
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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.
Walmart turns to Indian suppliers to meet procurement needs, aiming to buy $10 billion worth of goods per year by 2027.
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US retail giant Walmart is shifting its procurement strategy in response to a sea change in fast moving consumer goods (FMCG) manufacturing from the Global South.
Broadly speaking, Walmart’s strategy is to accelerate its procurement of goods from “categories where India has expertise.” These include food, consumables, health and wellness, general merchandise, apparel, homewares and toys. Additionally, Walmart spokespeople have noted that India—which is home to the third largest pool of scientists and technicians in the world—“has some of the brightest minds in innovation, and we want to explore potential solutions to challenges in our value chain with these innovators and startups.”
Andrea Albright, Executive Vice President of Sourcing at Walmart commented: “India is well-positioned to support increased demand for products by Walmart customers, and we are excited about our partnership with Hero Ecotech. This collaboration furthers our work to strengthen resiliency in our global supply while contributing to economic growth worldwide.”
Accelerated growth
India’s manufacturing sector is booming. Led by the automotive, electronics, and textiles sectors, Indian manufacturing is projected to reach $1 trillion in the next three years, according to a report by Colliers. A surge of investment—both domestic and international—is driving this growth, with the state of Gujarat receiving the lion’s share of the growth as the region is “becoming India’s manufacturing powerhouse.”
In order to support the development of its procurement network among Indian suppliers, Walmart has also announced plans for an invite-only event to be held in New Delhi this February, where “Indian export-ready suppliers are invited to apply to pitch their products to our buyers for Walmart U.S. stores and Sam’s Clubs,” and “Innovative Indian companies are invited to pitch solutions addressing sourcing challenges across apparel, general merchandise, fresh and packaged food, health and wellness, and consumables. Pitches may lead to pilot projects within Walmart’s value chain.”
Our final cover story for 2023 explores how Deputy CIO May Cheng is accelerating a digital customer and product-centric approach…
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Our final cover story for 2023 explores how Deputy CIO May Cheng is accelerating a digital customer and product-centric approach to IT management for the International Trade Administration (ITA).
Welcome to the latest issueof Interface magazine!
Interface showcases leaders at the forefront of innovation with digital technologies transforming myriad industries.
We connect once more with the tech trailblazers at the International Trade Administration. Deputy CIO May Cheng and her team areaccelerating adoption of ITA’s customer and product-centric approach to IT management. In addition, their focus is on Agile, DevSecOps, Value Proposition, and Human Centred Design. “In 2023, we launched 13 products, three MVPs and saw enhancements operationalised. Moreover, the digital model has enabled a partnership between business and IT. The result is clearer lines of shared responsibility, transparency in resources, and a continuous learning culture across the agency.”
Businessman touching data analytics process system with KPI financial charts, dashboard of stock and marketing on virtual interface. With American flag in background.
Royal Papworth Hospital NHS Trust: Digitally transforming patient care
The Royal Papworth Hospital NHS Foundation Trustis centred on bringing tomorrow’s treatments to today’s patients with a clear mission to provide excellent, specialist care to patients suffering from heart and lung disease. We hear from Andrew Raynes who took up his role as CIO in 2017. He is overseeing a digital transformation program bringing value to staff and patients. “Using the global language of interoperability… we’ll see greater efficiency in terms of use of technology and sweating our assets. Furthermore, exploiting the benefits to support seamless care by allowing standards to do the heavy lifting.”
Toronto Community Housing: Supporting tenants with tech
Toronto Community Housing houses tenants in 106 of Toronto’s 158 neighbourhoods. It ensures over 43,000 low and moderate-income families are supported in their continuously managed homes. Luisa Andrews, VP Information Technology Services tells us it’s the best role she’s had in her career. “It’s the most challenging, and where I’ve seen the most progress in a short amount of time. I’m proud of my team and what we’ve accomplished in five years. We, and our partners, have enabled the corporation, through technology, to do what it needs to do for our tenants.”
Marshfield Clinic Health System:
Marshfield Clinic Health System provides care at over 50 locations across the US state of Wisconsin. Chief Data & Analytics Officer Mitchell Kwiatkowski explains its tech mantra to us: “We’re trying to toe that line while examining new technologies as they come out. We’re aiming to understand what they are, how they can help, and implementing things that are mature enough and show promise. I don’t think healthcare is necessarily risk-averse; it’s a highly regulated area that doesn’t always have deep pockets for investment. However, it’s people’s health at stake, so we have to be careful…”
Also in this issue, we get the lowdown on the tech trends for 2024 from Hitachi Vantara innovation guru Bjorn Andersson. We also hear from the WatchGuard Threat Lab research team with their cybersecurity predictions for the year ahead.
A consortium of volunteers from California have slowly restructured their state schools’ digital procurement process. Next year, it plans to go national.
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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.
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.
The HS2 rail project promises over 300 work packages, ranging from £1 million to £500 million for 2024.
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The 2024 procurement pipeline for the HS2 rail project promises a £1 billion “boost” for British businesses, as the project administrators reveal details for a slew of contracts available over the coming year and a half.
The contract opportunities, collectively worth over £1 billion, give a heads up to potential suppliers looking to boost their order books and grow their business in the year ahead. So far, UK businesses have secured over £17 billion worth of work on HS2 and 2024 promises even more opportunities to get involved.
“Forward planning is absolutely crucial for businesses, so we’ve worked closely with our stations and civils contractors to develop a simple procurement pipeline setting out what we’ll need and when,” commented Robin Lapish, HS2’s supply chain lead.
HS2 – London with Manchester
HS2—a 140 mile high speed rail network project originally slated to connect London with Manchester—was first announced under the UK’s Labour government in 2009. In the 13 years since its announcement, the project has experienced delays, cost overruns, and controversies. Construction began in September of 2020.
According to the UK’s Institute for Government, while the project was initially estimated as “delivering £2.40 of benefit for each pound of public money spent, the government had revised the BCR down to 1.8 in 2013,” and “Lord Berkeley estimated that HS2 would only deliver £0.66 for each public pound spent, predicting both higher costs – at £22bn more than the 2019 Chairman’s stocktake – significantly reduced benefit from both passenger demand and train frequency, and less ambitious predictions of economic growth.”
As of February 2023, HS2’s total cost to date was calculated at £24.7 billion, and its BCR was calculated as having dropped to .80 following a reduction in rail use after the pandemic—prompting Prime Minister Rishi Sunak to announce the cancellation of the Birmingham to Manchester leg of the line.
This presumably goes all the way back to when every company was a sharp rocks and oxen firm. For the modern enterprise, identifying how the technology du jour empowers successful organisations in your industry and harnessing it for your own ends is just as vital to success today as it was for the Egyptians in 3,500 B.C. to figure out as quickly as possible where the Sumerians were getting all those cool, new, super shiny and sharp new rocks.
Nowhere is this more true than in the procurement sector. A place where harnessing Big Data can drive new efficiencies, improve resilience and agility in the face of disruption. This is done all while helping procurement teams understand their business in real-time.
However, this doesn’t mean that Big Data analytics adoption has been simple, easy, or without risk. The disruption caused by the COVID-19 pandemic highlighted most of a company’s value chain is dependent on external third parties. There’s only so much you can get done without engaging with organisations up or down your value stream.
Procurement teams can typically find themselves managing expenses accounting for about 50% of a business’ revenue — sometimes overseeing spend in the billions of dollars. Procurement’s ability to maintain and navigate increasingly complex networks of relationships can be hugely enhanced by the power of analytics. However, adopting the wrong analytics platform, feeding it the wrong information, and drawing the wrong conclusions can be disastrous.
By gathering data from both internal and external sources, then analysing it with the appropriate tools, procurement teams have the capacity to create powerful insights in less time than ever before.
Combining environmental information (weather patterns, crop cycles, raw materials pricings, political unrest, etc.) with rich data generated within a company’s operations, mean that procurement teams using Big Data analytics have a significant leg up when it comes to predicting trends, finding favourable prices for buying, and sourcing inventory from a diverse network of suppliers so as not to place undue stress on their partner network. Reduced costs don’t hurt matters, either.
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.
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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.
At DPW Amsterdam, Kathryn Thompson and Fraser Woodhouse, Partner and Director at Deloitte, discuss the rise of generative AI and the impact on procurement.
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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.”
Automotive supplier Continental has chosen to work with JAGGAER to implement its global purchasing strategy while driving digitalisation.
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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.
Efforts to address climate and social issues in the procurement process don’t have to be siloed, argues a new report from Business Fights Poverty.
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With more than 90% of a company’s environmental impact originating within its supply chain, not its internal operations, corporations are under greater pressure than ever to divest and draw down their Scope 3 emissions.
At the same time, other Environmental Social and Governance (ESG) issues concerning gender disparity, minority representation, and workers’ rights are also more clearly in the spotlight than ever before alongside climate change.
However, a report published on 5th December by social impact-focused network organisation Business Fights Poverty, argues that while there is “an urgent need for transformative action on environmental and social issues such as climate change, biodiversity loss, poverty and inequality,” there exists a tendency in the corporate sector to tackle these “complex and fast-moving challenges by simplifying them and breaking them down into separate, smaller issues”.
The result is often that solving issues of climate, social, and ecological justice becomes a zero-sum game, with one issue neglected at the expense of others, because of a siloed approach manifesting itself beneath the ESG umbrella. The report argues that, not only is this approach antithetical to the ideals of ESG initiatives, but “an integrated and systemic approach that recognises the interconnectivity of the challenges across environmental and social issues” is more effective at tackling these issues.
The report, titled Supply Chain Decarbonisation with a Gender Lens: Practical Guidance for Global Businesses, notes that vulnerable groups, especially women, are especially vulnerable to the effects of climate change. It goes on to provide guidance for corporate procurement strategists and leaders, describing how to ensure that “women are both unharmed by decarbonisation strategies, and that their participation in any benefits generated in the process is secured.”
Four Gender-Sensitive Routes to Procurement Process Decarbonisation
Supplier incentives: Recognise and co-brand with suppliers who are emerging as leaders on decarbonisation and/or gender.
Procurement policies and choices: Source from and encourage women-led businesses that are providing low carbon solutions
Product and services design: Switch to renewable energy and upskill women to participate in the switch.
Business model innovation: Promote a circular economy that includes women, for example decent work for waste and recycling pickers.
The need for decarbonisation in the procurement process is pivotal. As of Q4 2023, nearly 40% of Fortune 500 companies have now set Net Zero targets. It’s not good enough, and the actual meaning of Net Zero is being eroded and worked around by corporations looking for ways to continue harming the environment and damaging the global social fabric while making record profits. But it’s a start.
“Whilst a growing number of companies are investing resources to better understand, account for, manage and reduce their supply chain emissions, little attention is being devoted to the role of, and impacts of interventions on, the people working in those supply chains,” urges the report. “The decarbonisation strategies of large multinational companies with complex global supply chains have impacts on workers around the world, both positive and negative.”
Only one in six procurement teams have “adequate talent” to meet their future needs, as industry demands grow and evolve.
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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.
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.
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“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.”
Conrad Smith, Founder and CEO at Graphite Systems, discusses the similarities between Formula One and procurement amid significant digital transformation.
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“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.
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.
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“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.”
Maarten van der Borden, Customer Transformation Director at Celonis, discusses the influence digital tools such as generative AI is having on procurement’s workforce.
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“When something new arrives on the scene, people have a tendency to immediately think of the worst-case scenario.”
Maarten van der Borden is a Customer Transformation Director at Celonis. As AI gets increasingly complex and advanced, there are concerns from some sections of the workforce that robots will take human jobs in procurement. Indeed, one of the biggest draws of automation is the cost savings and efficiency it brings, with AI able to complete some tasks almost instantly. But van der Borden challenges that notion and believes technology should be used as an enabler.
AI’s impact on jobs
“AI will, in my opinion, not replace anyone anytime soon,” he reveals. “What it will do is make life easier and change the way we operate. In the late 90’s, we couldn’t envision what having a mobile phone would be like. When those were first introduced, we thought how annoying it would be that you would always be reachable. Now we can’t imagine living without a phone.
“I don’t envision the elimination of procurement positions due to AI. Rather, a significant shift may occur in the transactional aspects of process analytics. Currently, individuals proficient in creating complex Excel macros or adept at extracting and transforming data into actionable insights are highly valued. These roles are likely to undergo changes, but this should be seen as an opportunity for enhancement, not a threat. It’s crucial to recognise this. My belief is that AI won’t be replacing jobs, particularly in procurement where human involvement is key. The role of technology should be to empower and improve processes in procurement, not to replace the human element.”
Maarten van der Borden, Customer Transformation Director at Celonis
The journey
Over the years, Van der Borden has distinguished himself through a series of impactful transformations and strategic developments, primarily at the nexus of IT, business operations, and finance. His journey has been marked by the successful management of large-scale programs, where his ability to engage cross-functional teams and collaborate with stakeholders at all organisational levels has consistently led to the achievement of key goals. Notably, he has a history of taking on complex and challenging projects, steering them from concept to completion under stringent conditions. This track record has established him as an influential change agent, known for transforming underperforming organizations into models of high performance and efficiency.
Having began his career in the Dutch Military, he experienced a similar journey to many procurement practitioners. Van der Borden fell into the space by a “happy accident” and never left.
He shares, “I didn’t know much about procurement initially, but I quickly grew to love it.” His journey led him to DS Smith, a major packaging organisation, where he successfully spearheaded a comprehensive global procurement transformation. Subsequently, he transitioned to head the finance transformation within the same company. In this role, he sought a tool that could effectively navigate the unique challenges of procurement compared to finance.
“I needed something that would show me how our financial processes really ran. It meant finding the most impactful inefficiencies and developing an action plan to deal with them.”
Celonis today
This search brought him to Celonis’ process mining capability, a product that resonated with him so profoundly that he decided to join the company. “Right now, I am a Customer Transformation Director at Celonis, which means I help our customers organise themselves around this solution because I firmly believe implementing a tech solution by itself doesn’t do anything. We will always need the human element to make the change and create value, based on the insights tech provides. I’m very happy to be here.”
Today, Celonis is the global leader in process mining, providing companies with a modern way to run their business processes entirely on data and intelligence. The firm pioneered the process mining category more than a decade ago when it first developed the ability to automatically X-ray processes, find inefficiencies and implement immediate, targeted, and automated action to resolve them.
Gen AI drive
Procurement is in a transformative moment. At DPW Amsterdam, generative AI was the buzzword on attendees’ lips everywhere you looked. For van der Borden he acknowledges how rapidly the space is changing as a result of an increased influence of digital tools.
“To me, the first big thing to realise when we talk about gen AI is the democratisation of data and process analytics,” explains van der Borden. “I think what’s really important is that procurement realm to me is a prime example of where gen AI can have a huge impact. I think what gen AI will do is open up the capabilities of analytics to a much wider audience than today. People who may previously have trusted some Excel sheets or PowerPoint slides presented to them to make decisions can now freely explore, or even converse with their own data and make informed decisions themselves. You start to build a community of data analysts rather than just having consumption of data analytics. That to me is the big game changer that gen AI is actually providing procurement with.”
Procurement’s perception
CPOstrategy sits down with Maarten van der Borden, Customer Transformation Director at Celonis, at DPW Amsterdam 2023
By its own common admission, procurement used to be boring. A function hidden out of sight and kept far away from the c-suite. Now, it’s front and centre, firing on all cylinders. Indeed, the Covid pandemic helped drive it towards the top of the agenda, in addition to other enablers such as transformation and ESG. For van der Borden, he believes procurement is beginning to shake off that old skin and be seen as more of a strategic function.
“We’ve received a bad reputation in the past because the impact has not always been clear,” he tells us. “Some analysis that people do on procurement as a strategic function is to ask what’s the real impact? Yeah, you manage the supply and demand but as long as I have my blue ball point where and when I need it, you’re doing a good job. If things start to fall over then procurement used to get the blame. What I’m really happy to see is that more and more CEOs are seeing procurement as a strategic function, not only driving value in the financial domain but also more and more as the primary contributors to a more sustainable future and the guardians of our corporate brands.
An evolution
“There’s been a noticeable evolution in procurement, particularly in the merging of processes like source-to-pay, procure-to-pay, and purchase-to-pay. Our definitions in these areas haven’t always been crystal clear. However, when you delve into purchase-to-pay, it’s apparent that this is where the transactional activities occur. Due its very transactional nature, this phase is measurable and reveals the outcomes of our upstream actions in sourcing. I’ve observed that these areas, despite often being managed by separate divisions or functions, are intrinsically linked. The transactional aspects are commonly seen in shared services, while the sourcing aspects represent traditional procurement.
“Bridging these two areas, in my view, is a significant shift. This is where technology truly demonstrates its value. By integrating and examining the transactional processes to understand their shortcomings, we can trace back to the root causes, often found in sourcing. This integration is fascinating to me. It allows us to assess the real impact of our efforts.”
DPW has announced it is expanding into North America following the success of its Amsterdam offering.
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DPW has announced it is expanding into North America following the success of its Amsterdam event.
Founders Matthias Gutzmann and Herman Knevel revealed the news via LinkedIn to confirm a move that will see significant growth into new territories.
Gutzmann exclusively told CPOstrategy: “Marking a pivotal moment for DPW, our expansion to the US isn’t just about growing our footprint, it’s about building on our ongoing momentum over the last few years and bringing the enthusiasm and expertise of DPW.
“We aim to bridge procurement organisations with innovative startup founders and change makers, fostering the growth of a digital procurement and supply chain ecosystem in North America.”
Accompanied by a photo of the duo outside Google offices in Silicon Valley, California, he posted on Monday (27th November): “I am currently in #SilliconValley together with Herman Knevel, gearing up for an exciting week filled with meetings with tech giants, founders, visionary partners and future collaborators.
“Having previously led the expansion of Procurement Leaders | A World 50 Group Community into North America, I must say I feel extra energised to bring my experience and strong relationships within the North American market for the benefit of DPW.
“Stay tuned for more updates as we embark on this exciting phase of growth and innovation!”
Founders Matthias Gutzmann and Herman Knevel
Since launching DPW in Amsterdam 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. The conference welcomed over 1,250 procurement professionals with more than 2,500 virtual attendees watching along at home in its 2023 edition in October.
Last year’s event was held at the former stock exchange building, the Beurs van Berlage, with the theme called “Make Tech Work” which focused on turning digital aspirations into a reality. DPW Amsterdam has already been announced for October 9 and 10, 2024, next year.
Further details about DPW North America will be revealed in due course.
At DPW Amsterdam 2023, Sigbjørn Nome, CEO and Co-Founder at Ignite, discusses the importance of a people-first mindset in procurement.
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“It’s super important to get the right people in procurement.”
Sigbjørn Nome, CEO and Co-Founder at Ignite, is passionate about talent. The company is now armed with 60 employees and has become an organisation of choice for many graduates in Norway. According to Nome, building a positive environment that empowers staff holds the key to long-term success and growth in procurement.
“We’ve managed to get a good reputation in Norway and recruit top talent,” he tells us. “In the beginning, we used the best students and offered internships to help us build the first version of the product. Then we built a good relationship with the universities in Norway and we’ve also recruited lots of senior hires too. There’s a great combination of talent within Ignite.”
Ignite is an advanced yet simple spend management solution that gives customers the power of correct and holistic data, transparency, and actionable analytics to empower data-driven decision-making. This way, customers not only save money and avoid risk but also make smarter choices and drive value across their organisation. Ignite provides a one-stop shop to consolidate, clean, and enrich data, get advanced procurement analytics, conduct supplier assessments, as well as holistically managing suppliers and contracts and quickly and automatically estimating their Scope 3 CO2 footprint.
With a background in consulting, Nome worked on a variety of procurement transformation projects and has witnessed significant potential in the space. Having decided to form Ignite in 2016, the organisation began as a consulting firm but it was later decided to be delivered as a software-as-a-service (SaaS) company. “As a consulting business, you are cashflow positive and you earn money from the get-go. While for a SaaS business, you need to invest a lot in product and productive development,” he tells us. “It is quite a challenging change. As a business owner, you also need to sell and be more out there to get customers. There’s been a lot of challenges and one of those has been building the team which I’m really proud of.”
Procurement’s evolving function
Procurement is changing. Traditional procurement revolved around delivery, cost and quality. Now, given the nature of environmental challenges as well as the necessity of data analytics, people with diverse skill sets are needed more than ever before. Nome believes it’s about changing the mindset of procurement. “You’ve got to shift that mentality because the function is so different today,” he explains. “In the future, it’s going to be a more collaborative function because procurement teams cannot win alone.”
With that future in mind, Nome recognises the space is a different beast today than it was a decade ago. Change dominates the industry and the players that embrace transformation will be the ones who win. “You need to use procurement as a lever to get change done,” he tells us. “It’s not enough anymore to look at your business only, your responsibility also extends to your suppliers. It’s about where you spend your money and your negotiation power because customers will look at that. I would say the regulation demands will offer a broader perspective, not only looking at your business but also how you spend your money.”
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.
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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.”
At DPW Amsterdam 2023, Danny Thompson, Chief Product Officer at apexanalytix, tells us about the art of developing trust amid significant innovation in procurement.
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Trust.
Apexanalytix needs to build quite a bit of it. As a company which protects $9 trillion in spend and prevents or recovers more than $9 billion in overpayments annually, its client portals actively support over eight and a half million suppliers.
Indeed, apex has revolutionised recovery audit with advanced analytics and the introduction of first strike overpayment and fraud prevention software. Today, apex is a leading global force in supplier management innovation with apexportal and smartvm, now the most widely used supplier onboarding, compliant master data management, and comprehensive third-party risk management solution in global procure to pay. With over 250 clients in the Fortune 1000 and Global 2000, apex is dedicated to providing companies and their suppliers with the ultimate supplier management experience. A big part of that experience is based on building trusted supplier-buyer relationships.
Danny Thompson is the Chief Product Officer at apexanalytix and has been with the organisation since July 2015. Now in his third role with the company in eight years, Thompson reflects on his journey with the organisation with positivity. “I came in as a product manager working on our portal product,” he tells us. “And after a short time, because I was a former customer, at Pfizer and International Paper Company, and was an internal voice of the customer, they ended up having me drive messaging with marketing. Recently, we hired a great new leader of marketing who has taken that over fully so I’m dedicated full time to product again. So it’s been a great experience for me.”
Gen AI surge
One of the hottest topics on the CPO agenda in recent months has been ChatGPT. Wherever you go within the industry, you’ll likely find a conversation being had about the technology’s possibilities, as well as perhaps its limitations or challenges – and Thompson is equally keen to explore.
Danny Thompson speaks with CPOstrategy at DPW Amsterdam 2023
“There is certainly a lot of attention being paid to gen AI in the industry, and within our company as well,” says Thompson. “I think it’s because of the shock value of ChatGPT hitting the world and people are really stunned by its ability to interpret natural language and come back with really good information in response to questions that are being lobbed at it. There’s a lot of excitement around what it could do as well as what other generative AI solutions can do to help solve procurement, supplier risk and supplier information problems. We are making progress, and have introduced some generative AI functions, but Generative AI presents some challenges right off the bat that we are working hard to solve as quickly as we can.”
One of these issues is the hallucination problem that is being questioned within the space. This is where AI tools like ChatGPT lack factual support for some of the information provided. “There’s a statement at the bottom of the page which states you can’t rely on results being factual,” Thompson affirms. “When it comes to supplier information and risk management, that’s a problem.”
Managing risk
And it is such an important sticking point that Thompson stresses when it comes to supplier risk information, it is about being careful that the usage of generative AI, in its current state, is used for guidance rather than fact-finding. “Another challenge is around leakage of sensitive information combined with contamination of sensitive or important information,” reveals Thompson. “We have a database of golden records for 90 million suppliers who are doing business with Fortune 1000 and Global 2000 companies. That is the best information we’ve been able to accumulate about suppliers and their relationships as a supplier to large companies. Some of that data is publicly available and some of it is more sensitive. We want to make sure we’re not loading that sensitive information into a generative AI function that might allow random people to access that information. We’ve got to be careful about that leakage of data.”
The opposite is true, as well. Thompson reveals that his team asked the generative AI-tailored questions which they assumed would be pulled from their own database. The findings were less than ideal. “The responses had been contaminated with public information which was full of inaccurate data,” he tells us. “We’re figuring out how to draw those boundaries, as well—to protect sensitive data while also preventing contamination.”
Trust first
This showcases the importance of trust once again to an organisation like apex. The companies it serves are moving significant sums of money around and the potential risks are sizeable. For Thompson, there can be no greater responsibility when using AI tools. “The data must be either highly accurate or at least they understand the degree to which it’s not,” he says. “If you don’t understand that level of trust you can have in it, then you shouldn’t be using it yet.”
With an unprecedented amount of technological innovation at procurement’s fingertips, the industry is evolving at a rapid pace. It’s placed at a unique moment with digital transformation being swept up throughout the space. While this brings obvious advantages such as time and cost savings, it also means increased cybersecurity threats. “There are more threats coming in as a result of AI,” says Thompson.
“One of the biggest challenges our clients us our solutions to solve for is fraudsters trying to take over a supplier’s account and intercept their payments by submitting fraudulent account change requests. One of the typical ways companies catch these is very often the request is coming through very poorly formatted emails with bad grammar. But what we’re seeing is the bad guys have started using generative AI to create really convincing bank account change requests so there are increased threats to be aware of. But this increase in the availability of information is also make easier the whole process of knowing your supplier and knowing the risks associated with them. And Generative AI is going to allow you to quickly get help to understand how to mitigate a given risk much faster and easier than it’s ever been before.”
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.
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“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.”
Last month, CPOstrategy travelled to DPW Amsterdam. Here are five takeaways from the biggest and most influential tech event in procurement.
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1. Digital transformation isn’t just about tech
David Rogers, author of The Digital Transformation Roadmap, delivered an important keynote that highlighted that digital transformation doesn’t just mean technology. He told the audience, “The hard part about transforming organisations isn’t about tech. It’s about making the technology work for your customers and for your business.”
He expressed the importance of delivering value in your organisation while also describing the art of rethinking business to define what growth opportunities there are by thinking differently about customers, competition, data, innovation and value. Rogers provided guidance to the audience and unveiled a five-step digital transformation roadmap. These are: define a shared vision, pick the problems that matter most, validate new ventures, manage growth at scale and grow tech, talent and culture. Rogers explained to the attendees gathered before him, “ChatGPT is not your strategy. Fall in love with the problem and not the solution.”
2. Building connections
DPW welcomed more than 1,250 procurement professionals over the two days while also hosting more than 120 procuretech solutions. New digital cards which were worn as lanyards around an attendees’ neck allowed for instant connections to be made and eradicated faffing about for contact details or losing important business cards. The buzz and hum of chatter in the air across the conference was audible. A walk around the two expo halls, both kitted out with dozens of tech solutions each offering something different to engage with ensured plenty of choice of destination. Many booths provided gifts which added a personal touch, such as Gatekeeper’s dragon or Omnea’s socks.
While the virtual only events in years gone by during the Covid period served a purpose, nothing could beat the sense of community and valuable face-to-face meetings that attendees were provided with.
3. Gen AI is a game-changer
If you were a fly on the wall in most conversations, a common theme would appear more often than not – generative AI. Indeed, the technology dominated thoughts at DPW Amsterdam 2023 which has only been accelerated given the ever-increasing influence of OpenAI’s ChatGPT which only launched a year ago. But gen AI isn’t only about chatbots, AI adoption was prevalent across the floor with each procuretech ecosystem showcasing its own spin on new technology as well as fresh and innovative ways of offering services.
Generative AI is firmly on the tips of people’s tongues. While its possibilities appear limitless, its rise to prominence has led and will continue to cause debate about how far its capabilities can reach in its current form. Expect that to continue.
4. People are still the secret sauce
As exciting as new technology is, without good people your operations are doomed to fail. While there have been concerns from some sections of the space that robots are here to replace humans, DPW Amsterdam’s conversation revolved around making tech work for us and about using technology as a tool to make day-to-day life easier.
Ultimately, even chatbots require a human at the other end to make the correct inputs otherwise all the end user receives is data without direction. While discussions were had as to whether AI can help plug talent gaps, all it means is that boring, outdated data-entry tasks will be taken over by machines and allow the next generation of the workforce to focus on greater value-add work that will lead to increased efficiency for themselves and the company they work for.
5. Now is the greatest time to be in procurement
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.” It was quite the welcome – and set the tone for the subsequent two days.
With an unprecedented amount of innovation at a practitioner’s fingertips in today’s ever-evolving and transformative world, the future is what procurement makes it. Gone are the days of procurement being some boring back-office function hidden out of sight, the industry has had a sudden injection of life via digitalisation.
Matthias Gutzmann, Founder of DPW, exclusively told us: “It’s the best time to be in procurement. It’s the most exciting era to be in procurement and supply chain so it’s an amazing time that we need to celebrate and get loud about it.”
Michael van Keulen, CPO at Coupa, discusses the emergence of gen AI and whether procurement is in a golden era amid technology transformation.
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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.”
Matthias Gutzmann, Founder of DPW Amsterdam, discusses the conference’s rise to prominence, reflects on challenges and reveals future plans.
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“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.”
CPOstrategy examines why replacing legacy systems could hold the key in procurement to achieve long-term success.
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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.
Erik Oberländer (DE), Manager, Procurement Advisory, PwC, discusses how to combat inflation and maximise savings through game theory.
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Material scarcity, rising inflation, exploding energy prices, and an unstable geopolitical situation pose procurement challenges like never before.
The right negotiation strategy is not only essential for companies to achieve cost savings but is also absolutely vital for survival.
In the current market situation, securing material availability often takes top priority. In this case, negotiations with suppliers must be based on partnership and close cooperation. On the other hand, if contract volumes have been awarded in competition between multiple suppliers with a high degree of shiftability, the use of game theory should be considered.
But what does the game-theoretical negotiation approach look like? In a classic bilateral negotiation, the focus is on convincing the other party with the right strategy and tactics, a convincing storyline, and compelling arguments for one’s own position. In contrast, the game-theoretical approach involves developing a bidding mechanism that maximises the competitive dynamics between suppliers. The design of the bidding mechanisms is based on insights from numerous scientific theories.
In fact, since the 1990s, several Nobel Prizes in Economics have awarded in the field of game theory. This scientific approach opens up new perspectives in complex negotiations and makes it possible to forecast how people tend to behave. In strategic procurement, many companies use game theory in bids and negotiations. After realising unimaginable savings results, procurement teams are electrified and absolutely convinced of the effectiveness of game theory.
Game theory in procurement
The two most relevant and commonly used bidding mechanisms in procurement auctions are the Dutch (ascending bid increments) and English auction (descending bid increments). In combination with other elements, such as qualification and ranking rounds, they can maximise competitive pressure through credible market transparency.
However, when developing any game-theory-optimised bidding mechanism, many questions should be asked. For example: How should the lots be formed to create the greatest possible competitive pressure? What decision will a supplier make if it is assumed that they want to maximise their own benefit – and how do you optimise the bidding design to take this into account? With what bidding design can you put the best suppliers under pressure?
These criteria are met:
Game theory is fascinating – with demonstrable successes that cannot be achieved through classic negotiations, with the consistency and “purity” of its systematics, and with the surprising realisation that some game-theoretical approaches have been intuitively and unconsciously used to increase strategic competition and minimise risk aversion.
Many procurement teams believe this approach only applies to certain categories of goods. This is a misconception. Generally, only three criteria will be met. We call them the 3Cs:
•Comparability: All relevant decision parameters will be taken into account and is monetised through a bonus-malus evaluation. The offers of participating suppliers are comparable, and award decision is based on total cost of ownership.
•Commitment: The award decision is completely open. All participating suppliers are released by the department, and all cross-functions can win the contract on their own. In addition, it is clearly communicated that there will be no renegotiations or vetoes in further procurement committees.
•Competition: There must be more than one supplier interested in the scope of the award. Only this way can a competitive situation be created that is maximised with the help of a tailored award design. The right incentives for suppliers must be identified, and the appropriate signals set.
Possibly, not all of these criteria are met at the beginning of the project, but they can be developed together in cross-functional teams (consisting of colleagues from procurement, engineering, quality, logistics, and sales).
How the award is carried out:
Once the 3Cs are met, suppliers must be prepared for the award event. In transparent communication, the mechanism and rules are explained, and any uncertainties are clarified. No supplier should be unsettled, because only if the supplier has fully understood the mechanism, can he behave optimally, and the award mechanism can achieve its full effect.
The award day is then carried out with suppliers on-site or virtually via eAuction tools. Especially for larger award volumes, it is advantageous to have suppliers on-site, as signals are also sent to suppliers between rounds. In addition, you can literally feel the tension level and adjust the bid steps accordingly.
Virtual implementation facilitates the scaling of the approach with multiple providers. Smaller award volumes are carried out quickly and without great coordination effort. The selection of the appropriate tool provider is crucial. Not all tools can map more complex award mechanisms and adapts to specific individual starting situations.
Here are the first steps:
It must always be considered that game theory is a complex science and cannot be simply applied. The preparation time for the design of award strategies is often underestimated and set too low. To become a good game theorist, it is not enough to attend a weekend course or read a book. In fact, the unprofessional application of game theory can do more harm than good. Therefore, it is strongly recommended to be accompanied by a coach during the first use – only with this expertise are amazing negotiation results possible.
It is not always easy to delegate final decision-making authority to a mechanism, but it is worth it. Successful awards can ignite the fire in procurement teams. It is important to generate maximum enthusiasm, support cross-functional cooperation, and institutionalise negotiating skills in procurement teams.
By Erik Oberländer (DE), Manager, Procurement Advisory, PwC
CPOstrategy compiles five ways that ChatGPT can transform procurement amid the rise of generative AI in the space.
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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.
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.
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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.
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.
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“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.”
Shaz Khan, CEO of Vroozi, discusses why AI is the great equaliser for companies to optimise procurement.
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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.
ORO Labs has announced it has raised $34 million in Series B funding led by Felicis with participation from existing investors.
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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.
At DPW Amsterdam, Ashwin Kumar, vice president at GEP, discusses procurement transformation and what tomorrow’s challenge could look like.
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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.”
Vizibl has revealed the launch of a new sustainability target programme to help large organisations get supplier engagement for sustainability initiatives ready to launch within four weeks.
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Vizibl has announced the launch of its Science-Based Targets Initiative (SBTi) Framework aimed at helping large organisations get supplier engagement for sustainability programmes ready to launch within four weeks.
The new configuration will allow companies to get started with their supplier raw spend data, which Vizibl first intakes.
The move will also see data cleansed, normalised and enriched, mapped and loaded onto Vizibl’s sustainability launchpad for emissions.
Organisations can also use the launchpad to quickly visualise emissions hotspots or which suppliers have committed to a SBTi.
Companies can quickly select cohorts of suppliers to add to supplier engagement programmes and start taking action after four weeks.
The new configuration will also allow all the supplier engagement action that’s been taken to decarbonise their supplier base, in one central location using the Vizibl platform, to mitigate against the rising tide of risk from upcoming and existing ESG regulations.
The process
This process follows SBTi’s supplier engagement guidance steps and leads the organisation through the process.
It will also mean automating key steps of the framework that would otherwise be administratively intensive spreadsheets.
The programme ready to launch is aligned to a UN-backed global sustainability standard for supplier engagement in the SBTi.
It supports Vizibl customer’s evidence of the collaborative actions associated with upcoming mandatory ESG regulations around scope 3 reduction.
It is also underpinned by a library of supporting content specifically to guide the organisation further to achieving science-based targets.
Once the programme is ready to launch, the Vizibl team is ready to walk the organisation through the launch process.
The team also supports the ongoing programme rollout and maintenance, continuously monitoring progress to ensure the programme meets agreed objectives.
“With mounting ESG regulatory pressure on businesses, ensuring our customers have the tools they need to quickly and accurately assess and improve sustainability performance across their supply base is key to Vizibl,” commented Richard Hogg, CEO at Vizibl.
“Ensuring that our customers can build a body of evidence that shows the efforts they’re taking, both at speed and at scale, to engage their suppliers to decarbonise their supply chains, is critical to meeting net-zero targets.”
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
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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.”
Zip has been named as the most innovative fintech solution after being recognised with an award.
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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.”
CPOstrategy visits HICX’s first Supplier Experience Live as organisations gear up to remove friction and become a customer of choice.
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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
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
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.
Global research and advisory giants Deloitte and DPW has announced a partnership to bring procurement innovation to organisations.
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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.
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
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“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.
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.
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.
CPOstrategy examines 10 of the best ways to use artificial intelligence (AI) in procurement
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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.
Nigel Greatorex, Global Industry Manager at ABB, on how digital technologies can support decarbonisation and net zero goals
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Nigel Greatorex is the Global Industry Manager for Carbon Capture and Storage (CCS) at ABB Energy Industries. He explains how digital technologies can play a critical role in the transition to a low carbon world by enabling global emissions reductions. Furthermore, he highlights the role of CCS and how challenges can be overcome through digitalisation.
Meeting our global decarbonisation goals is arguably the most pressing challenge facing humanity. Moreover, solving this requires concerted global action. However, there is no silver bullet to the global warming crisis. The solution requires a mix of investment, legislation and, importantly, innovative digital technologies.
Decarbonisation digital technologies
It’s widely recognised decarbonisation is essential to achieving net zero emissions by 2050. Decarbonisation technology is becoming an increasingly important, rapidly growing market. It is especially relevant for heavy industries – such as chemicals, cement and steel. These account for 70 percent of industrial CO2 emissions; equal to approximately six billion tons annually.
CCS digital technologies are increasingly seen as key to helping industries decarbonise their operations. Reaching our net zero targets requires industry uptake of CCS to grow 120-fold by 2050, according to analysis from McKinsey & Company. Indeed, if successful, it could be responsible for reducing CO2 emissions from the industrial sector by 45 percent.
A Digital Twin solution
ABB and Pace CCS joined forces to deliver a digital twin solution. It reduces the cost of integrating CCS into new and existing industrial operations. Simulating the design stage and test scenarios to deliver proof of concept gives customers peace of mind. Indeed, system designs need to be fit for purpose. Also, it demonstrates the smooth transition into CCS operations. Additionally, the digital twin models the full value chain of a CCS system.
Cybersecurity leader Shinesa Cambric on Microsoft’s innovation journey to identify, detect, protect, and respond to emerging threats against identity and access
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This month’s cover story highlights a cybersecurity program protecting billions of users.
Welcome to the latest issueof Interface magazine!
Interface showcases leaders at the forefront of innovation with digital technologies transforming myriad industries.
Shinesa Cambric is on a mission to drive innovation for cybersecurity at Microsoft. Moreover, by embracing diversity and opening all channels towards collaboration her team tackles anti-abuse and delivers fraud-defence. Continuous Improvement doesn’t just play into her role, it defines it…
“In the fraud and abuse space, attackers are constantly trying to identify ways to look like a legitimate user,” warns Shinesa. “And this means my team, and our partners, have to continuously adapt. We identify new patterns and behaviours to detect fraudsters. At the same time, we must do it in such a way we don’t impact our truly ‘good’ and legitimate users. Microsoft is a global consumer business and any time you add friction or an unpleasant experience for a consumer, you risk losing them, their business and potentially their trust. My team’s work sits on the very edge of the account sign up and sign in process. We are essentially the first touch within the customer funnel for Microsoft – a multi-billion dollar company.”
ABB: Digital Technolgies contributing towards Net Zero
Nigel Greatorex, Global Industry Manager for Carbon Capture and Storage (CCS) at ABB Energy Industries, explains how digital technologies can play a critical role in the transition to a low carbon world. He highlights the role of CCS in enabling global emissions reductions and how challenges can be overcome through digitalisation…
“It is widely recognised decarbonisation is essential to achieving net zero emissions by 2050. Therefore, it’s not surprising that emerging decarbonisation technology is becoming an increasingly important, and rapidly growing market.”
CSI: How can your IT estate improve its sustainability?
Andy Dunn, Chief Revenue Officer at IT solutions specialist CSI, reveals how digital technologies can contribute to ESG obligations: “Sustainability is a now seen as a strategic business imperative, so much so that 74% of companies consider Environmental, Social and Governance (ESG) factors to be very important to the value of their company. Additionally, we know almost three in four organisations have set a net zero goal. With an average target date of 2044, 50% of organisations are seeking more energy efficient products and services.”
https://www.youtube.com/watch?v=tsDaZiSO1ho
“Optimising energy use and consolidating servers and storage infrastructure form a strong basis for shaping a more environmentally friendly and efficient IT estate. It no longer needs to be the Achilles Heel of an ESG policy. “
Mia Platform: Sustainable Cloud Computing
Davide Bianchi, Senior Technical Lead at Mia Platform, explores the silver lining of sustainable cloud computing. He reveals how it can help us reduce our digital carbon thumbprint with collaboration, efficient use of applications, containerisation of apps, microservices and green partnerships.
“We’re already on an important technological path toward ubiquitous cloud computing. Correspondingly, this brings incredible long-term benefits too. These include greater scalability, improved data storage, and quicker application deployment, to name a few.”
Also in this issue, we hear from Doug Laney, Innovation Fellow at West Monroe and author of Infonomics and Data Juice. Also, we learn how companies can measure, manage and monetise to realise the potential of their data. And, Deputy CIO Melvin Brown discusses the people-centric approach to IT supporting America’s civil service at The Office of Personnel Management (OPM).
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
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Our cover story explores the rise of data and information as an asset.
Welcome to the latest issueof Interface magazine!
Interface showcases leadersaiming to take advantage of data, particularly in a new world of AI technologies where it is the fuel…
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.
Pauline Potter, Director of Procurement at Evri, discusses her firm’s drive to delivering sustainability and offering best-in-class solutions.
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Today, Evri stands as the UK’s biggest dedicated parcel delivery firm and is armed with more than 18,000 couriers.
It has over 8,500 local one-stop ParcelShops and lockers and a growing network of best-in-class hubs and depots. Founded in 1974, Evri has undergone significant transformation over the years, most recently a successful rebrand with Hermes UK in March 2022. And overseeing the company’s procurement function is Pauline Potter. A Cornell University graduate in the US, Potter trained as an engineer before moving into consulting at KPMG and Efficio.
Indeed, setting the standard in procurement isn’t easy. It takes hard work, dedication and a drive to consistently deliver and meet customer demands, particularly in today’s world. However, to companies like Evri, they take challenges in their stride.
In our recent CPOstrategy Podcast, Pauline Potter, Director of Procurement at Evri, discusses her firm’s driving sustainability while at the same time delivering best-in-class solutions while maintaining its position as the UK’s biggest dedicated parcel delivery company.
This month’s cover story sees us speak with Brad Veech, Head of Technology Procurement at Discover Financial Services.
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.
Melvin Brown, Deputy CIO at the Office of Personnel Management, explains the organisation’s ‘sprint to the cloud’ and its determination to modernise at every level.
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Our cover story highlights the Office of Personnel Management’s ‘sprint to the cloud’ with technology.
Welcome to the latest issueof Interface magazine!
Interface hears from leaders who champion a people-first approach driving successful technology transformations.
Culture Modernisation at the Office of Personnel Management
The Office of Personnel Management (OPM) is a government entity which manages America’s civil service. This month’s cover story explores how an organisation that prioritises people is taking a human approach to IT. Deputy CIO Melvin Brown oversees a portfolio of $500m in programs and a growing workforce of around 300 federal employees and contractors. OPM is undergoing a major cloud transformation… “We want to be cloud-first and cloud-smart as we move forward,” he explains. “So, we created a two-year sprint to the cloud plan where we take all our major applications and move them to the cloud in order to take advantage of all the benefits that brings, from both a security and a utility perspective.”
International Trade Administration: A strategic vision for technology
The International Trade Administration (ITA) strengthens the competitiveness of U.S. industry, promotes trade and investment, and ensures fair trade through the enforcement of trade laws and agreements. We hear from its CIO Gerald Caron who is passionate about involving all stakeholders in ITA’s transformation… “We’re introducing different ways of thinking to drive innovation at the International Trade Administration (ITA). What is the art of the possible? We’re looking to explore possibilities with technology across our business units and build simple foundations for the development of more complex approaches.”
Irwin Mitchell: Technology with a human touch
Also espousing the importance of a people-centric approach, Graham Thomson, Chief Information Security Officer at Irwin Mitchell, discusses his firm’s transformative legal solutions. “We’re far more than just a law firm,” he says. “I think what sets us apart is that we’re very people focused and an organisation that genuinely cares about not only our customers but our people too. People are your biggest asset, and you have to look after them.”
State of Vermont: Using AI for good
We spoke with Shawn Nailor, Secretary and CIO at State of Vermont, about IT modernisation, tackling cybersecurity state-wide, and how AI is being used for the good of Vermonters. “We’ve got to be practitioners in order to give good guidance on how to use advanced technology and where… We want to establish a practice by which we can lead by example and show good applications or AI tools to advance services and the delivery of products.”
Also in this issue, we round up the must attend tech events; get game-changing AI, Metaverse and ‘moonshot’ insights from Lenovo, and learn why people are at the heart of the decision-making process at energy company newcleo.
We look into the need for a supply chain reset amidst inflation concerns, supply uncertainty, geopolitical issues and sustainability drives.
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Today’s supply chains are under pressure like never before.
Amidst inflation concerns, supply uncertainty, geopolitical issues and sustainability drives, the modern supply chain is having to think twice about the way it operates. It means companies are rethinking their supply chain strategy as well as the materials they source and the suppliers they work with. But such significant change doesn’t come easy and isn’t necessarily cheap either. Indeed, these factors have led to the necessity of a great supply chain reset. But this is no easy fix. It impacts the entire business model, from strategy, marketing and design all the way through packaging, storage and transportation.
Supply Chain Revolution
The first part of a supply chain overhaul is rationalising the portfolio. A major review of the product portfolio could reveal what is profitable to make or sell. In many industries, the combined effect of the rising cost of products, logistics, carbon charges for border crossings and frequent supply disruptions is increasing the cost-to-serve, reducing gross margins and making it unprofitable to hold inventory as a buffer.
Leading companies look for ways to improve communications among the supply chain, leadership, sales, and other commercial teams so that supply chain leaders clearly understand the trade-offs required to win in the market. The most successful companies are also involving other key stakeholders in the supply chain balance equation discussion, including finance, R&D, regulatory, sustainability, and procurement. This ensures everyone understands all the implications of the proposed overhaul, particularly what can actually happen.
COVID-19 disruptions pushed companies to reorient their supply chains around resilience. According to Bain & Company, management at one global apparel firm recognised early on that this would require a transformation that would have ripple effects across other parts of the business. In order to make the correct decision, it pulled together a cross-functional strategy team that included the heads of supply chain, finance, sustainability, consumer insights, and the product’s business unit. The team saw the supply chain redesign as an opening to not only boost resilience but also responsiveness and sustainability. It found reducing reliance on any one location would provide insulation from supply disruptions, and making its products closer to customers would speed up delivery and shrink the supply chain’s carbon footprint.
Design to delivery and beyond
Taking a detailed view of the entire product journey, from design to delivery and beyond, can also help to simplify sourcing, by standardising as many elements as possible, reducing the range and specification of materials used for production and packaging. This means fewer suppliers and components, which lowers the exposure to disruption. Companies should investigate whether it’s possible to use less material and/or more recycled content, and whether this can reduce total cost of manufacture.
Today, chief supply chain officers balance multiple conflicting needs of cost, service, sustainability, agility and resilience. As a result of increasingly international trade complexity and the need to manage a widening range of risks, it’s difficult to determine where products should be manufactured and sold. While the onshoring versus offshoring versus friendshoring debate remains, it is further complicated by issues such as sustainability, trade wars, agility and, increasingly, visibility.
In the era of mass offshoring, manufacturers have enjoyed the huge scale efficiencies of large manufacturing centres in low-wage countries. For a wide range of products, there is a now a considerable and visible shift to get closer to the end customer, to ensure a faster response to changing consumer demands, while avoiding tariffs, cutting logistics costs and reducing carbon footprint.
Looking ahead, supply chain has little choice. It can’t stand still and wait for the next black swan event to unfold – companies must be more resilient and fluid. A great supply chain reset may not just be a “nice to have” anymore.
In EY’s January 2023 European CEO Outlook Survey, it was discovered European CEOs expect short-term challenges but have reason for optimism.
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Today’s CEO faces unprecedented challenges like never before and is tasked with navigating choppy waters.
Amid global uncertainty caused by a potential recession and on the back of war in Ukraine and disruption caused by COVID-19, it can feel overwhelming for even the most experienced leaders.
A positive horizon?
Despite this, consulting giants EY has discovered reason for optimism in its January 2023 CEO Outlook Pulse survey which includes 390 responses from CEOs across Europe. While the survey found 98% of respondents are indeed expecting a global recession, the majority of European CEOs (52%) anticipate it to be temporary and not a persistent one. These figures are a greater percentage than CEOs worldwide (48%) who point to more long-term optimism for the global economy among European CEOs.
According to the survey, 47% of European respondents believe this recession will be different from previous slowdowns. The recent crisis is more driven by myriad geopolitical challenges and an ongoing fallout from the COVID-19 pandemic compared with previous recessions primarily as a result of financial and credit market factors. Many CEOs are aware of this difference and acknowledge the necessity for new and sustainable approaches that build resilience in uncertain times.
In EY’s last survey in October 2022, ongoing pandemic-related concerns such as supply chain issues were the most important topics. However, since then supply chain pressures have eased to some extent with data from S&P Global Purchasing Managers’ Index (PMI) showing improvement. Only 32% of European CEOs now cite supply chains as the key issue which is down from 41% in October. Given inflationary pressures and the upward movement in interest rates, European CEOs are increasingly focusing on the policies and steps they believe European governments should take to help businesses mitigate the downturn.
About 35% of European respondents, in comparison to 32% globally, consider uncertain monetary policy and increasing cost of capital as the biggest challenge to growth. With inflation beginning to decline in November 2022 after 17 months of upward trajectory, CEOs are closely following central bank activity for potential course changes.
A strategy change
In response to the current recession, EU policymakers are considering more dovish economic recovery proposals instead of top-down austerity rules seen during the sovereign debt crises a decade ago. This includes rethinking debt rules to help countries navigate this downturn. Alongside this, EU governments now face pressure on how to handle the discontent of people protesting against the rising cost of living crisis and questions still remain on how extensively they will intervene. In particular, governments are reluctant to pursue austerity measures as a result of protests from the crisis 10 years ago. Meanwhile, for CEOs, financing will continue to be a challenge as a result of increased capital costs that are set to persist which disrupted growth plans.
European CEOs have learned from previous financial crises and recognise that it is essential to think of new and sustainable strategies to capitalise on the opportunities.
What is the way forward?
According to EY, there are five directives which are worth exploring over the next few years.
Investing in operations European CEOs identify investing internally to boost operations as extremely important. Risk isn’t only about extraordinary events; day-to-day operational failures can also lead to losses, regulatory action and reductions in share prices. Operations such as finance, accounting and supply chain have emerged as the top priority area of investment for European CEOs (41%).
Recognising disruption and accelerating digital transformation
Amid ongoing global pressure to embrace new technologies and a digital transformation, COVID-19 further accelerated a trend toward digitalisation. Around 38% of European CEOs (in line with 37% globally) are looking to invest in digital transformation, data and technology to emerge stronger from this downturn.
Developing a strong environmental, social and governance (ESG) strategy
Businesses need to ensure ESG processes are moved to the centre of business strategy. Sustainability, including net zero and other environmental issues, as well as societal priorities, is one of the key areas that European CEOs identify as a need for more investment.
Nurturing talent
Despite the recession, the labour market remains tight in Europe. European CEOs are weighing cost management options, with 37% considering a move to contract employment and 38% planning on reducing learning and development investments. About one third are also considering a restructuring of their workforce compared with global and Americas CEOs (36% and 42%) considering the same approach.
Portfolio transformation
Looking ahead, portfolio rebalancing is expected to be a key theme as CEOs will be compelled to make bold decisions regarding their business portfolio. During a recession, companies must critically assess what their core businesses are, what their focus should be and where they can create value by spinning out or selling non-core assets. Some 93% of European CEOs consider prioritising restructuring opportunities as an important initiative in the next six months.
Welcome to the launch issue of CEOstrategy where we highlight the challenges and opportunities that come with ‘the’ leadership role
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Our first cover story explores how Vodafone is leveraging strong leadership to drive the collaborations enabling businesses to champion change management and better use technology.
Welcome to the launch issue of CEOstrategy!
Tasked with accelerating business growth, while building the synergies across an organisation that can drive innovation to meet diverse customer needs and keep revenues on track, the modern CEO must be mentor, marshall and motivator on the journey to success.
“Leadership is purpose, it’s why do you do the things you do…”
Our cover story throws the spotlight on Vodafone US CEO David Joosten; also Director for Americas & Partners Markets at Vodafone Business, he talks to CEOstrategy about leading from the front and setting the standards to deliver growth while keeping employees and customers happy.
“People follow leaders that are honest about themselves. If you can reflect on what you’ve done well, but also where you need to improve it can inspire others to do the same.”
EMCS Industries Ltd: How a CEO can navigate change management
“Why hire talent and then tell them what do? You have so much to learn from the great people you hire. Micromanaging is not management, and it’s certainly not leadership. Let your people thrive!”
Read our interview with EMCS Industries Ltd CEO Trevor Tasker for more thought-provoking insights on leadership from the shifting tides of the marine industry in this maiden issue.
How to be an authentic leader
“At the most basic human level, everyone knows what it’s like to feel heard by another person, and how that changes our behaviour. It can help anger and sadness subside and enable us to start seeing things differently. So, when employees are being listened to by their leaders, it can only help how an organisation operates.”
Dr Andrew White, director of the Advanced Management and Leadership Programme at the University of Oxford’s Saïd Business School and host of the Leadership 2050 podcast series, explores transformative approaches to leadership for the modern CEO.
How can CEOs drive forward culture change around diversity and inclusion?
Diane Lightfoot, CEO of Business Disability Forum, explores the changing the narrative around diversity and inclusion in the workplace.
“Disability is still often parked in the “too difficult” box when it comes to Diversity, Equity and Inclusion. Employers are often afraid of doing or saying the wrong thing and as a result, do or say nothing. As a CEO, the stakes feel (and often are) higher. That high profile platform can feel daunting at the best of times; when tackling an unfamiliar topic, it can feel positively overwhelming. But what we do and say as senior leaders has a huge impact. Indeed, it is critical in driving change.”
https://www.youtube.com/watch?v=g-TRCm1dv6o
Also in this launch issue, we get the lowdown on agile ways of working from Kubair Shirazee, CEO of Agile transformation specialists Agilitea. Elsewhere, we speak with Nirav Patel, CEO of the consultancy firm, Bristlecone – a subsidiary of Mahindra Group and a leading provider of AI powered application transformation services for the connected supply chain – who discusses the challenges facing CPOs and supply chain leaders in our uncertain times. And we analyse the latest insights for CEOs from McKinsey and Gartner.
Standard Bank CIO Bessy Mahopo on the challenges of operating in a fractured market and how the company overcomes them
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This month’s cover story highlights how technology is helping Standard Bank overcome the challenges of a fractured market to both drive business growth and improve services for customers.
Welcome to the latest issueof Interface magazine!
“Time may change me, but I can’t trace time…” sang David Bowie. Changes can be challenging to manage with the path to positive disruption not always a smooth change management journey.
Interface dives deep for insights on understanding, planning, implementing and communicating change across industries.
Standard Bank CIO (CIB – Transactional Banking) Bessy Mahopo explains how one of South Africa’s largest banks is using its own digital transformation successes as a template to support the country’s ongoing technological evolution by overhauling IT from the inside out. “I believe that once we start moving the curve to fifth and sixth generation technology, we’re going to become even more of a value-producer.”
The art of change management with SAP
Maria Villar, Head of Enterprise Data Strategy and Transformation at SAP, talks about the importance of driving change in the technology space and helping businesses thrive with data from the perspective of one of the world’s leading enterprise resource planning software vendors. “My job is about finding out what a good data strategy looks like and continuing to spend time with customers to look ahead…”
Talent transformation journeys with TUI
We caught up with Cerstin Lang, Director for HR Group IT at TUI. She reveals how it’s global For:ward program is driving digital transformation as the travel giant works with training partner Udacity to upskill IT talent. “Our IT goals are focused on developing a structure that supports new ways of working with the right balance to innovate and grow in the future.”
How TransUnion is enabling consumer trust
Alejandro Reskala, CIO Canada, LATAM, Caribbean at TransUnion, about technology transformation at a leading consumer credit reporting agency, its dedication to people, and how it makes trust possible. “TransUnion has always blazed a trail to use technology and data to generate insights that help support financial inclusion.”
Also in this issue, we ask what the birth of ChatGPT means for businesses leveraging tech and learn from Rivery why organisations need to rethink their data strategy with robust operational analytics.
Mark Weil, CEO at TMF Group, discusses the rise of staff attrition in the industry
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At the start of 2023 many companies are still struggling to find employees. The job market favours the applicant far more than before Covid-19 across many sectors. Higher interest rates and lower economic growth so far haven’t reduced the pressure on labour availability.
High staff turnover isn’t just a matter of the cost it creates. The disruption from running with a lot of open roles and with less experienced staff can disrupt client service, increase error rates and lead to more serious compliance and reputation damage.
Mark Weil, CEO at TMF Group
Examining the data
A lot of commentary on the situation has been based on surveys of employees’ intentions rather than their actual decisions. By managing our clients’ financial, legal and employee administration we have access to large volumes of data. This provides insight on the overall recruitment and resignation levels across workforces, from several hundred thousand employees, covering a broad range of sectors and job levels in more than 90 countries.
As a starting point, the data tells us that there was indeed a significant global increase in staff resignation during and after the pandemic. Across the 90 countries, average company staff attrition rose from around 15% annually in mid-2020 to 25% at the end of 2021. That’s a dramatic 67% increase in just 18 months.
Global annualised employee attrition trend
Digging deeper reveals a much more nuanced picture by company and country. In 2021, staff attrition averaged around 20% across the 90 countries but was below 10% in a small number, with Argentina the lowest at 6%. Of those above 20%, India, the UK and Poland topped the list with a rate of 26%. Both India and Poland are now major destinations for companies establishing regional service centres – locations that are supposed to be low cost, stable hubs that support many other countries. So rising staff turnover there will be particularly painful.
2021 average employee attrition by country
When examining the data at company level, annual attrition levels vary even more widely, from a low of around 5% to a high of 40%. Some of that will be a result of challenges in specific industries and companies. Some will arise from the underlying attrition in the labour market of the countries they operate in. To disentangle how much is company versus country, we compare in the chart below the attrition a firm is seeing with the average attrition it should be seeing given the mix of countries where it operates. The wide spread in the data shows that that country averages matter far less than individual company factors. For example, looking at companies whose country mix should give them expected attrition of around 15-20%, we see many at 30%-40% and others at just 5%-10% attrition.
Company actual 2021 attrition versus average for the countries where they operate
Staff attrition is a problem at any time, but becomes a significant threat to a business if it gets too high. How high is a matter of judgement and depends on the particular company. In professional services, for example, when staff attrition is above 20% it starts to impact client service and above 30% it can pose a risk to regulatory and reputational integrity.
The rise in global staff attrition, coupled with big spikes by country and company means that multinational firms will have an increased number of locations where attrition is high and potentially well beyond manageable levels. From 2020 to 2021 the number of employees in company locations experiencing more than 20% attrition nearly doubled, from around 15% to 27%. Looking at where the levels were highest, employees in countries experiencing more than 35% attrition rose from 1% to 7%. That means there’s an increasing number of hotspots, where extremely high staff attrition means companies need to intervene quickly to avoid staff resignations spiralling due to increased workload.
Factoring in country complexity
An important additional factor is the complexity of a particular country to operate in. Many countries have onerous business rules which are enforced vigorously. High staff turnover in complex countries is particularly dangerous because of the added risk of compliance breaches.
We can look at country complexity using TMF Group’s Global Business Complexity Index. It ranks countries annually based on 292 criteria, covering the fiscal, legal and employment environments for doing business in each location.
Jolyon Bennett, CEO of Juice, discusses how sustainability has moved to the forefront of his organisation’s operations
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A green approach is quickly transitioning away something that is ‘nice to have’ to an essential component of a company’s strategy.
To Jolyon Bennett, who heads up UK tech accessories manufacturer Juice, being environmentally friendly is non-negotiable. Bennett has transformed the mobile phone accessories sector, having consistently introduced a series of quality, vibrant and consumer-focused products to market, ranging from portable power banks through to super-fast chargers.
He takes us under the bonnet of his firm’s sustainability drive.
You have recently removed all single-use plastic from your entire product range – why?
Jolyon Bennett (JB): “Why wouldn’t you? Single-use plastic is one of the biggest polluters in manufacturing – it uses 3% of the entire planet’s oil consumption. This year, it’s forecast that there will be 50kg of plastic waste for every single one of the eight billion human beings on planet earth – that’s a lot! Consumers, manufacturers and brand owners like myself all need to get on board with the fact that we’re going to need to use and re-use plastic packaging to make different things.
“Why have we done it? Because it’s totally the right thing to do. We need to stop making so much plastic and we need start reusing what we’ve already got. We need to stop cutting down trees in order to make paper and cardboard – let the trees grow and re-use what we’ve got. It just makes sense on a planetary level to stop consuming quite so much and start being just a bit more content with what we’ve got. Why do we need to make ‘new new new’ all the time?”
What have you used instead of virgin plastic?
JB: “We’re reusing, reusing, reusing. Did you know that recycled plastic – depending on its quality and density – can be recycled and re-used between seven and 200 times. Isn’t that unbelievable? It’s such an amazing material. Plastic is a vibe, and we should be re-using it. Juice is using post-consumer waste such as Evian bottles to make speakers, old milk cartons to make power banks and so much more!”
Why do you love plastic?
JB: “I just think we’ve got a lot of it so why not reuse it? I admire the material because it’s so durable – it’s an incredible scientific breakthrough to be able to make something that’s not only waterproof and heatproof but lasts for up to 3,000 years. There are so many different elements that make plastic a great material. I would prefer it if we didn’t have any, but that’s not going to solve the current (and ever-growing) problem of plastic waste finding its way into our oceans, and burying it isn’t the answer either. The problem is with us humans is that we just shy away from the truth – l don’t want to shy away, I want to face these problems head on and meet the challenge.”
Has Juice taken a financial hit to make this happen?
JB: “As an example, we sell around three million cables a year (based on last year’s figures) and each piece of packaging that we are making using post-consumer waste costs us between $0.15 and $0.25 more, so as a minimum, our increased cost for doing this is almost half a million dollars. But I still think it’s the right thing to do. Money is made up – the world could end and money would no longer matter, so let’s stop making decisions based purely on money and let’s start making decisions based on the right thing to do.”
How do you rate the overall quality of the ‘Eco’ products compared to the ones they have superseded?
JB: “There is absolutely no difference whatsoever, so I rate them just as highly.”
Do customers really want these eco products or is this more for your own conscience?
JB: “I don’t suffer from guilt so in that respect I don’t feel driven by my conscience to do this – doing the right thing has its own gravity and its own way of whisking you forward. Generally, I believe that people and businesses that do the right things will prosper. I’m a firm believer in the philosophy of ‘do the right thing and good things will happen’ so it’s a strategic choice to do something that has a positive impact because positive things attract positive things. While not every consumer or every retailer is especially interested in our sustainability drive, I do think this is shifting slightly. Maybe I do have a conscience, but the reality is that it’s the right thing to do, and the right thing gets rewarded in the end.”
Are retailers keen to stock them?
JB: “We haven’t given them a choice! We changed all of our products because we wanted to and we are adamant that even though the materials we are using are different, our products still perform just as well, if not better.”
Should other tech brands follow suit?
JB: “Of course they should, and we would happily help them do so. We’re willing to introduce other tech brands to our suppliers and guide them through the same process we’ve taken, sharing our knowledge – including the hurdles we’ve overcome – because it’s the right thing to do. I don’t understand why any brand would want to continue producing virgin plastic when they don’t have to, it just doesn’t make any sense to me.”
What advice would you give to other brands wanting to embark on this process of removing single-use plastic from their products?
JB: “Do it. Stop messing about – get on with it and do it. Although it may cost you a bit more in the short term, we’ve proven that consumers do generally buy more of your products if you are making the right decisions towards the environment, so you will reap this extra cost back whilst also doing the right thing.”
What is next for Juice?
JB: “I want Juice to be a brand that limits its impact. We’re currently doing this with our manufacturing and through our supply chain and the way that we conduct ourselves in general. I want to start releasing products that have a positive impact on humans as well as the planet – I’m a firm believer that everyone can win. There will always be a demand for technology, so I don’t believe that we should be fighting against it, however, I would very much like to see people taking their technology off grid.
“My dream is to be able to take every mobile phone on planet earth off grid and start generating our own personal electricity. I want to create products that link to your activity – imagine if you could run 5k and the kinetic activity could generate enough energy to a charge a device such as a phone or a laptop while you do it? I’m interested in organic solutions to current chemical problems such as organic battery cells using salt water and algae as a storage method of electricity – so much so that we’re currently in discussions with a photosynthesis harvesting electronics brand about using photosynthesis as a charging capability!
“I want to get more connected with nature and I think you can have it all – I think we can still enjoy modern technology as well as the beautiful world around us. If we can utilise our intelligence in the right way, we can all live in a perfectly harmonious symbiotic relationship with amazing technology products and a sustainable environment for all wildlife.”
Procurement is in a state of flux. Against a backdrop of economic uncertainty, the procurement landscape is volatile and requires…
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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.
Paul Farrow, Vice President of Hilton Hotels’ Supply Management, sits down with us to discuss how his organisation’s procurement function has evolved amid disruption on a global scale
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The hospitality industry has endured a rough ride over the past few years.
Following the COVID-19 pandemic which stopped the world in its tracks and now with millions facing a cost-of-living crisis, it’s been a period of unprecedented disruption for those involved in the space and beyond.
But it’s a challenge met head-on by Paul Farrow, Vice President of Supply Management at Hilton Hotels, and his team who have been forced to respond as the world continues to shift before their eyes.
Farrow gives us a closer look into the inner workings of his firm’s procurement function and how he has led the charge during his time with Hilton Hotels.
Could we start with you introducing yourself and talking a little about your role at Hilton Hotels?
Paul Farrow (PF): “I’m the Vice President of Hilton’s Supply Management, or HSM as we call it. I’ve been with Hilton Hotels for 12 and a half years, and my role is to head the supply chain function for our hotels across Europe, the Middle East and Africa.
“Over the past few years, Hilton has grown rapidly and has now got 7,000 hotels in over 125 countries globally. What is really exciting is Hilton Supply Management doesn’t just supply Hilton Hotels and the Hilton Engine because we also now supply our franchisees and competitive flags. While we have 7,000 hotels globally, Hilton Supply Management actually supplies close to 13,000 hotels. That’s an interesting business development for us, and a profit earner too.”
You’re greatly experienced, I bet you’ve seen supply chain management and procurement change a lot in recent years?
PF: “The past two to three years have been tremendously challenging on so many industries but I’d argue that hospitality got hit more than most as a result of the Covid pandemic. Here at Hilton, supply management was really important just to keep the business operational throughout that tough time, but I’m delighted to say we’re fully recovered now.
“Looking back, it was undoubtedly difficult, and you only have to look at the media to see that we’re now going through a period of truly unprecedented inflation. On top of the normal day job, it’s certainly been a very busy time.”
Hospitality must have been under an awful lot of pressure during the pandemic…
PF: “Most of our teams as a business and all functions have worked together far more collaboratively than ever before through the use of technology and things like Microsoft Teams and Zoom. Trying to work remotely as effectively as possible changed the way we all had to think and the way we had to do. Now we’re back in the workplace and in our offices, we’re actually looking to take advantage of that new approach.”
Inflation, rising costs, energy shortages, as well as drives towards a circular economy means it’s quite a challenging time for CSCOs and CPOs right now, isn’t it?
PF: “Those headwinds have caused and created challenges of the like that we’ve not seen before. The war in Ukraine and Russia has meant significant supply chain disruption and supply shortages of some key ingredients and raw materials. China is a significant source of materials and they’re still having real challenges to get their production to keep up with demand.
“All the local and short-term challenges are around energy and fuel pricing, so throughout the supply chain that’s been a major factor to what we’ve had to deal with. On top of that is the labour shortages. We rely heavily throughout the supply chain and within our business to utilise labour from around the world. In my region, particularly from say Eastern Europe as well as other businesses all fighting for a smaller labour pool than we had before. We are fighting with the likes of the supermarkets, Amazon’s, not just other hotel companies to capture the labour pool we need both in our properties but also within our supply chain supplies themselves.
Hilton operates a rather unique procurement function, doesn’t it?
PF: “We trade off the Hilton name because our brand strength is something that we are able to utilise and we’re very proud of, but we’ve also got additional leverage by having that group procurement model.
“We’ve got essentially two clients. We’ve got our managed estate which is when an owner chooses to partner with Hilton, they’re signing a management agreement because they want the benefit and value of the Hilton engine. That could be revenue management, how we manage onboarding clients and customers through advertising, as well as the other support we give in terms of finance, HR, marketing and sales as well as procurement.”
HSM is a profit centre and revenue driver through its group procurement model but how does this work?
PF: “Our secret sauce is our culture. It’s our people and that filters across all of our team members and indeed all of our functions. The key strategic pillars are the same for health and supply management around culture, maximising performance and so on as they are across the overall global business.
“Across our 7,000 plus hotels, the majority are actually franchised hotels because that’s the legacy of what still is the model in the US. When I joined Hilton 12 and a half years ago, the reverse is true where nearly all of our hotels in Europe, Middle East and Africa, and indeed in Asia Pacific, were and are managed. In the Europe, Middle East and Africa regions right now we’re building up close to a 50/50 split between managed, leased and franchised.”
What has pleased you most about the roll-out of the HSM?
PF: “It’s certainly not been easy because we’ve got 70 countries that sit within our region here in EMEA and Hilton’s penetration in those individual countries is very different. We may have 100 hotels in one of those markets and only one or two in specific countries. Our scale and our ability to get logistics solutions is different by market.
“Getting everyone on board to what we want to achieve to our guests and to our owners means we have to pull different levers. We have very effective brand standards. If you’re signing up to Hilton, you’re signing up to delivering against those brand standards that we believe are right for our organisation.”
What kind of feedback have you had from your clients?
PF: “Integrity is in our DNA, and we work very closely with our suppliers who we value as partners. These are long-term relationships, and we work hand in hand because we have to see that they’re successful so that we can be successful – it’s really important to what we do and we constantly look for feedback.
“With our internal and our external customers, we’ll have quarterly business reviews and so we’ll get that feedback through surveys where we are asking them to tell us what we do well and what we could do better. Our partners are now asking what additional value can you do to bring support to our organisation through ESG? So that’s what’s on the table now when it wasn’t before. But it’s not just that – it’s about the security of supply competitiveness, competitiveness of pricing, and a whole bunch of other very important things as well.”
Looking to the future, what’s on the agenda for the next few years?
PF: “We’re out there meeting and greeting people in person and there’s always new opportunities that make things exciting in what we do and how we work. Innovation’s very high on our agenda and we’re very proud of what we do in food and beverage. In non-food categories, it’s about how we support our owners and our hotel general managers to find that competitive edge and do the next big thing ahead of our competitors.”
Anything else important to know?
PF: “One thing we’ve been able to take full advantage of is how we’ve been able to grow our business by bolting on new customers. I think it’s fantastic that our competitors choose to use Hilton Supply Management because they benchmarked what our capabilities are and how competitive we are.
“Another key part of the agenda is environmental, social and governance (ESG) sustainability. Responsible sourcing and everything that sits within that is front and centre of what we do. Within that you’ve got human rights, animal welfare, single use plastics as well as general responsible sourcing like managing food waste. The list is very long, but they’re all very important.”
Check out the latest issue of CPOstrategy Magazine here.
Here are 10 of the most important leadership skills that CEOs need to demonstrate in 2023.
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In today’s world, a CEO needs to be lots of things to different people. The importance of having the leadership skill to being able to lead through unprecedented disruption was highlighted by the COVID-19 pandemic and helped to define what makes a good CEO.
Here are 10 of the most important leadership skills that CEOs need to demonstrate in 2023.
1. Clear communication
Communicating effectively with employees is one of the most vital skills any leader can have. By adopting a transparent mindset, it leaves little room for miscommunication or misunderstandings. But rather than just being eloquent, CEOs should deliver meaningful content too. A CEO needs to be able to communicate the essence of the business strategy and the methodology for achieving it.
2. Strong talent management strategy
People are the most important component of all businesses. CEOs who are able to recruit and retain key employees have a greater chance of increasing productivity and efficiency. After recruiting good people, the key to retaining them is by harnessing a positive work environment that empowers employees to succeed.
3. Decision-making
As a leader, thinking strategically to make effective decisions is vital to the success of an organisation. Making decisions is a key part of leadership as well as having the conviction to stand by decisions or agility to adapt when those decisions don’t have the required outcome. While all decisions might not be favourable, making unpopular but necessary calls are important characteristics of a good leader.
4. Negotiation
Negotiation is a fundamental part of being a CEO. In a top leadership position, almost every business conversation will be a negotiation. Good negotiations are important to an organisation because they will ultimately result in better relationships, both with staff inside the company and externally. An effective leader will also help find the best long-term solution by finding the right balance and offering value where both parties feel like they ‘win’.
5. Creativity and innovation
Being quick-thinking and ready to explore new options are great skills of a CEO. Creative leadership can lead to finding innovative solutions in the face of challenging and changing situations. It means in the midst of disruption, of which it has been increasingly prevalent, leaders can still find answers for their teams. Creative CEOs are those who take risks and empower employees to drop outdated and overused practices to innovate and try new things that could lead to greater efficiency.
6. Agility
Without agility over the past few years, businesses would have failed. CEOs were forced to embrace remote working following the advent of the COVID-19 pandemic whether they liked it or not. Now, faced against a potential recession, these macroeconomic events are unavoidable and have to be managed carefully. Effective leaders will have their fingers on the pulse and ready to respond to changes.
7. Strategic forecasting
Creating a clear path forward is essential to achieving uninterrupted success. The ability to look into the future and identify trends and issues to then react to is vital. Good CEOs are able to plan strategically and make informed decisions to set goals and plan for the future easily.
8. Delegation
CEOs can’t do everything. A leader tends to be pulled in a number of different ways every day and it is impossible to be on top of everything. This means the importance of bringing in a team of people who are trusted and skilled in their respective areas of expertise. Successful CEOs are expert delegators because they recognise the value of teamwork and elevating those around them.
9. Approachability
An approachable CEO who welcomes conversation and is an active listener will help employees feel at ease raising issues or concerns. This approach will help build strong relationships with staff and customers and encourage a healthy culture which is beneficial to employee retention. Leaders with strong, trusting and authentic relationships with their teams know that investing time in building these bonds which makes them more effective as a leader and creates a foundation for success.
10. Growth mindset
If a CEO arms themselves with a growth mindset it allows them to meet challenges head-on and evolve. This shines a light on improving through effort, learning and persistence. As others may back down in the face of adversity and upheaval, successful CEOs will strive to move forward with confidence. Those with a growth mindset are unlikely to be swayed as they have the tools needed to reframe challenges as opportunities to grow.
In McKinsey’s latest report ‘Actions the best CEOs are taking in 2023’, we examine three of the biggest trends on the c-level agenda
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Anyone can sail a ship when things are going well. But it takes a strong, robust and characterful CEO to steer a business through choppy waters and out the other side.
In McKinsey’s latest report ‘Actions the best CEOs are taking in 2023’, the research and advisory firm uncovered which trends are set to have the biggest impact on how CEOs lead their business throughout the year.
McKinsey’s CEO Excellence Survey surveyed 200 of the best corporate CEOs of the past 15 years. This was completed by whittling down a list of all the current and former CEOs of the 1,000 largest public companies during that timeframe. The list was subsequently filtered based on tenure, including only those who had completed at least six years in the role. From there, the CEOs were continuously shortlisted until the best 200 were determined.
Each CEO was asked to identify the top three trends that are set to determine how leaders tackle the future. Here is an insight into those findings.
1. Actions to deal with digital disruption
CEOs are targeting digital trends in three key ways: developing advanced analytics, enhancing cybersecurity and automating work. OpenAI’s launch of ChatGPT has accelerated the demand of companies looking to embrace advanced analytics for a competitive advantage. Improving cybersecurity is another key action for CEOs with the importance of guarding against external threats paramount amid strengthening and more mature cyberattacks. Lastly, automating work is another key priority to scale efficiency and eliminate boring and manual tasks which free up people’s time.
2. Actions to deal with the risk of high inflation and economic downturn
One CEO who is worried about economic uncertainty told McKinsey: “Act early to lower costs and protect the balance sheet so that you are stronger and leaner when the economy begins to turn more favourably.” McKinsey found that companies that outperformed the 2008 financial crisis cut operating costs by 1% before the downturn while the others expanded costs by the same percentage. The best performers reduced their debt by $1 for every $1 of book capital before the downturn. This can be done by reducing operating expenses, redesigning products and services as well as reassessing strategic and economic assumptions.
3. Actions to deal with the escalation of geopolitical risk
According to McKinsey, there are three actions to help manage the escalation of global and national crises. CEOs are targeting building robust compliance capabilities, creating resilience in supplier networks and investing in monitoring and response capabilities. These actions come following the challenges presented by COVID-19, the war in Ukraine and now inflation concerns. Many firms are choosing to build their trade compliance organisations and improve how they screen different customers and companies. While a defensive approach is the way forward for many, some companies see the turbulent times as an opportunity.
How Minted is leveraging digital technology to make investment in precious metals, accessible, affordable and simple
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Shahid Munir, co-founder of Minted, discusses how his firm is competing with larger banks for a spot at the top table of investment in fintech.
Few industries have boomed like the fintech space over the past few years. With a plethora of new technology at consumer fingertips like never before, banks are being properly challenged by upcoming startups offering an alternative solution. Among these is Minted, aiming to make the buying, selling, transferring and delivery of physical precious metals simple through flexible monthly plans and one-time purchases. The company was founded in 2018 by three close friends – Shahid Munir, Hamzah Almasyabi and Haroon Siddiq – with a shared passion for entrepreneurship, technology and the opportunities the financial industry presented. Their combined drive led to the creation of Minted.
Shahir Munir, Co-Founder, Minted
The rise of Minted
Munir, co-founder of Minted, admits the journey has been a “rollercoaster” since the trio decided to launch their venture. “It’s certainly been exciting,” he explains. “It’s been a great learning curve and was a case of taking an industry where so many people were so used to doing it one way and offering something new. This has been challenging because we have a great product, but no one understood it. We’ve had to go out and educate people first in what has been a journey of growth, but it’s a constant journey.”
A decade ago, financial technology was considered by many as ring-fenced by bigger banks. But Munir stresses he has tried to change that narrative and offer competition which provides tremendous value. “Previously, a bank was the only way you could provide financial products,” he says. “Technology has allowed more innovative and creative solutions to launch and test the bigger banks and what they became bad at which was the customer experience. Now you see bigger banks adopt a lot of the technology and some of the practices used by challenger banks which can only be a good thing. Being in London has also helped because it is one of the leading hubs for fintechs and really supports the financial technology industry.”
Armed with different skillsets, the three co-founders complement each other with a diverse range of experience. With Almasyabi bringing an operations background and Siddiq bringing business strategy, Munir completes the line-up with finance and technology know-how. “I think it’s what sets us apart and makes us different,” he says. “Our backgrounds mean we’re not tunnel visioned and can see clearly when things aren’t working. We have a great thinktank within the business which helps us come up with ideas.”
Making precious metals accessible, affordable and simple
“I recall seeing a meme about how the price of a Freddo chocolate had changed over the years, no longer being its trademark 10p, it was now 200% more expensive and also smaller in size. This led me down rabbit-hole of trying to understand why most items go up in price as years pass and rarely come back down again. I became fascinated with how the government increases the money supply and the concept of inflation – my money buys me less in the future than it does today.
“I met with the other two founders that same night and the thoughts extended from my mind into an intense conversation about quantitative easing, Brexit, cost of living – snacks were being consumed faster than the rate of government borrowing. Where could we park our money, what was better than money? That was when the penny-dropped (pardon the pun). Hamzah proclaimed: ‘What about gold, guys?’”
Digital disruption
Through Minted, customers will have full legal ownership over their gold and can also request to have their gold delivered to a verified address. The gold and silver are stored in a grade 10 vault in the UK with the highest level of security possible. The products are fully insured by Lloyds of London at the current value while in vaulted storage as well as when being transported.
As a digital disrupter, one of the biggest challenges Minted continues to face is a lack of understanding. Customer assurance is an important priority, and the organisation has established several initiatives to gain trust. Minted is registered and regulated by the Financial Conduct Authority (FCA) which means the firm operates to the highest financial standards and guidelines as determined by the FCA. “I feel like we need to go that extra mile,” stresses Munir. “What I think we underestimated at first was the extent to which people needed to ask questions until we launched a live chat facility on the website. This function helps build our knowledge base and allows us to hold the customer’s hand throughout the process. We’ve also found success when we’ve attended face to face exhibition events and had one-on-one interactions. It’s been brilliant to see first-hand the customer perception and look at what we can do better to meet their needs.”
Munir says he has noticed a trend of people starting with a “flutter” to test the water and check out the process. “I think it’s important that people build their confidence and recognise the value in what we offer,” he explains. “Once this is done, we often see those same customers make larger transactions. We know our difference can be a challenge for some people to accept which is why education is such an important topic to us. We have to keep doing explainer videos, use social media and hold community sessions to be there for customers.”
Scaling up
Minted recently launched its own app which offers customers an even easier way to manage their gold and silver, as well as introducing a tool to partner with businesses called Minted Connect. Munir believes the move has helped showcase an advanced, modern way for people to own physical items. “I love the app as it just makes things so much easier for customers via the platform,” he explains. “It’s been fantastic, a one-stop solution that helps stores the precious metals for free and allows them to be delivered at any time. In a world where everything is so digitally enabled it is nice to offer something physical – people don’t even buy cars anymore. Hopefully via customer feedback we can make improvements to the app that will help us develop new features.”
Munir believes gold is increasingly being seen as an alternative for savings and affirms global pressures like the threat of inflation amid economic uncertainty has helped people to realise the full potential of Minted’s offering. “In the past if you wanted to save money, you simply open a saver account and start adding money but with gold it was often a little trickier,” he says. “But with Minted we’ve simplified the process and tried to make it as automated as possible. Gold is a great alternative which has stood the test of time.”
Looking ahead, Minted is showing no signs of slowing down and is expanding into different territories. Munir remains positive for the next few years and what comes next for his organisation. “We’re working towards expanding the team because I feel like we’re at the stage now where each of our departments needs its own team of people to run each department,” he explains. “We’re scaling up and branching into new markets such as Turkey, and focusing in on developing the business to business side too.”
“Disruption should drive digitalisation and cloud uptake rather than hindering it.”
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Sal Laher, Chief Digital & Information Officer at global enterprise software provider IFS, reveals how a single strategy for cloud and digitalisation helps businesses maximise the rewards of growth.
Digitalisation equals transformation
Digitalisation and the business transformation projects that enable it are again on the radar for many businesses, particularly given the current macro-economics and potential recession being predicted. According to recent data from Research and Markets, The Global Digital Transformation Market size is expected to reach $1,302.9bn by 2027, rising at a compound annual growth rate (CAGR) of 20.8% in the period 2021-2027.
This renewed focus on digitalisation is aligned to businesses accelerating cloud migration, including readily available SaaS solutions. The Flexera 2021 State of the Cloud Report finds 92% of enterprises have a multi-cloud strategy and 80% have a hybrid cloud strategy.
Sal Laher, Chief Digital & Information Officer, IFS
Both trends will go hand in hand as digitalisation and cloud migration continue to drive business efficiencies, process change and consumer service demands. Most organisations are aware of the potential rewards both business models can bring. This is because it is not the first time they are being talked about– this major transformational shift has already been in place for a decade. But some, wary of the disruptive impact of recent global events are holding back from implementing them. However, it is the wrong approach.
Disruption should drive digitalisation and cloud uptake rather than hindering it. Even in isolation, either moving to the cloud, or undertaking digitalisation, will enable faster decision-making, supported by greater compute power and more agile processes, generating faster output and enhancing customer service. Yet, to drive competitive edge, organisations need to combine cloud migration with business transformation and look to maximise those benefits. To do this, they must develop a single strategy covering both elements and move forward with a common approach.
Migrating to the cloud for business transformation
By digitalising, organisations have an opportunity to benefit from faster time to insight, enhanced business and customer connectivity, and operational efficiencies. It allows them to more easily collect and analyse data that they can later turn into actionable, revenue-generating insights.
Over time, they can go further and start to tap into the benefits of artificial intelligence, machine learning, big data analytics, and the Internet of Things (IoT). But it is the additional compute power and scalability of the cloud that helps them to maximise these benefits and fulfil the potential of digital technologies.
Cloud migration also includes adopting evergreen application (business process) solutions in the cloud with the many SaaS solutions that are available today. That’s why it is important that they adopt a single plan to migrate to the cloud and drive business transformation all in one. This tandem approach also avoids unnecessary customisation, making a business much more agile to change based on actionable data insights.
Adopting a single plan will, in itself, drive up efficiencies and drive down costs. But critically, the two must be linked to ensure that businesses maximise the benefits of the migration process.
It is cloud, after all, that helps businesses adapt to the new digital world, enabling them, for instance, to leverage out of the box business applications, digital analytics tools and low code platforms that deliver informed decision-making and reduce costs. But cloud doesn’t just maximise the benefits for businesses, it also accelerates them. Cloud has become the fulcrum of digital transformation, mainly due to its ability to enable innovation at scale and allow businesses that have digitalised to rapidly launch enterprise-ready products.
Without cloud, businesses will struggle to drive through timely updates to systems and processes. The costs of stakeholder management may ramp up. Moreover, moving to the cloud without doing it within the step-by-step structure of digital transformation risks mistakes being made, increasing the likelihood of data loss and security breaches through misconfigurations.
Optimising the benefits of digital transformation in the cloud
We have seen how important it is to adopt a single strategy for cloud migration and digitalisation and to execute them in tandem. But organisations also need to maximise the benefits of the combined approach. So how can they best do this?
First, they need to avoid procrastination and delay. The benefits of digitalisation and cloud migration working together are compelling – and senior leaders need to seize the initiative and kickstart the transformation. To get the ball rolling, they need to conduct a benchmarking exercise to better understand where their business stands in terms of its capabilities or gaps. This will help to decide where efforts and resources should be focused.
They then need to align their business processes with IT. That’s key as modern business models increasingly emphasise the digitalisation of processes.
Cloud computing and network security concept, 3d rendering,conceptual image.
They should begin by determining their goals and the systems, technologies, and processes currently in use to achieve them. Next, they need to brainstorm and document core business objectives before developing a cloud and digitalisation migration roadmap to guide their implementation. Measuring performance will also be crucial to optimising results. In choosing which metrics to analyse, organisations should concentrate on those that will most positively impact their bottom line or user experience.
Ensuring employees buy into the process of cloud-based digitalisation will also be key. Organisations should use cloud-based digitalisation as an opportunity to strengthen business processes and help employees switch to new ways of working which maximise the potential of the new technology.
Digital readiness
Given all this, it is vital businesses don’t delay on their journey to digital and the cloud. Unfortunately, CIOs often struggle to know where to start with a cloud and digital migration strategy.
Before they begin, they often look to put a complete strategy in place up front. The truth is that it is not necessary. Instead, they need to get going and prioritise what’s most important. Pick one area, settle on a use case, digitalise, and move it to the cloud, demonstrate results – and then repeat incrementally. That will enable the business to showcase value and create momentum. Over time also, this single coordinated approach, will allow it to tap into a wide range of cloud and digitalisation related benefits – and ultimately to maximise the rewards.
Ian Povey, CIO – Head of Payments Services & Technology, on the strategic transformation taking place at NatWest benefitting both the bank and its customers
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This month’s cover story reveals how innovation is at the core of change for payments processes at NatWest.
Welcome to the latest issueof Interface magazine!
Charles Darwin famously said: “It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.” Technology is helping us to evolve. And that evolution is being driven by innovation.
“It may be a cliché, but a transformation journey really has no end… If you fixate on a constant end state without ‘checking in’ you can, and likely will, fail in your objectives.” A wise outlook from a CIO with three decades of change management experience across banking’s payments panorama.
Ian Povey, CIO – Head of Payments Services & Technology, discusses the strategic transformation taking place at NatWest and how that journey of change and innovation is benefitting both the bank and its customers as it evolves to become a relationship bank for a digital world. “Our environment is always changing – we must be on the back of the ‘Change Dragon’ and steering/influencing as a leader and always learning from our teams for new ideas.”
Customer-Centric transformation at FedEx
We also check in with logistics leader FedEx… Custom Critical CIO Cheryl Bevelle-Orange reveals a “technology-forward yet flexible company” embracing innovation and “paving the way for customers to get more relevant information faster about their packages while delivering with excellence”.
https://www.youtube.com/watch?v=galaZZlrEn0
Continuous Improvement in IT at Mazars
Mazars CIO David Marcelino explains his approach to innovation and leading on a successful IT transformation program at one of the world’s largest audit and advisory firms aiming to improve the digital experience for all its stakeholders. “Change Management, adoption, training and awareness are at the core of every single business technology project we deliver.”
Tech innovation at speed with the US Air Force
We also caught up with George Forbes, Director of Digital Operations Directorate at the United States Air Force, who outlines the importance of innovation within the federal government.
Digital Transformation in healthcare at Avellino
Nancy Selph, Global Head of IT at Avellino Lab, discusses how technology is creating new opportunities to improve health outcomes and the importance of leadership in the industry.
Also in this issue, we round up the key tech events and conferences across the globe; we learn how Minted are making it easy for everyone to invest in gold; and we feature the latest on cloud digitalisation from IFS.
We look into the supply chain production process of Easter Eggs and the journey to their final destinations in supermarkets
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Chocolate is arguably the world’s most popular sweet treat. Depending on who you ask, of course.
After, perhaps Christmas, it is the most common time for people to indulge in chocolate if they don’t do so anyway throughout the year.
And synonymous with Easter are the eggs themselves which are loved by children and adults alike all over the world.
The journey to Easter Eggs
The supply chain process is split into eight stages of production: cultivating, harvesting, splitting, fermentation, drying, winnowing, roasting and grinding. Following production, the supply chain process is extended further with logistics which is the final step to providing customers with their favourite seasonal sweet treat.
The journey actually begins with cocoa tree plantations being established which is done by scattering young cocoa trees amongst new shade trees or by planting the cocoa trees between established trees. These are planted in humid tropical climates, with temperatures between 21 and 23 degrees Celsius. This is consistent rainfall periods and a short dry season because these conditions provide good quality cocoa.
Each tree produces 20-30 cocoa pods a year which grows straight from the tree’s trunk and main branches. With this tree also yielding fruit, the crop is carefully pruned, and as a result, it is easier to harvest the cocoa pods. The next step is the labour-intensive task of harvesting the crop.
The harvest is a whole community affair on small West African farms. Large knives are then used to detach the pods from the trees and placed in large baskets on workers’ heads. The pods are then manually split open to remove the beans so they are ready for the two-step curing process. Each pod consists of between 20-40 purple cocoa beans.
The curing process consists of fermenting and drying the beans to develop the chocolate flavour. There are several fermentation methods but the most traditional is the heap method. This requires placing mounds of wet cocoa beans in between layers of banana leaves on the ground for between five to six days. Following this, the drying stage begins. This involves the wet bunch of beans being spread out in the sun or using a more advanced method of special dying equipment.
From plant to factory
Often, a lot of large chocolate brands then buy the cocoa through intermediaries. The beans are then packed into sacks ready to be exported to the brands processing facilities in other locations globally.
After arrival, the beans are cleaned and quality inspected before the winnowing stage takes place. The dried beans are cracked to separate the shell from the nib which is where the small chunks are used to produce chocolate. Afterwards, the roasting phase begins in which the nibs are baked at high temperatures reaching 120 degrees Celsius in special ovens. This is where the colour and flavour is acquired.
Subsequently, the next stage is grinding which creates the basis of all chocolate products. The roasted nibs are grounded in stone mills until a thick liquid chocolate consistency is achieved.
Chocolate to egg
The final step is creating the chocolate egg masterpiece by using highly efficient computer-operated technology which has been used since the mid-20th century. The molten chocolate is placed in heated egg molds which are rotated so there is an even thickness. Following this, the eggs are left to cool and then removed from the molds. Once cooled, the eggs are wrapped in coloured foil and packaged into individual boxes before being sent out for retail. The transportation and exportation throughout the various supply chain stages is vital being a seasonal product. This means they are heavily relied upon for their timings to deliver to large supermarkets and independent stores.
Gartner surveyed 400 senior business leaders about the challenges faced and their priorities for 2022-23. We analysed the results
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Priorities change in a business; they evolve all the time to match the societal landscape around them. Following a major worldwide disruption like the COVID-19 pandemic, it’s no surprise that the focus for CEOs has shifted to match the way our outlooks and challenges have changed.
Gartner surveyed 400 senior business leaders about their 2022-23 priorities and found that – for the first time – environmental sustainability has made its way into the top 10. Additionally, workforce issues are a bigger priority than ever before.
Mark Raskino, VP Analyst at Gartner, said of the results: “In 2022, the Gartner CEO and Senior Business Executive Survey showed that, catalysed by multiple macro trends and economic factors, business leaders are reprioritizing some key areas of enterprise purpose and management focus.”
The last time there was such a dramatic change in the priorities of CEOs was in 2009-10, during the recovery from the last major recession. Here, we’ll dig into the key challenges for CEOs in 2023…
Growth
While growth remains the primary challenge, with 51% of respondents stating that it’s in their top three priorities, it’s actually down 8% from 2021-22. Gartner has surmised that the reason for this is that, due to ongoing supply chain disruptions, business leaders are less focused on driving up demand if they don’t necessarily know whether they can supply. Many organisations are working hard to revamp and improve their supply chains, but uncertainty remains and nobody wants to make promises that they can’t keep.
Technology
Technology has also dropped slightly as a top three priority, though it remains the second biggest focus at 34%. While the survey respondents are 5% less concerned about tech-related issues than in 2021-22, it’s still hugely important – especially as the world recovers from the pandemic.
Many businesses have taken the pandemic as a sign that they need better digitalisation, as a lack of that made the transition to home working difficult for some. Additionally, cybercrime is a major concern, especially when ensuring employees have the hardware and software they need to work safely from multiple locations.
Workforce
A focus on the workforce is up 32% from 2021-22, putting it at 31% in third place. This is the second consecutive year that workforce has become more of a priority, and there are multiple reasons for this.
Attracting and retaining employees is a challenge because older generations are retiring and there aren’t always enough replacements for specific roles. Plus, the younger generations joining the workforce are more likely to align themselves with businesses they truly believe in, meaning they are more picky, so organisations have to be the best they can and transparent with it.
Additionally, diversity, equality, and inclusion are bigger focuses than ever, and these have been boosted by the spotlight being shone on such topics during the pandemic. All in all, almost half (49%) of CEOs agreed with the statement that ‘it is very difficult for us to find and hire the kind of people we need in our business’.
Corporate
At 29%, corporate has dipped only a little since 2021-22 – just 5% – and remains a top priority. Corporate includes company structure and culture changes, and this is a focus right now due to the challenges of employee retention, as well as the drive towards digitalisation. Corporate change is required to improve business efficiency and performance, hence its position on this list.
Financial
The financial side of business has decreased in importance to CEOs for 2022-2023, dropping by 27% since 2021-22. However, it’s still in the top three for 20% of respondents. CFOs are making a major push towards finance transformation through technology to boost efficiency in their departments. Despite the ongoing challenge of building digital competencies in finance, 82% of CFOs have reported that their investments in digital are accelerating and exceeding investments in many other areas.
Products & Services
Products and services remain in the top three spot for 15% of respondents, up 43% from 2021. As the world recovers from the pandemic, the products and services a business produces are in the limelight. Competition is more fierce than it’s ever been, so innovation is key to remain in the best position.
Customer
The customer as a priority is up 26% from 2021-22, at 15% – and it’s no surprise. Linking into products and services, and the challenge of hiring the latest generation of workers, costumers have very high standards and hard work is required to impress them and retain loyalty.
In a Gartner survey about customer service trends, 74% of respondents stated that improving operational excellence to create a seamless customer journey is either ‘important’ or ‘very important’, and the survey found that business growth is best achieved through positive customer experience outcomes.
Environmental sustainability
Nine per cent of respondents to the Gartner survey stated that environmental sustainability is a top three priority – up a huge 292% from 2021-22. This is the first time it’s broken into the top 10, which is telling. Businesses are increasingly under pressure to do more when it comes to their own environmental impact. Many leading nations are aiming to be carbon neutral within the next few decades and being more sustainable undeniably leads to growth.
Cost
Also at 9% is cost, which is actually down 24%. Despite it being less of a concern than in 2021-22, cost remains a major focus. Supply chain shortages and the government support offered to help people through lockdowns have driven inflation, and Russia’s invasion of Ukraine has made that worse. As a result, we’re seeing the prices of products from the region shoot up, and those cost increases inevitably become the problem of business leaders.
Sales
While it’s number 10 (6%) on Gartner’s list of priority areas, sales is a 77% bigger priority in 2022-2023 than it was in 2021-22. Sales falls into a similar category to cost; with rising inflation comes an inability for customers to spend as freely as they once may have, making the landscape more competitive. Having said that, as we touched on with growth, sales aren’t necessarily being driven to the same degree due to supply chain disruptions.
Sara Malconian, Chief Procurement Officer at Harvard University & Jim Bureau, CEO of JAGGAER explain how ESG & the Circular Economy is changing the evolution of procurement.
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We speak to Sara Malconian, Chief Procurement Officer at Harvard University and Jim Bureau, CEO of JAGGAER to see how ESG and the Circular Economy is changing the evolution of procurement…
Sara, how have you seen your role evolve as a procurement leader over the years as ESG and supplier diversity come into focus?
Procurement leaders have gone from ‘cost cutters’ to ‘problem solvers’ within their organisations. Our core mandates used to be to drive cost savings and efficiency. We were hyper-focused on getting the most out of the organisation’s spend and supplier relationships. Those priorities haven’t gone away, especially in today’s inflationary environment, but the expectations of the procurement function are significantly higher and broader today.
Procurement functions saved their companies during COVID and the confluence of disruptions that followed. We showed we are a strategic linchpin. We are now looked upon to drive value and impact and strategically guide our organisations to achieve broader goals, including diversity and environmental, social, governance (ESG). Internal stakeholders realised the benefits of procurement and sought help with advancing their department’s agendas or solving their challenges. We listen to their needs, allocate the right resources, and ultimately enable them and the overall organisation to be successful.
I’ve been in procurement for over 20 years, and I can honestly say you’d be hard-pressed to find a more rewarding and exciting career. Procurement professionals have a real opportunity to make a tangible difference within their organisations, communities, and the world through the way we source products and services.
What is Harvard doing to have a positive impact on society? Can you share some examples, Sara?
Across the Harvard community, students, alumni, faculty, and staff are advancing scholarship and teaching on the world’s most significant challenges, and everyone wants to do their part to address inequities. Supplier diversity and inclusion have been a priority for Harvard for years, but we wanted to make even more of an impact and really invest in the growth and development of diverse businesses, especially as the pandemic highlighted inequities and disparities within our communities.
In 2021, we formed the Office for Economic Inclusion & Diversity (OEID), which is dedicated to reaching out to diverse suppliers, giving them opportunities, and providing them with tools, training, and resources to be successful. The office also encourages the use of underrepresented business enterprises (UBEs) in the purchasing of all goods, services, and construction at Harvard and standardises procurement practices with these businesses across the university.
We’re proud of the work this office is doing. We’re actively training suppliers on Harvard’s policies and how they can work with us. We’re creating a central location for them to access bid and RFP opportunities. UBEs can also apply to be mentored by Harvard Business School students.
We’ve created a dashboard to track and analyse spend with diverse suppliers across all of Harvard’s schools and measure progress over time. Everything we’re doing is aimed at increasing spend with our existing diverse suppliers, as well as the number of diverse suppliers that work with Harvard, and helping these suppliers grow their businesses.
Jim, why is prioritizing ESG and supplier diversity important and what steps can companies take today to progress in their journey?
Beyond being the right thing to do, investors, boards, regulators, customers, and employees now expect organisations to prioritise ESG and diversity initiatives and walk the talk. There’s also a clear business impact. Supplier diversity drives competitive bidding processes that lead to cost savings. Working with partners who are sustainable and have different ideas and perspectives fuels innovation and creates a competitive advantage. Sourcing from a sustainable and diverse supplier pool also reduces risk by broadening organisations’ access to multiple resources for various materials, products, and services.
One of the most critical steps companies can take to progress on their ESG journey is to make it clear to suppliers that environmentalism is a priority for their organisation. They will attract suppliers with higher levels of ESG maturity and provide suppliers who are earlier on in their ESG journey with sustainability toolkits and training to help educate them on eco-friendly best practices and sustainability innovations.
This step avoids having to overhaul their supply chain to account for ESG. Strategically managing suppliers by leveraging third-party data, scorecards, and supplier audits are crucial for understanding the ESG risks that suppliers pose and minimizing disruptions by working with them to correct these issues.
Successful supplier diversity programs start with a top-down culture shift. If a company’s culture isn’t diverse, inclusive, and supportive for all its stakeholders, they won’t be able to drive supplier diversity in a meaningful way. Supplier diversity strategy should map back to company goals and include an executive-level champion to sponsor the program internally and help bring in the resources they need.
Outside of leveraging technology to identify diverse suppliers and build a program, businesses can talk with people who have been in their shoes. They can collaborate with like-minded companies at industry events, engage in relevant LinkedIn groups, and connect with organisations such as the National Minority Supplier Development Council.
Once diverse suppliers are on board, organisations can create a supplier diversity policy that clearly outlines how many diverse suppliers need to be invited to bid for each event to ensure teams are executing on the strategy. Leading supplier diversity programs go beyond simply spending with diverse suppliers to providing mentorship and training them on how to respond to RFPs correctly, as well as creating environments where it’s easier for them to engage.
Jim, what role does technology play in helping organisations achieve ESG and supplier diversity goals?
Technology is a key enabler of ESG and supplier diversity initiatives. One of the biggest obstacles to supplier diversity and ESG is a lack of reliable supplier data. Suppliers don’t always keep their information up to date in self-service portals. The data procurement teams have isn’t always enriched to the level they need, with insights on diversity status, certifications, and proof of ESG compliance.
Researching and assessing suppliers is tedious and time-consuming, which leads many organisations to skip the verification step. Without this information, organisations don’t have a true picture of the inclusivity and sustainability of their supplier network, which makes it impossible to identify the right partners to source from to meet their ESG and supplier diversity goals and make an impact.
Technology addresses this challenge by automatically collecting, enriching, validating, and integrating the supplier data needed to obtain this level of supply base visibility and make decisions that drive ESG and diversity. AI-powered tools are available to match buyers with specific diverse suppliers who also have the capabilities to help drive ESG objectives and meet broader procurement criteria.
Software that segments the supply base and helps visualise spending with small and diverse suppliers across a variety of classifications is critical for setting benchmarks and measuring progress and ROI.
Jim and Sara, how do you expect the ESG and diversity conversation to shift and where should procurement leaders focus for the future?
Sara: I expect we’ll see the conversation shift to emphasise measurement. It’s not enough anymore to say you’re committed to ESG – you need to prove it and show demonstrable progress and ROI. Maintaining the momentum on ESG initiatives is hard. Technology is key for setting benchmarks and goals, ensuring accountability for hitting key milestones, and measuring progress and return in a credible way.
Jim: In a declining economic environment, choices inevitably need to be made. I expect the conversation around ESG will center around where companies can focus to maintain progress on ESG initiatives as financial and economic pressures come to the forefront. While some companies may need to scale back in some areas to preserve cash and resources to navigate a downturn, I’d advise them to be careful about slowing ESG down too much as it will be much harder to catch up to current levels after the economy bounces back.
I’d argue that when ESG is done right it can be a strategic lever for navigating a down economy, saving organizations money and resources, driving innovation, and helping them achieve broader business objectives and resilience.
Here are five of the biggest procurement events happening during 2023 that chief procurement officers won’t want to miss.
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Procurement Futures
London, UK | 1-2 February 2023
Held at the QEII Centre in central London, Procurement Futures is a new conference, launching in 2023. It promises delegates the chance to find out how to make supply chains more resilient, with thought-provoking and presentations and discussions designed to inform and inspire.
There is a flexible programme of content that can be tailored to attendees’ preferences, with networking opportunities throughout and a huge variety of sessions to attend and take part in.
This CIPS event has three streams of content: Insights, Ignite and Interact. Insights will showcase presentations and panel discussions from leaders, Ignite will consist of hands-on workshops to help delegates optimise their procurement strategies and Interact will be smaller groups taking part in interactive roundtables and debates.
Speakers across the two days will include Ross Grierson, Director of Procurement, Primark; Patrick Dunne, Director of Group Property, FM & Procurement (CPO), Sainsburys Plc; Rebecca Simpson, Procurement and Supply Chain Director, Balfour Beatty; and Nick Jenkinson, Chief Procurement Officer, Santander. In addition, delegates are ablew to book a one-to-one career workshop, where they’ll get advice on professional development from coaches covering a variety of specialisms.
Tickets are £795 for CIPS member, £995 for a non-member and £2240 for a supplier/solution provider, and there is a discount of 30% for tickets purchased before 30 November 2022.
The third World Digital Procurement Summit is aimed at procurement directors, VPs, managers and other industry specialists. The two-day event will focus on accelerating procurement processes, adopting emerging technologies, finding the right talent, overcoming the barriers to progress and embarking on a journey of transformation. It’s a hybrid event, bringing together procurement experts from various industries, which will maximise knowledge exchange opportunities. The event organisers list five key learning points for delegates:
Exploring the latest advances in data and cognitive technologies to gain greater insights and improve procurement processes
Overhauling the procurement ecosystem with new technologies and strategies to drive business value
Sharing the best practices of monitoring and managing a range of risks to hedge against future disruptions
Developing capabilities and skillset required for the digital transformation of procurement
Defining ESG metrics of the procurement strategy to ensure business continuity
Speakers will include Paul Harlington, Group Procurement Director at TUI Group and Patrick Foelck, Head of Strategy and Transformation Procurement at Roche.
Click here to check out a video from a previous event. Tickets cost €1495.
Returning for its 8th annual event, Women in Procurement & Supply Chain will deliver two days dedicated to leadership and the future of procurement. The event will feature a series of exclusive panel discussions and keynote addresses examining career development, overcoming imposter syndrome, working with confidence, developing an unbeatable talent pool, mentoring, diversity and inclusivity.
It will also address risk mitigation, digital disruption, ESG, sustainability, economic development, ethical sourcing, category management, cultural diversity, strategic sourcing, supplier relationships, procurement with purpose, and supply chain resilience. There are two pre-conference masterclass options on 6 March – that can be booked separately – covering either contract law or leadership skills.
Some of the reasons to attend include:
Discover the path to taking your procurement career to a new level while elevating your organisation with dedicated days on leadership and the future of procurement
Learn best practice strategies to facedown supply chain vulnerabilities and reduce risk exposure
Get ahead of the game with insights into the future of procurement and the impact of globalisation on modern supply chains
Put yourself at the cutting edge of ESG and procurement with the latest updates and trends in procurement with purpose
Speakers for the main two-day conference include Michelle Richard, Director of Procurement, Thales; Karina Davies, Chief Procurement Officer, icare NSW; and Kylie McKinlay, Procurement Partner – Property and Business, Australian Broadcasting Corporation.
Tickets start at $3,495 with discounts available until 25 November 2022.
The Americas Procurement Congress will feature the region’s most progressive CPOs sharing their expertise
With a focus on what makes CPOs tick, the Americas Procurement Congress will feature the region’s most progressive CPOs sharing their expertise in keynote presentations and working groups.
Giving delegates the tools to stay on the cutting edge of procurement developments, there are also sessions aimed at those with responsibilities over governance, procurement capabilities and quantifying data. Unsurprisingly, sustainability will also be a key theme in 2023, and attendees will hear from a diverse range of sustainability leaders about how to transition from traditional metrics to a purpose-driven function.
The agenda for Americas Procurement Congress 2023 will include:
Sustainability of the future
How to transition from traditional metrics to a purpose-driven function
Harnessing the power of digital transformation
Utilizing data as a driver of sustainable value, supply continuity and transparency Agile procurement
New approaches and skills that facilitate speed and agility
Frictionless procurement
Removing friction from the procurement process to support high-velocity sourcing
Beyond Just in Time
Designing future-fit supply networks for an age of chaos and conflict
Gartner Supply Chain Symposium/Xpo 2022 addressed the most significant challenges that chief supply chain officers and supply chain leaders face as they mitigate risk and navigate uncertainty in an increasingly dynamic and challenging environment.
At the conference, the top 5 sessions that CSCOs and supply chain leaders met on included:
Signature Series: The Future of Supply Chain
What the Pivot to Sustainable Profit Means for Procurement Leaders
The Art of the New Age One Page Dashboard: Why Your Current Perfor-mance Measures May Be Doing More Harm Than Good
Manage Supplier Risk With Technology
Procurement Role Redesign: Stop Fitting Square Pegs Into Round Holes
Here are five of the best procurement schools in Europe.
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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
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
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
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.
Expert analysis of the tech trends set to make waves this year
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Digital transformation is a continuing journey of change with no set final destination. This makes predicting tomorrow a challenge when no one has a crystal ball to hand.
After a difficult few years for most businesses following a disruptive pandemic and now battling a cost-of-living crisis, many enterprises are increasingly leveraging new types of technology to gain an edge in a disruptive world.
With this in mind, here are what experts predict for the next 12 months…
1. Process Mining
Sam Attias, Director of Product Marketing at Celonis, expects to see a rise in the adoption of process mining as it evolves to incorporate automation capabilities. He says process mining has traditionally been “a data science done in isolation” which helps companies identify hidden inefficiencies by extracting data and visually representing it.
“It is now evolving to become more prescriptive than descriptive and will empower businesses to simulate new methods and processes in order to estimate success and error rates, as well as recommend actions before issues actually occur,” says Attias. “It will fix inefficiencies in real-time through automation and execution management.”
2. The evolution of social robots
Gabriel Aguiar Noury, Robotics Product Manager at Canonical, anticipates social robots to return this year. After companies such as Sony introduced robots like Poiq, Aguiar Noury believes it “sets the stage” for a new wave of social robots.
“Powered by natural language generation models like GPT-3, robots can create new dialogue systems,” he says. “This will improve the robot’s interactivity with humans, allowing robots to answer any question.
“Social robots will also build narratives and rich personalities, making interaction with users more meaningful. GPT-3 also powers Dall-E, an image generator. Combined, these types of technologies will enable robots not only to tell but show dynamic stories.”
3. The rebirth of new data-powered business applications
Christian Kleinerman, Senior Vice President of Product at Snowflake, says there is the beginning of a “renaissance” in software development. He believes developers will bring their applications to central combined sources of data instead of the “traditional approach” of copying data into applications.
“Every single application category, whether it’s horizontal or specific to an industry vertical, will be reinvented by the emergence of new data-powered applications,” affirms Kleinerman. “This rise of data-powered applications will represent massive opportunities for all different types of developers, whether they’re working on a brand-new idea for an application and a business based on that app, or they’re looking for how to expand their existing software operations.”
4. Application development will become a two-way conversation
Adrien Treuille, Head of Streamlit at Snowflake, believes application development will become a two-way conversation between producers and consumers. It is his belief that the advent of easy-to-use low-code or no-code platforms are already “simplifying the building” and sharing of interactive applications for tech-savvy and business users.
“Based on that foundation, the next emerging shift will be a blurring of the lines between two previously distinct roles — the application producer and the consumer of that software.”
He adds that application development will become a collaborative workflow where consumers can weigh in on the work producers are doing in real-time. “Taking this one step further, we’re heading towards a future where app development platforms have mechanisms to gather app requirements from consumers before the producer has even started creating that software.”
5. The Metaverse
Paul Hardy, EMEA Innovation Officer at ServiceNow, says he expects business leaders to adopt technologies such as the metaverse in 2023. The aim of this is to help cultivate and maintain employee engagement as businesses continue working in hybrid environments, in an increasingly challenging macro environment.
“Given the current economic climate, adoption of the metaverse may be slow, but in the future, a network of 3D virtual worlds will be used to foster meaningful social connections, creating new experiences for employees and reinforcing positive culture within organisations,” he says. “Hybrid work has made employee engagement more challenging, as it can be difficult to communicate when employees are not together in the same room.
“Leaders have begun to see the benefit of hosting traditional training and development sessions using VR and AI-enhanced coaching. In the next few years, we will see more workplaces go a step beyond this, for example, offering employees the chance to earn recognition in the form of tokens they can spend in the real or virtual world, gamifying the experience.”
6. The year of ESG?
Cathy Mauzaize, Vice President, EMEA South, at ServiceNow, believes 2023 could be the year that environmental, social and corporate governance (ESG) is vital to every company’s strategy.
“Failure to engage appropriate investment in ESG strategies could plunge any organisation into a crisis,” she says. “Legislation must be respected and so must the expectations of employees, investors and your ecosystem of partners and customers.
“ESG is not just a tick box, one and done, it’s a new way of business that will see us through 2023 and beyond.”
7. Macro Trends and Redeploying Budgets for Efficiency
Ulrik Nehammer, President, EMEA at ServiceNow, says organisations are facing an incredibly complex and volatile macro environment. Nehammer explains as the world is gripped by soaring inflation, intelligent digital investments can be a huge deflationary force.
“Business leaders are already shifting investment focus to technologies that will deliver outcomes faster,” he says. “Going into 2023, technology will become increasingly central to business success – in fact, 95% of CEOs are already pursuing a digital-first strategy according to IDC’s CEO survey, as digital companies deliver revenue growth far faster than non-digital ones.”
8. Organisations will have adopted a NaaS strategy
David Hughes, Aruba’s Chief Product and Technology Officer, believes that by the end of 2023, 20% of organisations will have adopted a network-as-a-service (NaaS) strategy.
“With tightening economic conditions, IT requires flexibility in how network infrastructure is acquired, deployed, and operated to enable network teams to deliver business outcomes rather than just managing devices,” he says. “Migration to a NaaS framework enables IT to accelerate network modernisation yet stay within budget, IT resource, and schedule constraints.
“In addition, adopting a NaaS strategy will help organisations meet sustainability objectives since leading NaaS suppliers have adopted carbon-neutral and recycling manufacturing strategies.”
9. Think like a seasonal business
According to Patrick Bossman, Product Manager at MariaDB corporation, he anticipates 2023 to be the year that the ability to “scale out on command” is going to be at the fore of companies’ thoughts.
“Organisations will need the infrastructure in place to grow on command and scale back once demand lowers,” he says. “The winners in 2023 will be those who understand that all business is seasonal, and all companies need to be ready for fluctuating demand.”
10. Digital platforms need to adapt to avoid falling victim to subscription fatigue
Demed L’Her, Chief Technology Officer at DigitalRoute, suggests what the subscription market is going to look like in 2023 and how businesses can avoid falling victim to ‘subscription fatigue’. L’Her says there has been a significant drop in demand since the pandemic.
“Insider’s latest research shows that as of August, nearly a third (30%) of people reported cancelling an online subscription service in the past six months,” he reveals. “This is largely due to the rising cost of living experienced globally that is leaving households with reduced budgets for luxuries like digital subscriptions. Despite this, the subscription market is far from dead, with most people retaining some despite tightened budgets.
“However, considering the ongoing economic challenges, businesses need to consider adapting if they are to be retained by customers in the long term. The key to this is ensuring that the product adds value to the life of the customer.”
11. Waking up to browser security
Jonathan Lee, Senior Product Manager at Menlo Security, points to the web browser being the biggest attack surface and suggests the industry is “waking up” to the fact of where people spend the most time.
“Vendors are now looking at ways to add security controls directly inside the browser,” explains Lee. “Traditionally, this was done either as a separate endpoint agent or at the network edge, using a firewall or secure web gateway. The big players, Google and Microsoft, are also in on the act, providing built-in controls inside Chrome and Edge to secure at a browser level rather than the network edge.
“But browser attacks are increasing, with attackers exploiting new and old vulnerabilities, and developing new attack methods like HTML Smuggling. Remote browser isolation is becoming one of the key principles of Zero Trust security where no device or user – not even the browser – can be trusted.”
12. The year of quantum-readiness
Tim Callan, Chief Experience Officer at Sectigo, predicts that 2023 will be the year of quantum-readiness. He believes that as a result of the standardisation of new quantum-safe algorithms expected to be in place by 2024, this year will be a year of action for government bodies, technology vendors, and enterprise IT leaders to prepare for the deployment.
“In 2022, the US National Institute of Standards and Technologies (NIST) selected a set of post-quantum algorithms for the industry to standardise on as we move toward our quantum-safe future,” says Callan.
“In 2023, standards bodies like the IETF and many others must work to incorporate these algorithms into their own guidelines to enable secure functional interoperability across broad sets of software, hardware, and digital services. Providers of these hardware, software, and service products must follow the relevant guidelines as they are developed and begin preparing their technology, manufacturing, delivery, and service models to accommodate updated standards and the new algorithms.”
13. AI: fewer keywords, greater understanding
AI expert Dr Pieter Buteneers, Director of AI and Machine Learning at Sinch, expects artificial intelligence to continue to transition away from keywords and move towards an increased level of understanding.
“Language-agnostic AI, already existent within certain AI and chatbot platforms, will understand hundreds of languages — and even interchange them within a single search or conversation — because it’s not learning language like you or I would,” he says. “This advanced AI instead focuses on meaning, and attaches code to words accordingly, so language is more of a finishing touch than the crux of a conversation or search query.
“Language-agnostic AI will power stronger search results — both from external (the internet) and internal (a company database) sources — and less robotic chatbot conversations, enabling companies to lean on automation to reduce resources and strain on staff and truly trust their AI.”
14. Rise in digital twin technology in the enterprise
John Hill, CEO and Founder of Silico, recognises the growing influence digital twin technology is having in the market. Hill predicts that in the next 20 years, there will be a digital twin of every complex enterprise in the world and anticipates the next generation of decision-makers will routinely use forward-looking simulations and scenario analytics to plan and optimise their business outcomes.
“Digital twin technology is one of the fastest-growing facets of industry 4.0 and while we’re still at the dawn of digital twin technology,” he explains. “Digital twins will have huge implications for unlocking our ability to plan and manage the complex organisations so crucial for our continued economic progress and underpin the next generation of Intelligent Enterprise Automation.”
15. Broader tech security
With an exponential amount of data at companies’ fingertips, Tricentis CEO, Kevin Thompson says the need for investment in secure solutions is paramount.
“The general public has become more aware of the access companies have to their personal data, leading to the impending end of third-party cookies, and other similar restrictions on data sharing,” he explains. “However, security issues still persist. The persisting influx of new data across channels and servers introduces greater risk of infiltration by bad actors, especially for enterprise software organisations that have applications in need of consistent testing and updates. The potential for damage increases as iterations are being made with the expanding attack surface.
“Now, the reality is a matter of when, not if, your organisation will be the target of an attack. To combat this rising security concern, organisations will need to integrate security within the development process from the very beginning. Integrating security and compliance testing at the upfront will greatly reduce risk and prevent disruptions.”
16. Increased cyber resilience
Michael Adams, CISO at Zoom, expects an increased focus on cyber resilience over the next 12 months. “While protecting organisations against cyber threats will always be a core focus area for security programs, we can expect an increased focus on cyber resilience, which expands beyond protection to include recovery and continuity in the event of a cyber incident,” explains Adams.
“It’s not only investing resources in protecting against cyber threats; it’s investing in the people, processes, and technology to mitigate impact and continue operations in the event of a cyber incident.”
17. Ransomware threats
As data leaks become increasingly common place in the industry, companies face a very real threat of ransomware. Michal Salat, Threat Intelligence Director at Avast, believes the time is now for businesses to protect themselves or face recovery fees costing millions of dollars.
“Ransomware attacks themselves are already an individual’s and businesses’ nightmare. This year, we saw cybergangs threatening to publicly publish their targets’ data if a ransom isn’t paid, and we expect this trend to only grow in 2023,” says Salat. “This puts people’s personal memories at risk and poses a double risk for businesses. Both the loss of sensitive files, plus a data breach, can have severe consequences for their business and reputation.”
18. Intensified supply chain attacks
Dirk Schrader, VP of security research at Netwrix, believes supply chain attacks are set to increase in the coming year. “Modern organisations rely on complex supply chains, including small and medium businesses (SMBs) and managed service providers (MSPs),” he says.
“Adversaries will increasingly target these suppliers rather than the larger enterprises knowing that they provide a path into multiple partners and customers. To address this threat, organisations of all sizes, while conducting a risk assessment, need to take into account the vulnerabilities of all third-party software or firmware.”
19. A greater need to manage volatility
Paul Milloy, Business Consultant at Intradiem, stresses the importance of managing volatility in an ever-moving market. Milloy believes bosses can utilise data through automation to foresee potential problems before they become issues.
“No one likes surprises. Whilst Ben Franklin suggested nothing can be said to be certain, except death and taxes, businesses will want to automate as many of their processes as possible to help manage volatility in 2023,” he explains. “Data breeds intelligence, and intelligence breeds insight. Managers can use the data available from workforce automation tools to help them manage peaks and troughs better to avoid unexpected resource bottlenecks.”
20. A human AI co-pilot will still be needed
Artem Kroupenev, VP of Strategy at Augury, predicts that within the next few years, every profession will be enhanced with hybrid intelligence, and have an AI co-pilot which will operate alongside human workers to deliver more accurate and nuanced work at a much faster pace.
“These co-pilots are already being deployed with clear use cases in mind to support specific roles and operational needs, like AI-driven solutions that enable reliability engineers to ensure production uptime, safety and sustainability through predictive maintenance,” he says. “However, in 2023, we will see these co-pilots become more accurate, more trusted and more ingrained across the enterprise.
“Executives will better understand the value of AI co-pilots to make critical business decisions, and as a key competitive differentiator, and will drive faster implementation across their operations. The AI co-pilot technology will be more widespread next year, and trust and acceptance will increase as people see the benefits unfold.”
21. Building the right workplace culture
Harnessing a positive workplace culture is no easy task but in 2023 with remote and hybrid working now the norm, it brings with it new challenges. Tony McCandless, Chief Technology Officer at SS&C Blue Prism, is well aware of the role organisational culture can play in any digital transformation journey.
“Workers are the heart of an organisation, so without their buy in, no digital transformation initiative stands a chance of success,” explains McCandless. “Workers drive home business objectives, and when it comes to digital transformation, they are the ones using, implementing, and sometimes building automations. Curiosity, innovation, and the willingness to take risks are essential ingredients to transformative digitalisation.
“Businesses are increasingly recognising that their workers play an instrumental role in determining whether digitalisation initiatives are successful. Fostering the right work environment will be a key focus point for the year ahead – not only to cultivate buy-in but also to improve talent retention and acquisition, as labor supply issues are predicted to continue into 2023 and beyond.”
22. Cloud cover to soften recession concerns
Amid a cost-of-living crisis and concerns over any potential recession as a result, Daniel Thomasson, VP of Engineering and R&D at Keysight Technologies, says more companies will shift data intensive tasks to the cloud to reduce infrastructure and operational costs.
“Moving applications to the cloud will also help organisations deliver greater data-driven customer experiences,” he affirms. “For example, advanced simulation and test data management capabilities such as real-time feature extraction and encryption will enable use of a secure cloud-based data mesh that will accelerate and deepen customer insights through new algorithms operating on a richer data set. In the year ahead, expect the cloud to be a surprising boom for companies as they navigate economic uncertainty.”
23. IoT devices to scale globally
Dr Raullen Chai, CEO and Co-Founder of IoTeX, recognises a growing trend in the usage of IoT devices worldwide and believes connectivity will increase significantly.
“For decades, Big Tech has monopolised user data, but with the advent of Web3, we will see more and more businesses and smart device makers beginning to integrate blockchain for device connectivity as it enables people to also monetise their data in many different ways, including in marketing data pools, medical research pools and more,” he explains. “We will see a growth in decentralised applications that allow users to earn a modest additional revenue from everyday activities, such as walking, sleeping, riding a bike or taking the bus instead of driving, or driving safely in exchange for rewards.
“Living healthy lifestyles will also become more popular via decentralised applications for smart devices, especially smart watches and other health wearables.”
The digital landscape is changing day by day. Ideas like the metaverse that once seemed a futuristic fantasy are now…
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The digital landscape is changing day by day. Ideas like the metaverse that once seemed a futuristic fantasy are now coming to fruition and embedding themselves into our daily lives. The thinking might be there, but is our technology really ready to go meta? Domains and hosting provider, Fasthosts, spoke to the experts to find out…
How the metaverse works
The metaverse is best defined as a virtual 3D universe which combines many virtual places. It allows users to meet, collaborate, play games and interact in virtual environments. It’s usually viewed and accessed from the outside as a mixture of virtual reality (VR), (think of someone in their front room wearing a headset and frantically waving nunchucks around) and augmented reality (AR), but it’s so much more than this…
These technologies are just the external entry points to the metaverse and provide the visuals which allow users to explore and interact with the environment within the metaverse.
This is the ‘front-end’ if you like, which is also reinforced by artificial intelligence and 3D reconstruction. These additional technologies help to provide realistic objects in environments, computer-controlled actions and also avatars for games and other metaverse projects.
So, what stands in the way of this fantastical 3D universe? Here are the six key challenges:
Technology
The most important piece of technology, on which the metaverse is based, is the blockchain. The blockchain is essentially a chain of blocks that contain specific information. They’re a combination of computers linked to each other instead of a central server which means that the whole network is decentralised. This provides the infrastructure for the development of metaverse projects, storage of data and also allows them the capability to be compatible with Web3. Web3 is an upgraded version of the internet which will allow integration of virtual and augmented reality into people’s everyday lives.
Sounds like a lot, right? And it involves a great deal of tech that is alien to the vast majority of us. So, is technology a barrier to widespread metaverse adoption?
Jonothan Hunt, Senior Creative Technologist at Wunderman Thompson, says the tech just isn’t there. Yet.
“Technology’s readiness for the mass adoption of the metaverse depends on how you define the metaverse, but if we’re talking about the future vision that the big tech players are sharing, then not yet. The infrastructure that powers the internet and our devices isn’t ready for such experiences. The best we have right now in terms of shared/simulated spaces are generally very expensive and powered entirely in the cloud, such as big computers like the Nvidia Omniverse, cloud streaming, or games. These rely heavily on instancing and localised grouping. Consumer hardware, especially XR, is still not ready for casual daily use and still not really democratised.
“The technology for this will look like an evolution of the systems above, meaning more distributed infrastructure, better access and updated hardware. Web3 also presents a challenge in and of itself, and questions remain over to what extent big tech will adopt it going forward.”
Storage
Blockchain is the ‘back-end’, where the magic happens, if you will. It’s this that will be the key to the development and growth of the metaverse. There are a lot of elements that make up the blockchain and reinforce its benefits and uses such as storage capabilities, data security and smart contracts.
Due to its decentralised nature, the blockchain has far more storage capacity than the centralised storage systems we have in place today. With data on the metaverse being stored in exabytes, the blockchain works by making use of unutilised hard disk space across the network, which avoids users within the metaverse running out of storage space worldwide.
In terms that might be a bit more relatable, an exabyte is a billion gigabytes. That’s a huge amount of storage, and that doesn’t just exist in the cloud – it’s got to go somewhere – and physical storage servers mean land is taken up, and energy is used. Hunt says: “How long’s a piece of string? The whole of the metaverse will one day be housed in servers and data centres, but the amount or size needed to house all of this storage will beentirely dependent on just how mass adopted the metaverse becomes. Big corporations in the space are starting to build huge data centres – such as Meta purchasing a $1.1 billion campus in Toledo, Spain to house their new Meta lab and data centre – but the storage space is not the only concern. These energy-guzzlers need to stay cool! And what about people and brands who need reliable web hosting for events, gaming or even just meeting up with pals across the world, all that information – albeit virtual – still needs a place to go.
“The current rising cost of electricity worldwide could cause problems for the growth of data centres, and the housing of the metaverse as a whole. However, without knowing the true size of its adoption, it is extremely difficult to truly determine the needed usage. Could we one day see an entire island devoted to data centre storage? Purely for the purposes of holding the metaverse? It seems a little ‘1984’, but who knows?”
Identity
Although the blockchain provides instantaneous verification of transactions with identity through digital wallets, our physical form will be represented by avatars that visually reflect who we are, and how we want to be seen.
The founder of Saxo Bank and the chairman of the Concordium Foundation, Lars Seier Christensen, argues, “I think that if you use an underlying blockchain-based solution where ID is required at the entry point, it is actually very simple and automatically available for relevant purposes. It is also very secure and transparent, in that it would link any transactions or interactions where ID is required to a trackable record on the blockchain.”
Once identity is established, it is true that it could potentially become easier to assess creditworthiness of parties for purchasing and borrowing in the metaverse due to the digital identity and storage of each individual’s data and transactions on the blockchain. However, although it sounds exciting, there must be considerations into how it could impact privacy, and how this amount of data will be recorded on the blockchain.
Security
There are also huge security benefits to this set up. The decentralised blockchain helps to eradicate third-party involvement and data breaches, such as theft and file manipulation, thanks to its powerful data processing and use of validation nodes. Both of these are responsible for verifying and recording transactions on the blockchain. This will be reassuring to many, given the widespread concerns around data privacy and user protection in the metaverse.
To access the blockchain all we will need is an internet connection and a device, such as a laptop or smartphone, this is what makes it so great as it will be so readily available. However, to support the blockchain, we’re relying on a whole different set of technologies. Akash Kayar, CEO of web3-focused software development company Leeway Hertz, had this to say on the readiness of the current technology available: “The metaverse is not yet completely mature in terms of development. Tech experts are researching strategies and
testing the various technologies to develop ideas that provide the world with more feasible and intriguing metaverse projects.
“Projects like Decentraland, Axie Infinity, and Sandbox are popular contemporary live metaverse projects. People behind these projects made perfect use of notable metaverse technologies, from blockchain and cryptos to NFTs.
“As envisioned by top tech futurists, many new technologies will empower the metaverse in the future, which will support the development of a range of prolific use cases that will improve the ability of the metaverse towards offering real-life functionalities. In a nutshell, the metaverse is expected to bring extreme opportunities for enterprises and common users. Hence, it will shape the digital future.”
Currency & Payments
Whilst it’s only considered legal tender in two countries, cryptocurrency is currently a reality and there is a strong likelihood that it will eventually be mass adopted. However, the metaverse is arguably not yet at the same maturity level, meaning cryptocurrency may have to wait before it can finally fully take off.
Golden Bitcoin symbol and finance graph screen. Horizontal composition with copy space. Focused image.
There is no doubt that cryptocurrency and the metaverse will go hand-in-hand as the former will become the tender of the latter with many of the current metaverse platforms each wielding its native currency. For example Decentraland uses $MANA for payments and purchases. However, with the volatility of crypto currencies and the recent collapse of trading platform FTX indicating security lapses, we may not yet be ready for the switch to decentralised payments.
Energy
Some of the world’s largest data centres can each contain many tens of thousands of IT devices which require more than 100 megawatts of power capacity – this is enough to power around 80,000 U.S. households (U.S. DOE 2020) and is equivalent to $1.35bn running cost per data centre with the cost of a megawatt hour averaging $150.
According to Nitin Parekh of Hitachi Energy, the amount of power which takes to process Bitcoin is higher than you might expect: “Bitcoin consumes around 110 Terawatt Hours per year. This is around 0.5% of global electricity generation. This estimate considers combined computational power used to mine bitcoin and process transactions.” With this estimate, we can calculate that the annual energy cost of Bitcoin is around $16.5bn.
However, some bigger corporations are slowly moving towards renewable energy to power their projects in this space, with Google signing close to $2bn worth of wind and solar investments in order to power its data centres in the future and become greener. Amazon has also followed in their footsteps and have become the world’s largest corporate purchaser of renewable energy.
They may have plenty of time yet to get their green processes in place, with Mark Zuckerberg recently predicting it will take nearly a decade for the metaverse to be created: “I don’t think it’s really going to be huge until the second half of this decade at the earliest.”
About Fasthosts
Fasthosts has been a leading technology provider since 1999, offering secure UK data centres, 24/7 support and a highly successful reseller channel. Fasthosts provides everything web professionals need to power and manage their online space, including domains, web hosting, business-class email, dedicated servers, and a next-generation cloud platform. For more information, head to www.fasthosts.co.uk
Todd Salmon, Executive Advisor for Strategic Services at GuidePoint Security, on the cybersecurity challenge of keeping up with the pace of the ever-changing digital world
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This month’s cover story explores how GuidePoint Security, an elite team of highly trained and certified experts, cut through cybersecurity chaos and confusion to put control back in customers’ hands.
Welcome to the latest issueof Interface magazine!
Interface welcomes in 2023 with a need-to-know list of what we can expect from technology this year and how it can allow enterprises to gain a competitive edge in a disruptive and increasingly digital world. Faced with everything from process mining and AI to quantum-readiness and the metaverse we cut through the hype to bring you the facts.
GuidePoint Security: digital transformation in cybersecurity
“Cybersecurity is in such a reactive mode because of the sheer volume of risks and vulnerabilities an organisation faces,” says Todd Salmon, Executive Advisor for Strategic Services at GuidePoint Security. “We see a lot of copycats and repeat attacks happen, but at the end of the day it’s all about creating solutions to help combat those problems.”
GuidePoint’s elite team of highly trained and certified experts, cut through cybersecurity chaos and confusion to put control back in customers’ hands. Helping them make the smartest, most informed cyber risk decisions, and choose and integrate the best-fit solutions to build the most effective cybersecurity program, Salmon discusses the challenge of keeping up with the pace of the ever-changing digital world.
bp: a strategic reinvention
“We are investing in digital to drive process efficiency and improve insights; but also to develop our people with the skills we need for now, and the future at bp. This means we are playing to win while caring for our people through investing in their personal development,” says Head of Strategic Transformation Nick Hales.
“After setting the right foundations through various remediation and compliance initiatives, we embarked on our digital transformation journey,” adds Strategy & Transformation Manager Emmanouela Vlachantoni. “There was a clear opportunity to standardise and streamline our controls environment to reduce complexity and increase insight.”
Fairfax County: winning the IT war with cybersecurity
Meanwhile, across the pond, we learn how Fairfax County in the State of Virginia is reaping the rewards of a cybersecurity program enabling government services and keeping citizens safe. “My role is to educate our leadership to ensure they understand the business value of cybersecurity as it relates to government services. Being accountable for the security of their systems and data is a key factor in developing a successful cyber program,” explains CISO Michael Dent.
Also in this issue, we round up the key tech events and conferences across the globe and, with the help of the experts at Fasthosts, take a deep dive into the metaverse… Can virtual reality become our reality? Read on to find out.
Nick Hales, Head of Strategic Transformation and Emmanouela Vlachantoni, Strategy & Transformation Senior Manager, on the journey to reinvent business processes that are reimagining bp
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This month’s cover story reveals how bp’s Strategic Transformation leaders are on a journey to reinvent business processes that are reimagining the energy giant.
Welcome to the latest issueof Interface magazine!
Our final issue of Interface for 2022 covers some of this year’s hot tech topics: digital transformation, cybersecurity, data & analytics, customer-centricity and more…
“We are investing in digital to drive process efficiency and improve insights; but also to develop our people with the skills we need for now, and the future. This means we are playing to win while caring for our people through investing in their personal development,” says Nick Hales.
“After setting the right foundations through various remediation and compliance initiatives, we embarked on our digital transformation journey,” adds Emmanouela Vlachantoni. “There was a clear opportunity to standardise and streamline our controls environment to reduce complexity and increase insight.”
Fairfax County: winning the IT war with cybersecurity
Meanwhile, across the pond, we learn how Fairfax County in the State of Virginia is reaping the rewards of a cybersecurity program enabling government services and keeping citizens safe. “My role is to educate our leadership to ensure they understand the business value of cybersecurity as it relates to government services. Being accountable for the security of their systems and data is a key factor in developing a successful cyber program,” explains CISO Michael Dent.
Piedmont Healthcare: data & analytics at the heart of growth
The power of data cannot be under-estimated… At Piedmont Healthcare Mark Jackson, Executive Director of Business Intelligence is building a data strategy driving speed to insight at scale. “Tool selection has played an important role in our ability to scale the BI program and deliver rapid insights in a dynamic environment.”
Also in this issue, CalArts CTO Allan Chen explains how an IT strategy based on coordination and collaboration is supporting six schools; Information Tech VP Fausto Sosa de la Fuente reveals the people-centric transformative IT process at construction industry giant CEMEX; and we take a look at the latest insights from McKinsey highlighting the lessons CEOs can learn from successful digital transformations.
John MClure, CISO at Sinclair Group – a diversified media company and America’s leading provider of local sports and news – talks about the evolution of cybersecurity and the cultural shift placing it at the forefront of business change
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This month’s cover story explores how Sinclair Broadcast Group is embracing the evolution of cybersecurity and placing the role of the CISO at the forefront of business transformation.
Welcome to the latest issueof Interface magazine!
Communication, secure and at speed, is a vital component of the transformation journey for both the modern enterprise and its relationship with stakeholders, be they customers or partners. Putting the right building blocks in place to deliver successful change management is at the heart of the inspiring stories in the latest issue of Interface.
Our cover star John McClure progressed from a career in the military and work as a consultant in the intelligence industry to fight a new kind of foe… As CISO for Sinclair Broadcast Group, a diversified media company and America’s leading provider of local sports and news, he talks about the evolution of cybersecurity, the battle to meet the rising velocity and sophistication of cyber-attacks and the cultural shift of the role of CISO placing it at the forefront of business change.
“Sinclair is unique in terms of its different business units and how it operates. It’s my job as CISO leading our cyber team not to be an obstacle for the business; we’re here to help it move faster to keep up with market forces, and to move safely. We’re here to engineer solutions that work for the enterprise but also help us maintain a positive security posture.”
State of Florida: digital government services
We also hear from CIO Jamie Grant who is leading the State of Florida’s Digital Service (FL[DS]) on its charge to transform and modernise the way government is accessed and consumed. He is building a team of talented, goal-oriented and customer-obsessed individuals to drive a digital transformation with innovation at its heart. “Leadership is really about developing the team and investing in the people. And it turns out that when you get their backs, they appreciate it and then you can achieve anything.”
ResultsCX: putting people first
Jamie Vernon, SVP for IT & Infrastructure at AI-powered customer experience solution specialist ResultsCX, discusses what drives customer care in the 21st century, and the part technology has to play.
“We are the custodians of our customers’ customers,” says Vernon. “In this increasingly tenuous relationship with their customers, they trust us. My leadership takes that responsibility very seriously, and charges each of us with doing everything we can to provide a perfect call, or email, or chat, every time, thousands of times a minute, around the clock and around the calendar.”
Jamie Vernon, SVP for IT & Infrastructure at AI-powered customer experience solution specialist ResultsCX, discusses what drives customer care in the 21st century, and the part technology has to play.
“We are the custodians of our customers’ customers,” says Vernon. “In this increasingly tenuous relationship with their customers, they trust us. My leadership takes that responsibility very seriously, and charges each of us with doing everything we can to provide a perfect call, or email, or chat, every time, thousands of times a minute, around the clock and around the calendar.”
Also this month, Sarita Singh, Regional Head & Managing Director for Stripe in Southeast Asia, talks about how the fast-growing payments platform is driving financial inclusion across Asia and supporting SMEs with end-to-end services putting users first, and we get expert advice for the modern CEO from the University of Oxford’s Saïd Business School.
Our cover story this month reveals how Sarita Singh, Regional Head & Managing Director for Stripe in Southeast Asia, and her team are driving financial inclusion across the region and supporting SMEs with end-to-end services putting users first
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This month’s cover story reveals how Stripe’s payments platform is driving financial inclusion across Asia.
Welcome to the latest issue of Interface magazine!
Opportunities for innovation and growth via the adoption of new technologies are everywhere. However, organisations are faced with a bewildering array of choices to help them transform and choosing the best option to drive positive disruption is a tough call. We take a look at some of these fascinating journeys…
Sarita Singh, Regional Head & Managing Director for Southeast Asia, Stripe
This month’s cover story explores the genesis of fast-growing payments platform Stripe. Sarita Singh, Regional Head & Managing Director for Southeast Asia, leads a team driving financial inclusion across the region, supporting SMEs with end-to-end services putting users first.
“We’re building products and the financial infrastructure to help our users go cross-border, beyond their domestic boundaries, to widen their markets and drive efficiencies within their financial services infrastructure. With Stripe under the hood, businesses are able to focus on what they do best without wasting time researching, purchasing, integrating, and maintaining dozens of payment technology point solutions because Stripe is a platform that offers all of them, and is already integrated.”
IAG: tech procurement linked to purpose
We speak with IAG’s CPO & VMO Claire Ledder, who reveals the transformative approach to technology procurement being deployed by an Australian market leader home to several leading insurance brands. “We’re now able to tackle sourcing and contracting with an end-to-end approach capable of measuring the value delivered.”
Portrait Photography
U.S. Department of State: facilitating diplomacy with tech
Todd Cheng Director of IT Customer Service at the U.S. Department of State, talks about the ever-evolving relationship between technology and diplomacy. “We’ve been through the process of updating the IT model at State to a new, more customer centric version of the Information Technology Infrastructure Library (ITIL).” By his calculations, these changes have benefited the organisation by reducing network disruption by some 400,000 hours of diplomacy every month.
Afni
Afni’s CISO Brent Deterding explains how breaking down the traditional and perceived barriers between security and the boardroom can transparently position cyber effectiveness as a critical enabler of improved business outcomes.
Afni’s CISO Brent Deterding
Also in this issue, we hear from Zoom on the future of work and report again from London Tech Week where an expert panel gave advice for businesses on anticipating and preparing for cyber risk against a backdrop of geopolitical uncertainty.
EyeCare Partners works in partnership with clinicians and healthcare leaders to achieve the best patient and business outcomes and this…
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EyeCare Partners works in partnership with clinicians and healthcare leaders to achieve the best patient and business outcomes and this has had dramatic results, such as a 1,500% revenue growth since 2015.
EyeCare Partners is growing through acquisitions, by providing strategic capital and operational support to its network of partner practices in 680 locations across 18 states. In February 2020, this growth was boosted when Swiss private equity firm Partners Group acquired a controlling stake in EyeCare Partners. “They’re a very interesting group,” he says. “They’re very heavy on investment, plus they have a very, very impenetrable and robust sustainability platform too, which is very near and dear to my heart through my time at Unilever,” This level of growth is fuelled significantly by increasing demand for eye care over the longer term, driven by an ageing US population and an increased incidence rate of eye diseases. But this level of growth requires an agile and resilient operational enterprise.
Ericsson organised a dedicated virtual event, Ericsson Digital Unboxed 2021, for Jazz Pakistan, to share its thoughts on industry leadership…
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Ericsson organised a dedicated virtual event, Ericsson Digital Unboxed 2021, for Jazz Pakistan, to share its thoughts on industry leadership and discuss digital infrastructure.
Ericsson’s global and regional experts and thought leaders showcased the latest insights, use cases and technologies tailored to Jazz Pakistan.
During the virtual event, Ericsson shared its technology vision and updates, and also discussed the possibilities for consumer and enterprise segments. It delved into several topics revolving around creating a differentiated user experience for sports, spectrum strategies, and dedicated networks with a focus on B2B segments.
As part of the event, the latest Ericsson ConsumerLab reports were also presented and discussed. Several demos were also part of the event like Edge Compute Gaming, where low latency access can enable a better gaming experience, and Ericsson Industry Connect, a channel-ready cellular network for factories and warehouses, built to streamline ordering, installation, and management for Enterprise IT.
Abdul R. Usmani, VP of Network, Jazz said: “Digitalisation is everywhere and is now part of our daily lives. At Jazz, we aim to provide state-of-the-art end-to-end services to our customers, focused on data-driven networks as well as the need to accelerate technology advancements in the areas of AI, FinTech and digital content.
“The Ericsson Unboxed event showcased several valuable insights which will accelerate the next phase to meet the evolving demands of connectivity. We are looking forward to more insights and are confident in the next step of the digitalisation journey.”
Ekow Nelson, Vice President of Ericsson Middle East and Africa and Head of Ericsson Pakistan added: “Ericsson’s partnership with Jazz spans over many years with several recent wins and shared successes in the areas of network rollout and digital services. Our world is witnessing challenging times due to COVID-19 and connectivity has never been more critical than ever.
“At Ericsson, we endeavor to automate and accelerate our networks and technology to meet the demands of an ever-changing world. We are working closely with Jazz to provide the best possible connectivity, ensuring that Jazz networks run optimally as demand grows and the need for digitalization expedites.”
UtterBerry, a tech giant whose innovations have been used on some of the largest infrastructure projects in the world, is…
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UtterBerry, a tech giant whose innovations have been used on some of the largest infrastructure projects in the world, is bringing some of its operations to Leeds, Yorkshire, creating 800 jobs – as reported by the Yorkshire Post.
The business’s primary objective is producing sensors which monitor the movements of infrastructure – for example, bridges and tunnels – in real time. It allows those working on the infrastructure to be warned in advance if anything’s wrong, preventing potential accidents.
The new Leeds hub will also design and manufacturer contactless COVID-19 symptom scanners. UtterBerry is aiming to roll these out across the globe.
Heba Bevan, founder and CEO of UtterBerry, is keen to help those who lost their jobs during the pandemic find meaningful work again, and to attract more women into a typically male-dominated industry.
“What attracted me to Leeds was I knew there was a huge amount of talent around Yorkshire because you have got amazing universities,” she said.
“There is a huge pool of undergraduate and graduate talent.
“Engineers want to do good and provide sustainable developments. The pandemic showed us just how much we are lacking in manufacturing.”
Chancellor of the Exchequer, Rishi Sunak, said that the investment was “fantastic news for Leeds”.
As reported by DroneLife, Verizon has launched a Robotics Business Technology Division in a bid to involve itself further in…
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As reported by DroneLife, Verizon has launched a Robotics Business Technology Division in a bid to involve itself further in the unmanned sector.
Verizon states that it “expands enterprise solutions for drones and ground robotics”.
It acquired Skyward, a drone management company, in 2017 and has since used drones for emergency response and the maintenance of its own network.
It has also worked closely with businesses like UPS or delivery projects, and to leverage the power of 5G.
The new division will continue to enable autonomous solutions for Verizon.
“Enterprises in many industries are adopting drones and ground robots to gather data, survey and monitor infrastructure, and automate logistics operations,” says Mariah Scott, Head of Robotics Business Technology.
“By integrating these fleets with one operational platform, and leveraging Verizon’s advanced connectivity solutions, businesses can speed up time to insight, increase automation of their operations and deliver greater value.”
“Robots are a critical aspect of the 5G future. The formation of this new business unit will accelerate the symbiotic relationship between humans and machines, paving the way for Verizon to transform the way businesses approach innovation and the future of work,” adds Elise Neel, VP of New Business Incubation.
“Our talented team of roboticists will leverage the power of Verizon’s network, paired with the sophistication of next-generation software, to orchestrate and unify robotic experiences. This work will help deliver on the promise of making the fourth industrial revolution a reality.”
According to a new study, technology could create a way for indigenous communities in the Amazon to curb deforestation in…
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According to a new study, technology could create a way for indigenous communities in the Amazon to curb deforestation in a major way, as reported by the BBC.
Conservationist groups have supplied indigenous citizens of the Peruvian Amazon with satellite data and smart phones to allow them to monitor the removal of trees. As a result, tree losses have been halved in the first year of the project.
The researchers wanted to see if putting information directly into the hands of those living in the forests themselves could make a difference to the rapid deforestation that has plagued these areas for decades – with great success.
The controlled study was randomised, using 76 remote villages in the Amazon, with 36 randomly-assigned people participating.
Thirty-seven other communities served as a control group, where normal forest management resumed.
When suspected deforestation was picked up by satellite information, coordinates and photos were loaded onto USB drives and delivered up the Amazon river. Then, the data was downloaded onto apps which would show the participants the locations.
It could then be confirmed whether or not the deforestation was unauthorised, and community members would decide on the best approach. If drug dealers were involved, they could decide whether to report to law enforcers. Otherwise, they would intervene directly.
“It’s quite a sizeable impact,” said Jacob Kopas, an independent researcher and an author on the paper. “We saw evidence of fewer instances of tree cover loss in the programme communities compared with control communities.
“On average, those communities managed to avert 8.8 hectares of deforestation within the first year. But the communities that were most threatened, the ones that had more deforestation in the past were the ones pulling more weight and were reducing deforestation more than in others.”
Indigenous groups welcomed the research. “The study provides evidence that supporting our communities with the latest technology and training can help reduce deforestation in our territories,” said Jorge Perez Rubio, the president of the Loreto regional indigenous organization (ORPIO), where the study was carried out.
A global shift to remote working has accelerated digital transformation and prompted a higher degree of focus on cybersecurity, according to Kaspersky’s latest report.
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A global shift to remote working has accelerated digital transformation and prompted a higher degree of focus on cybersecurity, according to Kaspersky’s latest report.
Transitioning from a corporate office environment to working from home, coupled with financial restraints due to economic recession, has seen challenges presented to cybersecurity experts not many had seen before.
From February to March 2020, a 569% growth in malicious website registrations was detected and reported to INTERPOL, including malware and phishing. In April, there was a huge spike in ransomware attacks by multiple threat groups that had been previously dormant for months.
Cybercrime threats are expected to rise as more opportunities present themselves in the coming months. Fake vaccine registration websites will aim to steal data, whilst business email compromise schemes aim to take advantage of the economic downturn and shift in the business landscape.
Protecting the perimeter of a company is no longer enough: there is a desperate need now for home office assessment with tools to scan the level of security. Discouraging poor internet practices such as connecting to an unprotected Wi-Fi hotspot should be top of the list, with VPNs and multifactor authentification systems being offered as a solution.
With an increased reliance on cloud technology and services, dedicated management and protection measures are now a necessity for businesses. Around 90% of employees use non-corporate software and cloud services, such as messaging apps, and this is unlikely to change any time soon.
To ensure that any corporate data is kept under control, better visibility over cloud access will be necessary. IT security managers will need to align themselves with this cloud paradigm and develop skills for cloud management and protection.
This is why, according to Kaspersky, the quality of protection is “no longer up for discussion.”
“Quality protection is now a must have,” report Alexander Moiseev, Chief Business Officer at Kaspersky.
“Another major trend is that deep integration between various components of corporate security, ideally from a single vendor, now plays a bigger role. For instance, there was a long-held belief in the industry that various specialised solutions from various vendors can help create the best combination for protection.
“Now, organisations are looking for a more unified approach with maximum integration between different security technologies.”
You can read Ksapersky’s “Plugging the gaps: 2021 corporate IT security predictions” report in full HERE.
Data revealed as Tech Nation and Dealroom launch the Impact & Innovation database…
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New research from Tech Nation and Dealroom reveals that investment into UK impact startups increased 9.5x between 2014 and 2019. UK impact startups have raised €1.4B so far in 2020 with Cleantech and Climate tech companies raising the most capital of all UK impact startups.
The biggest rounds for UK impact startups in 2020 include Octopus Energy, Arrival, Connexin (Hull), Tokamak Energy (Abingdon), Compass Pathways, Cera, Highview Power, FiveAI (Cambridge), The Meatless Farm Company (Leeds).
It comes as Tech Nation and Dealroom launch the Impact and Innovation database, that catalogues 4,939 startups and scaleups, 7,472 funding rounds, and 232 exits of innovative companies addressing the world’s most pressing challenges.
George Windsor, Head of Insights at Tech Nation, commented: “UK impact tech firms have come on leaps and bounds over the last six years – with nearly 10x more investment made into groundbreaking companies in 2020 than 2014. UK tech must continue to play a key part in tackling some of the world’s toughest challenges, including climate change. This revolution is happening right across the country. Tech Nation is pleased to work with some of the leading companies in this space through our world-first Net Zero programme – ensuring that companies working in this sector can scale to have the greatest impact.”
The data also reveals that European startups are more impact-focussed than their global peers. €6B was invested into European impact startups in 2019, making up over 15% of all VC investment in the region. This research shows that what was once fringe investment and innovation activity is finding traction and proven success in Europe, becoming a core part of European innovation ecosystems.
Climate tech startups, which includes electric vehicles, have attracted the most investment within the Impact sub-sector, with European players emerging as global market leaders. European companies working to tackle climate change and its impacts have attracted €9.8B in VC investment in the last five years.
Impact innovation startups are also fueling growth and job creation. Crucially, these startups are actively hiring, the Impact & Innovation database lists over 2,100 jobs in impact startups that are currently hiring in Europe – over 390 of these are in the UK.
The Impact and Innovation platform will bring together startups, investors, non-profits, governments, and corporates in one open-access data-driven platform. The new mapping of the global impact and innovation ecosystem will facilitate data-driven policy and decision making, the sharing of cross-industry knowledge, and will foster the partnerships required to help next generation innovators succeed on the global stage.
A new study from Business Fibre reveals the best cities to be a tech student around the world
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A new index by Business Fibre has analysed 34 of the world’s Organisation for Economic Co-operation and Development (OECD) capital cities to find 2020’s best cities to be a tech student. The index has analysed each city according to metrics such as the number of universities offering technology and engineering courses, total tech companies and employees in each city, the monthly living cost and the top cities investing in tech-related research. See the index here.
The top 10 cities to be a tech student
To find the world’s top cities to study technology, we have ranked each city according to a series of metrics to find the overall winners for those looking to start their career in technology.
The metrics explored include budget spent on tech-related research, the number of people employed in professional, scientific and technical sectors, tech companies, monthly living costs as well as the number of top universities offering technology and engineering courses.
Introducing the top 10 cities to be a tech student…
London, UK
Berlin, Germany
Jerusalem, Israel
Bern, Switzerland
Seoul, Korea
Stockholm, Sweden
Paris, France
Canberra, Australia
Rome, Italy
Tokyo, Japan
Top cities contributing to tech research
Exploring Technology research spend, the study also finds the top cities who are consistently investing in technology research. This has been calculated by looking at the % of the total GDP spent on research.
Rank
City
Research Spend (% of total GDP)
1
Jerusalem, Israel
4.8
2
Seoul, Korea
4.3
3
Bern, Switzerland
3.4
4
Stockholm, Sweden
3.4
5
Tokyo, Japan
3.2
6
Berlin, Germany
3.1
7
Copenhagen, Denmark
3.1
8
Vienna, Austria
3
9
Helsinki, Finland
2.7
10
Brussels, Belgium
2.7
The highest-ranking city is Jerusalem, which ranks high across all metrics and is the 3rd best city for tech students overall. The top three cities for tech-related research also include Seoul, spending 4.3% of the GDP, followed by Bern at 3.4. All three cities also rank high for the best universities and overall top cities for tech students.
Top 10 universities to study technology worldwide
Based on the top 10 cities to be a tech student, we wanted to find the best universities in each city for aspiring students. To find the best universities BusinessFibre looked at metrics such as the total number of students, faculty staff and the number of international students. This alongside each universities global subject ranking for Engineering and Technology make up the top 10 tech universities in the world. The monthly cost of living has also been included so that students can be sure they’re studying at the best overall tech university.
Rank
University
Worldwide ranking (Engineering and Tech 2020)
City
1
Imperial College London
7
London, UK
2
Technical University of Munich
25
Berlin, Germany
3
Technion – Israel Institute of Technology
179
Jerusalem, Israel
4
ETH Zurich – Swiss Federal Institute of Technology
4
Bern, Switzerland
5
Seoul National University
22
Seoul, Korea
6
KTH Royal Institute of Technology
30
Stockholm, Sweden
7
Ecole Polytechnique
57
Paris, France
8
The Australian National University
71
Canberra, Australia
9
Sapienza University of Rome
127
Rome, Italy
10
The University of Tokyo
21
Tokyo, Japan
Comment from Ian Wright: “With technology arguably being the fastest growing and most profitable industry in the world, we wanted to find the best cities in the world to be a tech student as well as the top cities funding technology-related research.
It’s clear from the research that London, Berlin and Jerusalem are the best cities for students, while Seoul and Bern join Jerusalem at the top for investing in technology-related research.
For those who don’t want to spend a ton of money on their education, Seoul National University is a great option that offers a lower living cost while still having a good global university ranking.”
Resellers will have a central role to play in helping IT leads manage ‘hybrid’ workforces as employee demand is split between working in the office and at home, according to Brother UK.
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A study of almost 300 office-based employees reveals a divide in appetite for returning to work, with 53% of respondents saying they feel safer working from home in the current climate.
The office commute is the top concern for two thirds of respondents (66%), followed by sharing toilets and bathrooms (65%) and using communal kitchen areas (61%). Almost half (49%) are also worried about the cleanliness of other colleagues, according to the findings.
On the contrary, 37% say they are looking forward to getting back to the office. Many miss seeing colleagues (77%), collaborating face-to-face (62%) and having a ‘proper’ workspace (45%). A quarter (25%) are also missing the office gossip.
The business says this split in demand for office and home working will create a productivity and safety challenge for many organisations – and resellers will have an opportunity to provide a range of solutions, including labelling devices, higher-end print devices for home offices, and compact scanners, to tackle it.
Andy Johnson, Head of Product and Solutions management at Brother UK said: “Understandably, many people in the UK are still concerned about returning to the office. But businesses also recognise that some employees are struggling to work from home and want to offer them the opportunity to resume some sense of normality.
“Companies must cater for both and this hands IT leads the challenge of not only managing a mix of office and home working technology on a longer-term basis, but also making sure they can operate productively while keeping employees safe.
“To do this, businesses will need their reseller partners on hand to help them with a range of challenges, from ensuring they have the right printing and scanning devices so people can work in the office safely, to providing remote working tools so those at home can operate securely at distance.
“We’ll be at the side of partners with our full print range, with devices suited to home and office use, as they help customers to meet the needs of the hybrid workforce.”
Isabelle O’Keefe, Principal of Sure Valley Ventures, explores the ways in which technology companies have adapted and overcome.
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The pandemic has prompted unparalleled uncertainty and disruption for businesses and economists alike. But, as 49% of employees shift to working from home, and consumers move online and adapt to living in lockdown, technology businesses have responded rapidly to fill the void, providing effective solutions for businesses and communities looking to navigate the post-pandemic world.
Throughout lockdown, we have seen a rapid adoption of online and digital services and a shift in spending, with 44% of consumers using contactless or digital payments more and 34% set to do more shopping online. Many of the online behaviours that have been adopted during the outbreak will continue after the pandemic, and this subsequently cultivates the right environment for certain segments of the tech industry to thrive.
A switch to online grocery shopping
UK customers are forecast to spend an estimated £16.8bn on digital grocery shopping during 2020, an increase of around 33%, according to the latest research by Mintel.
Before COVID-19, demand for same-day delivery services was already on the rise. But, as consumers avoid retail outlets in order to minimise the risk of exposure, the pressure on brands to offer a seamless delivery system has become much stronger. Mastercard recently reported that card-not-present transactions made up 50% of April’s volumes, up 10% year on year, demonstrating the significant shift in consumer spend trends in recent months.
The shift in spending habits can be seen through the growth of online supermarket Ocado in the FTSE 350, whose share price has almost doubled since the start of lockdown. Buymie, Ireland’s leading same-day grocery delivery company, which has strategic partnerships with Lidl and The Co-op, has successfully raised a total of c.$9m since the start of the year. The company has seen a surge in demand on the back of the COVID-19 pandemic due to its ability to fulfil grocery delivery orders in as little as one hour. On-demand grocery delivery has emerged as a high growth segment of the tech and retail markets during this extraordinary period.
Advertisers eye in-game ads as audiences rise in lockdown
Advertising is another industry which is rapidly evolving in the current climate. While digital advertising spend is predicted to drop, recent research by ResearchAndMarkets.com indicates that the global in-game advertising market is poised to grow by $10.97bn during 2020-2024, progressing at a CAGR of 20%.
Throughout the lockdown, gaming has experienced rising online audience figures, with telecommunications provider Verizon estimating that video game usage in the USA during peak hours had risen by 75% from the previous week, just one week into lockdown. Games Workshop has had much success by switching to online sales, seen through its current market value of £2.7bn. With audiences rising, Mastercard and Alienware have become the first to sponsor Riot Games, which announced in May that it would offer in-game arena banners for the first time for League of Legends Esports.
Admix, which brings ads to games, esports, VR and AR, is benefitting from this hyper-accelerated digital trend. It is working on a unique technology to support game advertising at scale, where advertisers can bid programmatically through traditional ad-buying platforms, rather than relying on an ad agency model. Non-intrusive in-gaming advertising presents a significant opportunity in today’s market.
Educators and events companies move online
The COVID-19 pandemic has accelerated efforts to improve remote working and learning as lockdown prohibits the gathering of pupils and professionals around the world. Zoom has achieved global success and Microsoft Teams recently became the 10th most downloaded app in the app store. However, virtual reality is now transforming how training and educational content is delivered and consumed globally.
Immersive VR Education provides a ground-breaking alternative to video-conferencing providers like Zoom. It allows users to immerse themselves fully in a virtual environment, making hard to visualise concepts much easier to understand. In 2020, they have also partnered with the global giant HTC which agreed to invest €3m in the company in May. This evolving partnership in the current pandemic shows how IVR Education is in a strong position to take advantage of the new ways to work and learn in a post-COVID-19 world.
An even stronger demand for robust cybersecurity solutions
The recent surge in online activity has meant that protecting critical data is more important than ever. A report by Centrify highlights that 71% of UK-based business decision makers believe the shift to 100% remote working during the COVID-19 crisis has increased the likelihood of a cyber-breach. With these concerns echoed by management teams around the world, the global cybersecurity market is predicted to grow from $173bn in 2020 to $270bn by 2026.
The recent data protection requirements announced in June for all US Department of Defence suppliers have increased the demand for AI security companies, like Getvisibility, which leverages AI to discover, protect and classify critical data. The company has seen revenues rise by 50% month-on-month since the start of 2020. In the current climate, there is much value in a company that gives users visibility of data.
The current environment has allowed certain tech companies and the transformative digital solutions they provide, to become even more attractive. From our perspective, these emerging tech trends will continue to accelerate in a post-COVID world.
Frances Sneddon, Data Scientist and CTO at Simul8, explores how digital simulation can provide the crystal ball that businesses need.
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How do you loosen a lockdown? It is a challenge that governments across the globe are grappling with as they attempt to balance the necessity of kick-starting economies with the necessity of protecting people and productivity from the coronavirus pandemic. Digital simulation tools could be a crucial piece of the puzzle, helping businesses to rapidly test out the effects of different alterations to their workflows in a risk-free environment before putting them into practice.
Organisations will need to revisit their risk assessments and carry out an entirely new set of analyses to consider how previously run-of-the-mill processes and practices might need to be updated. While containing the further spread of COVID-19 is non-negotiable, opening things up again will require compromises at every turn, finding a workable balance of safety and productivity.
Social distancing, cleaning and hygiene practices, the number of staff on the premises at any one time, shift patterns – this is where the list of new considerations begins. What happens in the event that we reach a point where everyone entering the workspace needs to be tested for coronavirus symptoms? Add to this the wider interconnectivity of daily working needs, from customer interactions to managing supply chains, sharing workspaces with other businesses, controlling the flow of people against transport and infrastructure dependencies, and suddenly the ramifications of any changes begin to multiply.
Simulating possible outcomes
With so many possible knock-on effects when implementing the guidelines necessary to control the spread of the virus, finding the optimum work-arounds to continue any semblance of business-as-usual will likely need some experimentation. Experimentation, however, comes with risk.
By eliminating the risks involved in trial and error, simulation lends itself perfectly to adapting to the new world order where COVID-19 remains a threat. This rapid, predictive technology will offer a new level of preparedness.
Process simulation software uses animated, interactive models to replicate the operation of an existing or proposed production system. It enables organisations to analyse system efficiency and safely test process changes to improve throughput and profitability. It is used for evaluating things such as a manufacturing plant layout, setting up or reconfiguring production lines, routing calls through a complex contact centre, optimising staffing resources, or perhaps evaluating the benefits of new Industry 4.0 improvements.
It offers powerful capabilities to positively influence and streamline the continuity of the customer journey and experience. Marginal gains in processes such as systemised warehousing, seasonal stock levels and delivery infrastructure management can all be simulated to achieve greater cumulative advantages in competitive sales environments.
Using a drag and drop interface, you can quickly build a virtual representation of an existing or proposed system, similar to drawing a flowchart. The simulation can then be used to highlight problems, experiment with process changes and run a range of ‘what-if’ scenarios. This allows you to find solutions that will deliver the best results without risk to current production output or capital investment. Decision making confidence will quickly rise as risk factors decrease.
For example, a production line may need to be elongated to allow enough space between stations for safe work practices. Where will this additional space requirement impose and what will be the impact on throughput? Perhaps less storage space, or perhaps it requires other machinery to also be reconfigured. Warehouses, including picking and logistics processes may also need to be restructured.
Simulations can answer questions you didn’t ask and provide solutions you didn’t know you needed. They can teach you how to learn from mistakes you haven’t yet made and optimise processes in ways you never imagined.
Once reconfigured, how about disruptions that will slow down the production process? Equipment will need to be cleaned more frequently, for example. Certain tasks requiring simultaneous input from more than one worker may need to be rearranged, or they may simply take longer than normal. Simulation is more accurate and flexible than traditional process modelling methods, like spreadsheets, as it incorporates the random events and variability that can impact day-to-day factory flow and throughput. This might include equipment downtime in the event that an engineer cannot be reached to resolve a maintenance issue, or perhaps staff absence if an employee is required to self-isolate with immediate effect.
Data-led decision-making
In order to make appropriate decisions around these issues – decisions that will strike the right balance between productivity and safety – organisations need to work with tangible data. But at a time when whole new precedents are being set, past data will have its limitations in informing the decisions of this new world order – and incorrect decisions will pose actual threats to human life. There is little room for trial and error.
This is where digital simulation tools can be truly invaluable. These AI-driven systems learn quickly with cumulative predictive data facilitating a powerful feedback loop.
Digital simulations offer means of testing multiple different possible outcomes quickly, cost-effectively – and crucially, without risk. Questions about staff resourcing, stock controls, waiting times, supply chain management – anything where you can create a flow chart to analyse different outcomes is suitable for digital simulation.
Every business can benefit from testing the viability, sustainability and ultimately profitability of a proposed change or improvement. Typically, modelling occurred after a build, now it’s possible to predict productivity advances and advantages before. Decision making processes are empowered by an improved level of realism and predictability.
Case study
Setting a new throughput target to meet an increase in production demand – when launching a new model car, for example – will require an audit of current lines to see where the daily production rate can be increased. Chrysler did just that, using simulation software to study its line speed when it was tasked with improving one of its plants’ daily production rate from 930 to 969 vehicles.
Reviewing the full production line manually, and then testing different ideas to see the impact of changes on throughput, would have taken time. It would also run the risk of becoming a costly experiment. Instead, by building a digital simulation of the production line, the team at Chrysler were able to remove this risk and discover a quick route to understanding the full picture, testing different scenarios to identify the most effective plan before implementing.
Chrysler’s simulation revealed that two specific stations were causing bottlenecks and slowing throughput. Attention could now be focused on correcting and optimising those stations to speed up the lines without disrupting the rest of the process. The result of this focused optimisation enabled Chrysler to meet its target of producing an extra 39 units per day, which equated to an extra $1million revenue per day. The simulation provided the evidence needed to fast-track this critical decision, in the end with a relatively simple solution.
While this example demonstrates the benefits of proactively optimising production lines under normal circumstances, the elimination of risk, especially where safety is concerned, makes the use of simulation even more vital as a tool to help navigate to more normalised services in a COVID world.
James Hall, Commercial Director, Striata UK, explores the threats customers face and how to combat them.
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With cybercrime escalating in volume and sophistication every year, consumer trust is a bigger challenge for organisations than it’s ever been. And while legislation such as the EU General Data Protection Regulations (GDPR) and California Consumer Privacy Act (CCPA) have made things simpler by setting minimum standards for organisations to adhere to, they need to do more to truly guarantee trust.
They should not, for instance, assume that their responsibility is over once a document has been delivered safely to the customer. If a customer’s personal devices are unsecured, there is still a risk that one gets hacked or stolen. This means that confidential information sent by the organisation could find its way into the public eye, or worse, get exploited for criminal purposes. Even if the organisation’s own security protocols are watertight, it could still end up shouldering the blame or have its reputation tarnished.
When considering why it’s so important for organisations to protect customer communication even once it’s on the end device, it’s worth remembering just how many threats customers face.
The millions of mobile phones stolen every year alone represent a massive danger of identity theft. That’s before even getting to the number of people every year who fall victim to phishing scams or who have their information compromised after inadvertently installing malware.
According to Kaspersky Labs, the number of unique malicious objects detected by its web antivirus solution reached 24,610,126 in 2019. Some 85% of web threats detected were malicious URLs making the risk of a customer unwittingly clicking on a URL an ever present threat to data protection.
In short, while organisations have never been more aware of the need to keep their customer data safe internally, the threat to that data once it’s on the customer’s device continues to increase.
Data protection by design
One solution to mitigate these threats is for organisations to bake data protection into the design of their customer communications. Data protection by design is about considering data protection and privacy issues upfront in everything the organisation does, especially when it comes to customer communication. This not only ensures compliance with relevant legislation, it can save the organisation reputational damage and, ultimately, revenue.
But what does data by design look like practically?
Well, encryption and password protection should be non-negotiable for starters. Encrypting and protecting important documents ensures that even when it resides on the customer’s smartphone or laptop, the information cannot be easily accessed if the device is stolen or hacked.
Encryption is a process that encodes a message or file so that it can only be read by the intended recipient. Encryption scrambles, or encrypts, data which the receiving party can only unscramble, or decrypt, using a key (a string of values or an application).
Password protection, meanwhile, means a document cannot be opened without entering a shared secret known only to the sender and recipient. Requiring a password to access a secured document not only adds another layer of protection, but has other benefits. In the unlikely event that a document is sent to the wrong person, the incorrect recipient cannot open the document (personal information remains private) thereby avoiding a data breach.
Customer education is key
While it’s obviously important that the organisation does everything in its power to protect and encrypt information, customer education remains the most powerful weapon in its arsenal. Cybercriminals can find their way around new technologies, but tech-savvy customers are much harder to crack.
If an organisation can help its customers avoid risky behaviour and protect their personal information, no matter where it sits, they’re much less likely to fall victim to cybercrime. That, in turn, means reduced reputational and financial risk.
A new study found that a wide range of streaming services fail to connect with consumers on an emotional and psychological level.
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TV subscription brands consistently show ‘narcissistic’ tendencies, which can erode subscriber trust and ultimately make them disloyal, according to a report launched by Singula Decisions.
The new study – ‘The Psychology of a Subscriber’ – found that a wide range of streaming services, in both entertainment and sports, fail to connect with consumers on a deeper emotional and psychological level, by:
Not understanding the fundamental drivers motivating a subscriber’s behaviours and interactions
Invading their boundaries when asking for financial commitment too soon
Insufficiently tailoring the service to meet the moods and mindset of each customer
Creating ‘avoidant’ or ‘ambivalent’ attachments to subscribers that do not build loyal relationships
Ineffectively providing subscribers with the ability to share more about themselves and to listen to their feedback
Psychology of a Subscriber
The qualitative study, conducted and authored by Qualitative Researcher, Accredited Psychotherapist and Director of QualiProjects, Jennifer Whittaker, and Business Psychologist and Researcher, Katharina Wittgens, explores subscriber attitudes towards TV brands in the UK and US, gaining a deep understanding of how consumers think, feel and behave throughout the customer journey.
Whittaker, says: “Many brands do not listen to subscribers, nor do they create a safe enough space for subscribers to come forward and give more. In fact, brands often have unconscious narcissistic tendencies and are blinded by the belief that customers are only there to serve, by giving ‘strokes’ to the ego – aka money to the account – and helping to build a good reputation. Unfortunately, brands cannot know subscribers until subscribers give more. But subscribers will only give more if they trust, and they’ll only trust if they don’t feel forgotten.”
Part 1: Acquisition
This first report in a three-part series covers the acquisition phase of the customer journey. The research found that dissatisfaction and suspicion can begin from the moment a subscriber ‘joins’ a service, if asked to hand over financial information or commit to the brand too soon. While subscribers are at their most enthusiastic in the first months of engagement, brands rarely take advantage of their potential to become advocates.
Commenting on the findings, Bhavesh Vaghela, CEO of Singula Decisions, adds: “We recognise how tough it can be to build a strong brand and grow a TV subscription business as consumers continue to dip in and out of services every month. We have seen strong consumer brands being created in other sectors such as retail, ecommerce and banking; consumers are loyal to these brands and TV subscription businesses are behind this curve. Brands must think differently about how they build a service and experience that best suits the needs of their customers – and do a better job to emotionally connect with their customers to build trust and loyalty.”
Death of the demographic?
Bucking the trend of demographic differences, the study found that at the acquisition stage there weren’t huge variations in needs and experiences between age groups. From Gen Z to Baby Boomers, subscribers of all ages said they felt a sense of being ‘pushed by TV brands to commit to the platform financially or share private information. Both UK and US consumers also emphasised the need for a variety of content; American respondents search for unique content that is frequently updated, while British viewers seek value for money based on choice and options for the whole family. After joining the platform, subscribers felt brands were nowhere to be seen, without guidance on how to use the service or how to connect accounts with friends.
Best practice opportunities
The findings do indicate, however, that brands willing to listen and take time to truly understand their customers, can build trust and loyalty. The report sets out nearly 40 best practice recommendations that can help brands to offer a simultaneous sense of both freedom and connection that subscribers crave in order to feel comfortable to share more of themselves.
Building a relationship that goes beyond a transactional one will have a huge impact on consumers who are faced with more choice than ever. brands that take a lead from other industries, such as retail, ecommerce, and banking, and seek to connect with their customers on a more emotional level, can emerge much stronger.
Wazoku is preparing for future growth through an additional injection of £1.25M, on top of its latest acquisition.
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Wazoku has announced a new funding round of £1.25M, led by Calculus Capital, supported by other shareholders and members of the Wazoku management team.
Wazoku is also continuing its expansion with the acquisition of US open innovation firm, InnoCentive’s, assets, creating the world’s most comprehensive and powerful innovation platform and community. Following a partnership earlier in 2020, it quickly became clear that the combination of platform and network had huge value to innovation-focused businesses and was a unique proposition in the market.
“Adding such a remarkable and proven external crowd to our existing platform means that no other organisation in the world has our reach and experience when it comes to open innovation, crowdsourcing and idea management,” said Simon Hill, CEO, Wazoku.
“This is a significant step for Wazoku – further funding and a strategic acquisition mean we are better positioned than ever and have a strong and established US presence. Workplaces are becoming inherently open and collaborative and we can offer the tools, services and collective expertise to help global businesses of all sizes solve problems and create opportunities.”
InnoCentive has grown a global network of almost 500,000 expert problem-solvers, comprising CEOs, PhD students, engineers, scientists, entrepreneurs, retired technologists and business leaders. This combined brainpower has helped address thousands of the world’s most complex innovation and bid data challenges, for organisations such as AstraZeneca, NASA and Enel. InnoCentive has a 75% success rate in solving challenges and Wazoku customers – which include John Lewis & Partners, Barclays and the Ministry of Defence – now have full access to this service.
Wazoku now provides the world’s biggest innovation community and broadest innovation offering. It allows the crowdsourcing of solutions to any pressing business challenge, all supported by the features and functionality already found in the Wazoku platform, Idea Spotlight.
“Our customers have long demanded a platform that integrates internal idea management with external crowdsourcing,” said Alpheus Bingham, CEO and co-founder of InnoCentive. “This enables multiple modes of innovation within the same workflow and on the same digital backbone and the combination of Wazoku and InnoCentive capability offers precisely that. No other firm has the experience and capability of crowdsourcing, idea management and open innovation that this combined proposition brings. The possibilities and potential are hugely exciting.”
Wazoku’s latest investment round brings the total amount raised to £7.35M and recognises the increasing demand for innovation in business. COVID-19 saw both an increase in business and a change in the way in which organisations were using Wazoku, with the quarter during lockdown (April-Jun 2020) Wazoku’s best ever from a new business perspective and overall platform activity level.
“The rapid shift to remote working and the need for engaging dispersed networks as well as the on-going need to innovate and solve problems, has seen a significant increase in demand for both our idea management and open innovation services,” said Simon Hill, CEO, Wazoku.
“We will continue to invest in new talent in both Europe and the US, and in product development, but our main focus is on continuing to build awareness of the power of open business models for driving cost-effective and highly impactful business change.”
Peter Ruffley, Chairman at Zizo, discusses how the promise of AI…
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The promise of AI
At present, the IT industry is doing itself no favours by promising the earth with emerging technologies, without having the ability to fully deliver them, see Hadoop’s story with big data as an example – look where that is now.
There is also a growing need to dispel some of the myths surrounding the capabilities of AI and data led applications, which often sit within the c-suite, that investment will give them the equivalent of the ship’s computer from Star Trek, or the answer to the question ‘how can I grow the business?’ As part of any AI strategy, it’s imperative that businesses, from the board down, have a true understanding of the use cases of AI and where the value lies.
If there is a clear business need and an outcome in mind then AI can be the right tool. But it won’t do everything for you – the bulk of the work still has to be done somewhere, either in the machine learning or data preparation phase.
AI ready vs. AI reality
With IoT, many organisations are chasing the mythical concept of ‘let’s have every device under management’. But why? What’s the real benefit of doing that? All they are doing is creating an overwhelming amount of low value data. They are expecting data warehouses to store a massive amount of data. If a business keeps data from a device that shows it pinged every 30 seconds rather than a minute, then that’s just keeping data for the sake of it. There’s no strategy there. The ‘everyone store everything’ mentality needs to change.
One of the main barriers to implementing AI is the challenges in the availability and preparing of data. A business cannot become data-driven, if it doesn’t understand the information it has and the concept of ‘garbage in, garbage out’ is especially true when it comes to the data used for AI.
With many organisations still on the starting blocks, or having not yet entirely finished their journey to become data driven, there appears to be misplaced assumption that they can quickly and easily leap from being in the process of preparing their data to implementing AI and ML, which realistically, won’t work. To successfully step into the world of AI, businesses need to firstly ensure the data they are using is good enough.
AI in the data centre
Over the coming years, we are going to see a tremendous investment in large scale and High-Performance Computing (HPC) being installed within organisations to support data analytics and AI. At the same time, there will be an onus on data centre providers to be able to provide these systems without necessarily understanding the infrastructure that’s required to deliver them or the software or business output needed to get value from them.
We saw this in the realm of big data, when everyone tried to swing together some kind of big data solution and it was very easy to just say we’ll use Hadoop to build this giant system. If we’re not careful, the same could happen with AI. There’s been a lot of conversations about the fact that if we were to peel back the layers of many AI solutions, we’ll find that there is still a lot of people investing a lot of hard work into them, so when it comes to automating processes, we aren’t quite in that space yet. AI solutions are currently very resource heavy.
There’s no denying that the majority of data centres are now being asked how they provide AI solutions and how they can assist organisations on their AI journey. Whilst organisations might assume that data centres will have everything to do with AI tied up. Is this really the case? Yes, there is a realisation of the benefits of AI, but actually how it is best implemented, and by who, to get the right results, hasn’t been fully decided.
Solutions to how to improve the performance of large-scale application systems are being created, whether that’s by getting better processes, better hardware or whether it’s reducing the cost to run them through improved cooling or heat exchange systems. But data centre providers have to be able to combine these infrastructure elements with a deeper understanding of business processes. This is something very few providers, as well as Managed Service Providers (MSPs) and Cloud Service Providers (CSPs) are currently doing. It’s great to have the kit and use submerged cooling systems and advanced power mechanisms but what does that give the customer? How can providers help customers understand what more can be done with their data systems?
How do providers differentiate themselves and how can they say they harness these new technologies to do something different? It’s easy to go down the route of promoting that ‘we can save you X, Y, Z’ but it means more to be able to say ‘what we can achieve with AI is..X, Y, Z‘. Data centre providers need to move away from trying to win customers over based solely on monetary terms.
Education and collaboration
When it comes to AI, there has to be an understanding of what the whole strategic vision is and looking at where value can be delivered and how a return on investment (ROI) is achieved. What needs to happen is for data centre providers to work towards educating customers on what can be done to get quick wins.
Additionally, sustainability is riding high on the business agenda and this is something providers need to take into consideration. How can the infrastructure needed for emerging technologies work better? Perhaps it’s with sharing data between the industry and working together to analyse it. In these cases, maybe the whole is greater than the sum of its parts. The hard bit is going to be convincing people to relinquish control of their data. Can the industry move the conversation on from being purely technical and around how much power and kilowatts are being used to how is this helping our social corporate responsibility/our green credentials?
There are some fascinating innovations already happening, where lessons can be learnt. In Scandinavia for example, there are those who are building carbon neutral data centres, which are completely air cooled, with the use of sustainable power cooling through solar. The cooling also comes through the building by basically opening the windows. There are also water cool data centres out there under the ocean.
Conclusion
We saw a lot of organisations and data centres jump in head first with the explosion of big data and not come out with any tangible results – we could be on the road to seeing history repeat itself. If we’re not careful, AI could just become another IT bubble.
There is still time to turn things around. As we move into a world of ever-increasing data volumes, we are constantly searching for the value hidden within low value data that is being produced by IoT, smartphone apps and at the edge. As the global costs of energy rise, and the numbers of HPC clusters powering AI to drive our next generation technologies increase, new technologies have to be found that lower the cost of running the data centre, beyond standard air cooling.
It’s great to see people thinking outside of the box on this with, with submerged HPC systems and full, naturally aerated data centres, but more will have to be done (and fast) to meet up with global data growth. The appetite for AI is undoubtedly there but for it to be able to be deployed at scale and for enterprises to see real value, ROI and new business opportunities from it, data centres need to move the conversation on, work together and individually utilise AI in the best way possible or risk losing out to the competition.
Ranjit Rajan, a thought leader on the impact of digital transformation on economies, business, and the tech industry with a specialization in the emerging markets of the Middle East and Africa is also the co-author of Digital Nation: How the United Arab Emirates is building a future based on tech innovation, along with Dr Saeed Aldaheri…
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How does a company go about defining exactly what digital transformation means?
I think digital transformation is one of those buzz words that comes up in every conversation you have these days. Not just with CIOs and technology leaders but with any business executive. And I think a lot of the traditional IT work is now being rebranded as digital transformation. But in reality, digital transformation actually refers to significant receptive transformation in business courses and models. It entails the use of advanced technologies, such as AI and blockchain, cloud and big data analytics and so on to disrupt business to redesign customer experiences. To develop new revenue streams and business models and to monetize organizational and eco-system data to drive change within industry. So, it means quantum improvements and step changes in customer experiences, in operational efficiencies and in business models.
Once upon a time digital might’ve been left to an IT guy or a tech division and now it seems everybody needs to have an understanding on it…
Business leaders have become much more aware of the possibilities that technology can offer and so they are able to look at technology from the prism of business outcomes. And then on the other, the advancement of technology and the emergence of technology such AI, blockchain, robotics and 3D printing have created such new youth cases which were not possible before. And because of that, these cases are largely industrial and business use cases, and so therefore, it now gives an opportunity for the technology leaders to reach out to business and tell them that they can leverage these technologies.
At the same time, from the business’s point of view, from the line of business executive standpoint, he or she can now is much more aware of what is possible with technology. And therefore, he or she’s now proactively reaching out to the technology leaders and asking them for ideas and suggestions. So, it’s working both ways now and there’s alignment between the CIO and the IT department and the line of business executive, which is absolutely critical for success of digital transformation.
Jobs have been essentially redefined through technology, so how do you go about navigating that change and ensuring they are brought along on these journeys?
So, what is happening within organizations has been greatly influenced by how employees use technology in their personal lives or how technology has been impacting the personal lives of employees as individuals. Our personal lives have been transformed by technology such as smart phones and mobility, by the use of social media. By these applications that we use and how we interact with our service providers, with your consumer services organizations, the government, etc. Now, because of that, employees now, when they go to their workplace, they are looking at technology differently. They want to have the same experiences they have in their personal lives at the workplace as well. So now they are demanding that they have similar kinds of experiences at the workplace. And that is increasing pressure on the technology departments and senior executives to transform policies and services within the organization. And of course, the customers of the organization are also demanding greater use of technology in their services and products.
And of course, customer expectations of that journey are changing too…
The pressure on organizations today is tremendous. On the one hand you have customers demanding more; their needs are constantly changing, they are heavily influenced by technology. And so you have to step up and offer services which are augmented by technology. And you have to offer them at the service level that is being offered by the large digital services companies and social media networks like Facebook and Google. So, you have to offer services on a par with those; at the same time your employees are also consumers of these technology augmented services. On both sides you are under pressure.
How do you stay abreast of exactly what that customer wants?
It is indeed challenging. Your customer needs are constantly changing and the way a customer uses technology and how they utilise a service is also constantly changing. And so therefore, organisations need to be very agile, very flexible, and constantly on top of what those customers’ needs are. And this has to be done at the level of single, individual customers. You have to look at your hyper-personalisation and offer individualised services. And that is now possible with technology. It is possible by leveraging technology such as big data analytics and artificial intelligence. You’re now able to understand the needs of a customer as an individual, at an individual level and offer hyper-personalised services to that customer. The question is, how many organisations are really doing that? And how many of them have a strategy to do that?
As a business looking to embrace this digital innovation curve and digitally transform, how do you go about understanding what the right technology is?
I think there has to be a long-term strategy to look at the business overall. Look at those customer touch points that create the maximum level of friction for customers. And then try to make them frictionless. So what progressive organisations are doing is looking at their customer life experiences and creating customer journeys. So, it’s not just about providing an individual service to a customer, it’s about tying those services together to address a particular customer life experience. And therefore, creating a customer journey. Once you do that, then you kind of look at which technology makes sense in order to create less friction at various customer touch points. Now in some cases it might be AI, that could work, in some cases it could be some other technology. But then you build your technology’s story from the customer experience story.
What other challenges does a company face as it looks to begin and embrace a digital transformation journey?
Well there are several challenges for organisations that have been around for a while and play the legacy systems. And not just legacy systems, but also legacy processes, the organisation culture, mindset of the employees; all of them are hurdles to transformation. Often times, organisations are having to be built in certain ways because they have silos of innovation, they have data silos, each department has its own data sets that are not shared across the organisation. They have old technology that is perhaps not amiable to change and transformation. And so there are a number of hurdles that organisations need to overcome while they transform. It can’t be done overnight and they have to start working on each of these issues along the way.
But, in terms of technology itself, I think it’s important for organisations to consider developing a single unified architecture, wherein they can then plug in various new technologies that they want. And that architecture will need to enable flow of data across departments and businesses within the organisation. It should also enable the augmentation of their data with intelligence using AI, machine learning and all of that. And should also be able to integrate customer experience applications and services, easily.
And the other thing that’s important when you look at this is that organizations, which no longer exist in silos within industries, are part of larger ecosystems. And it is really the power of the ecosystem that matters to the end of the day. And so therefore, organisations need to have a technology strategy or technology architecture, to which other entities within the ecosystem can easily integrate and seamlessly transfer data and do transactions. And so therefore, for organisations which have legacy systems, it would take time for them to move and overcome these hurdles.
Obviously, you’re not just going to progress in a straight line, and there are going to be hurdles…
I think organizations need to understand that digital transformation is not a single project. It is not something that can be done within a few months. For medium to large size organisations, digital transformation will probably take years. And it is an ongoing process. And so, organisations need to have a longer-term strategy for digital transformation. So, the CEOs and the CXOs and the other members of the board need to outline a longer-term strategy and then kind of break it down into shorter term flexible goals. It is important for organisations to have the strategic agility when they have these longer-term goals and visions. But at the same time, have shorter term projects and initiatives. But the most important thing is to communicate this effectively.
Now you have specialisation and you’re very knowledgeable and experienced in the emerging markets of the Middle East and Africa. I want to zoom in a little bit in terms of the innovation and digital curve of the UAE…
Well the story of the UAE is a fascinating one. UAE is a fairly, relatively young country. It was formed in 1971 with the unification of various Emirates as states within the religion. Originally the UAE depended heavily on oil resources, so a large part of the GDP of the UAE was driven by oil earnings. But over the years, over the decades, the UAE has been very strongly focusing on on diversifying its economy away from oil. So, the UAE kind of realises that one day it will run out of oil and that they have to develop other resources.And so over the years the UAE has come out with several strategies to diversify. I just published a book called The Digital Nation, which kind of traces and monitors the development of the digital transformation within the UAE. And what has happened is that over the last decade or so, the UAE has been increasingly focused on developing its digital capabilities.
We had the vision 2021, which was launched in 2010 and that increasingly focused on developing the UAE as a knowledge economy, diversifying it away from oil. Right now, the UAE has about 70% of its economy is based on non-oil revenues. And so, it wants to further diversify and sees this opportunity. It sees this opportunity to leverage this destruction that we see around the world. That it can leverage that to create a mark for itself in the world. And so, a lot of strategies that have emerged over the last decade or so, have been focused on leveraging technologies such as AI, blockchain, IOT, etc, to drive these facets of the economy Including, transforming the public section and driving better citizen experiences and services but also transforming from the private sector. And also making the UAE an attractive destination for foreign investment, attracting talent from all over the world, driving innovation etc.
Tell me a little about Vision 2021, and how far along that journey the UAE is, currently?
It focused on several key areas, including education, health care, economics, etc. But, as I said, there has been a great focus on building knowledge industries. And as part of that, technology has been a core pillar or underlying foundation for that Vision 2021. The leveraging of technology has been one of the key elements of the vision. You see the focus on exploring technology to drive education, enable health care, better citizen services and supporting the private sector.
So technology has been at the core of Vision 2021. And as we get close to the end of the Vision 2021 strategy, we see a lot of developments that have happened which have technology at the centre of them. You see the launch of a number of technology related strategies and so we have the UAE AI strategy 2031, which aims to reduce government costs by 50% by leveraging AI and also fostering the development of AI within the UAE across sectors, and the use of AI across sectors. We see the launch of the UAE IOT strategy, the UAE fault and revolution strategy, blockchain strategy, etc. This hue of technology strategies have been launched by the government, which essentially focused on leveraging these technologies to drive government services, also supporting private sector and running innovation within the country.
The UAE’s leaders have been very effective in communicating their digital vision to the senior executives within the government and the private sectors and also to the citizens. It’s as if this is a personal quest for these leaders. When these strategies are launched, for example, the AI strategy, the UAE AI 2031 Strategy, which I spoke about earlier, the UAE immediately appointed a Minister of AI. So, it’s coming right from the top. They appointed a Minister of AI and that ministry now oversees the roll out of AI across public sector organisations. It oversees the education and wellness building around AI. It focuses on driving innovation around AI, etc. So, that’s just the example of AI.
Similarly, the UAE has known strategies related to the fourth industrial revolution: blockchain, IOT, etc. Now for each of these strategies, the communication of the vision comes right from the top. It’s the senior leaders of the country, the prime minister of the country, for example, Sheik Mohammed bin Rashid, who’s been very vocal, in terms of telling the government, the businesses and the citizens and residents of the country that this is something that we have to leverage. This technology disruption is something that we can harness to create a better country, to offer better services. One of the things that has been brought together to focus upon is happiness. Sheik Mohammed bin Rashid, the prime minister, has been talking about making UAE the happiest nation in the world. And a lot of these technology strategies kind of come together and focus on the happiness agenda of the country. So, it’s a national agenda for happiness and wellbeing and technology and the UAE has been very effective in doing that.
The Singapore FinTech Festival (SFF) and the Singapore Week of Innovation and Technology (SWITCH) will come together for the first…
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The Singapore FinTech Festival (SFF) and the Singapore Week of Innovation and Technology (SWITCH) will come together for the first time as SFF x SWITCH.
Running from 11 to 15 November,
this event will gather the global innovation and business community in
Singapore. There will be over 400 speakers, more than 900 exhibitors, 41
international pavilions, and about 60,000 participants from 130 countries.
Sustainability and climate change are the overarching themes of the combined conference this year, given the growing calls for the technology and financial sectors to be enablers and change agents for sustainability.
This theme is reflected in the
content of the conference, the design of the event space at the Singapore Expo
and through the provision of food from sustainable sources, with a sustainable
dining menu featuring the Impossible Beef rendang pizza.
The inaugural SFF x SWITCH will
feature innovative technologies across five key sectors – FinTech, Urban
Solutions and Sustainability, Health and Biomedical Sciences, Advanced
Manufacturing and Engineering, and Services and Digital Services – to catalyse
cross-industry exchange and learning in technology adoption, application of
R&D, and commercialisation of new solutions.
Debuting this year is the Sustainability,
Finance and Tech Summit (11-13 November), featuring over 50 speakers
who will take the stage to discuss how they are paving the way for a more
sustainable future in the world of finance and beyond.
The annual Global
Investor Summit (11 November) will bring together 17 venture capital,
corporate venture capital and family office investors from San Francisco to
Tokyo, to share their strategies for unlocking growth, impacting inclusion, and
delivering long-term value creation in the FinTech and Deep Tech ecosystems.
Leading the Deep Tech
conference, the Global Access to Innovation track (11 November)
will feature perspectives from a myriad of movers and shakers in Asia’s
innovation ecosystem. From founders of tech unicorns to senior leaders from
both the private and public sectors, conference participants can look forward
to finding out more about the opportunities in market access, innovation and
investment, in Asia and beyond.
A new summit created this year
to spotlight key issues faced by small and medium enterprises (SMEs) is SME
Digitalisation and Platforms – Business sans Borders (BSB) (13
November). The sessions in this track will cover pertinent issues such as ‘SME
Financing Reimagined’, the ‘Impact of Trade Wars on SMEs and Platforms’ as well
as the ‘Roadmap for BSB Beyond 2020’. The discussions will take place at a new
Coral Triangle stage, which is designed for more intimate and interactive
conversations.
By Alistair Sergeant, CEO, Purple Consultancy Businesses are increasingly having to create and modify their organisational capabilities to adapt and keep…
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ByAlistair Sergeant,CEO, Purple Consultancy
Businesses are increasingly having to create and modify their organisational capabilities to adapt and keep up with the ever changing and evolving digital technology which surrounds them.
For many, their digital projects are failing; the speed of digital transformation is alienating the essential human interaction and cultural change required to make the projects a success.
Bring back the humans
According to the latest statistics, 88% of digital transformation projects fail and there is a reason for that.
The speed of digital change is something that no business can ignore but most try relentlessly and largely unsuccessfully to keep up with. We are surrounded with disruptive business models coming to market with new technology rapidly changing and it is easy to get so wrapped up by technology that we forget to consider that without the human element, the transformation process will fail.
This rapid change has resulted in a serious skills gap from a business and technology prospective for most UK organisations. As a result, both large corporations and SMEs UK wide are not as agile as they should be, not only affecting growth, but also impacting customer experience and employee engagement.
We know that (most) cars, no matter how technologically advanced they are, need a human to drive them and this is just the same when implementing digital change in your business.
Meaningful change starts with people, not technology. Your team needs to adapt to keep up with the pace by making changes to the way they have worked in the past but none of this can work successfully unless we encourage a chance in culture.
The role of the leader
To implement an effective digital transformation strategy, leadership is not only vital but critical for success. In so many cases, those implementing the strategy haven’t taken the time to understand what needs to be changed, what the strategy should aim to deliver and when, and more importantly how to correctly communicate change with staff or other company stakeholders.
It’s time to remove the digital-first approach as this method requires your entire team to buy in to it and almost forces them into a corner. To work on a new team culture in the business, which encourages your staff to embrace the changes and understand the reason for the changes, takes time. As a digital leader you need to guide and support your employees, encourage them and give them time to grow with the transformation process.
Understanding how they work, how they think and playing to their strengths is time consuming but will ultimately help to grow your successful ‘human-first’ approach.
Get to know your customers
Customers are human too. They are not just numbers on a sheet. It is vital you get to know them, get to the bottom of what they like, what they want and also what they don’t want. You are aiming to promote a human-centric approach so that you give them the solutions they actually want and not what you assume they want.
You can maximise the success of your product or brand by taking the time to get to know who your target market is and allowing them to see that there are humans behind the brand who actually care about what they want and are prepared to talk to them and listen to them.
No matter how advanced technology is becoming, in certain situations there is simply no replacement for the human touch. Empathy plays a large part in positive company and team growth as well as social skills, the power of persuasion and negotiation, and these are all done better by humans and is what your customers will relate to.
Be patient
Building a system within your business, where humans and technology can work together with more of a balance, is where successful digital transformation will be most successful. One can’t work without the other but in your quest to beat off the competition, don’t overlook the heart of your business, which is the human element and ensure you invest as much in them as the technology you use. Take time to let a new company culture evolve and ensure that your employees understand the new structure and most importantly your vision as you are the ‘human’ who is implanting the change.
Borislav Tadic, Vice President BMS & Transformation DRC, explores how a major digital transformation of Deutsche Telekom has enabled greater…
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Borislav Tadic, Vice President BMS & Transformation DRC, explores how a major digital transformation of Deutsche Telekom has enabled greater customer experience and significant technological advancements.
Tell us what
your role is and how it fits into the wider Deutsche Telekom strategy?
I’m Vice President at Deutsche Telekom, responsible for board member support and transformation of the board area, data privacy, compliance and legal, working here in the Bonn headquarters of Deutsche Telekom Group. We as Deutsche Telekom Group are present in 50 countries and I would say are definitely a leading European telecommunications brand. We hope, after our mergers and acquisitions in the United States that we’ll become an even bigger player on a global level.
How
important is it in your position to continue to learn?
That’s a fantastic point. One thing
I try to do is constantly improve on an individual level. That includes formal
education. I have at least 10 internationally recognised certifications and I’m
currently working on my PhD in parallel to my work and I use numerous
non-formal opportunities to expand my knowledge, both in the formats offered in
the company and outside as well as through reading and keeping up to date with
the latest developments every day, every morning.
That attitude is something I try to include in our transformation programs. For example, during the past two years, we’ve up-skilled more than 1000 employees off this board area, both in Germany and internationally, in several ways. First, offering them online learning content on our intranet platform, creating awareness about the different digital courses we have in the context of Deutsche Telekom, which are focused on their profession. We also continue to learn about global technological developments, so they can understand the new trends and developments in the industry so that they can better advise and/or support their customers.
From there we went a step forward and decided not only to offer them in a digital format, which is easy to implement and easy to offer and cost-efficient but also to enable a knowledge transfer. This is through our Digital Future Campuses in Athens and here in Germany. Several hundred people and experts from different functions of our board area were brought together and we educated them in areas such as broadband development, 5G, agile working, international collaboration, diversity and many other topics which directly or indirectly contribute to their performance and to their daily jobs. Satisfaction rate on the company level was one of the best in the recent history of Deutsche Telekom, with 96 to 99% participant satisfaction with the program.
Deutsche Telekom AG
A
transformation of any kind breeds challenge, what are some of the challenges
you have faced?
It is a challenge indeed. The first aspect of the challenge is that you have to give or convey as much knowledge as possible in a relatively short time and of course to make the knowledge current because if you prepare a course around blockchain and you prepared it two years ago, today you would need a completely different base. The pace of change with regards to the content, which you create to educate someone, is very high. It’s important that you stay up to date in the preparation and delivery of these courses.
Even that aside, you have a limited budget and this limited budget has to be approved and/or aligned with our human resources area. We are working with them closely because of course they have way more transparency about the needs of every individual employee and we have of course our professional view and vision where we want to be as a group. We basically worked with our colleagues from HR and with our expert groups in identifying which areas we need to focus on because you have hundreds of areas, especially in our fast-changing, fast-paced business around digitisation and technology.
After we finalised that, we created a program and then the next challenge was how to get the best possible lecturers and best possible experts to share the knowledge, because of course, their time is limited. There are of course budget limitations and numerous other restrictions including language barriers. We tackle that by trying to find the best in-house experts in some areas and external partners for others. They have more experience in some domains that are relevant to us. Then there is the delivery.
Even if you organise a format that consists of online courses as well as the physical presence of a course for several hundred people, that’s not an easy task. It sounds like an easy task; it’s just an event with a couple of hundred people but no, this is multi-partner, multi-party interactive session with numerous choice options because not everyone gets the same program. The people choose the modules and you have to fit all of that together. These are some of the challenges we’ve hopefully successfully tackled.
How
do you ensure that your transformation is done so with the customer experience
in mind?
That was the essence of our program and it’s a great question. First, we understood that we cannot only assume what the customer wants, we need to know what the customer wants and the only way to do that is to talk to the customer. As a governance function, we went and talked to the customers. We went out and spoke with actual private customers and business customers of Deutsche Telekom and asked them: what can we, from security, from privacy, from legal, from compliance, do differently in order to make your life better and easier?
We got our feedback. It was extremely good feedback, in the sense of many concrete, actionable points we can implement. For example, one of them was to simplify terms and conditions. When you sign a contract anywhere, for any mobile service, TV service or anything else we offer, you need to read through the pages of the contract documentation. This document is written mostly with the small letters, small font, explaining what will happen in case of some emergency escalation or conflict etc. It’s written in a language that no one understands but it was always the intention of Deutsche Telekom to make it fully understandable to our customers. We were doing our own efforts but when you speak directly to the customers, he can explain to you, which paragraphs are not easily understood or interpreted.
We used that feedback to simplify the terms and conditions for our major products. We did that within a couple of months and now we have one of the best, if not the best terms and conditions document, which is now standard. This raised the trust with our customers because they know that Telekom is fully transparent and wants them to understand what they are signing and what they are changing with their contract situation. This is only one example of numerous changes we did to the direct discussions with external customers.
How
important is transparency to a company like DT?
When you look at how you can make it more transparent and when you simplify the processes and the policies, the documents, when you’re directly communicating your goals and why you are doing certain things, this raises the trust of the customers. But of course, many digital tools can also help you to raise that transparency. For example, you can do it for ethical reasons. We have been very successful in advancing customer demands through a chatbot. It became so good that some of the customers didn’t even know that they were being served by the chatbot. Because it answered all their questions in the manner that they would expect from a live person, but we still, from an ethical perspective, decided to include the sign notification saying: “You’re speaking with our digital assistant, not with a real person.”
We’ve also introduced specialised
tools both internally and externally. As an example, we have a data privacy
cockpit that enables you to log in as a customer of Deutsche Telekom and
basically see which data you have approved or are sharing with both Deutsche
Telekom and you can also click and approve or disapprove with us sharing that
data with other parties. We are very strict with that. This is one of the parts
of our unique selling proposition; we’re extremely careful with the data of our
customers. What we want to achieve is for customers to no longer need to call or
send an email to understand which data of theirs is in the system and which can
be shared, but they also can log in with their mobile or fixed device and look
and choose and change the categories at any time, through a very useful and
user friendly interface.
Around 10 years ago, through internal experiences, we realised that this could become something we are known and recognised for, and so we decided to really invest internally into data privacy, security, compliance to strengthen our legal functions, to strengthen our audit functions. We did this in order to create a system that not only gives assurance to our shareholders but also to all of our customers. We don’t do it because we must; we believe that there is clear value in data being handled in an ethical and responsible manner for our customers.
How
difficult is this with regards to DT’s presence across 50 countries?
First is that we look at all of our footprints holistically where, if we have a high standard which is not producing a significant change in the product pricing or service pricing, we look to apply it throughout the whole footprint. In the area of compliance, security, privacy and risk management, we are applying the highest standards worldwide.
The challenge here is that you have certain local changes which happen and which of course demand us to stay on the ball in that we are always in contact with our local counterparts which are responsible for these areas where the board area is active and not only upscale them, not only to make them aware of the customer demands both locally and internationally, but also to always make sure that they’re applying the latest, leanest standard and the process to keep the high levels of these services.
How
will you continue to grow and transform? Can a transformational journey ever
really end?
There is no endpoint. You’re absolutely right; the transformation will never stop and should never stop. It’s a process of continuous improvement of the organisations and individuals and customers’ demands, markets. Everything is changing, so we need to keep changing constantly. I think it’s very important to say in the sense of the role you mentioned is that you also lead by example, not only me but also my colleagues and other senior executives. They need to be aware that if we are promoting a tool to be used or a process to be simplified, we have to start with ourselves.
They’re extremely important, these change processes, because it’s not sufficient only to upscale, to implement the customer demands and to digitise and introduce digital tools. If you want the whole organisation to have a sane and a good mix of agile projects and waterfall projects, I need to show that some of my projects in the digitization context are being run agile.
What do the next 12 months look like for DT?
We’re going to focus on new skills. Let’s say that we are going to further explore what the blockchain is bringing. We are going to further explore what the changes are, not only technologically, but also the social changes related to 5G. In addition to that, we want to further explore AI and also further explore digital ethics. We are going to be active in the corporate digital responsibility domain where we, as Deutsche Telekom, are very much pioneering some of the elements here in Europe, so this is definitely going to happen.
What
makes a successful CTO?
I would say surround yourself with extremely diverse people because diversity is not only diversity in the context of having different people with different backgrounds around yourself or different religions, different genders, different ages, etc., but also diversity in the opinion context, and the context of thoughts. And when you’re surrounded by such people, try to be like a sponge.
Try to take as much input as you can to process this and put it into the context and to continue changing because if I would apply what I learned at let’s say in the university or what I’m learning now for my PhD, that might be okay for a certain period of time, but the world, technology and the market is changing with extreme pace. So, you have to be fully aware that this will continue changing so your adaptability is the key. Your curiosity is the key and if you keep that, I’m sure that you’re basically ensuring that you’ll be successful today and tomorrow.
Frank Konieczny, Chief Technology Officer of the U.S. Air Force, talks about how the role of the CTO is changing…
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Frank Konieczny, Chief Technology Officer of the U.S. Air Force, talks about how the role of the CTO is changing in a bid to add stability and assurance throughout organizations.
“What you will find in the field, especially in the Air Force is that we have a lot of officers moving around every two years or so because that’s the normal pattern,” said Konieczny in the podcast.
“They are now depending more upon looking at the CTO as the person that understands the mission and what they need to continue with. That’s the way we established it.
“We have CTOs and all the major commands out in the field and a few of the functional commands as well. We have established a foothold, if you will, throughout the organization, because that’s a dependency. A lot of the officers depend upon the CTO to tell them, ‘Is this a good idea or not?'”
