This week, The Digital Insight welcomes Sam Holding, Head of International at SparkPost.
Sam reveals the role of email in enabling marketing teams to be agile and to successfully meet the changing needs of the business and of their target audiences…
“So, I’m Sam Holding and I head up the international business for SparkPost. Over the past 20 years, I’ve worked in digital advertising and ad tech and I’ve experienced just how important a really well executed digital program is for a business and seen how email is a key component within that.
I was fortunate enough to be offered an opportunity to join the SparkPost team 18 months ago. SparkPost is an email sending and deliverability platform. What that means is we send a lot of mail. We’re the world’s largest and most reliable email sender. We deliver almost 40% of the commercial email sent globally. To put that into context, that’s about 4 trillion emails that we support our clients to send. We’ve also got the world’s largest email data footprint, which we make available to our customers, for them to use, to make data-driven decisions and drive better performance from their email programs…”
In the latest episode of The Digital Insight, George Booth, Chief Procurement Officer at Lloyds Banking Group explores risk assurance and whether it’s become a top priority for the CPO of today.
George also talks about how big data, AI, and blockchain are redefining the sourcing function and in turn, redefining the role of the procurement professional. We also discuss how, in the digital age, balancing the need to identify and onboard new fintechs with a need to protect the business from inherent risks cause significant challenges, but also opportunity.
The latest episode of the Digital Insight welcomes Jim Marous, internationally recognised financial industry strategist, and the publisher of the Digital Banking Report and Sonia Wedrychowicz, an experienced technology transformation professional, having worked in the business management and corporate consumer banking across Europe, North America, and Asia for over 25 years.
Jim and Sonia discuss how digital transformation is more than technology and explore the leadership and cultural issues surrounding digital transformation in banking
The Digital Insight talks exclusively to Jay Weintraub, CEO & Founder of InsureTech Connect, all about digital transformation in the insurance industry.
Weintraub, currently at InsureTech Connect 2019 in Las Vegas, explains the challenges and opportunities currently in the insuretech sphere, whilst also noting the “groundswell of activity by entrepreneurs” who are looking at the world and wanting to make a change.
In the podcast, Weintraub also discusses buzzwords, the power of relationships and what lies on the horizon for businesses.
In the latest episode of the Digital Insight podcast, author and ex-Amazon Director John Rossman discusses the concept of digital transformation.
Rossman lays out 50 (and a half) ideas that businesses and organisations should be considering as they look to transform their operations, embrace innovation and prepare for the next era of business.
In 2002, Rossman took up the role of Director of Merchant Integration at Amazon, overseeing the launch of the Marketplace business – one of the largest third-party selling networks around and responsible for 58% for all units shipped and sold.
In 2004, Rossman moved to become Director of Enterprise Services, overseeing e-commerce infrastructure for worldwide retailers such as Target and Marks & Spencers.
When Rossman left after nearly four years at Amazon, his consultancy role soon started to show him the ‘Amazon effect’ and the impact this ideology was having on the business world.
It is this that Rossman draws upon as the driving force in his new book, Think Like Amazon.
“Several years after I left Amazon,” said Rossman, “one of my clients at the Bill & Melinda Gates Foundation came to me and said: ‘John, I’ve seen how you’ve put the little anecdotes and manoeuvres from Amazon into our business – it’s really impactful and I think you should write a book about it.”
“My inspiration for the book was that, really. Passing on those little moves, teaching clients to take authentic things from Amazon, and implementing them into your own business at the appropriate point and appropriate approach to help make change happen.”
“Being digital, and digital transformation, has many different definitions and there’s not really one correct answer,” Rossman continues.
“I believe that being digital is the combination of speed and agility. Speed is about being able to do a repetitive action extremely quickly and efficiency – that’s really operational excellence.
“Agility, meanwhile, is about sensing and then making change happen. That’s the ability of the business to innovate within itself.”
The Digital Insight is the technology, supply chain & procurement podcast that delivers valuable C-Level perspective into the core issues surrounding business transformation and digital disruption.
Each episode brings the most inspiring executive insights from those driving transformation strategies within the world’s most exciting companies.
Recent episodes have featured insights from Natterbox’s Ian Moyse, Women in IT Asia’s Woman of the Year, Carolyn Chin-Parry, and Gartner’s Executive Partner of Supply Chain, Frank Vorrath.
Don’t miss out on the chance to expand your own knowledge and skillset – subscribe now!
Part four of a six-part supply chain masterclass with Frank Vorrath, Executive Partner of supply chain at Gartner. Frank explains how to build a supply chain excellence operating system, enabled by a centre of excellence.
One of the key things identified within your concept of a supply chain excellence operating system is two-directional thinking, where you’ve got people working in the business and people working on the business – could you elaborate on that, please?
Transformations are really driven by future growth ambitions of those organisations, or if they are looking and expanding into new areas and new business models. Lots of things are changing very fast and exponentially. If you look at that, that sets limitations for organisations to actually do the same things as they did in the past. From a structural point of view, your current capabilities won’t allow you to compete in the future. You have to think about how you are going to approach that.
There’s also a limitation in terms of resources. The concept of perform and transform is simple to understand, which means you still have to focus on your core business and create results and good performance, while at the same time transforming. The concept is almost like running a sprint and a marathon at the same time. If you think about what you can do with the same setup and structure you have without investing, and potentially a different set of excellences, then it’s probably stretching your current resources to a limit.
If you think about the transform activity you have to do as an organisation, you think more about what you need to do to be successful in the future. If you think about the sprints, you still have to focus on your core business and on day-to-day good performance, and you also need to think about what enables you to perform day to day, running these sprints, making sure you keep and stay focused on delivering performance end results to your business and to your customers as well meeting their objectives and needs, but also transforming the organisation at the same time and building the new muscles you need in the future related to the capabilities.
What sort of challenge does this balancing act, between the two areas, present?
If you do that with your current resources you have available in your business you may find yourself in a position that is too much a stretch for your resources: to be able to deliver on your expectations. Somewhere, you need to balance it. The question is can you balance that with your existing resources and the existing structure you have, or perhaps you have to set up a different structure – where you have people working in the business and people working on the transformation. Both are equally important to you as a business because one is really keeping the lights on and delivering the performance you need today, which is finding the capabilities you have to build for the future. That needs to be balanced. Is it easy? Probably not. But is it required? Absolutely.
Where does change management come into the equation?
With change management and transformations, it’s really shifting the mindset and the behaviour and actions towards generating more an improved and sustainable business performance and results. It’s about having clarity of the destination, and a clear understanding of why are you doing this, and what you want and need in order to transform.
The next important part of change management is role modelling. Your leadership plays such an important role here in championing the transformation with clear and defined specific communication and milestones. Taking people along with you on this journey and having an understanding of ‘walk the talk’, and being visible and aligned on a leadership level creates the pull in an organisation.
There’s also organisational capabilities, the resources I need, the financial commitment that an organisation has to make to transform, because it can be dependent on the maturity of that organisation. Sometimes you have to be able to invest first to generate the benefits later on. You have to be able to have governance in that model, which is strictly focused on priorities for the business as an outcome and is steering the organisation through that transformation. The culture and the mindset of the people, the knowledge and skills have to be in place, and it has to be somewhere measured and sustained.
Also, you have to be able to reinforce. How do you align your goals and objectives and your incentives structures on the two important activities, perform and transform, in a balanced way? Not just incentivising generating results today, but also incentivising transforming the organisation to be able to compete in the future. It’s not just continuous improvement. It’s building an operating system, considering what drives change, creating push and pull in an organisation, and really with the mindset of the future to improve, as well as building muscle, creating sustainable business performance and end results, and meeting the never-ending customer expectations in future.
How does a role model approach help overcome the challenges in change?
It has to start at the top of an organisation, which means you have to be very clear, very concise and compelling. People need to understand why you are doing this, and be very clear about the outcome, when you want to do certain things, and what it’s actually going to do for the organisation. Take people along the journey and bring them in a way in that they have a stake in the game, so they are able to participate and provide their input into the transformation. That’s really important when you start your change management and transformation.
You also have to somewhere create an excitement factor for your people to believe that the future you’re going to create for them is a future where they want to be part of, where they want to be proud of, so they are excited to actually take you as an organization forward into that future.
How do you bring the customer into the conversation?
It’s key to incorporate customers into it. Don’t be shy in asking your customer how can you serve them better. How can you create more a collaborative joint partnership together? It’s no longer about vendor and supply and customer relationship, it’s about a partnership on a more strategic level. As a business, if you’re able to figure that out and bring your key customers in, listen to them and make them part of it, or even make them a joint development in terms of building an operating system, even better. You may want to consider joint investments into building the capabilities you need in future, especially in areas when it comes to looking into talent related to emerging technologies, data, data scientists, etc.
You really have a scarcity and you have to build and think about how you want to build these kinds of talents in your organisation from a different perspective and different ways. You may want to do this jointly together with your customers, because they probably have the same needs like you have in their own business, and the same kind of limitation and challenges to find the right talents. Instead of just doing it on your own and being completely internally focused, combine the inside out with the outside in. The key in that is your customer or your customers.
How important is it to develop an end to end supply chain IT strategy and technology roadmap so that the technology and the procurement transformation are aligned?
You have to have an end-to-end view of your technology. Technology can’t be seen in isolation with what you are trying to accomplish with the strategic objectives of your business related to the value proposition you have. Technology and digitalisation, you can be taken from two angles and that’s what I’m seeing currently happening in the marketplace. On the one side, you see companies focusing and creating new business models through digitalisation related to their products and services, selling outcomes and solutions instead of selling products and devices.
On the other side, you see a lot of activity in terms of digitalisation in the supply chain. These two things are connected, but we also know that 70% of the initiatives currently in the marketplace are disconnected. Technology is creating new business models, using data to access and provide insights to your business for better and informed decision making. Data could also mean monetising that data and creating new business models. Technology, from your business process optimisation point of view, can create a new level of maturity in terms of efficiency.
That’s where a lot of companies are focusing on and deploying new technologies because they want to figure out if there are business benefits they can introduce to the business and to harness new capabilities and with automated processes that reduce time, errors, cost, and also increase the efficiencies they have in their business. To be able to do that, you need to have a blueprint and an understanding of where you are at currently with your technology landscape and your applications, and also where you want to grow in the future.
What is the overall journey of this centre of excellence system, where it starts with developing infrastructure, building supply chain excellence capabilities, and then reaching a stage where that supply chain excellence is woven within the organisation’s DNA?
The ideas of transform and perform, and the resource constraints that organisations are having by using the same resources has been recognised in the market widely and you have seen over the last couple of years more and more organisations actually building a centre of excellence. With a centre of excellence, you have to consider that there are different centres of excellence. Now you have to have a functional centre of excellence where you just focus on building the maturity in certain areas of your supply chain.
You could also have a logistics centre of excellence. You could have other centres of excellence, like a manufacturing centre of excellence. The goal is to design your centre of excellence and be aligned with the main activity across your whole value chain, which means if you are a manufacturing organisation and a supply chain organisation or procurement, you would organise your centre of excellence in a way that would incorporate the strategy element into that. There are different ways of structuring a supply chain centre of excellence.
My recommendation, if a business can afford it, would be to focus on end to end, rather than just functional, because if you just focus on functional excellence, again, your integration and collaboration across the different functions might be a bit of a challenge.
Is excellence an ever-moving target?
You always have to work on that. You’re never done. If you really think about your plan of a transformation, does it stop after three years? No, it’s not going to stop.
What you’re hoping for when you had enough momentum, excitement and generated the results, is the building of a culture and a DNA. That is probably the longest part of a transformation which is never-ending, because if you think about it from a leadership point of view, when you build it with your team and operating system, you want to build something which is sustainable and not dependent on you as a leader or your team. It should be there, even if you move on. It should be part of the culture so that people and generations after can still build from what was built, to make it better.
Frank Konieczny, Chief Technology Officer at the US Air Force (USAF), discusses the importance of remaining mission-focused in an ever-evolving technological world.
How did you find yourself working as CTO for the USAF?
It’s unusual because moving from industry into government is kind of the opposite way that most people do things. I was the Chief Technology Officer, CIO, and Operations Director at a large government telecommunications contractor. One of my friends was at the Air Force and he was trying to get his technology established. I told him I’d go to the Air Force if he could give me a CTO position – a true CTO position.
They wanted an injection of commercial capabilities and commercial experience into the government. It was kind of a new thing. You see it now more than ever, more people from the industry come into government because they want that injection of talent and capability and difference of opinion.
What was meant by a “true CTO” role?
I think I was the first in a position described as CTO in any of the departments, the Army, the Navy, the Coast Guard etc. I was already a CTO and kind of knew what we were going to do, but it was a question of the scope of the responsibilities across the Air Force, which is rather large.
Now we talk about me being a Chief Information Technology Officer because there is another CTO for R&D who covers airplane platform development, such as materials and wingspans. I only get involved in the IT part of it.
The question was: what should a CTO do and what expanse should they have? That’s what is unique about it, they had never thought about doing this before. They had technical advisors come in, but they had never had a true CTO across the Air Force.
What did you bring to the role?
I had both operational experience and CIO experience as well as technology experience, which was unusual. I could look at it from various viewpoints that would normally be more pigeonholed into their viewpoints.
My role was to bring new technology into the organisational structure as it was, which was difficult at first because this was brand new to them and we had to convince everybody this was a good idea. That was a big difference.
Most of the stuff we do in the Air Force involves written requirements. You generate a proposal and then a vendor comes in and wins the bid and everybody’s very happy. But they never think about how you inject technology or what technology you want to really go for because a lot of the stuff was requirements based upon your prior history and your knowledge. I was bringing in new types of capabilities that they hadn’t seen before.
Have you had to work to obtain an “operational buy-in” from multiple stakeholders?
I had to set up what we call the target baseline architecture because that’s the only way they could see something. The difficulty comes from them wanting to see some capability. They want to see something on paper. You have to show them that you have the intelligence and capability to do this.
You also have to present something that says, “Here’s a problem I know you have and here are some technologies that you should start investigating.”
We put this into a target baseline. The target baseline for us is identifying what’s going to happen for a particular problem area within two years; what you should be going for and what technologies are available for two years out.
It was a different way of looking at it because most of the planning cycles for the government are 10 years out. We’re in an age where 10 years out isn’t possible or you can’t even determine as we barely what’s going to happen in the next year.
As an example, early on they were doing some testing on a test platform. When they brought it into the real network, it never worked right. They would say: “I don’t understand. We tested it.” I would tell them that in the industry, you don’t do that.
You test it on a test network and you bring it to the real network and then you test it in the real network and you control it. You just have to make sure because the network is so complex. They never did it like that. They wanted to make sure it was perfect before moving.
I convinced them that they should be testing on the real production network and they should control it in a different way than they were doing it before. A lot of it is a trust issue. They have to be able to trust that you do understand the technology and you do understand some of the problem spaces.
I was a duty contractor before, I had worked with all the components and different problem spaces that they have and I was a project manager for a very large system for the Army. I knew what the problem spaces for the components were.
Do you think you’ve been successful on this front?
It’s taken multiple years to get there, but we are doing different experiments in the way the organisation does things. Everybody believes we have to risk, everybody believes we have to do continuous monitoring, everybody believes that anything we feel is going to have a problem is fixed and has to be more agile.
It’s just a question of introducing people to the capabilities that are really out there and getting them away from the 10-year plan issue.
Have you experienced a situation where organisations look to technology without understanding its true value? And just implement for the sake of implementing?
There are plenty of shiny objects that people want without understanding the ramifications of using that shiny object. Since the Air Forceis distributed across the globe, we get a lot of that coming in the form of “Hey, we want to try this.”
A lot of times they do try and they find out that it’s not extendable to the entire Air Force. I have a rapport with the rest of the organisations, so they come back and say, “Hey, we tried this. This may be interesting. Why don’t you consider it for the entire organisation?”
It’s not a question of stopping innovation in the field. It’s a question of how do you look at innovation in the field and determine if it’s applicable to the entire enterprise and how you would move it to the entire enterprise and support it.
How is the role of the CTO changing?
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. 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 organisation, because that’s a dependency. A lot of the officers depend upon the CTO to tell them, “Is this a good idea or not?”
Are you being faced by a new generation of Air Force officer – one that is digitally-led and tech-enabled?
The new officers want everything now. That’s normal. We all do that. Anything new is cool. Then again, it’s just a question of bringing them back into the mission focus, what is really going to support the mission as opposed to anything else.
I think we’ve succeeded in that because we do push them back to the missions, and we’re actually encouraging this now, which is kind of interesting because we have competitions from airmen coming in and saying, “Hey, this is a new technology that we want to produce out there.”
We’re actually giving them money to do things to support their endeavours and everything else. A lot of times that falls back to me or one of the other CTOs to actually watch them to make sure they’re doing it correctly.
We also have more competition now from small businesses. We actually support research and development of small businesses to put new technology out into the field and we actually work with people. So, we have turned ourselves into a technology engine looking at various technologies rather than just writing RFPs and sending them out.
What’s changed about your role since joining the organisation?
Most CTOs don’t have airplane manufacturing associated with them. In industry, most CTOs are CTOs basically for IT. The only difference is we change the duty title a little bit because we wanted to emphasise that we’re focusing on IT as opposed to anything else, but as opposed to actually doing material testing for new wings and evaluating the capabilities and the vibrations of wings, giving new designs and everything else and the engines associated with it, things like that.
We have this way of looking at the R&D effort before it gets into a technology point where you can actually feel it. That’s the R&D piece of it. The IT piece is everything after that, basically.
When you talk to the CTO of most organisations they will tell you they’re all IT because there may be some pieces of manufacturing, but most of them are not in the manufacturing area except for watching, making sure the equipment actually works. That’s not what they’re doing.
They’re not designing manufacturing equipment per se, unless again, there’s an IT component of automation, artificial intelligence and everything else. It’s not that I don’t work with things on airplanes. I just don’t design airplanes.
How do you ensure that, as a technology professional, you are continuing to learn and remain ahead of the game?
I read a lot. That’s nothing new, but I try to stay abreast of what’s going on. Our tech vendors keep me abreast of what’s really going on with their push. I look at what technology is actually happening and where we should be going. It’s just one of those things.
I read a lot in the field and see what’s happening so I can see where we’re progressing, and the question then becomes, “How can we best move in that direction?”
What are some of your current initiatives as CTO?
We’ve been trying to bring mobility to the airman for a while now. The aircraft are mobile but for the airmen, mobility is a big key because what we’re trying to add connectivity to an iPad or whatsoever and send information on it to them because there’s no connectivity out in the field, on the airfield. One of the big pushes right now is pulling LTE and 5G out into the bases to start doing some of this capability.
Does it form a broader question as to what are we ultimately looking to do? We’re trying to make sure that aircraft get maintained quickly, effectively, in a certain way. We want to make sure that the parts that we want can be ordered directly right there when the repairman is there trying to fix the aircraft.
It’d be nice if we were sitting at a depot and the part could automatically be automated, being moved out to where the repairman is in some automated vehicle. That’s one of the ways we look at going forward with the mission because that mission is important.
Where do you think the next industry shift will come from?
The next shift is AI. It’s such a buzzword right now, but we’re starting to see more and more of augmented support via computers, via neural nets and machine learning capabilities. We’re seeing it more and more and we’re seeing some places where we can actually start using it now. I think that the push is how to effectively use AI technologies to enable a mission. Because a lot of people look at it and say they need it, without even knowing what it is.
With new technologies and faster processing speeds, we can achieve more results with AI. As the processing has increased capability, we see that there’s some applicability for AI to run in real-time. We’ve been doing AI for around 20 years. I was coding expert systems way back when they were just coming out. Right now, we have processing capabilities that support some of this.
At the USAF, we’re trying to analyse data and be more of a data-driven organization, so long as it supports the mission. Everybody says, “Hey, I have to have it,” and you’re like, “Great. Give me a problem and I can tell you what applicable AI techniques there are for that problem space”. As we progress, you’re seeing more and more of that occurring, even though it’s still hype.
How important will people remain?
People believe that their job is going to go away because of AI. AI is just an enabler to do your job better. You still have to be there. We talk about autonomous operations such as autonomous cars. Autonomous cars have a lot of problems with them right now because they have to make decisions really fast and they have to do it correctly.
Then there’s the ethical behaviour of automated entities. We’re going through this right now with AI. AI is just code somebody coded in a particular way. There may be some bias in that code as to conclusions, but you don’t know that. So, you have to understand all this. You just can’t say, “Hey, it’s really great. We’re going to go forward with it and proceed,” because that’s not how it works.
Everybody has to realise, with new technologies that it’s difficult at times to get people grounded into the mission that the new technologies are supposed to support. You’re solving a problem with these new technologies or you’re helping to solve a problem, but this problem is basically something that you want to enhance in your mission. You have to think of technology as an enabler for your particular mission. A lot of people forget that. They just think, “I want to have new technology because it’s cool.”
Recently crowned the IT Woman of The Year at the 2019 Women IT Asia Awards, Carolyn Chin-Parry is a true digital leader, having worked with a number of companies around the world to embrace digital transformation.
In this episode, Carolyn speaks to the challenge of transformation as well as the successes. We explore her passion for humanising digital transformation where no one is left behind as we continue our journey into the new digital era.
“Everyone is at a different journey, and at a different maturity level. Even if you’re a similar-sized industry player within the same industry and market, it doesn’t mean that your journey for transformation to survive looks the same,” Carolyn explains in our exclusive interview.
“If you look inwardly, there are different cultures and there are different appetites for risk as well as exploration around transformation. There are different directors, a different c-suite. It really depends on the company culture as well as the senior leadership to really drive a real transformation journey.”
Carolyn Chin-Parry continues: “Some players who wake up seeing themselves far behind, and some are really advanced. But even if you look at those leaders in a certain sector, they still have plenty of challenges in front of them.”
“I’ve worked in technology, and traditionally most people would have looked at technology or in particular IT as a cost centre. In this new era of Industry 4.0 and beyond, technology is actually now a value creator, and is very much a case of an enabler to survive.”
“Lead with courage instead of fear. If you allow yourself to be training and learning and reading frequently, you’re actually always going to be a step closer to understanding what that disruption could look like and prepare yourself for it.”
Part four of a six-part supply chain masterclass with Frank Vorrath, Executive Partner, Supply Chain, Gartner.
In this episode, Frank explores the concept of transforming organisational structures and talent development in order to prepare for the next era of business growth.
“Companies that really understand and develop the talent they have, while also looking from the outside to consistently bring new talent into the business, are winners in tomorrow’s marketplaces.” – Frank Vorrath, Executive Partner, Supply Chain, Gartner.
Neill Hart, Head of Productivity and Programs at Computer Systems Integration (CSI), speaks exclusively to The Digital Insight about how the company has moved beyond simple systems integration and helps customers find and exploit a ‘perpetual edge’ in technology innovation and digital transformation. Click here to listen to the full podcast!
“As Head of Productivity and Programs at CSI and the head of enablement, I am the middle ground between strategy and execution. We take the company strategy, which is very much centred on digital transformation, and using utility or cloud computing, we take it to the market in a way that makes sense for our client base.
Companies will have three or four desired outcomes; grow the business, save money, innovate faster and to protect (data, reputation etc.). Traditionally it’s to save money. On-premise data centres require capex investment, you have to buy equipment, run it in a data centre and pay for electricity and power, operations etc. The offer of cloud or utility computing is that use what you need and only pay for what you use. You don’t pay a lot to the water company if you don’t turn the taps on. That’s the dream of utility computing or cloud computing is that you break away from the capex investment. It’s inflexible. If you run out of capacity with an on-premise data centre, you have to buy some more equipment and that takes weeks or months to arrive. With cloud, if you need some more you pay for more…”
“Great companies need to do three things: out-think, out-compete and outperform their competitors…” Frank Vorrath, Executive Partner of Supply Chain at Gartner.
This week, in the third episode of an exclusive six-part supply-chain masterclass, Frank Vorrath, Executive Partner of Supply Chain at Gartner, reveals how supply chain excellence operating systems can really help build the muscle of an organisation, as enterprises evolve and react to volatile markets, increased competition and rising customer expectations.
“There are still many companies struggling to make long term commitments, and not really addressing the balance between the uncertainty of short-term financial performance and long-term investments, to build better capabilities. Now for many, many years, there has been continuous improvement initiatives being around standardisation of processes and all these good things, but we need to take that to the next level of building truly end-to-end capabilities.
We’re talking about building something which creates more sustainable business performance and results… When I talk about a supply chain excellence operating system, it’s really to build the muscle in an organisation, to be able to cope with future requirements, from the customer side in responding to customer expectations, but also being able to compete differently in the marketplace and building capabilities related to people, processes, technology as an enabling element…”
A global leader in procurement and supply chain, Sam Achampong is Head of CIPS MENA, and responsible for influencing supply chain and procurement transformation across the region.
So, could you give us a brief outline of your role at CIPS MENA?
CIPS works in a number of ways. I guess if you look at a triangle, there’s three main areas we work in. One is education, and that’s around our qualifications. Another is around thought leadership in terms of the events and social networks we create. The other is around our B2B operations where we work directly with organisations to work on the capability development of their own procurement teams, and their procurement organisation.
The operation in the Middle East has been around for about 10 years now. In terms of the region, I think we acknowledge that the level of maturity in procurement is in many ways a little bit behind more established areas of the world. But over the past 10 years that gap has been closing. So, we’ve seen some significant strides in terms of how people view procurement, and how strategic people see procurement. However, there remains a lag in recognising it as a strategic function. We continue to work with organisations and individuals in this region to improve that.
What are the challenges procurement is facing in MENA at the moment? Skill shortages or technology uptake?
So, it’s a bit of both. There are skills shortages, because there is a lack of people who have those commensurate professional and strategic skills in procurement in the region. So, let’s call them licensed procurement professionals; people who are actually qualified in procurement practice, and who have the skills in that function. So, that’s a skills gap that only CPOs in the region will acknowledge.
The other thing is the recognition of the profession itself. So, when you go above the actual stakeholders around procurement, your CFO, CEOs, the C-suite and others, the recognition of procurement as a strategic function is lacking in many ways here. So, what that means is, you find that a lot of procurement departments are being used as transactional departments, who are either performing a compliance role, or a simple transactional role. So, that obviously diminishes the role of procurement and diminishes the effectiveness of what procurement can deliver in this region. really is a lack of depth in the market of people who have those skills when they are called upon. So as a result, you cannot look to a major organisation or a particular job description, procurement category manager, for example, in a major bank and assume that they have the necessary skills that you would expect a procurement IT category manager to have. Because there just isn’t that depth of skills in many areas.
However, as I’ve said, there have been big strides over the past five to eight years to improve that. So, there are real centres of excellence around the region who have been working for a long time to overhaul their entire departments. You’re talking about some of the major organisations like ADNOC, the major oil company, or SABIC in Saudi Arabia, around to Etihad Airways in Abu Dhabi, who’ve been working very hard for a few years to ensure that procurement becomes a strategic function, and that the people who work in it are professionals.
Would you recommend more professional qualifications being introduced in the region?
Yeah, that’s the other side of it. So, there is looking for people in the market who already have those skills, that’s one side of it. The other side is putting together the infrastructure, whereby people are able to get hold of those skills. So, that’s the backbone of what we’re trying to do. We set up several study centres across the region where people can go and study CIPS qualifications anywhere around the region from Lebanon, to Bahrain, to Saudi Arabia, to the United Arab Emirates, to Egypt. In addition to that, we’ve worked very closely with a lot of organisations to set up in-house procurement academies, whereby we work directly with them to upscale their teams to the highest level over a period of time. There are two areas in which we work. One is the B2B, and the other is just for the B2C where you have the student network and the individuals who want to attain those skills.
We’re working with a lot of the educational establishments to work with them to ensure that procurement qualifications, skills and standards are available in the local university network. So, we’ve done that across the region, where we work with centres of education, to help them put in place skills and qualifications that are commensurate with leading procurement practice.
I guess, the other side is away from the people. It’s a case of how people actually do procurement. So, what are the strategic games, what are the processes, practices? We’ve also worked with several organisations to provide advisory services to look at how they actually do procurement and guide them into putting into place procurement practices that are leading practices to help achieve value. You’ll see organisations like the Dubai Expo 2020 project, who have recently gone through what we call the CIPS Procurement Excellence Program, where we review how they do procurement and guide them towards best practice.
Have you encountered a stark contrast between, broadly speaking, the Middle East and the North Africa region?
In the Gulf, you will find real centres of excellence and some real heavyweights in the public and private sectors, who have invested in putting together skilled procurement professionals, and invested in how their departments manage procurement strategically. So, you will find some very educated and strategic people.
When you look more to North Africa, Egypt is a very populous and academic country. So, you do find a lot of people from the academic perspective, who have come through a level of education to attain procurement skills; maybe not to the highest level, in terms of strength and depth, but that’s the angle that happens in North Africa rather than companies sponsoring people to go through qualifications.
West Africa, again, is slightly different. You have countries in West Africa, like Ghana, who are working very hard now to establish procurement centres of excellence among the public sector. So again, we’re working very hard with them to put in place structures that defend how they build up the reputation of good public procurement within those areas.
So, there are differences between the Gulf, North Africa and West Africa and several subtleties between the public and the private sector. But interestingly, I think what’s happened over the years is that there’s always been a gulf in the maturity levels of the practice of procurement and many other professions. What’s happened over the last two or three, or three or four years is the advent of technology. So, there’s an element now where people are looking to leap frog the long route of getting people highly qualified and educated in procurement and are instead trying to invest in technology to do that procurement for them, which makes sense to a certain perspective. But obviously, the caution has always been to make sure that whoever is working on procurement for you, in terms of people, are highly skilled commercial managers, because it’s clear that you cannot rely fully on technology.
I can recall one particular instance where the prerogative was to try and eradicate as much as possible, the ethics and procurement fraud from the procurement life cycle. So, the solution that was being implemented was a whole-scale eSourcing suite, which is a good idea in terms of transparency. But of course, the fact is that probably 80% of procurement fraud is carried out at the specification stage. So, you still do need to work on the people, otherwise, you’re not really eradicating the problem.
You touched upon ethics, and obviously transparency within the supply chain is a hot topic globally, so I guess within MENA, building trust is a very important part attracting foreign investment, for example…
I think you’re right, and for any country or region that’s looking to attract foreign investment, it’s incumbent on them to create an environment conducive to that investment coming in. And key to that is procurement, the reputation of how business is done, and how supplies interact, and how organisations are gained through those transactions across the supply chain to obtain value is absolutely crucial to attracting investment.
So, ethics is key. We work with a number of organisations across the region, specifically on that subject. In fact, there are several organisations who now have the CIPS Ethics Kite Mark where all of their team have, specifically on that subject, been trained in ethics. The organisation can demonstrate that people within their team, as long as they procure anything, they have a full knowledge of what the subject is. Now, if you look at some statistics, and in terms of the effect on procurement, I think procurement fraud is like taking up 20% of the cost of doing business in developing countries, and 10% of the cost of doing procurement anywhere else. So, I guess for those areas of those countries who can ill afford it, that becomes a really, really important topic to address because it directly affects their affordability to invest in infrastructure and other areas, as it’s adding to the cost of doing business.
Technology is driving a lot of the procurement transformation stories at the moment and obviously MENA has had sort of issues such as the uptake of technology in the past and concepts such as cashless banking, plus they’ve had cyber security weaknesses. What kind of challenges have you seen there with regards to the technological side of it?
People have access to the latest technology, and people do have access to, and are able to purchase, the best solution they can afford. So, if there is an issue that it’s sometimes a case of people over specifying what they want. So, an organisation may have acquired the latest ERP or eSourcing suite, or solution, that is applicable to their operations, and to a certain extent, other organisations have seen that and said, “Okay, well, we’ll have that as well,” without aligning it directly to what they need.
So, there has been, to a certain extent, some over specification, which procurement transformations are now addressing. There are an awful lot of procurement transformation going on, where organisations are actually really looking at what they’ve done over the last 18 months and sizing or repointing how technology is adding value.
So, you have people looking at developing marketplaces, where they haven’t thought about it before. A lot of organisations are creating their own marketplaces where everyone could be a buyer, rather than continue to centralise procurement across the procurement team. So, they are making use of those cloud-based systems and those marketplaces enabled by some of the technological solutions out there.
Do you see blockchain playing a bigger part in procurement transformation?
There’s a lot going on around blockchain at the moment. We have the UAE government, for example, who have said that they will become the first blockchain government by 2020. And there are several practical examples of how blockchain is used around scanning trans-shipments etc. There are many other examples from around the world and the region. I think the reality is that blockchain is not yet an end-to-end solution. I think when it is, then you’ll see the benefits of the really embedded end-to-end blockchain solutions where people either have an in-house blockchain or a localised blockchain across groups of businesses; a corporate blockchain.
I think that’s where regions like the Middle East will come to the fore, because they are perfectly positioned to be leaders in the adoption of this technology. Because they don’t have a lot of legacy systems and practices to hinder their adoption of new technologies. They also have very strong advocacy at government level. If the UAE government, for example, says that they will become the first blockchain government by 2020. Well, that means that everyone’s going to have to participate in that transformation. Because if the government will make that a priority, then certainly everyone else does it. So, there’s a great opportunity for wide scale adoption of blockchain technology, when end-to-end solutions are implemented. Companies out here are very, very open to the technological changes.
This week is part two of a six-part supply chain master class with Frank Vorrath, Executive Partner Supply Chain at Gartner. Frank has years of experience working on the frontline of supply chain management, and this week he’s detailing the hidden potential of a strategy-driven supply chain… Listen now!
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