Almost three quarters (74%) of procurement professionals admit that their transition to eProcurement technologies could have been smoother if they’d had more support from a dedicated expert according to exclusive research from Wax Digital. 

The eProcurement specialists, surveyed over 200 senior professionals in IT, HR, Finance and Procurement and nearly half of the buying professionals quizzed believe that more training would have boosted their business’ digital transformation experience. And just over a quarter think it would have been better to introduce these new technologies over a longer period of time.

72% of procurement professionals have received either partial training or no training in new technologies after the digitisation of manual processes within their businesses. Yet, 28% said they have received enough training, with one in ten claiming that the process could not have been improved.

The study results also suggest that procurement’s roles and responsibilities have changed now they’re increasingly taking advantage of digital technologies. Eight out of ten procurement professionals claimed that new technology has changed their job role over the past decade. However, 60% believe that the adoption of digital technologies has increased their overall productivity.

88% of procurement professionals said that their company benchmarks either as average or below the industry standard for digital implementation. This viewpoint differs considerably from the responses from IT and finance as the research shows that they believe their businesses are meeting or exceeding standards.

Daniel Ball, business development director at Wax Digital, said: “It’s great to the see productivity gains being achieved by procurement through the adoption of digital technologies. Streamlining slow, laborious manual processes will simplify tasks such as invoicing, supplier sourcing and contract management; freeing up time for the team to work on other projects across the business.

“Any organisation going through the digital transformation process needs a dedicated expert on board to help champion all things digital in the business. Their role would be to support other employees as they get to grips with new technologies and help them to embrace the digital transformation process by offering first-hand experience and expertise, as well as coaching them on best practice. This approach can help organisations make the most of their new digital technologies and help ensure the transition is a success, improving productivity and efficiency across the organisation”.

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

Value Drivers: From risk mitigation to leveraging knowledge

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

 The role of procurement: transactional to strategic

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

 Business role: business partners enter the game

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

Delivery model: a centre of excellence

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

Resources:  investing in people and technology

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

By Daniel Ball, business development director at waxdigital.com

Ever heard the joke that the only way to be popular in procurement is to buy a dog and take it in to work? Well, times are changing, and procurement’s popularity is on the ascent as it is recognised for its positive contribution to both the environment and society. Many of today’s savvy procurement professionals realise the advantages of adopting new approaches to how they buy goods and services.

Once perceived as the team that simply saves the business’ money, procurement’s role is changing, as both sustainable and ethical purchasing practices increasingly become business priorities.

Legislation such at the UK Climate Change Bill is forcing procurement to address environmental issues such as plastic reduction and biodiversity. And, more and more customers are now making their buying decisions based on their suppliers’ sustainability credentials.

While sustainable procurement can make a big contribution to an organisation’s Corporate Social Responsibility (CSR) efforts, some businesses are making change of a different kind through their purchasing.

Ethical sourcing is a way for organisations to make positive societal change by choosing to buy from social enterprises which support those most marginalised from the workforce. According to Social Enterprise UK there are over 100,000 social enterprises in the UK. They employ two million people, contribute £60 billion to our economy and offer their services across most sectors. Just like traditional businesses, social enterprises work to make a profit but use it to help create positive social change for those most in need of support.

As well as contributing to good causes, engaging with social enterprises can also have a positive impact on the external and internal perception of a company. According to an Ipsos Mori poll, 84% of consumers believe that companies should do more for society. And, working with social enterprises can have a positive impact on staff morale too with 75% of millennials claiming they would agree to a pay cut to work for a more socially responsible company.

From bathroom soap to recruitment services, the UK’s social enterprises are well-equipped to support numerous business needs. Here are a few examples of social enterprises supplying to businesses throughout the UK:

Soap Co. is an ethical brand that creates cruelty-free body care products, including soap for office washrooms. It provides training and work opportunities for people who are visually impaired, or with other disabilities.

Graduate Planet, is a recruitment business which reinvests it profits into local environmental initiatives. 

Auticon is a national IT consultancy exclusively employing autistic adults as IT consultants.

Recycling Lives is recycling and waste management company that supports charity programmes for ex-offenders.

Working with social enterprises can sometimes be as easy as changing office supplies provider. Another business dedicated to changing lives, is WildHearts Group, a leading UK B2B social enterprise. It encourages businesses to make a positive social impact simply by coming to them for office supplies. Providing 35,000 everyday products that businesses need to buy anyway at competitive prices, its profits help funds the work of the WildHearts Foundation who support struggling female entrepreneurs in Africa and young people affected by social immobility in the UK. 

One CPO who works with the WildHearts Group, told us about the impact this approach to procurement is having on the organisation: “Social enterprises have revolutionised the scale of conversations procurement now has with key stakeholders in the business.

“We’ve found an effective way of making people feel good about procurement. We now have case studies demonstrating how we are contributing – for example, we’ve helped a Ugandan mother set up her own business. Borrowing just £40 enabled her to set up her own fruit and vegetable stall.  It’s no longer a conversation about a ream of paper but one about helping someone educate their kids. What’s not to like about that?”

As well as helping facilitate social mobility, there are many more benefits this ethical approach to procurement can bring to the business. Working with social enterprises doesn’t have to mean compromising on cost or quality, with many suppliers credited for their excellent customer service, competitive pricing, and innovative products and services. 

Crucially, it’s also becoming increasingly common for customers to only want to work with businesses who support social enterprises. WildHearts Group say  they often see organisations highlight their association with them in tenders to help them win the business.

Both sustainable and ethical procurement practices not only deliver both environmental and societal benefits but contribute to the success and motivation of the wider business too. But don’t underestimate the impact these approaches to purchasing can have on the procurement team too.

Another CPO told us that he’d met more senior managers at his business through working with social enterprises than he ever would have done so previously. Perhaps now CPOs can raise their profiles without having to buy a dog after all.

Tradeshift co-founder Gert Sylvest, and CPO Roy Anderson, reveal how their global open business platform is transforming the future for buyers and sellers. By Elliot Francis

Tradeshift was founded in Denmark in 2010 by Gert Sylvest, Mikkel Hippe Brun and Christian Lanng. The trio’s ambition was to connect organisations across the world with an open business platform capable of transforming the way buyers and sellers interact by digitising and connecting every process. With over 800 staff based in 13 countries worldwide, Tradeshift helps businesses connect with all their suppliers digitally; remove paper and manual processes across procure-to-pay; seize early payment discounts to save money and buy what they need while managing supplier risk.

Sylvest’s vision is clear: “Marrying social technology with hard transactions will change the way the world thinks about business and finance, and allow us to bridge major digital divides.”

The Tradeshift Platform

Our platform allows you to run applications to meet the needs of what you’re doing when you’re doing it,” explains Tradeshift’s CPO Roy Anderson. “Different roles, such as advertising, legal services, facilities or engineering, have different requirements, requisitioning means and connections to their suppliers. They want a system that works for them. Tradeshift creates a user centric model – versus a procurement centric or IT centric model – providing different tools for different skillsets.” Tradeshift’s platform can connect the dots digitally offering a breakthrough in use-ability. “The key element of procurement is penetration,” he adds. “Getting all of your customers on board is a lot easier with this user centric tool.”

Anderson’s career path included the role of CPO at MetLife where he managed close to 20,000 suppliers. With just a few hundred of those automated, his resources were tied to managing the risks and costs of unconnected services tied to an IT-centric model. Today, he identifies three areas where Tradeshift can drive transformation in procurement… The aforementioned deep penetration of connectivity with suppliers digitises the supplier base. Secondly, the platform allows for user centric applications. With the penetration and platform established the third key benefit for users is access to a growing marketplace of products and services. “It becomes something that can work for a CPO very effectively,” he maintains. “You can tie into the Tradeshift marketplace and be able to buy your product at your price, and use the services without having to do the enormous work of setting up and running through the business case and the IT resource plan and the implementation efforts.”

Innovation

Since 2010 Tradeshift has been targeting the Fortune 5000 companies and branching out to cover the whole Source-to-Pay cycle, moving inside organisations and onboarding employees for accounts payable automation, and increasingly for procurement alongside services offered via the marketplace. This innovation has helped define the company’s strategy on AI, blockchain and IoT. “We started to implement Machine Learning and AI back in 2012 and created CloudScan, an industry first scan and capture for the accounts payable process. What differentiates those who profit from Machine Learning is the ability to solve the network layers. Being a cloud-based network platform, we have the ability to learn from both the individual company’s best practice – procurement, invoice approvals, product classification – and how it works across the network. This has helped us develop automatic invoice coding and approvals based on existing patterns.”

Challenges

“It’s always an educative journey,” believes Sylvest. “We’ve been approaching things from a new angle since we went 100% network first in the cloud. Customers that are successful on our platform buy into the bigger vision… When we use apps on a phone, everything is connected by default. Companies get that. After 40 years there is only one way to go, greater digitisation of the supply chain and the collaboration between companies. The challenge for them is to embrace ways of breaking down data silos to leverage the benefits of AI. Big players like Google and Facebook are driving this and putting out their technology as open source and using engineering communities to develop this at breakneck speed. The issue lies in how you adapt and use the technology, so most enterprises today are embarking on that learning process to make sure they reap the benefits.”

Automatic success

The automation of e-invoicing has been a resounding success for the company. Tradeshift Pay is now utilised globally by hundreds of businesses and was recognised in the Gartner Magic Quadrant for Procure-to-Pay Suites in 2018. “Tradeshift’s model is to do digital by default,” confirms Anderson. “We work with suppliers to be able to get their documents digitally ripped to start, moving away from paper that needs to be scanned. It’s always going to be a tailored activity, but ultimately suppliers can see that by embracing a digital network, accurate invoices make for accurate payments. Finance teams can manage their working capital more efficiently, suppliers can be paid faster while cash be used more effectively…” Anderson reckons what’s good for the supplier is good for the client. “This is an enormous value proposition to many of our customers,” he adds. “The next step is to digitise the front end – the sourcing of the data analysis and spend analytics; the contract requisitioning, catalogue, and all of the services linked with that.”

Partners delivering applications

The Tradeshift platform is home to more than 300 visionary applications, like FRDM, which allow users to make purchases that elevate both profits and people by offering supply chain transparency from supplier down to raw materials level. “With the FRDM application, you can target the areas where slave labour is prevalent. If the product or service you buy has the potential to be at risk, you can mitigate that risk and aim to eliminate it.” Allied to this are sustainability apps such as Eco and tools for a multitude of tasks from background checks and spend analytics to requisitioning and forecasting.

Tradeshift on trend

Anderson notes that as supply chains digitise, clients are demanding speed, ease of use and a lower cost of implementation. He recalls that in previous roles, as CPO at MetLife and Fidelity, he would create a marketplace inside the company of trusted suppliers with the right risk portfolio that was sustainable, to allow internal customers to get the job done. This could take months – even years in some cases – to set up the suppliers and relevant content, contracts and technology. “My goal now is to be the CPO of an entire network of companies,” says Anderson of the Tradeshift marketplace. “There are organisations out there that separate you from your supplier. I consider that bad business. Our platform will give companies the flexibility to have products and services readily available to capture and curate their own solutions in a matter of days. Now they’re going to get aggregated buying opportunities, but still be able to have their relationship with their manufacturer or supplier.”

Predictions on Procure-to-Pay

Sylvest believes the marketplace embodies the idea of the network, rather than the traditional one-to-one procurement model which misses out on the economics of scale. It’s a place where Tradeshift’s app strategy (300 and counting) will flourish. “When we founded Tradeshift, we chose to make all of our interfaces open source for third parties to develop services,” he explains. “B2B spending is very complex and for every category, especially materials, third parties will bring specialism that can enhance services across different geographies. What will set us apart in the market will be the ability to combine the procurement process with product formation, fulfilment, payment and the financing of the physical goods or based on the invoice.”

Sylvest is most excited about the work Tradeshift is doing with ten of the largest banks (HSBC, CitiBank etc) to provide supply chain financing and discounting in the App Store. “They’ve chosen to have a presence in a competitive marketplace where it’s up to users to decide which financial services suit them best. For me this is proof that our network strategy is working.”

New frontiers for Tradeshift

Tradeshift Frontiers is the company’s digital innovation arm working on two major themes: the future for FinTech and how to connect the physical supply chain with the financial supply chain. Both of these are looking at ways to integrate Blockchain. “Tradeshift Cash was launched in 2018. With half a trillion dollars flowing through the network in receivables, what if you could take those receivables and tokenise them? By turning them into a digital asset you use the Blockchain as a marketplace where invoice tokens are for sale amongst financers. Instead of a traditional sale of invoice volumes over six months, we envisage a much more fluid process where invoices are tokenised in real time and out up for sale. In this competitive model financers compete based on their appetite for risk and knowledge of an industry.” Tradeshift is also working on Ecosystem Finance – extending credit for outstanding receivables between two parties down the supply chain with further tokenisation.

Goals

Faster and friction free financing is the ultimate goal for Tradeshift as it bids to make B2B buying as simple as using a consumer credit card. A key part of its development over the next 12 months will be onboarding partners to deliver critical mass with SKU development for products on the shelf.

“Once you’re digitally connected, then you start to build the value from there,” adds Anderson. “But suppliers don’t necessarily see that value on day one, it takes them time to be able to turn that into an ROI… But, if we look into the future, the only suppliers you’ll want to deal with are those that are digitally connected; more accurate, complete, compliant and transparent in their process. The alternative will be risks in the cost structures.”

Over the next 12 months, the goal for Tradeshift is to add more suppliers to its marketplace, and grow the digital ecosystem. “We’ll build the tools and the connectivity to be able to add a massive amount of value,” pledges Anderson. “It will open people’s minds, just like they did with Y2K when they had to invest in new ERP systems, and they’re investing in this digital environment. This is not an evolution, this is a revolution in how supply chain thinking will be done.”

The latest International Data Corporation (IDC) Innovators report highlights five companies who are disrupting the procurement world with their use of technology, with a particular focus on improving and streamlining supplier relationships. Here is our round-up of who they are and why you should be checking out their offerings.

Written by: Lucy Dixon

FairMarkIT
Boston-based FairMarkIT offers a tail spend management platform that uses machine learning to take charge of procurement. In other words, it will save time and money on the significant amount of expenditure that is not already actively managed by procurement processes – the sourcing and buying of low-value items that can make up the majority of an organisation’s purchases. It is a web-based SaaS platform that offers an alternative to outsourcing and integrates with ERP and P2P. FairMarkIT’s customers typically see between six and 12 percent in cost savings.
fairmarkit.com

LVRG
LVRG promises easier and stronger supplier relationships, and it delivers on this by freeing up more of your time to work on those relationships rather than supplier research or data entry. The system builds up summary snapshots of all your suppliers using available data and integrates with existing software, from Asana and Slack to Dropbox and Salesforce, which will help give the full picture of your suppliers. Security is a top priority for LVRG, and it is committed to getting the right balance between transparent communications and privacy concerns.
lvrg.ai

SirionLabs
SirionLabs is shaking up the procurement world by using technology to disrupt how businesses think about contracts. Its contract management software offers supplier governance, revenue assurance and enhanced visibility. It automates traditional governance processes end-to-end and delivers real-time data-driven analytics, which will streamline contract management and automatically generate new contracts, while tracking the real-time performance of existing contracts. Its latest innovation is SirionBI, which enables real-time access to big data generated during large services engagements between organisations, including data for obligations, service levels, invoicing, issues, actions and spend.
sirionlabs.com

Tealbook
This Ontario-based company is a global network of buyers and suppliers, created using software developers, machine learning engineers and procurement experts. Machine learning and analytics give the user a transparent view of every supplier, with more valuable insights produced as usage increases. Tealbook’s in-house data scientists support procurement teams with constantly evolving technology to drive change. It invests heavily in research through a partnership with the Vector Institute for Artificial Intelligence and has a growing partner community of innovative companies working together to transform procurement.
tealbook.com

Vizibl
Vizibl is all about growth through supplier innovation and collaboration – harnessing the expertise of all the organisations in your network. It is a cloud-based system with the ability to help you manage all supplier relationships, and at the same time bringing the benefits of enhanced collaboration, improved speed, transparency and efficiency. Vizibl is built with input from specialists in procurement, innovation, strategy, marketing, manufacturing and finance, with a focus on building software that enables companies to create more valuable relationships with their partners.
vizibl.co

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

The theory of stakeholder relationships is an increasingly significant area in the procurement and supply field. Identifying and defining who the stakeholders are is vitally important in any business scenario and equally so in procurement and supply, in order to perfectly understand how they are involved and what influence they can bring as a direct impact on the work and success of procurement and supply. 

The theory of stakeholder relationships is an increasingly significant area in the procurement and supply field. Identifying and defining who the stakeholders are is vitally important in any business scenario and equally so in procurement and supply, in order to perfectly understand how they are involved and what influence they can bring as a direct impact on the work and success of procurement and supply. 

A stakeholder is an individual or groups of people who have an interest in an organisation; these may be colleagues in other parts of the organisation, as well as people and groups outside the organisation. Stakeholder groups can be profiled into three different categories:

1. Internal stakeholders group; such as directors and senior managers, the technical/design function, manufacture/production/operations function, sales and marketing function, finance/admin function, storage and distribution/logistics function.

2. Connected stakeholders group; such as shareholders, end customers, intermediary customers (e.g. agents/distributors/retail outlets), suppliers, financial institutions/lenders.

3. External stakeholders group; such as government and regulatory bodies, pressure groups (e.g. Greenpeace), interest groups (e.g. consumer associations and trade unions), community and society at large.

Why is stakeholder profiling important?

It is worth taking the time to profile your stakeholder groups for these reasons:

1. Decision Making: profiling provides an insight into how much influence stakeholders have over decisions. Moreover, it helps you to allow time for responses while working with stakeholders who tend to be slow to act.

2. Communication: profiling helps you to identify the best way to share the features and benefits of your products and services. In addition, it enables you to include stakeholders’ needs in a communication strategy.

3. Understanding: profiling enables you to be aware of what stakeholders’ needs, wishes and priorities are, also it makes it easier to keep track of changing needs and requirements, and it helps you to see the market from stakeholders’ points of view. Likewise, a clear understanding of your stakeholders can help you to deliver more acceptable solutions that more closely fit their needs.

Approaches followed to build rapport with internal and external stakeholders:

Effective communication with stakeholders in any project or business relationship is important as there needs to be an exchange of information between the parties. People will be engaged at various stages in the process and any communication blockages may result in incorrect assumptions and decisions.

Considerably, it is important for the organisation and stakeholders to get to know each other and understand each others’ motivations. This helps to build a relationship where each party is happy to deal with the other, and then, eventually, learn to trust one another. Trust is established when each side has shown themselves to be reliable, consistent, and able to keep promises.

Building rapport with internal stakeholders:

In a business, everyone needs to feel part of the same team and that they are all working towards achieving a common goal. If management do not communicate their expectations to everyone then staff or whole department may go in different directions and lose track of the organisation’s overall goals.

Internal stakeholders feel more engaged with the business if they are kept informed of where the business is heading and what its significant aims and achievements are.

Building rapport with external stakeholders:

Building rapport with external stakeholders takes a little more effort as they are not involved directly with what is going on in the business.

It is vitally important to keep external stakeholders updated with the business’ products and services, goals and achievements. They do not need to know the details of how the business runs, but they do need to understand the aims of the business.

Key techniques and strategies to develop, maintain, and improve relationships with your internal and external stakeholders to promote an effective procurement and supply function:

Having established a connection with stakeholders, to ensure future success you must build a trusting and lasting relationship with them. Whoever they are, whether senior to you or outside your organisation, you can use similar key techniques to help you strengthen these relationships:

1. Be honest and open: being honest and open with stakeholders makes them more likely to be the same with you. If you need help, ask for it. Stakeholders will appreciate your honesty and value the opportunity to assist before a situation escalates.

2. Be proactive: dealing with risks and issues straight away helps you to spot challenges before they become a problem. You cannot control what crops up but you can control how to respond.

3. Be positive: no matter the challenges in your relationship with stakeholders, remaining confident that you will find a solution helps solutions to be found.

4. Listen to others: make an effort to engage with your stakeholders and listen to what they have to say. Understand others’ points of view before you try to get them to understand yours.

5. Have empathy: gain a clear understanding of the stakeholders’ needs and wants. How would you react if you were in their position? – look for a solution that will benefit all parties (win-win).

6. Set a good example: build trust and respect and aim to be professional. It takes a lot to build a reputation, but it can be lost very quickly.

Maintaining relationships with stakeholders:

The better your relationships with your stakeholders are, the more likely it is that your will be able to overcome challenges as they arise.

– Involve stakeholders: Do not lose sight of your stakeholders over time. You built good relationships at the outset and it is easy, under the pressure of work, to forget to maintain those relationships. Maintain regular contact and keep the communication channel open so the stakeholders can also contact you.

– Keep your word: Maintain truth and honesty throughout the relationship. You are accountable for what you are responsible for. If you say you are going to do something, then do it. If the stakeholder feels you are not keeping your word they will begin to lose respect for you and feel that you do not respect them.

– Keep an open mind: Challenges will happen so you need to consider all options when trying to resolve an issue. Be open to the other person’s input – it may be the solution you seek.

– Address issues as they arise: Often issues are side-lined in the hope that they may resolve themselves miraculously, but they usually do not! Deal with them straight away, discuss them, agree on a course of action, learn any lessons and move on. The relationship will be stronger as a result.

Improving relationships with stakeholders:

Occasionally, you will encounter stakeholders with whom you find it difficult to develop a good relationship. There may also be times when a previously good relationship becomes less successful. In these situations, it is important to maintain a professional attitude toward the relationship.

Additionally, you can make a renewed effort to get to know and understand the person. Try to uncover what resistance there is, and why they are behaving as they are. There may well be a simple issue that can be easily resolved.

In conclusion:

Within an organisation, and between the organisation and its suppliers and customers, there needs to be effective and transparent engagement and communication. Therefore, building rapport and developing relationships with all groups of stakeholders are considered the core of building valuable long-term business partnerships.