Expenses for items such as individual company mobile phone usage, printing and copaying is typically billed centrally against a centrally negotiated contract. The costs incurred, however, are often both a mystery and black hole of unaudited, unchecked invoices.

They needn't be.

All organisations can access individual employee expense data if they so wish. The reality is that few of them do. Which is really a lost opportunity, when you consider all of the anomalies, discrepancies and consumption-driven cost reduction which can be attained here through just having the right data.

My guest this week, Anthony Devine, explains how organisations can, through the power of well presented data and a culture of transparency, use this data to drive awareness of cost and usage, and make a serious dent into the overall spend on these services.

2:50

Anthony tells a fascinating story of how he discovered this was a problem from a very different original career path he had been on.

4:45

What does Finfo define as indirect employee expenses for the purpose of what the tool can track?

6:31

How can these expenses be broken down to show what each employee or username is consuming? What are the means and mechanisms used to be able to get hold of the data and present it in an easily understandable format?

8:59

What is preventing the client from accessing this data themselves? Anthony’s answer is surprising in that the barriers to entry are relatively low but the penetration rate of clients actually requesting this data natively is very low.

11:08

I ask Anthony how they are able to fulfil the data privacy requirements of GDPR, and what data they are actually able to legally display within their own organisation.

14:47

Anthony walks us through how Finfo onboards a new client, and how they go about giving them visibility of the data which could generate an easy return on investment with regard to going after the low hanging fruit.

18:14

The savings figure in Year 1 that Anthony alludes to is an eye-popping number you won’t want to miss if you’re an IT or telecoms procurement professional!

21:41

Beyond year 1, how does Finfo manage to deliver value beyond implementing the initial quick wins?

23:01

How procurement category managers can benefit from a third party provider (such as Finfo) as a means to having better knowledge of their competitive position with regard to their contract terms with telecomms and printer/copier suppliers.

26:05

I ask Anthony to give me the elevator pitch of how Procurement Managers should be positioning this to persuade budget holders to invest in tools to assist with cost transparency

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finfo website

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Larger organisations tend to use enterprise level ERP systems such as SAP and Oracle, neither of which are particularly user-friendly. In fact, the average person who only uses them to request, approve or receive goods and services will usually find them cumbersome to the point that they find ways around them.

Organisations typically react to this by offering solutions such as punch-out catalogues and P-cards, or even third-party integrators and BPO to deal with tail spend.

Smaller and medium-sized organisations either don't have an ERP system (particularly for rapidly scaling startups), or they have a sales / accounts-oriented solution like Xero, Sage or Netsuite.

In all of these situations, there isn't really much opportunity to have visibility of requisition and order tracking, as well as what is being spent against which budget in a format easily visible to users and budget holders.

My guest this week is the CEO of Canadian scale-up Procurify, who are making waves through their super user-friendly P2P software which facilitates a more visible "spend culture" in organisations through its smartphone app first technology and easy to user interface.

2:14

Aman begins the interview by walking us through what he views as being a good corporate spend culture, and examples of where it can easily go wrong.

5:47

We explore the differences between a healthy corporate culture of spend transparency vs. a more controlling, top-down approach of strict spend control, and how the former can result in a much more autonomy and less bureaucracy.

9:35

Uncontrolled spend vs. transparent spend - what is the difference and what can cause the former vs. the latter?

16:00

We look into two examples: A rapidly growing company that has no ERP system vs. a well-established organisation that has a legacy ERP system in place that does not really cater well to procurement's needs. I ask Aman how Procurify's system can drive benefits and what time savings this typically provides.

22:18

What to do if you already have an existing, legacy ERP system in place? If this has a finance module, what options are there to use a P2P system such as Procurify that has been designed with procurement in mind when there is still a need to use legacy systems for accounts and invoice processing?

25:56

Simple P2P functions such as approvals of requisitions and POs and performing goods receipts have only fairly recently become commonplace via mobile app, whereas travel & expense software has had functionality to submit reports in an app for years. I ask for Aman's thoughts around why this has taken so long to catch up.

29:27

How Aman sees Procurify's product as just a tool which can help as an enabler of how organisations can succeed through company culture and mindset.

Procurify website

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While many solutions providers in the procuretech space have focused their efforts on automating or simplifying operational procurement, my guest this week is from a company who have used this technology to bring AI-driven benefits to the spend analysis process.

Instead of just providing a spend dashboard, Simfoni is seeking to distinguish itself from an increasingly crowded marketplace by offering spend classification, a suggested savings roadmap and risk analysis all in one.

We discuss how this can lead to faster decision making, as well as exploring some of the limitations where the procurement skills of the person managing the category will still come into play.

Just like a pilot's relationship with an aeroplane's auto-pilot capabilities, AI can do the heavy lifting, but the nuanced expertise of the procurement professional is vital.

3:10

What is AI-powered spend intellgence?

5:41

I ask Sreeram whether AI capabilities are really that advanced when it comes to classification of PO data and the ability to categorise vendors and individual POs into taxonomies or buckets of similar spend.

10:15

Can a machine or artificial intelligence perform risk analysis? Or is it more around accelerating decision making through making certain pieces of data more accessible?

13:31

We explore how using AI and machine learning can locate the most lucrative cost savings opportunities, which could vastly speed up the amount of time to come up with an expense reduction roadmap from an initial spend analysis.

15:20

Sreeram explains the concept of "should cost analysis", and how market intelligence can be utilised to project what direct materials should cost based on market price intelligence and various sources of commodity price data.

17:32

We discuss how tools like this can facilitate the ability to "hit the ground running" in a new category management position, especially in cases where Buyers and CMs don't have experience of purchasing that particular category before. Will Simfoni and similar tools enable access to more roles for experienced Category Managers with a more generalist background?

20:17

Of the 3 key pillars that Simfoni offers, I ask Sreeram his thoughts on which of them will have the most profound impact over the years to come.

24:10

I muse about some of the same topics coming up in several different interviews that I've done for the podcast and how this is very unlikely to be a coincidence! If you want to stay relevant, ensure you're aware of what these are!

Simfoni website

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Preparation for negotiations has long been something that we as procurement professionals know is vitally important, but all too often we're stuck in the weeds with firefighting and process-related administrative work to do what we should be doing.

Add to this the difficulties we also face in obtaining the necessary market data.

Maybe your organisation has stopped subscribing to commodity price data channels because the subscriptions are too expensive

Or you're new to a category and you don't know how to pull this data.

Perhaps your predecessor stored the Excel spreadsheets on his/her C drive or on some far flung corner of Sharepoint that you're not aware of.

We've all been there.

Time is scarce and access to the necessary knowledge isn't always straightforward. In today's episode, I interview Kent Ledgerwood, VP of Customer Success at LevaData. They're a company who are facilitating easier access to supplier data to help buyers in their negotiation preparation, as well as more general risk management assessment activities related to sourcing and supplier management.

2:53

I start off by asking Kent whether he believes it's true that Sales typically know their customers better than Procurement knows their suppliers, and what we can do to catch up and level the playing field.

4:48

We go on to discuss how size of company may still impact overall perceived buying power. However, it no longer necessarily means better access to market intelligence and certainly doesn't mean ability to act faster.

6:43

Kent explains how there is a sweeping change of collaboration in diverse industries between buyer and customer, in order to become more innovative, maintain margins and be faster to market. Democratisation of data and the ability to open up is changing the way business is done.

8:51

Will this trend happen faster in certain industries than others?

9:59

We discuss to what extent having perfect knowledge of the market and of the supplier can assist a negotiation preparation, and why AI will still rely on the human at the other end and their ability to be able to interpret the data to facilitate them in making informed decisions.

11:26

How "big data" can give you the insights to how your organisation is performing in relation to not only the market, but also compared to other peer companies in the same industry?

13:49

What are the limitations of what a machine can provide vs. where does the human knowledge of the Commodity / Category Manager come in to complement this augmented intelligence?

16:03

How cognititve data can assist with New Product Introduction (NPI) through its analysis a Bill of Materials (BoM) to ensure that pricing can be optimised in real time in collaboration with both Engineering and Procurement.

18:23

We look into how intelligence of actual costs in the marketplace can ensure speed and effectiveness in sourcing, and how this can also avoid unsubstantiated budgets driven from financial controllers without the benefits of market insight.

21:22

Risk management is the buzzword of late, but no platform will completely eliminate all of your potential supply chain disruption. We explore the benefits as well as the limitations of this, as well as looking deeper into 2nd and 3rd tier vendors and how they can be analysed to spot potential risk.

24:54

Certain geopolitical risks are easier to predict vs. less predictable risk such as the emergence and rapid spread of Covid-19. I ask Kent to what extent good data is necessary in order to provide the necessary intelligence in the context of risk to your supply chain. His answer is surprising and unexpected...

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Accounts payable issues are something that we as procurement professionals shouldn't really need to get involved in but inevitably we do. In these instances, our role is usually the equivalent of a fire extinguisher. It performs no added value and very rarely do we receive any recognition for it.

So why does it land in our inbox?

Because, well, where does the buck stop when the supplier hasn't been paid or invoices have been lost? Yup, that's right. If we own the vendor relationship, then you can bet your bottom dollar that we'll hear about it when AP are underperforming.

There are lots of reasons why this happens. Broken processes, poor onboarding of new staff, reliance on sending invoices by post or email, as well as high attrition rates within AP teams can all lead to a less than optimal process.

My guest on today's show walks us through how automation can lead to productivity gains of up to 70% and redeployment of staff from administrative processes to more analytical work.

This is a great example of how developing countries have leapfrogged us in the West to come up with a truly remarkable solution, and that innovation is everywhere.

3:10

Veekshith walks through the 5 main areas that a CFO typically needs to cover off, and how Finly has contributed to automating these.

4:21

Why did Finly decide to include a procurement module? Learn how non-PO spend is much more common within Indian companies and how they were able to adapt a solution to accommodate this.

8:09

Veekshith talks about how automation can increase departmental productivity by ca. 70% and that smart companies can redelpoy the headcount saved through this to more added value tasks.

12:09

We talk about specifically the procurement modules and whether these can be used as stand-alone options without the need for ERP integration, and the pros and cons of doing this.

15:26

Because procurement teams typically don't have an IT or capex budget, persuading the business to invest in procuretech is usually a laborious and difficult task. Especially if there are no guaranteed P&L savings. I ask Veekshith his thoughts on whether selling directly to CFOs (because this is predominantly a finance tool) is easier than going through procurement. His answer is super interesting and also gives an insight into how corporate structure and governance in India is different

19:24

I ask Veekshith about his plans to conquer the US and European market and he explains some of the challenges of making this a reality. His answer was startling and was a huge eye-opener of how far behind our banking systems are in more mature markets vs. more innovative players in emerging economies.

21:58

This is a competitive space, and there is no one-size-fits-all solution. I therefore ask Veekshith as a final question what he sees as Finly's USP, especially in light of their plans to enter more competitive markets.

Finly website

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Although it may not seem that way as we emerge from Covid-19, the war for talent is just about to get real. The thing is, it's the war for the right talent. If you're in a fairly generic, operational procurement role then I HIGHLY recommend you listen to this episode and take ACTION before you find yourself in a role that's becoming obsolete, thanks to the unstoppable march of technology and automation.

In this episode I'm joined by experienced recruiter Martin Smith of Talent Drive, a UK based recruitment agency specialising in Procurement and Supply Chain roles.

We discuss the impact of Covid-19, immediate and longer term trends as the importance of "bums on seats" in the office from 9 to 5 every day diminishes and as technology plays an ever more important role in how procurement teams achieve their results.

4:23

Martin goes into what the market is likely to look like post-lockdown and how employers will be forced to move with the times if the marketplace for top talent stays competitive.

7:26

We explore the impact this could have on salaries and benefits, and how employees could value softer benefits going forward as access to technology and telecommuting becomes the norm.

9:11

Will salary become less important as time goes on, as employees tend to value flexibility over remuneration?

11:51

I ask Martin his thoughts about fixed-term contracts and the increase of interim managers, as companies become more savvy about having flexible resourcing to cover peaks and troughs in demand and workload on a project-specific basis.

17:26

Martin and I go (educated) crystal ball gazing into how procurement organisations of the future may look. If you’re worried about whether your skills are relevant, or if your role could become redundant or obsolete in future, this is something you REALLY need to listen to and define an action plan. A robot may be able to do your job in 10 years time. This is your wake-up call.

22:08

We discuss how operational and tactical procurement roles will likely not exist in a few years time in more progressive companies who are focused on added value and driving the business forward, rather than technocratic, process obsessed procurement teams.

23:13

I have a bit of a rant about how procurement professionals are still predominantly tied up in non-value added tasks and administrative work! Then I ask Martin about his thoughts on the biggest change in skills that employers will seek from procurement professionals as we go full speed ahead into a digital age, where soft skills and the ability to influence stakeholders will play an ever-increasing role.

27:08

We round off the interview looking at how certain roles currently not in procurement may at some point be part of the organisation, and also discuss where procurement’s reporting line is likely to be as we move more into Industry 4.0.

29:00

Finally, I ask Martin for his 3 tips of how procurement professionals can improve their relevance (and their employability) in a changing market.

Talent Drive website

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Procurement has an image problem.

We're often seen as the department our stakeholders and business partners run to when they have a problem that requires an immediate reaction. We're often brought in to extinguish the fire extinguisher, but rarely to prevent them from happening.

So, how do we move from being a reactionary department seemingly in servitude to our stakeholders, to a better respected business partner that is seen as a value generator.

Part of the solution is making our contribution to the organisation better known and more visible. We're not just a department that fulfils our annual cost savings targets. We also provide a whole lot of other value that often goes unmeasured, but where individual business partners are more directly impacted.

It's here where we discuss how better awareness and communication of these initiatives, and a common mechanism to measure and track these, can make a huge difference to how procurement is perceived internally as a credible business partner.

My guest this week on the show is Pierre Laprée, CEO of Per Angusta. They're a French company who have developed and successfully implemented a tool that tracks total procurement performance in major businesses.

3:12

Pierre explains his background and how he went from Procurement Director to SaaS startup entrepreneur, by way of seeing a clear problem that needed solving and having the foresight and confidence to jump in with both feet to develop a solution!

6:17

I ask Pierre's thoughts on why procurement is often misunderstood. Whether he sees it as a lack of corporate understanding of what procurement actually does, or whether culturally it's just that we're still seen as being an administrative function.

7:43

Technology is not the solution to all problems. If the organisational structure is immature and a CFO is too blinkered to acknowledge procurement performance beyond just hard savings, there's no magic bullet.

8:42

We discuss the dangers of only measuring cost savings, and what can be done about this in terms of wider value recognition.

10:22

Pierre explains how performance tracking can be expanded to other financial and value-driven contributions that are not as obviously visible in the P&L.

12:56

There is a value bomb dropped here, around how small steps with value generation and achieving "more with less" can build trust on a longer term basis with key stakeholders.

15:10

We discuss mechanisms of how cost avoidance can be measured and recognised, and how designating and agreeing a model for this requires interdepartmental alignment right from the outset.

22:32

Is data quality imperative to get results and buy-in from using the tool? We talk about the issue of potential lack of consistency and reporting standards across different countries and business units.

26:22

Rounding off the interview, the benefits of open platforms and interconnectivity. There is much more flexibility when it comes to using best-of-breed solutions vs. a one-size-fits-all enterprise level procuretech software.

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Per Angusta website

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We've often spoken about different software solutions and certain, specific areas of the Procurement flight deck which can be automated or digitised. Here, we're taking a step back and looking more holistically at dissecting a project from the conception, right the way through to after installation and commissioning has been completed and managing the performance of the vendor throughout the duration of the contract.

Sourcing a vendor, contracting with them, and then actually orchestrating an enterprise level digital transformation in procurement is no easy task.

My guest on this episode, Karthik Rama, who goes by the pseudonym "Procurement Doctor", has done this several times and shares his knowledge with us around what to consider when, and what the most common pitfalls are for the uninitiated.

2:15

Karthik explains his unique skill set and how this has served him well when being able to communicate with both procurement and technical / IT stakeholders.

3:00

Assuming procurement has the ownership of this initiative, then at what point should the project manager involve IT and start building relationships with the function?

4:45

How to go about understanding the marketplace. With all of the market intelligence out there, is there a still a need to do an RFI?

8:04

We discuss organisational maturity and how this is such a key factor to the success or failure of a procurement digital transformation

9:23

How to tackle the obvious problem that no buyer is likely to be an expert on this type of software, unless they're coming from an organisation which has already implemented procuretech.

11:15

The most common mistakes made during the RFP / vendor selection phase, and how to avoid making them!

14:32

Karthik shares his experiences of how open SaaS vendors are to negotiation during the contract process?

15:58

The vital importance of having an A player heading up the implementation of a digital transformation, as opposed to somebody who just has the bandwidth from a workload perspective. Karthik also shares a nugget of advice around which role specifically could be the best person to lead the implementation.

18:55

What works best in terms of mix when it comes to outsourcing certain aspects of a complex implementation to consultants, versus which functions or aspects of the project are better retained in-house?

20:57

Potential issues or watch-outs which could be lurking out there post-implementation and why hypercare period is key to ensure a successful handover.

24:33

When the project has been handed over, how does the day-to-day governance work from that point onwards? What happens when there are issues? Which ones has Karthik seen most frequently?

27:28

Typical contact periods, and pros and cons of going for shorter or longer agreements.

29:23

Karthik's LinkedIn profile

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Technological capabilities are changing fast. While it can sometimes sound like a cliché, there are tasks which can be aided by robots now that can massively expand our knowledge and remove what previously would have been many hours of administrative work.

In this show, we dig into what artificial intelligence (AI) can do to aid sourcing and buying teams, and how machine learning and cognitive buying can expand our knowledge of the supply base, as well as removing many hours of work from the source-to-PO process.

3:18

What actually is AI and what is the difference between AI and machine learning?

6:20

Benoit walks through a couple of practical examples of how a tool such as Silex can help procurement departments work more effectively by analysing the market's capabilities as well as all internal data on the incumbent supply base.

10:17

How "clustering" can enable sourcing teams to find potential suppliers on the market for specific items or components, in cases where a buyer may not have the necessary knowledge of the marketplace.

14:22

Benoit explains how Silex gathers market intelligence on so many different suppliers out there, enabling them to do the heavy lifting on behalf of the buyer.

15:53

We discuss how a tool such as this is not only used to derive greater savings. The real advantage is often seen as the ability to have greater market intelligence and a better synposis of the supply base in all countries.

18:34

How an AI-driven tool together with the human ability to think and evaluate effectively can be a killer combination when fuelling sourcing decisions.The consideration of total landed costs, coupled with the robot-powered intelligence of who can supply what in which country / region.

21:01

Using AI to serve both larger corporate clients as well as smaller businesses, and how it could potentially benefit both depending on the project and objectives.

22:48

How Silex can be used as a stand-alone tool with individual modules in the cloud, or can be integrated into customers' ERP systems.

25:51

What's next for Silex and how they plan to scale and grow their offering.

Benoit's LinkedIn profile

Silex website

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Marketing spend is one of those areas which often goes untouched. While many larger companies don't have a policy of having procurement manage this spend, smaller companies and especially startups don't have in-house procurement teams but nonetheless, they still have a considerable marketing budget as they grow and scale as a business.

Enter Sarah Scudder, my guest on this podcast. Sarah is a marketing services procurement expert and also the co-founder of a software company which helps companies procure print media.

We dive into how most requests and POs for marketing spend are for print and promotional items. While this creates most of the work, it's often often not where the real value is delivered, this being high frequency but low PO value in nature. By optimising and automating this, marketing procurement can add more value on where the big bucks are spent, on digital and visual media.

2:47

Sarah explains how buying marketing services is different to many other categories, and how bringing procurement in to manage their vendors can often be contentious.

5:14

Why difficulty at the beginning to engage and persuade stakeholders shouldn't put you off, and why marketing spend is a huge untapped opportunity that has a great potential to bring home some fast savings.

6:49

Sarah sheds some light on why senior marketing leaders are often prickly when procurement want to come onto their patch and manage their spend.

8:41

Why digital media and print media, as the main big buckets of marketing spend in most companies, are 2 very different beasts.

10:35

We dig into some specifics of print media and how it fits into the classic 80/20 pareto of it being 20% of the spend but 80% of the workload and total vendor count.

13:18

Sarah introduces how sourceit as a tool can assist with reducing workload and making processes transparent when it comes to sourcing print media requirements, both as an internally hosted catalogue for frequently purchased items as well as a guided RFQ process for one-time buys.

17:30

Why print media has many different nuances that are tricky to take into consideration if you don't have a strong background in procuring the category, and how sourceit already take this into account as part of the guided RFQ process.

19:20

Sarah walks through how, unlike most e-sourcing solutions, sourceit offers a mixture of both an outsourced procurement service for organisations who don't have their won marketing procurement, as well as the SaaS product as a stand alone solution for bigger organisations who just want to increase their productivity.

21:40

We get down to talking turkey about how to convince the business to use this type of solution in terms of hard and soft benefits.

28:08

Now is a better time than ever to penetrate marketing organisations and reach out to gain influence over their spend, as budgets are cut and they are having to deliver more with less.

Sarah's LinkedIn profile

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Real Sourcing Network website

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