The autumn months are a busy time in terms of conferences in the procurement technology sector and I’ve attended four excellent events in London recently. Whilst e World offered a chance to compare a wide range of solution providers, Coupa, Basware and SAP Ariba organised single vendor events underpinned by their own sales agenda.
Each of these events offered an insight into the capability of the software through a number of informative presentations, and the cultures of the respective organisations. I offer my own thoughts and comparisons below.
As a specialist recruiter in the sector and largely impartial observer, I find these events a very useful way of developing my knowledge, keeping up to date with the latest developments in the technology and enjoying the networking opportunities that exist between presentations. It’s great to catch up with long established contacts, meet new people and listen to conversations about people’s experiences of using the technology.
I’ve been to several eWorld events now and it is the best option if you are looking to get a flavour of the myriad of options available in procurement technology.
This year had even more exhibitors than the equivalent event last year with the vast majority of the major players represented in the exhibition area.
There’s a wide range of presentations from solution providers, implementation partners and end users offering the procurement professional an great learning opportunity.
The opening Keynote, Procurement And The Brexit Bombshell from Dr. John Glen, Director of The Centre for Customised Executive Development Cranfield University was very interesting if slightly alarming for a self-confessed “remoaner” like me. His advice was “plan for a hard Brexit, hope for a softer one.” If you get the chance to see him present, take it. Alternatively you can find him on YouTube.
I particularly enjoyed watching Mo Ahmad of Ariba talking about #MakeProcurementAwesome for the Mid Market and Ian Thompson of Tradeshift’s presentation on Procurement Innovation: How to Successfully Transition from Being Measured on Savings to Being Measured on Value?
Ian Thompson of Tradeshift
Both raised some interesting points and had an engaging, thought provoking presentation style.
You can view the other presentation topics and request details here: http://www.eworld-procurement.com/programme/
My only real negative about this event is that its surprising not to see more senior decision makers attend given the quality of the agenda and potential value of these solutions. The audience appears largely dominated by middle management procurement people who seem to gain a great deal from it so I ask are the leaders missing out?
The next eWorld event is on the 28th February.
Messrs Edbury & Daley at eWorld
The venue of Park Lane Hilton set the tone for the event along with a very upbeat feel about the environment. With impressive lights and modern introduction music, it was standing room only for Rob Bernsteyn’s opening address. He gave a very bullish, strong performance, articulating Coupa’s values with an impressive presentation, extolling their Value as a Service mantra.
A Coupa slide
He was followed by Paul Desrosiers of KPMG’s procurement technology practice. Paul interviewed two Coupa/KPMG customers in a well-rehearsed Q&A offering an insight into what Coupa has brought to their organisations.
The Digital Leader – KPMG
With over 700 people in attendance, there was just enough space in the venue and this resulted in quite an energetic feel to the event, particularly around the exhibition area where the likes of KPMG, Deloitte, Hackett, Bearing Point and Xoomworks were all exhibiting as potential Coupa partners.
I had a series of very interesting conversations with the consultants that I know from these organisations that typically had one common theme – there’s a shortage of people with experience of implementing the Coupa technology (and many of the competing solutions) to the extent where it can achieve its full potential with all the associated change management work that accompanies the use of such a powerful platform.
Of course it’s one of our jobs to help our clients overcome such skill shortages and we have various methods we can recommend but more on that another time.
One thing I particularly enjoyed was watching the dynamics of the event. There was a lot of visible evidence of potential deals being discussed between Coupa sales people, prospective customers, and the various implementation partners giving a real buzz to the environment during the breaks.
My personal highlight was the presentation by Paddy Lawton, founder of Spend 360 (acquired by Coupa in January)
Paddy Lawton of Coupa talks about Neural Networks.
He gave a fascinating summary of his journey from the origins of Spend 360 with manually inputted and analysed data to the point where he’s at today. In the process of explaining this journey he articulated a very compelling case for the use of these technologies with the emphasis on the value of the data, both now and in the future. His message was largely echoed by Eric Wilson at Basware event the following day, and if there is one key headline for the layman to take away, its that the sooner you start to make better use of your data, the sooner you can start to reap the enormous rewards for procurement.
As an aside the food was excellent and a lot of people seemed pleased with the range of top end Coupa branded merchandise. The flask will certainly come in handy for me on the golf course this winter!
The Basware Network
The following day took me to CodeNode, a very different, more understated venue with a real technology theme. On a smaller scale to the previous day, it felt more intimate and the presentations had more of an educational rather than sales feel by comparison.
There were plenty of Basware staff on hand to meet with potential and existing customers and the venue made for easy networking and open discussion.
Matthew Syed (AKA “The Ping Pong guy” from the BBC radio podcast and Times journalist) gave the opening keynote and he was absolutely excellent. His presentation on “black box thinking” was fascinating. He talked about the “growth mindset” offering comparisons of learning methodologies between the aviation and healthcare sectors with some references to sport thrown in. It’s well worth buying his book or watching some of his presentations on YouTube if you haven’t seen him speak.
He was followed by the aforementioned Eric Wilson (VP of S2P at Basware) who covered a range of topics including the huge importance of data. He discussed how our current machines will be obsolete soon but the data we are producing through them will only increase in importance in the next few years.
Eric Wilson of Basware
There were several other really interesting presentations from the likes of Theresa Lacey and Louis Fernandes, and again it offered a great opportunity to develop one’s knowledge of the power and importance of spend management solutions.
Theresa Lacey Making Sense Of The Terminology
It was great to see some of my contacts from the old Procserve business and compare the different cultures of the US owned Coupa versus the Finnish owned Barware – fascinating stuff for a recruiter.
The Future Of Procurement – Ariba
In early November Ariba invited both customers and potential prospects to its latest event. The Royal College of Surgeons was an atmospheric venue with its 500 year history, on-site museum and intimate lecture theatre where it felt like the audience were almost on top of the speakers.
It was a largely educational agenda with a subtle sell of the capabilities of their solution thrown in, making for another enjoyable event.
It was great to see Justin Sadler-Smith back in the sector after recently joining the business. He gave an excellent introductory speech and more evidence that he’ll bring a great deal to Ariba’s business in the UK, particularly with the partnership with IBM on Cognitive Procurement given his background at Emptoris.
He was followed by former SAP CPO and now Chief Digital Officer, Marcel Vollmer who gave a really insightful view of the impact of technology in both our personal and professional lives. He also talked about SAP’s own implementation of Ariba.
Some of the numbers for SAP’s transformation to Ariba
Between them they touched on some interesting issues including:
- Procurement moving into a different space in future business with its changing value proposition
- The growing importance of data scientists in procurement
- The potential for areas like Category Management to be largely automated
- The move towards supplier management and innovation rather than just delivering hard savings
- A strong message that the potential for change is here now and able to move at a rapid rate if we embrace it
The Future of Ariba S2P with Marcell Vollmer.
Later in the afternoon I really enjoyed listening to Andrew Croston of Smith & Nephew who gave a warts and all account of their experience of implementing the Ariba solution with consulting support from Deloitte.
It was a refreshing change from the often 100% positive presentations that are so common at such events. He was largely very positive about both organisations but also gave a good account of the challenges they’ve faced, and some useful feedback for anyone about to embark on a similar transformation journey. His dry northern wit also kept me and the rest of the audience amused throughout.
The three partners exhibiting were excelerated S2P, Deloitte & Apsolut but in keeping with the rest of the event they appeared to be in educational rather than full on sales mode.
Some Final Thoughts
- Procurement professionals really are spoilt for choice with solutions at the moment, the power of the technology is amazing, the real challenge lies in how you harness it for your organisation and finding the skills required to do so.
- Procurement professionals should go to as many of these events as possible. There are so many ways to learn about what’s happening and ultimately to enable you to choose the right solution for your business.
- The skill shortage I’ve been talking about for so long shows no sign of abating but you can raise your own profile and knowledge by embracing these learning opportunities.
Andrew Daley, November 2017
If you would like to discuss any of the points raised here please contact me via email@example.com
In our recent client survey we asked our regular customers to “summarise your thoughts on recruiters generally and how your experience with Edbury Daley compares to your other, existing or previous suppliers.”
Here’s what they said:
“You provide a much more personal service and leverage insight to help our choices”
“I feel that Edbury Daley are a trusted advisor. I generally don’t like other recruitment agencies”
“I find Andrew (Daley) personal, trustworthy and honest. I feel like his industry expertise sets him apart from his competitors in that I trust that he knows the kind of skills we are looking for, and the kind of candidates that would be a good fit for our business”
“Edbury Daley come across a smaller more personal resource”
“My experience of Peter Brophy and Edbury Daley has been exceptional. The company demonstrates professionalism and knowledge of industry with matching right candidate(s). Throughout the process; from initial contact to successful placement, they helped me to gain insight of candidates and i found them easy to chat with; highly recommended!”
“A really down to earth but clever person to deal with is Andrew. Shows a passion for understanding our business and getting the right fit candidates for it”
“It is the trust and honesty that Andrew has given and shown me that means I don’t have to engage with other recruiters.”
For the full results of our survey please visit Top 20 Client Survey Reveals Honesty Is The Best Policy.
We’ve observed significant growth in salaries in these sectors in the past three years and we’ve attributed much of that to the supply and demand equation in markets characterised by skills shortages.
However in the final quarter of 2016 we started to notice some changes of mentality in the market as some organisations responded to the climate of political and economic uncertainty.
Given our extensive network in these sectors we are uniquely well placed to research this subject and spent part of January 2017 questioning business leaders in our network about their approach to end of year pay reviews, basic salary and bonus differentials. We specifically asked if Brexit, Trump or any other factors had a tangible impact on their decision making.
We have received an interesting range of responses to the question “has the current economic climate had any impact on your decision making around salaries and bonuses for 2017?” Here are a selection of the responses that reflect the overall picture:
Spend Management Technology
Several cases here which demonstrate the range of performance across the sector:
Case 1 – Spend Analytics Company
“We are doing really well so growth is very much on the agenda and there has been no real Brexit impact on our sales. However our overseas salary costs for the team have gone up because of the weakness in the pound so we are looking at reshoring some of that team.
What has changed is that we are giving relatively small pay rises (in line with inflation and no more generally) but offering the opportunity to earn more through better bonus schemes. We are moving away from purely annual to monthly, quarterly and yearly bonuses, the first two of which are based on personal and the yearly is based on company performance. This has two benefits – it mitigates against the rising salary costs and it encourages certain key behaviours that we want to develop.
So in summary the Brexit impact has increased our salary costs due to weakness of pound and led to realignment of fixed versus variable remuneration.”
Case 2 Mid Tier Spend Management Company – UK focused
“We haven’t experienced any real change as yet, we think it’s more likely next year. We’ve had a great year so most people have got 100% of bonus capability. There are pay reviews to come, so any early signs in 2017 maybe factored in but no specific concerns as yet.”
Case 3 Mid Tier Spend Management Company – International
“We missed several key targets last year, largely because we had to address some issues with our product, so pay rises weren’t really on the agenda anyway, but there has still been a tangible shift towards greater bonuses to keep sales people motivated without exposing the business to higher basic salaries.
Client retention is at the top of our agenda, so we are heavily bonused for that.”
Case 4 European arm of a US owned Spend Management Company
“Nothing has been announced in terms of any official policy, however its noticeable that the payment of ad hoc bonuses has increased for high performers whilst base salaries have stayed the same.”
Case 5 Mid Tier Spend Management Company – UK focused
We’ve made a small number of redundancies because it’s clear that P2P deals aren’t progressing through the pipeline the way they were a year or so back. Analytics and invoicing are our strongest areas currently. Also professional services is doing quite well which suggests customers are sweating what they’ve got rather than going to market for new technology. We also saw signs of declining overall investment in 2016.” However this company hasn’t materially altered it’s approach to salaries.
Further Anecdotal Evidence
We know from our conversations with business leaders and established sales people that the bigger players are enjoying really healthy growth, and several of the sales people are earning impressive bonuses based on exceeding ambitious sales targets.
The market leaders continue to hire aggressively across Europe, both from direct competitors and other neighbouring sectors suggesting they remain bullish about their growth prospects.
On balance we believe the sector remains in rude health as companies with a strong product offering and clear go to market strategy continue to thrive. That said, there is clear evidence of keeping costs under control and a greater desire to retain staff through better performance related pay rather than big increases in fixed pay.
Big multi-disciplinary consultancies have, in our opinion, been falling behind on salary and particularly bonus numbers for some time now but continue to command a lot of loyalty from their staff. However it’s increasingly difficult for them to hire externally at Senior Consultant, Manager and Senior Manager grades because many other consultancies and corporates are paying better salaries.
Furthermore in procurement technology consulting some of the smaller niche players are consistently winning projects against bigger consulting players on the strength of greater expertise and agility combined with lower costs, so this is something they have to contend with.
One of our regular niche consulting customers in the technology sector told us:
“We had a really good year in 2016 and our pipeline is as strong as ever so there’s no need for us to factor any wider concerns into our salary and bonus decisions at this stage. Our business has a nice spread across Europe, so we expect to be insulated from Brexit. Also we’re not really involved in the US so we can’t see any direct impact from Trump at the moment.”
A concern for this type of organisation is that their staff are being targeted by the bigger consultancies so staff retention is a key driver. Thankfully they are in a position where they can reward their staff well which often makes them unaffordable for the bigger consultancies who have rigid salary bands.
If you would like to discuss any of the issues raised in this post or want up to date salary advice for yourself or your team, please contact us via firstname.lastname@example.org
Politicians and entire governments have fallen, through failing to recognise the views of stakeholders; Chairmen, CEO’s and whole boards have lost the initiative by ignoring how those with influence feel; you too could fail in your procurement leadership role, if you choose not to engage the entire subject of stakeholders.
You can also fall fatally on your sword if you pay lip-service to stakeholders, or patronise them, or, even worse, seek their views and then dis-regard them.
And if you really want to brass them off, talk about stakeholder ‘management’, rather than ‘engagement’; talk about “mapping” them; label them as ‘negative’; describe their views as “irrelevant”…are you getting my drift?
I come from a school of thought that in the process of successful procurement, there is a mission-critical requirement to embrace and engage the people who can or will be affected by what you are trying to achieve, in business-as-usual, and in the development of new strategies. Pass this opportunity over at your peril.
Who then, is a stakeholder? Let’s use an example.
In the travel and meetings category, who are the stakeholders? Those who make bookings? The actual travellers or meeting organisers? Their functional managers? All of the above? What’s your view?
My belief and my experience tell me that anyone in the organisation who has the power, influence, or authority to either ENABLE the success of your strategy, or DISABLE it, is a stakeholder.
In my travel example, the Sales, Finance, and HR Directors, may well be stakeholders, because a policy of classes of travel or hotels which meets the objectives of convenience, budget control, corporate image, and attractiveness to their staff, has been adopted. That policy has been communicated and is being enforced.
The sales-force, however, are not stakeholders – they are users, or internal customers.
In this example, the sales-force’s requirements need to be collected and taken into account, and their boss has to sign these off as legitimate requirements.
Your procurement job is to devise a strategy that fulfils their requirements (and those of others), implement and roll-out the strategy, and measure the benefits and the compliance.
If you devise a strategy that the Sales Director doesn’t buy, or that fails to meet the sales-force’s legitimate needs, you are doomed! That strategy is going nowhere!
A stakeholder then is a key influencer in the organisation; you need to identify them, and you must embrace them in your day-to-day activity, and in the process of making changes.
I am continually asked how many stakeholders should be engaged in a sourcing strategy’s creation, and how they should be engaged.
On the ‘how many’, there is no standard answer – there is instead good practice for identifying the stakeholders, and for establishing what they need (their legitimate business requirements), and for building a picture of how receptive they are to your approach.
There could be 2 of them, there could be 22, but if you think you have identified 222, you have not understood what you’re trying to do here – do not plan for early retirement!
How stakeholders should be engaged is more formulaic, at least in process terms, but your success will ultimately be determined by your behaviours and your personal style in engaging these people.
Starting at the top, do you have a clear mandate for your intervention in the category of spend, and do you have clear sponsorship? If you cannot answer “yes” to both of these, take a step back (although as a caveat, your sponsor may also be a key stakeholder).
Next, do you know how the category currently works? What is the policy and strategy, and what actually happens? What are the metrics, what are the market dynamics, what are the technology drivers in the category, what are competitors doing, is the spend forecast to rise or fall, how critical a category of spend is it to your organisation, who are your current suppliers, what are their strengths and weaknesses, what is our current relationship with them, and so on?
Your category team, the people you have enlisted to help you develop and deploy a new strategy, are key in all of this. They must work with you to identify the stakeholders and to assemble the facts and data.
Then, with the knowledge you have amassed, welcome to the world of stakeholder engagement, the world in which you and the team decide who engages which stakeholder, and how you ensure that the engagement is a truly bilateral process.
I advise you against megaphone communication – that is for crowd control, not for stakeholder engagement. You and your team must ensure that the way you engage your stakeholders is mature, consistent and drives the debate constructively. Your role in stakeholder engagement is to bring their legitimate views and concerns to the party, keep them informed with progress, and involve them in key decision-making (without turning the whole thing into a debating society).
The overall objective is to ensure that in the actions you take, and the strategies you develop, your stakeholders willingly take ownership – they can identify with what you are proposing, they recognise it, they are happy to take the baton, and move forward into implementation. That is your initial measure of success – clearly speed of deployment and subsequent compliance also matter.
This is also the route to building constructive ongoing relationships with your stakeholders, who, over time, will become increasingly appreciative of your inclusive approach, and the value of your activity.
Remember though, that there will be some turnover in your stakeholders, and their priorities may shift – in either case, you will need to re-engage.
The overall point is, that if you devise an approach, and then you have to try to sell it to your stakeholders, you have not understood the subject.
Go back to the top of the article, and read it again!
Thanks for your reaction to our first article.
Many of you appreciated the distinction that I described between leadership and management, and a number of respondents asked us to explore a topical leadership challenge, relating to change management, and particularly applicable to procurement – effective governance.
I loathe bad governance…and I get really mad at those in business who don’t understand the role of effective governance in the procurement setting, and confuse it with authority and power.
The failure of some of the most successful organisations, and a number high-profile CPO’s, to embrace and engage the value of effective governance, is utterly astonishing.
I had a recent conversation with a colleague in the Asian group of a global procurement team, in a complex business, in which she confessed that “we don’t really invest much in getting governance right in this business”.
That sentiment is tragically endemic, and I just fail to comprehend why intelligent people, with sophisticated business and influencing skills, cannot grasp the significance of good governance.
Procurement, in a dynamic and fluid environment, requires the design and implementation of effective change.
Reliance on power and authority alone, to orchestrate that is crass and wasteful, whereas the investment in setting up good governance is always worthwhile.
Think about it like ensuring the oil is in the engine before it is first started, or, in the work setting, understanding exactly what your objectives, limitations and authorities are, prior to commencing a negotiation.
What, then, is governance?
Well, you’ll be able to find lots of definitions and opinions, but checking the word’s antonyms or opposites, is more amusing and instructive. They include impotence (not in the medical sense), incapacity, opposition, and weakness, all of which nicely help me with my proposition.
Attempting to drive change, using only your authority, is futile, in a complex and fluid organisation. Experience and history show us that engaging all legitimate stakeholders in change is essential to successful change, whether these stakeholders are in your chain of command or not.
We shall explicitly cover stakeholder engagement next time.
Meanwhile, a decent governance model will enable and mandate the steps of a change project, un-block barriers, allocate resource, provide advocacy and legitimacy for change, and importantly take a co-ordinated view across multiple work-streams in a complex change programme.
Sound too hard?
Here’s an illustration to bring the subject to life.
A de-centralised PLC with autonomous divisions decided to embrace strategic procurement, for the first time, designed and driven from the centre. A small number of categories of spend, like packaging, marketing, and IT hardware, were selected, to test the theory that the combined spend across three divisions could drive larger benefits than the individual businesses could achieve.
But, how to run these categories, when each division had its own procurement head and processes, stakeholders, specifications, pricing, suppliers, and managing directors? And each division had a different attitude to the initiative.
The answer, after a bit of trial and error, was a governance body, led by the person at the centre who had been charged with trialling the new style of procurement, supported by a change governance specialist, and including the MD’s and heads of procurement of the three participating divisions, and an internal data analyst.
Each of the heads of procurement led a category of spend, with sponsorship from one of the MD’s but not their MD.
The heads of procurement pursued their respective projects with a tailored procurement category management approach that the governance body had signed off.
Each project had a charter, a set of objectives, and a timetable, and each reported their progress against a set of agreed criteria, using a project-management RAG (Red, Amber, and Green) methodology.
Having established terms of reference for the governance body, and communicated the entire process effectively and consistently around all the divisions, the programme was out of the starting gate at a gallop, with all the players determined to illustrate their value and effectiveness to the process, and with any barriers and objections being tackled fast and constructively, as they arose.
Each category over-delivered, on value and time, and in all cases the whole was greater than the sum of the parts.
In addition though, the biggest benefit of this approach was the visible demonstration of the value of good governance, and the breakthrough of achieving collaboration between divisions who had previously managed to avoid any motivation for working together.
The example may ring a bell with some readers, and it is a model that has been replicated many times over, with local variations.
All the divisions acknowledged willingly that they could not have orchestrated the changes from the inside out, and could not have achieved the benefits that the combined effort achieved.
In the absence of robust governance, impotence, opposition, and weakness can prevail, and probably will, due to the lack of common purpose, or leadership.
In my opinion, this perfectly captures and explains why so much ‘big-ticket’ change fails to deliver in the private sector, and more visibly in the public sector, where the only motivation for change is an edict from the centre, often Westminster, and an expectation of local delivery.
Sorry folks, change just doesn’t work that way – in the private sector, we need more enthusiasm for good governance and less politics; meanwhile, maybe we need a new approach in the public sector, where government promotes good governance, to facilitate success, and maybe even an increase in capability – but I’m not holding my breath!