CPOstrategy magazine – May 2019

Issue 2 / May 2019 / www.cpostrategy.com

INSPIRING PROCUREMENT TRANSFORMATION

EXCLUSIVE

How to build rapport with your stakeholders

TOP 5 PROCUREMENT

Procurement4.0 SAP’s Chief Digital Officer Marcell Vollmer reveals how procurement will perform a pivotal role in the fourth industrial revolution…

INSIDE: WORLD PROCUREMENT WEEK

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Welcome to the May issue of CPOstrategy Our cover star this month is SAP’s Dr. Marcell Vollmer, the global thought leader, who reveals how the ongoing transformation of procurement into a strategic value-adding role will see the function perform a pivotal role in the fourth industrial revolution…

So, where does a procurement transformation begin? “I think the most important thing for digital transformation, is to focus on the structure, the organisation, the process side, and then finally on the systems,” Vollmer tells us, from his Munich office.

“Oh, and don’t forget the people at the end.” It’s no surprise that many businesses are preparing for the future as everyone wants to understand, learn and adapt to a constantly shifting landscape. And although procurement is emerging into a progressive role, Vollmer is quick to point out the volatility of technological change. “Our CEO Bill McDermott says: ‘Change has never moved as fast as now, and it will never move as slow as today.’”

Elsewhere, we talk to CIPS Mena’s Sam Achampong on procurement in the Middle East and North Africa and catch up with the organisers behind World Procurement Week about how this fast-growing series of events is establishing itself as a must-attend date in the diary.

We also have an expert insight on keeping your stakeholders happy and list 5 top ‘procurement disruptors’ and events.

I hope you enjoy the issue!

EDITOR IN CHIEF Kevin Davies CREATIVE LEAD Mitchell Park SNR. PROJECT DIRECTORS Andy Lloyd Heykel Ouni PRESIDENT & CEO Kiron Chavda

– K evin Davies, Editor in chief Content@b2e-media.com

PUBLISHED BY

Contents

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PRO CU REMEN T 4.0

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CONTENTS

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22 HOW TO BUILD RAPPORT WITH YOUR STAKEHOLDERS

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32 INSPIRING PROCUREMENT TRANSFORMATION

TOP 5 PROCUREMENT DISRUPTORS

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WORLD PROCUREMENT WEEK

68 EVENTS

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Frank Vorrath, Executive Partner: Supply Chain for Chief Supply Chain Officers and Chief Operating Officers, Gartner

Denni Chief Inteva

LIST LAT

EXCLUSIVE INTERVIEW WITH SAM ACHAMPONG REGIONAL HEAD & GENERAL MANAGER, MENA A

is Hodges, Information Officer, a Products

Martin Starcke, Director Global Operational Procurement LEO Pharma

Mike Dargan, Group CIO UBS

TEN TO OUR TEST PODCASTS

G FCIPS, AT CIPS

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rocurement 4.0 WRITTEN BY Kev i n D av i e s

Our cover star this month is a procurement specialist who has overseen massive changes across this space.

SAP’s Chief Digital Officer for Intelligent Spend Management and former CPO, Marcell Vollmer tells us how the ongoing transformation of procurement into a strategic value-adding role will see the function perform a pivotal role in the fourth industrial revolution‌

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rocurement is undergoing a revolution. No longer a reactive back-office function, designed to keep costs down, procurement is evolving into a vital, strategic aid that provides the c-suite with extensive insights and forecasts that affect the entire business. The chief procurement officer is now a vital cog in the corporate hierarchy who helps to drive value and to steer the business forward.

With any revolution, there are revolutionaries, and SAP’s Chief Digital Officer, Marcell Vollmer is one such figure. Vollmer has helped to forge a new identity for the CPO during his time at SAP. Vollmer’s current role at SAP, the global advisory and strategy, is helping its clients define and execute digital transformation strategies, including the procurement and supply chain functions. “Digital transformation is about focusing on a vision for the future,” he explains.

So, where does a procurement transformation begin? “I think the most important thing for digital transformation is to focus on the structure, the organisation, the process side, and then finally on the systems,” Vollmer tells us, from his Munich

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“ A really good CPO, understands the business model and can collaborate with the right groups as a business partner to really create value” Marcell Vollmer CDO – SAP ARIBA

office. “Oh, and don’t forget the people and the change management on the journey, who are key to the overall success.” It’s no surprise that many businesses are preparing for the future as everyone wants to understand, learn and adapt to a constantly shifting landscape. And although procurement is emerging into a progressive role, Vollmer is quick to point out the volatility of technological change. Our CEO Bill 12

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McDermott says: ‘Change has never moved as fast as now, and it will never move as slow as today.’”

“Part of my role is helping them to cluster a little bit and structure the agenda because the change is so fast. 50% of all the companies on the Fortune 500 list for the year 2000 are no longer on that list. The speed (of change) is tremendous. Change has never moved this fast, and it will never move this slowly again, and so

getting what the business needs,” he tells us. “And this has fundamentally changed. Procurement today has a more important role in the business, to make procurement awesome.”

everyone is currently concerned a little bit and wants to prepare for the future.”

Vollmer is passionate regarding the massive potential of strategy-driven procurement as part of an overall transformation and is very much engaged in client-facing work within the procurement space. “Purchasing was not necessarily seen as a value contributing function and was viewed as the operational side, transacting,

THE USER EXPERIENCE The user experience is absolutely key amid a digital transformation. Modern procurement systems have provided CPOs and their teams with the tools to transform the operations and function of their department, but there’s more to making procurement than just the tools. “Everyone expects an ‘Apple easy’ or a ‘Google fast’ experience when you interact with a system,” Vollmer explains. “(Procurement) needs to be an awesome experience and it needs to have a great user experience, but it also needs to provide all the insights needed, that you can get from the spend data,” he explains.

“You have to do the demand planning and aggregation to really get everything for the best possible price depending on the quality and timings you need.

The golden time in procurement can be optimised and is a great experience for everyone engaging and interacting with the procurement function.”

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strategists and consultants are seeing a massive sea-change in the CPO’s role, which is seen by many as a stepping stone into the role of CEO. This is something Vollmer also endorses.

“Look at Tim Cook (CEO Apple); he was a chief supply chain officer,” says Marcell. “Procurement was reporting into his function, and what has he done? Not only is he now the CEO, but he has also contributed by inventing the Gorilla Glass for the iPhone to a great product experience. In the meantime, we have more than 2.2 billion iPhones sold. So, wow, there really is something that comes after procurement.”

Indeed, Vollmer was a CPO. And a chief operating officer. Currently, Vollmer is a chief digital officer. As Vollmer has demonstrated, procurement is evolving into a talent pool. “It’s a place where people want to work, because that’s my experience. When I talk to other CPOs, it is the most beautiful place you can be. You understand the business model and really know what the business is doing. You can see areas of the business that represent opportunities. ‘Oh, that’s an area where I want to be next in my career.’”

For procurement to fully transform 14

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the increasingly redundant perceptions it creates, it needs to work a little bit better on the marketing side, according to Vollmer. “Starting as a trainee buyer, to potentially make it to a CPO, is a model which will no longer exist in the future,” he explains. “The number one reason is that we are tending more towards project-based work, a gig economy, to use this term.

Millennials and Generation Z want to get more experience. They are not necessarily saying, ‘I want to work for a great company and procurement is a good spot for me to start, and most likely end, my career.’”

Vollmer is clearly excited about the future and sees procurement sat at the forefront of business transformation. “We are at the very beginning of the fourth industrial revolution. We are also at the beginning of a lot of technologies and machine intelligence is the most disruptive technology. I believe that this is a time of change and we need to prepare ourselves.

And I believe procurement will have a seat at the table of modern businesses. Artificial intelligence is changing the world in the same way the steam engine or electricity did. And machine learning is basically a part of w w w. cp o stra te g y. co m

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artificial intelligence. What’s currently becoming part of the business is internet off syncs and connected devices, which are being implemented more and more on the business side.

Everything is related to automation in a broader sense and to analytics, including big data and predictive analytics. But then also bridging it back to the machine intelligence; the prescriptive guidance, using not only descriptive information, not only predicting something based on historical data, but also using other sources like weather forecasts. We have seen, for example, that Ferrero was heavily impacted one year back, a little bit more than one year back, when the hazelnut was impacted by the dry weather. And this is really where you see the connection between the different technologies, being absolutely key.”

When it comes to procurement transformation it’s vital to have a vision. What is the future for your function? Vollmer has a very distinct notion of what that vision should be “And this is not limited to procurement,” Vollmer explains. “I would say that this is part of all discussions regarding the future of the back office.

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Marcell Vollmer CDO – SAP ARIBA Chief Digital Officer Marcell Vollmer is responsible for defining and driving digital transformation for SAP customers globally. A thought leader in procurement, supply chain, finance, and shared services, Marcell’s expertise lies in defining digital transformation strategy. He makes Run Simple a reality for customers around the world by helping them achieve significant cost reductions in procurement. Previously, Marcell was chief operating officer for SAP Ariba.

In this role, he successfully developed and led global business development, procurement, go-to-market, sales operations, and enablement. Prior to that, he was chief procurement officer for SAP and was responsible for the reorganization and process optimization for an end-to-end, source-to-pay organization.

Since joining SAP in 2005, he has held various leadership roles involving restructuring, improving project efficiency, and execution of global programs in finance, shared services, procurement, sales, human resources, and post-merger integrations. Marcell has a PhD and Masters Degree in Economics from University of Hamburg.

He is well known throughout the industry as a procurement and business thought leader.

An author of books and a popular blog, he is frequently invited to speak at industry events.

Therefore, the digital transformation starts with a vision. What do you really want to do with your function? How do you want to create value? On the procurement side, as in finance, HR, or IT, you can see what’s coming with cloud, with the hyperscalers, and the change in IT and how we consume software using cloud solutions. It’s a new business model. And therefore, I believe that you need to think about how you want to define the future for your function.”

A transformation is all well and good, but how do you create value?

According to Vollmer, this follows on from the vision. “You start with the structure,” he explains. “Start with the organisational side. What do you want to do? Which functions might you need? Which functions do you have already and might get impacted by automation or by machine intelligence and other disruptive technologies? And therefore, derive from that; think about the process side. How can you really help the business to be faster, to have fewer hours in the different processes, to be predictive in what is needed and also manage risk and secure a sustainable supply chain.

This will really drive value for your

organisation.”

Connecting with internet offsyncs and certain parts of the production of the supply chain is definitely adding value. “When you see automation with robotic processes helping your transactional processes become more automated, you can see the next level of machine learning. So, it’s not only the robotics process automation, which is just comparing a with b, and then if b is correct, going to c, and then to d and so on. It is also learning, ‘Oh wow, there is a lot that is happening when I see this in d happening.

Basically, here are the root causes and this is something that can be done, that is most likely happening, and can be already integrated.’”

Vollmer is a big fan of concrete use cases to get quick wins during transformative processes. “You are not joining a journey for the next two, three, five years. In the past, big IT implementations were lasting. I think that time is over. You need to be much faster today as the change is very rapid and you need to prepare yourself for it. A lot of people fear the change, the speed, and the disruption and what might come and how their jobs might get impacted. I always w w w. cp o stra te g y. co m

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say: ‘Yes, there is a high risk that your job will be changing. But look back at the past 10 years. How many times has your job already changed?’ At the World Economic Forum in Davos, this January, it was reconfirmed that until 2022, artificial intelligence will create 58 million additional jobs. Disruptive technology will change your job, but on the other side it will also provide great new opportunities. So many new jobs are getting created and there will also be a big shift from task. So technical operational tasks might disappear, but strategic value-adding tasks might show up, including everything related to analytics.”

CHANGE MANAGEMENT The biggest challenge of any transformation involves the people. Change management represents a massive cultural shift in the workplace and it’s vital you get it right. “I always say, don’t forget the people. Because we all know we have limitations in the team science we have today. Even as procurement creates hard savings for example, more people could potentially save more money. But is procurement in the situation where it can get new resources or new talent? Most 18

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“ W hen you see automation with robotic processes helping your transactional processes b e co m e m o re a u to m ate d , you can see the next level of machine learning” Marcell Vollmer CDO – SAP ARIBA

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likely not. Whatever you do, people are the most valuable assets in your organisation. So be careful in how you define and drive your transformation, because you need the people to be successful. No one is smart enough to run everything on her or his own. It’s a team approach and so think about the people.”

So, what makes for a good CPO? “A really good CPO, understands the business model and can collaborate with the right groups as a business partner to really create value and gets a seat at the table of the business by providing everything that is needed, including all the new innovative solutions or products the company can use to be successful in the future. It is also about creating and developing a great team, which can contribute and drive the value-generating activities.

So, good leadership skills are absolutely mandatory. That’s what a CPO needs, to be successful in the future.”

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How to build rapport with your stakeholder WRITTEN BY

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E m a n A b o u z e i d , G l o b a l P r o c u r e m e n t a n d Supply Chain Professional

rs

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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.

G LO B AL P ROCUREMEN T A N D S UPP LY CHAIN PRO F E SSIONAL 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 24

H O W T O B U I L D R A P P O R T W I T H Y O U R S TA K E H O L D E R S

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. E xternal 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.

W HY I S STA KEHOL D ER P R OF I L IN G IM P ORTA N T ?

It is worth taking the time to profile your stakeholder groups for these reasons: 1. D ecision 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. C ommunication: profiling w w w. cp o stra te g y. co m

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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. U nderstanding: 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.

A P PROACHES FOLLOWED TO BUIL D RA P P ORT WIT H I NT E R NAL AND EXTER N AL STA KEHOLDERS: 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 26

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

H O W T O B U I L D R A P P O R T W I T H Y O U R S TA K E H O L D E R S

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.

“ Gain a clear understanding of the stakeholders’ needs and wants. How would you react if you were in their position?”

Eman Abouzeid, G l o b a l P r o c u r e m e n t a n d Supply Chain Professional

BU IL D I N G R A P P ORT W I T H I N T ER N A L STA KEHOL D ER S: 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.

BU IL D I N G R A P P ORT W I T H EXT ER N A L STA KEHOL D ER S: 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 w w w. cp o stra te g y. co m

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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. B e 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. B e proactive: dealing with 28

risks and issues straight away helps you to spot challenges before t h e y b e c o m e a p r o b l e m . Yo u cannot control what crops up but you can control how to respond.

3. B e positive: no matter the challenges in your relationship with stakeholders, remaining confident

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that you will find a solution helps solutions to be found.

4. L isten 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. H ave 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. S et 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. w w w. cp o stra te g y. co m

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“ Challenges will happen so you need to consider all options when trying to resolve an issue�

Eman Abouzeid, G l o b a l P r o c u r e m e n t a n d Supply Chain Professional

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.

- I nvolve 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 30

communication channel open so the stakeholders can also contact you.

-K eep 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.

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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.

- 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.

IN CON C LUSI ON : 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. w w w. cp o stra te g y. co m

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LIST EN TO T H I S PO D C A ST on any of our output c h a n n e l s b e l ow

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WRITTEN BY Kev i n D av i e s

INSPIRING PROCUREMENT TRANSFORMATION A GLOBAL LEADER IN PROCUREMENT AND S UPPLY CHAIN, SAM AC H AMP O N G IS H E AD O F CIPS MENA, AND RESPONSIBLE FOR INFLUENCI N G T H E T R A N S F O R M AT I O N O F S U P P LY C H A I N AND PROCUREMENT ACROSS THE REGION…

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SO, COULD YOU GIVE US A B R I E F O U T L I N E O F Y O U R R O L E AT CIPS MENA? CIPS works in a number of ways. I guess if you look at a triangle, there are three main areas we work in. One is education, and that’s around our qualifications.

Another is around thought leadership in terms of the events and social networks we create. The other is around our B2B operations where we work directly with organisations to work on the capability development of their own procurement teams, and their procurement organisation.

The operation in the Middle East has been around for about 10 years now. In terms of the region, I think we acknowledge that the level of maturity in procurement is in many ways a little bit behind more established areas of the world.

But over the past 10 years that gap has been closing. So, we’ve seen some significant strides in terms of how people view procurement, and how strategic people see procurement. However, there remains a lag in recognising it as a strategic function.

We continue to work with organisations and individuals in this region to improve that.

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C I P S M E N A : I N S P I R I N G P R O C U R E M E N T T R A N S F O R M AT I O N

W H AT A R E C H A L L E N G E S P R O C U R E M E N T I S FA C I N G IN MENA AT THE MOMENT? S K I L L S H O R TA G E S O R T E C H N O L O G Y U P TA K E ?

So, it’s a bit of both. There are skills shortages, because there is a lack of people who have those commensurate professional and strategic skills in procurement in the region. So, let’s call them licensed procurement professionals; people who are actually qualified in procurement practice, and who have the skills in that function. So, that’s a skills gap that only CPOs in the region will acknowledge.

The other thing is the recognition of the profession itself. So, when you go

“ T HE UAE GOVERNMENT, SAYS THAT IT WILL BECOME THE FIRST BLOCKCHAIN GOVERNMENT BY 2020” Sam Achampong HEAD OF CIPS MENA

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above the actual stakeholders around procurement, your CFO, CEOs, the C-suite and others, the recognition of procurement as a strategic function is lacking in many ways here. So, what that means is, you find that a lot of procurement departments are being used as transactional departments, who are either performing a compliance role, or a simple transactional role. So, that obviously diminishes the role of procurement and diminishes the effectiveness of what procurement can deliver in this region. really is a lack of depth in the market of people who have those skills when they are called upon. So as a result, you cannot look to a major organisation or a particular job description, procurement category manager, for example, in a major bank and assume that they have the necessary skills that you would expect a procurement IT category manager to have. Because there just isn’t that depth of skills in many areas.

However, as I’ve said, there have been big strides over the past five to eight years to improve that. So, there are real centres of excellence around the region who have been working for a long time to overhaul their entire departments. You’re talking about 36

some of the major organisations like ADNOC, the major oil company, or SABIC in Saudi Arabia, around to Etihad Airways in Abu Dhabi, who’ve been working very hard for a few years to ensure that procurement becomes a strategic function, and that the people who work in it are professionals.

WOULD YOU RECOMMEND MORE PROFESSIONAL Q U A L I F I C AT I O N S B E I N G INTRODUCED

IN

THE

REGION? Yeah, that’s the other side of it. So, there is looking for people in the market who already have those skills,

C I P S M E N A : I N S P I R I N G P R O C U R E M E N T T R A N S F O R M AT I O N

that’s one side of it. The other side is putting together the infrastructure, whereby people are able to get hold of those skills. So, that’s the backbone of what we’re trying to do. We set up several study centres across the region where people can go and study CIPS qualifications anywhere around the region from Lebanon, to Bahrain, to Saudi Arabia, to the United Arab Emirates, to Egypt. In addition to that, we’ve worked very closely with a lot of organisations to set up in-house procurement academies, whereby we work directly with them to upscale their teams to the highest level over a period of time.

There are two areas in which we work.

One is the B2B, and the other is just for

the B2C where you have the student network and the individuals who want to attain those skills.

We’re working with a lot of the educational establishments to work with them to ensure that procurement qualifications, skills and standards are available in the local university network. So, we’ve done that across the region, where we work with centres of education, to help them put in place skills and qualifications that are commensurate with leading procurement practice.

I guess, the other side is away from the people. It’s a case of how people actually do procurement. So, what are the strategic games, what are the processes, practices? We’ve also

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worked with several organisations to provide advisory services to look at how they actually do procurement and guide them into putting into place procurement practices that are leading practices to help achieve value.

You’ll see organisations like the Dubai Expo 2020 project, who have recently gone through what we call the CIPS Procurement Excellence Program, where we review how they do procurement and guide them towards best practice.

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H AV E Y O U E N C O U N T E R E D A

STARK

CONTRAST

BETWEEN,

BROADLY

SPEAKING, THE MIDDLE EAST AND THE NORTH AFRICA REGION? In the Gulf, you will find real centres of excellence and some real heavyweights in the public and private sectors, who have invested in putting together skilled procurement professionals, and invested

C I P S M E N A : I N S P I R I N G P R O C U R E M E N T T R A N S F O R M AT I O N

“ P ROCUREMENT FRAUD IS LIKE TAKING UP 20% OF THE COST OF DOING BUSINESS IN DEVELOPING COUNTRIES” Sam Achampong HEAD OF CIPS MENA

in how their departments manage procurement strategically. So, you will find some very educated and strategic people.

When you look more to North Africa, Egypt is a very populous and academic country. So, you do find a lot of people from the academic perspective, who have come through a level of education to attain procurement skills; maybe not to the highest level, in terms of strength and depth, but

that’s the angle that happens in North Africa rather than companies sponsoring people to go through qualifications.

West Africa, again, is slightly different. You have countries in West Africa, like Ghana, who are working very hard now to establish procurement centres of excellence among the public sector.

So again, we’re working very hard with them to put in place structures that defend how they build up the reputation of good public procurement w w w. cp o stra te g y. co m

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within those areas.

So, there are differences between the Gulf, North Africa and West Africa and several subtleties between the public and the private sector. But interestingly, I think what’s happened over the years is that there’s always been a gulf in the maturity levels of the practice of procurement and many other professions. What’s happened over the last two or three, or three or four years is the advent of technology. So, there’s an element now where people are looking to leap frog the long route of getting people highly qualified and educated in procurement and are instead trying to invest in technology to do that procurement for them, which makes sense to a certain perspective. But obviously, the caution has always been to make sure that whoever is working on procurement for you, in terms of people, are highly skilled commercial managers, because it’s clear that you cannot rely fully on technology.

I can recall one particular instance where the prerogative was to try and eradicate as much as possible, the ethics and procurement fraud from the procurement life cycle. So, the solution that was being implemented 40

was a whole-scale eSourcing suite, which is a good idea in terms of transparency. But of course, the fact is that probably 80% of procurement fraud is carried out at the specification stage.

So, you still do need to work on the people, otherwise, you’re not really eradicating the problem.

You touched upon ethics, and obviously transparency within the supply chain is a hot topic globally, so I guess within MENA, building trust is a very important part attracting foreign investment, for example…

I think you’re right, and for any countr y or region that’s looking to attract foreign investment, it’s

C I P S M E N A : I N S P I R I N G P R O C U R E M E N T T R A N S F O R M AT I O N

incumbent on them to create an environment conducive to that investment coming in. And key to that is procurement, the reputation of how business is done, and how supplies interact through those transactions across the supply chain to obtain value is absolutely crucial to attracting investment.

So, ethics is key. We work with a number of organisations across the region, specifically on that subject. In fact, there are several organisations who now have the CIPS Ethics Kite Mark where all of their team have, specifically on that subject, been trained in ethics. The organisation can demonstrate that people within

their team, as long as they procure anything, they have a full knowledge of what the subject is. Now, if you look at some statistics, and in terms of the effect on procurement, I think procurement fraud is like taking up 20% of the cost of doing business in developing countries, and 10% of the cost of doing procurement anywhere else.

So, I guess for those areas of those countries who can ill afford it, that becomes a really, really important topic to address because it directly affects their affordability to invest in infrastructure and other areas, as it’s adding to the cost of doing business.

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procurement transformation stories at the moment and obviously MENA has had sort of issues such as the uptake of technology in the past an concepts such as cashless banking, plus they’ve had cyber security weaknesses. What kind of challenges have you seen there with regards to the technological side of it?

People have access to the latest technology, and people do have 42

access to, and are able to purchase, the best solution they can afford.

So, if there is an issue that it’s sometimes a case of people over specifying what they want. So, an organisation may have acquired the latest ERP or eSourcing suite, or solution, that is applicable to their operations, and to a certain extent, other organisations have seen that and said, “Okay, well, we’ll have that as well,” without

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developing marketplaces, where they haven’t thought about it before.

A lot of organisations are creating their own marketplaces where everyone could be a buyer, rather than continue to centralise procurement across the procurement team. So, they are making use of those cloudbased systems and those marketplaces enabled by some of the technological solutions out there.

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aligning it directly to what they need.

So, there has been, to a certain extent, some over specification, which procurement transformations are now addressing. There are an awful lot of procurement transformation going on, where organisations are actually really looking at what they’ve done over the last 18 months and sizing or repointing how technology is adding value.

So, you have people looking at

There’s a lot going on around blockchain at the moment. We have the UAE government, for example, who have said it will become the first blockchain government by 2020. And there are several practical examples of how blockchain is used around scanning trans-shipments etc. There are many other examples from around the world and the region. I think the reality is that blockchain is not yet an end-to-end solution. I think when it is, then you’ll see the benefits w w w. cp o stra te g y. co m

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of the really embedded end-to-end blockchain solutions where people either have an in-house blockchain or a localised blockchain across groups of businesses; a corporate blockchain.

I think that’s where regions like the Middle East will come to the fore, because they are perfectly positioned to be leaders in the adoption of this technology. Because they don’t have a lot of legacy systems and practices to hinder their adoption of new technologies. They also have very strong advocacy at government level. If the UAE government, for example, says that they will become the first blockchain government by 2020. Well, that means that everyone’s going to have to participate in that transformation.

Because if the government will make that a priority, then certainly everyone else does it. So, there’s a great opportunity for wide scale adoption of blockchain technology, when end-toend solutions are implemented.

Companies out here are very, very open to the technological changes.

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C I P S M E N A : I N S P I R I N G P R O C U R E M E N T T R A N S F O R M AT I O N

“ I T’S INCUMBENT FOR ANY COUNTRY OR REGION, LOOKING TO ATTRACT FOREIGN INVESTMENT, TO CREATE A CONDUCIVE ENVIRONMENT” Sam Achampong HEAD OF CIPS MENA

L IST E N TO T H IS P O D C A ST on any of our output c h a n n e l s b e l ow

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WORLD PROCUREMENT WEEK WRITTEN BY

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Kevin Davies

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WORLD PROCUREMENT WEEK IS A MUST-ATTEND 3-DAY PROCUREMENT EVENT ORGANISED BY PROCUREMENT LEADERS. WE SPOKE TO ORGANISERS MATT DIAS AND IAN LAWLESS WHO TELL US EXACTLY HOW THIS CONFERENCE IS HELPING TO RESHAPE THE ENTIRE PROCUREMENT SPACE… WO R L D P RO C U R E M E N T W E E K , a three-day conference and prestigious awards ceremony at The InterContinental, at the O2 in London, is the most prominent event in the global procurement calendar.

From the 14th-16th May, the industry’s most influential senior procurement executives will gather for a Category Leadership Forum, Strategy Deep Dive, World Procurement Congress and Awards organised by Procurement Leaders, the leading global intelligence and networking platform for procurement and supply chain professionals.

We spoke to two of the team 48

WORLD PROCUREMENT WEEK

Ian Lawless

Matt Dias

“ T HIS YEAR LOOKS AT HOW WE CAN BUILD ON THINGS AROUND SPEED AND AGILITY WITHIN PROCUREMENT AND HOW TO HARNESS THOSE TOWARDS COMPETITIVE ADVANTAGE” Ian Lawless CONFERENCE DIRECTOR, PROCUREMENT LEADERS w w w. cp o stra te g y. co m

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members with key roles in orchestrating the event to find out more. Matt Dias is Managing Director, Events at Procurement Leaders and is responsible for the commercial and operational aspects of the event and its portfolio. Colleague Ian Lawless is the Conference Director for the World Procurement Congress, overseeing the vast amount of research that goes into the programme, and curating the speaker line up and content.

“In previous years we held the flagship events, World Procurement Congress and World Procurement Awards aimed at CPO level delegates. With the addition of Strategy Deep Dives and Indirect Category Leadership Forum, we are realising the potential to impact the whole procurement ecosystem,” Dias explains.

“Alongside Procurement Leaders’ subscription membership offering, World Procurement Week brings the best experience the industry has to offer; truly best in class within the procurement space.”

World Procurement Week has grown substantially in terms of the number and stature of delegates and speakers in attendance. A thousand people will gather at the awards ceremony, more 50

WORLD PROCUREMENT WEEK

than 800 at the main congress and a further 200 at our Inaugural Indirect Category Leadership event. “World Procurement Week is where we really bring to life the impact our network has on transformative initiatives that we work with our clients on across the year,” says Dias. “One thing that excites me about working in this industry is that procurement professionals recognise the value in learning from

each other to transform the function. This collaborative attitude, combined with the pure power of the network in the room, sets this event apart from others in this space. Complementary to our product offering, delegates can use this opportunity to build relationships and make lasting connections to further advance the practice.”

There is a carefully curated agenda and experience across all aspects of World Procurement Week. “The event addresses all the major challenges being faced by the procurement functions,” Lawless explains.

The World Procurement Congress 2019 is centred on procurement’s role in competitive advantage.

“Our top line looks at a high-velocity procurement that encompasses advantage,” Lawless explains.

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“ W HEN I JOINED, THERE WAS A DEFINITE OPPORTUNITY TO TAKE ONE OF OUR FLAGSHIP EVENTS AND TURN IT INTO THE BEST-IN CLASS, WITHIN THE PROCUREMENT SPACE” Matt Dias MANAGING DIRECTOR, PROCUREMENT LEADERS

“From our point of view, that’s really the next step along the evolution of the procurement function; from one of back office and cost savings, to one that’s very focused on the front line of value creation and value delivery for any business. This year we build on previous concepts such as speed and agility within procurement and take them to the next level.”

Guest speakers this year include representatives from the most forward-thinking global procurement functions. “One thing we aim to do with our events is not only inspire procurement professionals, but also to help develop them into future business leaders. We don’t just have their own contemporaries speaking, we showcase thought leaders outside of procurement to drive divergent thinking.”

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Another feature Procurement Leaders is proud of is its “Procurement Leaders X”; a series of talks in the Tedx mould. “Our speakers from outside of procurement lend additional inspiration,” Lawless enthuses. “This year, we have Robert Guest, the Foreign Editor at the Economist as our first visionary session. He will provide insight into the current macro global trends, linking to potential future challenges for procurement in global supply chains.

Christian Horner, Team Principal of Red Bull Formula 1 Racing Team will be talking more specifically around leading and succeeding in the dynamic, results-orientated world.” Another major focus for Procurement Leaders is featuring women in procurement as a specific element on the agenda.

“Our closing visionary session is Dr. Anita Sengupta, formerly of NASA. Her

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“ E STABLISH THOSE CONNECTIONS BETWEEN NOT JUST CPOS OR PROCUREMENT TO PROCUREMENT IT’S ALSO PROCUREMENT TO THE WIDER MARKETPLACE” Ian Lawless CONFERENCE DIRECTOR, PROCUREMENT LEADERS

work has focused on developing spacecraft technologies that have enabled the deeper exploration of Mars, asteroids and deep space. Her work is now directed towards the future of conservation and exploration with electric flying cars.”

Daniel Hulme, Director of Business Analytics at UCL, London will be supplementing the agenda by running a CPO boardroom session on AI and the Future of Business. “We bring these additional insights to really elevate the week with Board-level challenges you won’t necessarily get at other conferences” says Lawless.

“Our headline partners GEP, SAP Ariba and Globality along with over 30 other partners at the event are consultancies to 54

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technology providers specific to procurement. These solution providers help us bring together the entire ecosystem for procurement to establish connections to the wider marketplace.”

Dias wraps things up: “World Procurement Week is an opportunity for procurement professionals to experience a collection of multifaceted, role-specific events and come together for the most comprehensive, energising experience available today. With an unrivalled breadth and quality of content, speakers and experience, the week truly is the must attend procurement team experience.”

Founded in 2004, Procurement Leaders™ is the world’s most valued professional procurement network. A unique and vital destination that connects, inspires and accelerates our members to become more successful. Powered by a community of over 750 leading global corporations and 33,000 senior procurement, sourcing and supply chain executives, we accelerate our member’s journey to superior performance, providing access to the in-depth insight, practical tools and expert guidance they need to transform procurement into a critical business driver. For more information about Procurement Leaders, visit www.procurementleaders.com

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TOP 5 PROCUREMENT WRITTEN BY Lucy Dixon

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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.

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01 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. www

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TOP 5 PROCUREMENT DISRUPTORS

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02 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. www

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03 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. www

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04 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. www

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05 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. www

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EVENTS OF 2019

WRITTEN BY Kev i n D av i e s

Conferences and events provide industry professionals with a forum to share knowledge and best practice while gaining strategic insight into industry trends and challenges.

Over the next 12 months, the procurement industry has a number of high-level events lined up in both the United Kingdom and Europe, each one adding practical business value for attendees.

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17.06.19

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GARTNER SUPPLY CHAIN EXECUTIVE CONFERENCE Gartner’s conference is designed to provide decision makers with relevant and timely analysis into the industry and the challenges that litter its landscape. The theme of the 2019 event is ‘A New Era: Converging the Physical and Digital Supply Chains’ – a topical theme that examines the blurring of lines between the physical and the digital in the procurement arena.

15.10.19

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PROCURECON ProcureCon is targeted at senior level procurement and focuses on strategy, insight and case studies that allow for leaders to share global learnings and best practice. The speakers include CPOs and executive heads and are representative of some of the largest manufacturers in Europe.

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EVENTS

24.11.19

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E-WORLD PROCUREMENT Since 2001, the biannual eWorld Procurement & Supply has provided a unique insight into the latest innovations and technologies for senior procurement, supply chain and finance executives. eWorld provides a highly time-effective platform to keep up-to-date with the latest developments, market trends and hot topics. This year, eWorld Procurement & Supply will be held at the prestigious De Vere Grand Connaught Rooms, Central London and will feature guest speakers from KPN, IBM and Procurious addressing topics such as analysis and metrics, Brexit impact and preparation and procurement advocacy and stakeholder engagement w w w. cp o stra te g y. co m

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Experts in procurement and supply chain Founded in 2008, Prokura is an entrepreneurial consulting company specializing in procurement and supply chain. Led by highly-experienced specialists from McKinsey & Company and The Boston Consulting Group, Prokura has already become a key player in the market, creating significant savings for leading private and public organizations in Nordic countries.

Prokura’s expertise combines deep functional skills and product, process, and service-industry experience to help clients build competitive and differentiating purchasing and supply chain capabilities that deliver value and allow companies to operate profitably and invest in the future.

Our expertise covers a broad spectrum of skills and we have developed a number of our own tools and methods. These include; diagnostics and optimization potential assessment, development of strategies and objectives and optimization of organizations, systems and processes.

Denmark

Norway

Germany

Prokura P/S Store Kongensgade 59A 1264 Copenhagen K +45 70 22 44 54

Prokura AS Bygdøy allé 2 0257 Oslo +47 466 13 911

Prokura GmbH HRB 79901, Königsallee 92a D-40212 Düsseldorf +49 176 228 42134