Procurement Leaders

By Dr Marcell Vollmer, Chief Digital Officer, SAP Ariba

How does a Chief Procurement Officer measure success?
In the past, executives responsible for sourcing, contracting, purchasing and payment gauged success chiefly on their ability to wring savings out of the value chain. Without question, reducing costs remains as crucial today as ever. But, with the advent of digital networks, Chief Procurement Officers find that they now have an exponentially greater opportunity to create value. By linking together buyers and suppliers in real time, digital networks allow procurement leaders to foster collaboration, spur innovation and drive much of the strategic value that fuels growth.

These activities, of course, can benefit the balance sheet. But there are others, equally important, that a spreadsheet cannot easily capture.

By Rod Robinson, Founder and CEO, ConnXus

When I graduated from Wharton in 1995 and decided to pursue a career in management consulting at AT Kearney, I had grand visions of being assigned to an engagement helping one of our multinational clients grow revenue through a high-profile M&A transaction or other topline growth strategy. Instead, I was assigned to a global strategic sourcing engagement for one of the most recognisable corporate brands in the world. I didn't know what strategic sourcing was, but quickly learnt that it was an approach to supply chain management that enabled an organisation to leverage its consolidated purchasing power to optimise the value it received from suppliers. This is when I realised that procurement was an often overlooked area of hidden corporate value.

The role of the CPO, the chief procurement officer, is changing. Although many CPOs still have narrowly defined functional roles that emphasize cost savings and compliance, today's modern CPOs are business leaders who are associated with revenue growth, innovation and a closer, more strategic proximity to the supply base. As a consequence of this new expanding role, the influence of the new CPO has increased significantly and CEOs are now starting to pay attention to procurement in a way they never have before.

So, what are the attributes of a great CPO? What separates these procurement role models from the pack? Matthias Gutzmann, Founder of Digital Procurement World, talked to three highly regarded experts who should know this better than anyone else: executive search consultants.

By Linda Ashok
A content, communications and branding professional

So many things are slated to change in 2020, the milestone year! But what matters most is your career; how is it going to prepare you as a procurement manager? Okay, let me clarify that there isn't any significant difference between a Purchasing or Procurement Manager. Of course, you know it because you are in the procurement arena already.

Typically, a procurement manager's job description entails the following:
• Partner with the category teams and leaders in developing and implementing strategies to drive significant value from the supplier base
• Conduct in-depth research on existing and emerging trends, identifying new technology/solutions, screening potential new suppliers, and performing complex analytical studies
• Manage relationships with key suppliers, developing negotiation strategies, and conducting negotiatio
• Lead critical process improvement projects and drive higher value for the operating companies.
• Consult internal functional areas such as marketing, R&D, operations, logistics, legal, and corporate functions

With such expectations in mind, an aspiring procurement manager must possess modern skillsets that organizations will seek in 2020. In this article, we cover both the elementary and advanced expectations from the role of a procurement manager.

By Helen Mackenzie
An experienced former CPO currently working with Procurious to help connect the procurement community across the world.

We're all talking about delivering value these days in procurement, aren't we? But with so many definitions around, how do we maximise its impact?

By Angela Mazza Teufer
Senior Vice President ERPM WE, ERPM North install base

Finance has always taken advantage of technology to improve productivity and collaboration. But with continuous innovation now driving our economy, the goalposts have moved. Today's organizations must adopt an agile finance operating model-- powered by emerging digital technologies and skillsets. The success of that model depends on 5 keys traits that the Finance Team must possess.

When Oracle and the Association of International Certified Professional Accountants (AICPA) decided to follow up our look at the best finance organizations, we already knew that agile finance functions were taking advantage of cloud technologies to improve efficiency; centralize process management and subject matter expertise; make greater use of analytics to contribute insights; and deploy multi-disciplinary teams to partner with decision makers.

Talking to both agile finance pioneers and those in less-advanced organizations for the new report, Agile Finance Unleashed, we discovered even deeper links between successful business and digital finance transformation. And the conversations with CFOs successfully delivering operational excellence and strategic influence using digital intelligence led to five conclusions about what makes for effective, future-ready finance leaders.

It is excellent if you have already gained a grip on procurement's changing landscape. If not, for many businesses, procurement remains quite intimidating. There are concerns about co-ordinating upstream and downstream processes. Risk management, supplier intelligence, advanced analytics and a drive towards innovation all suffer from disruptive digital transformation. "To keep up with the fast-changing supply chain landscape, a procurement leader has to have control over aspects that govern procurement", says Linda Ashok, a content, communications and branding professional.

This month SmartProcurement profiles Pascal Exbrayat from Nestlé East and Southern Africa Region (ESAR).

Full name: Pascal Exbrayat

Position: Head of Procurement, Nestlé East and Southern Africa Region (ESAR)

Your organisation's procurement expenditure: US$450-million

Who does P & SM report to: Head of Supply Chain, Nestlé ESAR

By Matodzi Ratshimbilani

President Cyril Ramaphosa and the Minister of Finance have, on several occasions in the recent past, informed South Africa that mega state-owned enterprises (SOEs) will soon be under the helm of chief restructuring officers (CROs), of whom a lot is expected to turn around the fortunes of beleaguered SOEs.

On 30 July 2019, the appointment of Freeman Nomvalo as CRO of Eskom was announced. However, previous announcements were scant on the details around the role of CROs at SOEs. The nomenclature of CROs seem to be borrowed from the United States where the practice was abound after the 2008 financial crisis.

Join us at Smart Procurement World in September, where we will look at what procurement functions can do to build more confidence in SOEs and how procurement should be positioned to protect and strengthen SA's core institutions.

Procurement is under immense pressure to transform and reinvent itself. The role of the Chief Procurement Officer (CPO) and their teams in the future will look very different to how it looks today.

Matthias Gutzmann, Founder of Digital Procurement World, chatted to some procurement leaders and the conversations that ensued suggest that CPOs are at a turning point with four potential paths to follow: up, over, down or out.

This month SmartProcurement profiles Dr Faith Mashele (MCIPS, MBA, PhD), from the Tshwane University of Technology.

Full name: Faith Mashele

Position: Financial Director: Expenditure

Your organisation's procurement expenditure: R1.1-billion

The telecommunications industry is evolving at tremendous pace. Nokia predicts that in 2025 the number of connected devices in the world will have risen from less than 10-billion to around 50-billion. These will include machines such as cars and household appliances that will communicate with each other.

"Today, most data sets are generated by human beings; in the future much more data will be generated by intelligent machines that will talk to each other. The volume of data is exploding and so too is the demand for real-time communication. This will require different hardware and software solutions and will have a massive impact on the supply chain," says Johannes Giloth, senior vice president of operations for Nokia Networks.

Giloth sat down with Supply Chain Movement's Helen Armstrong to describe the challenges of operating in this extremely dynamic and competitive marketplace.

How and when did procurement and supply become your passion and career choice?
I have not always considered procurement as a career path. I was initially inspired by scientific and technical jobs: I dreamed about becoming a chemist or a jet pilot. But my professional life developed differently. I started a commercial apprenticeship at a mid-size company based in Germany and one day several emergencies arose in the procurement department. I was asked to join the supply management team and that was the starting point of my successful career in the discipline that became a lifelong passion.

Making progress on society's biggest problems requires governments to make better use of data, involve citizens and collaborate with other sectors.

Procurement is constantly under threat. We always fight for recognition and access to full business spend. And, at the very time when we achieve acknowledgement for our contribution and procurement is widely understood, our function becomes a target.

For decades we have provided supply chain transformation projects, led group-wide savings programmes as well as developed risk and budget control policies and governance.

Yet, unlike other shared-service functions who are accepted as core business functions, we are tolerated as long as we deliver new benefits, yet challenged on our business results and KPIs. Our budgets become leaner with never-enough resources to achieve our goals. Once our skills are understood by the business, it wants to commoditise and outsource them to a systems-led provider or an inexperienced team of 'worker bees'.

Therefore, with this background of change and uncertainty, it is good to reflect upon and be upbeat about where strategic procurement leaders can contribute to society and to business, writes Stephen Wills (FCIPS, MBA), international senior procurement and supply chain expert, and former CPO in public and private business sectors (UK), in this month's SmartProcurement.

Commerce Edge South Africa has announced the appointment of Ronald Mlalazi (FCIPS) as their new Managing Director.

He succeeds Bernie van Niekerk, who, after 18 years leading the business, will now focus on Commerce Edge's international business expansion.

Mlalazi joins Commerce Edge's team of country heads from Australia, Africa outside of SA, and soon-to-be-established USA.

This month SmartProcurement profiles Prof. Marcus Ambe, from the University of South Africa, Unisa.

Full name: Prof. Marcus Ambe

Position: Chairperson of the Tender Committee (Other Projects) at Unisa;
Chairperson of the Supply Chain Management Research Group, Unisa;
Chairperson of the implementation committee for Enterprise and Supplier Development Programme, Unisa;
Professor in Supply Chain Management, Unisa School of Public and Operations Management;
Deputy Chairperson: Technical Standards and Competencies for the interim Supply Chain Management Council, SA

Your organisation's procurement expenditure: R2-billion

Who does P & SM report to: Chief Finance Officer (CFO)

This month SmartProcurement profiles Mark Kuipers, Chief Director: Capacity Building, National Treasury and Chairman of the SCM Council.

The SCM Council seeks to professionalise supply chain management (SCM) within South Africa - making it a discipline governed by national SCM norms, standards and principles. The Council engages with SCM stakeholders to unpack leading practices and strategies that can be used to qualify SCM practitioners in the country.

Currently an 'Interim SCM Council', it was launched as a collaborative effort between National Treasury's Chief Directorate: Capacity Building, within the Office of the Accountant-General (OAG), and the Office of the Chief Procurement Officer (OCPO). A fully-fledged SCM Council will be established in terms of the Public Procurement Bill as soon as it is enacted.

Matthias Gutzmann recently came across a quote from Fabian Ziegler, the CPO for Shell, at this year's World Procurement Congress in London who said, "Procurement is a relationship business." An article by Steve Kiefer, GM's purchasing chief, called "Relationships Matter" echoes this sentiment.

Fabian's quote is especially resonant because building business relationships - both internally and externally - is so critical to procurement's business success, today and in the future. Sure, other functions also require strong relationship-building skills, but as procurement's definition of value is evolving from "savings only" to "value beyond savings," these (soft) skills are paramount for procurement to deliver on this new promise.

Given the relevance of this topic, Gutzmann, the Vice President of Old Street Labs (the creators of Vizibl - a platform that links buyers and sellers to aid supplier management and collaboration) wanted to explore further and reached out to his fellow CPO friends to see how they improve relationships with their business partners.

Here is what they said: