The inclusive CPO (part 1): love your customers

AlejandraGarcia_100.jpgBy Alejandra Garcia (MCIPS), Vice President: Procurement, Royal DSM

For most organisations, procurement was already undergoing a digital transformation when the COVID-19 pandemic hit us last year. While the accelerated rate of change brought on by the crisis has been brutal, it has confirmed how critical our function is to maintaining a company's supply chain, and ensuring business continuity and long-term success.

Disruptions will increasingly be part of our reality and we cannot act surprised when unexpected events occur. While there are certainly 'state-of-the-art' capabilities and approaches to mitigating a crisis, having some fundamentals in place are key to successfully navigating them during tough times - and help us thrive when times are good. The basic principle is that business is there to meet customer needs and successfully fulfilling these needs requires aligned and engaged procurement teams.

I have captured this approach under the term 'inclusive'. This is not the standard usage involving diversity (e.g. gender, passport), but a broader meaning where we involve all stakeholders, listen to their voices and welcome what each one brings. In this three-part article series, I will cover the importance of customer insight, engaged teams and crisis management to become an inclusive chief procurement officer (CPO).

Hear more international insights from Alejandra at the upcoming SmartProcurement World webinar on 25 May 2021
WEBINAR | Building Bold Procurement and Supply Chain Strategies for Uncertain Times

SA procurement is going digital, but for many their processes are not ready for it

DigitalProcurement_200.jpgA good number of South African organisations find themselves in precarious positions when it comes to procurement because they have yet to properly integrate their basic processes and their weaknesses have become more evident during a time that limits peoples' movements and physical contact.

The global COVID-19 pandemic has changed almost every business process and for procurement, it has exposed the need to improve existing processes and pressured organisations to incorporate digital solutions as remote working has become a norm for the foreseeable future.

In a recent survey conducted by software development company Oxalys South Africa, in partnership with the Chartered Institute of Procurement and Supply (CIPS) and Smart Procurement, entitled: Post Covid-19: Procurement Key Priorities and Challenges in the Digital Era in South Africa, it was established that although there might be a lack of maturity in the South African procurement space, there is a real will to make it a strategic function, especially in the wake of the challenges brought on by the pandemic.

In fact, many South African organisations have not shied away from adopting digital solutions to streamline their business processes. It is a trend procurement must follow because current and future circumstances continue to demand automation for improved processes.

However, South African organisations must adopt the right path and a practical solution to digital procurement.

PhD research: the relationship between project success and entrepreneurial performance

AletSnyman_100.jpgA senior buyer for the natural sciences portfolio at the University of Pretoria (UP) who is conducting research for her Doctoral thesis is calling for participants to complete a survey.

Alet Snyman, a seasoned procurement practitioner of 20 years, is completing research investigating the relationship between project success and entrepreneurial performance.

Alet is a registered Doctoral student (1285025) with the Department of Business Management at UP.

Purchasing and supply management: the important difference that you must know

MosesManuel_100.jpgBy Moses Manuel, Lecturer in Business, Legal and Development Studies, and Founder of Zerite Network

Purchasing and supply management is not an entirely new concept to most people. Take a look at the first part, purchasing: we all undertake purchasing, be it data for your mobile phone, food, clothes, etc. Purchasing and supply management is one of those things you know, hence, you do not give it much thought. In business, however, it is another thing. There is a huge difference between doing something on a daily basis and doing it professionally.

Let us look at purchasing and supply management from a professional perspective.

Top five spend analytics measures for procurement managers

ErinMcFarlane_100.jpgBy Erin McFarlane, Vice President: Services, Fairmarkit

If you have recently joined an organisation or moved into a new role that is directly related to procurement, it can be challenging to know where to start. Even if you have been in the role for a while, the whirlwind of daily activity can distract you from having a strong holistic view of your organisation's relationship with its supply base.

There are hundreds of valuable metrics to help you better understand your company's supply chain. But like any professional, you have limited time and reporting requests can distract your team from critical activities. If you are in procurement and trying to better understand the commodity or category that you have been assigned, understanding the numbers is especially important to getting off to a great start.

Here are the top five spend analytics measures, along with how to define them, where to find them and what influence they have on your company:

Procurement perspectives: change management in procurement is essential to survival

StephenBauld_100.jpgBy Stephen Bauld

The COVID-19 pandemic is a perfect example that change is an ever-present feature of life.

Organisational change may be difficult, but as the conditions of the environment within which an organisation operates change, it becomes essential for survival.

Furthermore, the need for change reflects that every organisation is, in some respect, imperfect. Change forces people to make choices. Given the disruptive effects of change, it is critical to make the right choices.

The fallacy of discounts in software negotiations

BillHuber_100.jpgBy Bill Huber, Partner: Digital Platforms and Sourcing, Information Services Group

One of the most common questions enterprises ask about software spend is whether they should benchmark the discounts they receive from software publishers. Whether they are buying from Microsoft, Oracle, SAP, ServiceNow, IBM or others, the presumption is that a higher discount is better, which is true to a degree. However, the sales approach taken by software publishers is highly sophisticated, with less-than-transparent elements designed to maximise spend. The truth is that a premature focus on trying to get a higher discount on a software license or subscription on the part of an enterprise buyer can lead to paying too much.

Hear more IT insights from Bill at the upcoming SmartProcurement World IT Sourcing Summit on 03 June 2021
PRESENTATION | Priority Objectives for IT Sourcing Strategy

Demonstrating the value of marketing procurement

SarahScudder_100.jpgBy Sarah Scudder, President and Chief Revenue Officer, Real Sourcing Network

In 2020, the World Federation of Advertisers (WFA) published an important report on the current state of marketing procurement. This report is part of an ongoing initiative called Project Spring that is being led by the WFA Global Sourcing Board. The Project Spring initiative's goal is to "transform the value proposition of marketing procurement".

The first portion of the WFA report describes the results of a 2018 survey of senior marketing procurement executives that examined how marketing procurement functions are structured, how they operate, and how they are perceived within organisations and by external partners. The balance of the report focusses on what marketing procurement professionals need to do to increase the value that they create for a business and to enhance the perception of their work.

Based on the survey results and several subsequent workshops involving groups of marketing procurement professionals, the WFA identified four categories of challenges that must be addressed to enhance the perception of marketing procurement: process, people, performance and partners.

Should procurement report to finance?

GordonReid_100.jpgIn this article we unpack some of the comments posted during a recent poll on this topic.

Smart Procurement World (SPW) recently ran a straw poll on LinkedIn. The question that was asked was simply "Should procurement report to finance?". The poll garnered an impressive 669 votes with 66% saying 'No' and 34% saying 'Yes'.

Although the outcome of this survey is heavily weighted in favour of the 'No' vote, the results are far from conclusive, says Gordon Reid, Lead of the Transparent Procurement Advisory Programme. He unpacks the survey responses in this month's SmartProcurement.

PMI slightly down after 3-month improvement: remains above Quarter 1 average

PMI_April2021_200.jpgFollowing three consecutive months of improvement, the seasonally-adjusted Absa Purchasing Managers' Index (PMI) declined slightly to 56.2 index points in April 2021, from 57.4 in March. Despite the modest pullback, the index is now about 2.5 points above the average recorded in Quarter 1 of 2021 and about 26 points above the April 2020 reading recorded during the strictest phase of South Africa's COVID-19 lockdown.

7 strategic sourcing trends for 2021 and beyond

Kait_Ries.pngBy Kait Ries, Digital Marketing Manager, Bid Ops (a strategic sourcing software powered by AI)

Strategic sourcing has been growing in importance in the world of procurement. The traditional sourcing strategy of picking the supplier who offers the lowest cost worked for centuries, but does not cut it in a modern, globalised business climate.

Strategic sourcing has proven to be far more effective. In 2020, we saw the value of this approach as a pandemic pushed supply chains to breaking point. Consumer buying behaviour was upended, while many companies were forced to pivot and produce high-demand products such as personal protective equipment (PPE).

Adding to the challenges, there were travel and shipping restrictions, and many employees rapidly shifted to working from home.

Based on developments in procurement that were already underway - and the many lessons learnt during 2020 - it is clear that strategic sourcing is more important than ever. Looking to the new year and the near future, here are seven strategic sourcing trends for 2021 and beyond that every procurement professional should have on their radar:


 

 

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