Art of Procurement

Tim Crawford is a former CIO who now advises CEOs and business executives on strategic IT transformation initiatives. He is also the host of the "CIO in the Know" podcast. We had originally invited Tim to join Art of Procurement for a conversation about how procurement professionals can most effectively support our IT colleagues in the long term, but as the COVID-19 pandemic continues to dominate headlines and agendas worldwide, we decided to pivot and take this opportunity to discuss some of the IT challenges that are top of mind under the current circumstances. We asked Tim about the challenges most CIOs are facing on a day-to-day basis, and how procurement can help.

As we run this podcast, the entire world is consumed with the fallout from the COVID-19 pandemic. Procurement teams have been hit directly in the form of uncertain supply chains and unstable suppliers. While we are naturally consumed with short term risk mitigation, at some point, we will emerge from this crisis. What will our companies face then? Christian Heinrich is one of the industry professionals splitting his time between the short term and the longer-term view. He is the Co-Founder of scoutbee.com and a Professor of Digital Transformation at Quadriga Hochschule Berlin. Christian took some time out to share with us what he is seeing on the ground. What tactics and strategies are they taking and how are they starting to scope and plan out the actions they need to take today to prepare for a return to some kind of normalcy once the pandemic is contained.

Now that procurement professionals and organizations have absorbed the initial impact of the COVID-19 pandemic, we are stable enough footing to start to serve others - including our suppliers. Many of the programs procurement has put in place in recent years have incentives partnering with small, diverse businesses. Those disruptive companies are now at high risk of being disrupted by the pandemic, in some cases permanently. Amanda Prochaska is a long time procurement leader, working for companies like the Kellogg Company, Kraft Heinz, and MGM Resorts International. In 2019, Amanda founded HPP, a company that specializes in helping companies of all sizes achieve operational excellence by supporting the performance of their key suppliers. HPP has set up a Recovery Program to help suppliers take advantage of assistance from the Small Business Administration (SBA): Special steps being taken by the SBA, with backing from the US Treasury, to help small businesses affected by the COVID-19 pandemic Government eligibility requirements for SBA loans and how the funds need to be used The types of product and service suppliers that procurement may want to share this information with (i.e. facilities maintenance providers for buildings that have been closed down temporarily)

There are some categories of indirect spend - think pest control, waste & recycling, industrial gasses and equipment rental - that cost more to source than they offer in savings. Rich Ham, CEO of Fine Tune, calls those 'nuisance expenses.' For a combination of reasons, they take so much time to manage, and result in so little savings (once they have been sourced for the first time), that they serve as little more than a distraction for procurement teams trying to function more strategically. The uniform industry is valued at $16B annually, and 3 national players account for 55-60% of the revenue in the United States: Cintas, Aramark, and Unifirst. As regional and 'mom and pop' players in this industry are gradually being assimilated into the big three, procurement organizations are going to have to completely overhaul their approach to this category. In this interview, Rich provides insight into the unique approaches and opportunities associated with this specific 'nuisance expense:'

It is safe to say that we currently find ourselves in unprecedented times. Some of us will be impacted by the spread of the coronavirus more than others, but the likelihood is that it will affect all of us in some way. At Art of Procurement, we are going to be at your side for the duration, helping you prepare for the 'unknown unknowns' with practical advice on how you can mitigate the worst of the impact and turn your response into a competitive advantage. To that end, we arranged for a short-turnaround Sunday morning podcast recording with Jan Griffiths. As the former CPO of a tier-1 automotive manufacturer, now the Founder and President of leadership coaching consultancy Gravitas Detroit, Jan has weathered her fair share of crisis and uncertainty. She has come through all of it strengthened and determined to succeed, and she shares her insights with us about how we can do the same.

Everyone wants to have a positive social impact on their community or industry, but doing so also has to be a sound business decision. That is something that Paul Polizzotto instinctively understands. It has fueled and inspired his 30+ years as a social entrepreneur. As the Founder and CEO of Givewith, Paul is combining his desire to have social impact with his knowledge of marketing and advertising to create value for buyers, suppliers, and the world. Rather than being a soft, 'feel good' type of initiative, the Givewith process and principles are based on hard data and environmental, societal, and governance (ESG) analytics. Paul and his team know that the value of social impact has to be precise and undeniable if companies are going to get on board, and so they have made that the backbone of their approach to B2B commerce. In this interview, Paul explains how B2B transactions that were going to happen anyway, can be leveraged for social good: Buyers continue to negotiate the very best deal they can get, as well as competitive non-price terms Suppliers use their ability to advance their customers' sustainability objectives as a sales and collaboration differentiator And if you happen to have a few 'objections' that come to mind as a pragmatic procurement professional - you're not alone. We asked Paul the tough questions as well.

In this episode, AOP Host Philip Ideson and Kelly Barner (General Manager of AOP and Owner of Buyers Meeting Point) discuss their major take-aways from February's podcast interviews and share their point of view on a new topic. This month they discuss how to manage a healthy 'breakup', managing relationships, responsibilities, and results at the end of a project

According to the Cimpress corporate website, "We manage our businesses in a decentralized, autonomous manner so as to ensure we remain close to our customers, focused and entrepreneurial." Now go back and read that statement again – this time as a member of the procurement team supporting such a collection of businesses. Evert Karsen is the Vice President of Global Procurement at Cimpress. From his office in Switzerland, he leads a team of procurement professionals that support Cimpress' multiple autonomous brands, including Vistaprint, Easyflyer, and BuildASign. They don't have a mandate to lean on with internal stakeholders, but they don't have a savings target either. That combination of conditions has made it possible for them to deliver a wide range of value types and build a services-oriented relationship with the business.

You are probably familiar with some of these terms if you have ever participated in a complex contractual arrangement: arbitrator, mediator, certified deal architect, even the "wise persons committee." All of these titles refer to objective third parties that are brought in to help resolve high-stakes situations. Kate Vitasek, a member of the graduate faculty in executive education at the University of Tennessee, and the creator of the Vested model, has recently co-authored a whitepaper that takes the concept of the roles above and modifies it to meet the needs of ongoing, complex third-party relationships. A "standing neutral" is a form of alternative dispute resolution. It is different than the roles above in that a standing neutral is brought in before the conflict occurs; they are part of a contract's governance structure. They are neutral, and mutually approved by the parties to the contract. Kate provides background and case examples to show: How, when and why two (or more) companies might bring in a standing neutral to facilitate contract governance? What impact the standing neutral role has on the relationship associated with the contract. That using the right standing neutral under the right circumstances allows companies to proactively prevent conflicts and misalignment that could rob both parties of intended value.

Procurement can no longer turn a blind eye to bad data. If we are going to leverage our data for advanced applications such as AI, machine learning, RPA, etc. we have to address data quality now - without spending more time or allowing it to become more fragmented. Joe Yacura is a former CPO of organizations such as Fannie Mae, Bank of America and American Express, and is the co-author of the 3rd Annual Data Quality and Governance Study in partnership with Dr Rob Handfield and the Supply Chain Resource Cooperative (SCRC) at NC State.