Procurement Strategies and Innovation – A CPO treasure chest – Spend Matters

Procurement Strategies and Innovation – A CPO treasure chest 03/11/2024 AP Automation (Invoice-to-Pay or I2P) Contract Lifecycle Management (CLM) Environmental, Social, and Corporate Governance (ESG) Supplier Management At Spend Matters, it’s as important for us to get to know the requirements and opinions of the procurement community of practitioners as it is for us to understand the world of tech solutions and their providers. So it was good to see a nice mix of both presenting at Procurement Strategies and Innovation (PSI) last week. We use solution provider and practitioner intelligence, alongside our first-hand knowledge from endless demos within the tech industry (culminating in our Vendor Analyses) to steer our research and analysis which informs the best decisions of the best decision makers. PSI is a good place not only to hear from but to meet the innovators in this space, not just the developers and service providers but the people who interact with them. For our readers who couldn’t/didn’t attend, here are our own reflections based on the time we had ( if we missed you, apologies, but do reach out to us here to get your procurement tech solution in front of our analysts ). Introduction to the day We didn’t attend the opening panel session hosted by Rachel Repper, Principal Consultant, Amazon Business – Unlocking Value: Technology Transformation for Procurement Teams – but we heard it was well attended and focused on what turned out to be some recurring themes of the day: AI — you need to get educated and acquire skills Talent/skills — procurement tech talent pool is small; we are at a real intersection of where procurement meets technology Know your supplier — data: get comfortable with it, use its insights, get stakeholder opinion … … all sewn together with a thread of sustainability. Tech newcomers to PSI and Spend Matters FISCAL FISCAL

We met David Griffiths, CEO of FISCAL, a P2P risk management solution offering fraud forensics and SaaS risk software. The AI-based platform ‘continuously monitors transactional and supplier data for fraud, errors and duplicates allowing AP teams to act fast and correct errors before payment is made.’ David presented on the top P2P risks that all businesses should be looking out for. Supplier Master Files have changed, he said. Affecting factors include Brexit (which has brought a change in supplier base and suppliers themselves), cost pressures, regulations (how we monitor our supplier base), tariffs, shared service centers, M&As, to name some. So cleansing of SMFs is vital, even though it takes time. He advocates creating a daily deactivation report based on the last 13 months of activity, to create a risk profile for every supplier and an increased focus by Procurement on AP for every invoice. This includes ensuring there is only one way to send an invoice, allocating a part role to a team member, scrutinizing every invoice against checks, finding trends, determining risk areas and comparing size of MSF relative to active monthly suppliers. A key giveaway to fraud includes similar invoices sent to different suppliers, out-of-sequence invoice numbers, variations in dates, unusually high amounts, one-off invoices and below threshold invoices. In every supplier base there are missing credits, he says, which can significantly impact the bottom line. It’s becoming increasingly important to ‘know your supplier,’ he said. Many firms focus on the top 20 suppliers, because they represent the majority of supplier spend. But a supplier that wants to defraud you won’t be in your top 20. So his advice is to: Ensure every supplier you work with on a regular basis submits a statement Review and reconcile every statement Look for missing credits Get every supplier to sign up to do business with you TextMine TextMine

At an intimate and rather good interactive roundtable, we met TextMine, a young 2020 startup whose founders come from legal and engineering backgrounds. The AI-backed tool works to help procurement, finance, legal and operations teams create, manage, consolidate, query, compare and sign business-critical documents like invoices, payslips, tender documents, compliance reports and contracts. A $3.6 million seed round in 2023 helped make otherwise static documents ‘queryable.’ We discussed Gen-AI-powered document data extraction use cases, including contract compliance, ESG analysis and contract auditing. The table of senior procurement professionals threw up some genuine practitioner daily concerns around: Lack of full contract visibility, where thousands are stored in silos around various countries Lack of ability to mine text because language barriers have posed a big challenge — and risk The need for a tool that can both extract data and translate it Security — how safe are all business-critical documents in a central repository and how safe are they once extracted? Compliance and GDPR — does the data stay locked? Finding documents hidden in unstructured data, like email Ability to ID risk in contracts and invoice data Matching contracts to invoices Hosts Charlie Westley and Mike Nahimana assured us that these procurement challenges can be tackled with AI, which is “reimagining document software that goes far deeper than OCR.” Disclaimer: we did not ‘demo’ either product, but we’re sure our analysts will have them on their radar in the months/years to come. Presentations: Key takeaways While it’s good to hear from solution and service providers about their take on the burning issues in procurement today (we had great reports from attendees of Kodiak Hub, Ivalua, GEP, Enable, Probrand, Edbury Daley, Amazon Business) we were interested to hear what the practitioners had to say. We attended two excellent sessions. Coventry Building Society – Engaging suppliers in sustainability When you are tied to commercial and delivery imperatives, and even though you may have carbon-reduction initiatives in place, sustainability conversations with your suppliers are tough. This is the experience of Rebecca Howard, Head of Supplier Relationship Management at Coventry Building Society, who has run a very successful sustainability engagement program. In her session she gave a well received presentation on how to inspire suppliers to collaborate with GHG emissions, waste and water management, diversity & inclusion, social value, community initiatives and payment practices. As well as outlining all the excellent ESG initiatives that Coventry Building Society is engaged with in the community, her key points noted: Suppliers want sustainable long-term accounts from the supply side that will add value to their product Sustainability is a broad topic — It’s crucial to understand supplier priorities, not imagine them. CBS runs a yearly outreach program to suppliers to ascertain their wants, needs and challenges. A questionnaire is one method to capture priorities that can be boiled down to Risk/Security, Ethics, EDI, Community and Carbon. CBS can then ‘map’ stakeholder priorities to its own. CBS creates opportunities, governance meetings, bulletins, strategy events, awards, diversity discussions, performance challenges, etc. to listen to and influence suppliers — but you have to meet your suppliers where they are, she notes. They have learnt that their supplies care about:
shared values forward visibility data security prompt payment (which surprisingly didn’t come first) team building across multiple organizations shared values forward visibility data security prompt payment (which surprisingly didn’t come first) team building across multiple organizations “It’s important to remember,” she said, “that it’s a whole ecosystem of communications and that every touch point between organizations is a vulnerability.” Deliveroo — Tackling transformation Rob Turner, Director of Procurement & Supply Chain at Deliveroo, talked about joining a new organization as CPO and how to drive step change, focusing on people, systems and processes, gaining traction and softer skills. It’s been 10 years since Deliveroo delivered its first meal to the doorstep: it now serves 7.4 million consumers, through 176,000 merchants and has £7 billion gross transaction value and £2.1 billion net revenue. With a secured £8 million investment, Rob is running digital transformation programs in S2P, operating model and supply base. He outlined a very interesting journey: Arriving in a young yet large organization, it’s difficult to know what to tackle first to convert to a business that is sustainable and returns long-term business value. Procurement was expected to generate one-third of the expected business value; transforming procurement and supply chain was key. He staged an approach: Develop a hypothesis:
Underline the gaps, priorities, systems (are they fit for purpose?) and processes from the annual report. Look at the data, how does performance match benchmarks, ascertain how we recognize value. Collect the views of the business. Underline the gaps, priorities, systems (are they fit for purpose?) and processes from the annual report. Look at the data, how does performance match benchmarks, ascertain how we recognize value. Collect the views of the business. Build support:
Listen to stakeholders, what are their problems? find out where your hypothesis resonates. Use a tech platform to onboard riders (interestingly they ended up building their own). Use tech to discover payment problems with fraud; this led to the recovery of about £3 million which builds trust with senior stakeholders. Understand the power landscape and who the decision makers are. Listen to stakeholders, what are their problems? find out where your hypothesis resonates. Use a tech platform to onboard riders (interestingly they ended up building their own). Use tech to discover payment problems with fraud; this led to the recovery of about £3 million which builds trust with senior stakeholders. Understand the power landscape and who the decision makers are. Blueprint and validate:
Run diagnostic, draft outcomes and plan, test, refine, align, detail plan. Do this over and over again – keep testing, because cost base changes all the time, eg., with a new CFO, or new budget. Run diagnostic, draft outcomes and plan, test, refine, align, detail plan. Do this over and over again – keep testing, because cost base changes all the time, eg., with a new CFO, or new budget. Business case:
You may get push back from very senior management who’ve seen it before – explain why it’s different this time. You may get push back from very senior management who’ve seen it before – explain why it’s different this time. Mobilise:
Governance is critical, you have to show value delivery, value pipeline and ROI. You must be able to show how the money has been used. Make sure you understand every intervention. Manage it and report it. Governance is critical, you have to show value delivery, value pipeline and ROI. You must be able to show how the money has been used. Make sure you understand every intervention. Manage it and report it. Implement:
Automation is key — use systems that allow the business to do most of the task themselves, like sourcing. You have to automate so people can concentrate on what’s important. Even if your enterprise tech is fragmented, so long as you have a strong architecture it will work. Look for a product that you can adapt to your needs. Automation is key — use systems that allow the business to do most of the task themselves, like sourcing. You have to automate so people can concentrate on what’s important. Even if your enterprise tech is fragmented, so long as you have a strong architecture it will work. Look for a product that you can adapt to your needs. Procurement world updates from friends old and new Edbury Daley  Andrew Daley of Edbury Daley talked to us about what he is seeing in his role as a specialist recruiter in the digital procurement and supply chain world: Digitalization capabilities remain underinvested. A continued lack of recognition by procurement around adoption. Most procurement professionals don’t know whether they have the skills required to run digital procurement solutions effectively, or even what they are. Data suggests digital skills are not a priority for CPOs just yet; they aren’t hiring to train outside of the elite functions. If practitioners are concerned about GenAI leaving them behind, he suggests taking the initiative to learn the skills — go to events and attend webinars and read about trends and use cases from trusted sources. Barkers Great to catch up with our long-standing friend, ex-colleague and procurement market aficionado Jenny Draper, Commercial Director at Procurement & Commercial consultancy Barkers. They currently have a big focus on digital footprint and are talking to and working with a network of digital organizations. We learnt that they have Carbon Neutral Status for the second successive year and last year won partner of the year with Coupa for midsize. Barkers remain committed to delivering £2 million in social value annually! The Classification Guru Susan Walsh, founder of data cleansing experts TCG, won the vote for ‘best supplier showcase’ on the morning of PSI. And in even more exciting news, TCG, after focusing purely on service, is launching its own data automation product that has been two years in the making. It’s top secret for now, but we wish them well when it goes live at the end of this year, and we’re sure our analysts will be watching attentively. Amazing what gems you can discover at PSI – watch this space! The next PSI takes place in Autumn — keep an eye here for details. If any of the above resonates with you, reach out to talk to us . And to keep on top of industry movements, sign up to our weekly newsletter.
AP/I2P 03/06/2020
CLM 04/12/2023
SOURCING 08/24/2016

EPRO SOURCING SRM Avetta, Browz to Merge: Placing Avetta in the Context of Broader Supplier Management and Risk Management Solutions (Part 3) 02/25/2019 AP Automation (Invoice-to-Pay or I2P) Contract Lifecycle Management (CLM) Environmental, Social, and Corporate Governance (ESG) Supplier Management
AP/I2P 03/06/2020
CLM 04/12/2023
SOURCING 08/24/2016

EPRO SOURCING SRM Avetta, Browz to Merge: Placing Avetta in the Context of Broader Supplier Management and Risk Management Solutions (Part 3) 02/25/2019