Spend Analytics with Process Mining – Samir Kharkan from SCALUE
Understanding what you spend is the most important part of strategic procurement. Without this, you can't do much else. You're shooting in the wind, not really knowing whether what you're tackling are the ripest opportunities. While spend analysis tools have been around for a while, they're now becoming old hat. The new generation provides spend analytics and guides you to where the best opportunities may be hiding in your spend data. Taking it to a completely new level, the ability to combine spend analytics with process mining is game changing. If you're not sure https://en.wikipedia.org/wiki/Process_mining (what process mining is), it will save what would previously have taken days, if not weeks of work to find holes and inefficiencies in your processes. The P2P process is a classic case of where this can be implemented effectively, and combined with spend analytics to drive both performance improvement and cost reduction. That's what my guest today, Samir Kharkan, CEO of German startup SCALUE is here to talk about. The Killer Punch for Extracting the Most Value: Combining Process Mining with Spend Analytics 2:40 I start off by asking Samir the same question as I asked Kevin last week, and that is: what makes a vendor “cool”? 3:14 Spend ANALYSIS vs. spend ANALYTICS. What’s the difference, and how does analytics drive businesses forward more than just a standard analysis dashboard? How SCALUE and similar tools (see episode 3 with Eddie from Seaforth Analytics) differentiate themselves from the first wave of spend cube software 6:54 What is Process Mining, and how does this add further benefits beyond the spend analytics function in terms of analysing business processes to view potential inefficiencies and non-compliances? 8:30 Does a powerful tool such as spend analytics combined with process mining enable CPOs or CFOs to employ less experienced procurement managers now that software can do most of the heavy lifting? Spoiler: the answer is NO! 11:45 I ask Samir to walk through what the must-haves or prerequisites are on the customer’s side to ensure that implementation of a tool like SCALUE is successful. Samir’s "Captain of the ship" analogy is absolute gold! 15:47 We drill down into why this type of solution specifically solves a common problem for mid-sized companies, when considering this with the captain, ship and compass analogy that Samir so eloquently explains. 17:53 Is spend analytics and process mining also a relevant tool to use in professional service industries where there is no product being manufactured? 20:43 We drill down into an example of where an automotive supplier discovered 30% maverick spend in indirect services through the data made available by using SCALUE’s solution. Samir walks us through how they discovered it and then put measures in place to reduce this. 26:00 Let’s talk payback calculations…how long does it take for customers to typically see return on investment? 27:18 Samir gives a great example of how looking at invoice discrepancies based on drill down of incoterms can often give return on investment in just one swoop. How to connect with Samir: https://www.linkedin.com/in/samir-kharkan-6b641a40/ (Samir's LinkedIn profile) https://scalue.com/en/ (SCALUE website) How to connect with James: https://jamesmeadsconsulting.com/ (James Meads Consulting website) https://linkedin.com/in/james-meads/ (James' LinkedIn profile) https://bookme.name/jamesmeads/lite/initial-consultation (Book a Call with James) https://linkedin.com/showcase/procuretechpodcast (Follow The Procuretech Podcast on LinkedIn)
D'autres épisodes de "The Procuretech Podcast: Digital Procurement, Unwrapped"
Procurement Summit Live Sessions: Part 1 - ESG and Risk Management Startups
32:45This week, we bring you the first in a 3 part series of live episodes recorded at Procurement Summit in Berlin on 29 and 30 September 2021. We’ll be covering a different theme on each episode, and featuring 3 procuretech startups each week. Our focus is on some of the newer, less well-known startups who pitched and exhibited during the summit to bring awareness to some of the exciting new players out there who are destined to grow quickly. Hot Digital Procurement and Supply Chain Startups in the ESG and Risk Management Space On this episode, we’re looking at startups whose mission is solving problems in the rapidly growing and increasingly important ESG and Risk Management area. Shipzero Tobias Bohnhoff, Founder of Shipzero is my first guest. Shipzero tracks and manages transport emissions, helping freight buyers and logistics managers to have more transparency around their shipping data. The tool essentially enables companies to make strategic decisions around two key areas of transportation procurement and logistics management: Helping companies to reduce their overall transport footprint through optimisation of their freight operations. Evaluating different case scenarios when it comes to deciding which mode of transport to use. One part of this conundrum is actually looking at where to source goods from. The increasing cost, especially of ocean freight, is making companies reconsider lengthy supply chains where historically the logistics cost was not a major factor. Technology is now in place to enable data sharing between companies. The transportation market is very fragmented and contains a lot of smaller businesses who are not as technologically advanced as global logistics firms. Shipzero enables this data to be aggregated for the end customer. When it comes to decarbonisation, there are also the factors of considering transportation methods powered partly or wholly by renewable energy. Shipzero enables companies to simulate the CO2 emissions based on different transportation scenarios. The range and payload for electric trucks is different to diesel trucks. Using a granular data stream from the telematics of the truck allows you to make the decision of which methods or lanes for transport can be switched to transportation from renewable energy sources. Tobias mentions that any company with over €/$100 million annual turnover with significant transportation spend can benefit and see a positive payback of using the tool to optimise their transportation. I ask Tobias how he would convince a company who doesn’t see this as a priority, to take action now rather than in a few years time. Then we round off the interview by looking at Shipzero’s plans for future growth. https://www.linkedin.com/in/tobias-bohnhoff/ (Tobias’ LinkedIn profile) https://www.shipzero.com/ (Shipzero website) Prewave Next up is Harald Nitschinger, CEO of risk management solution Prewave. Harald comes off the back of winning DPW’s Startup Pitch competition during their virtual conference just a few weeks ago in September. So, what’s so special about Prewave?! Well, it’s certainly a hot topic with COVID-19, broken supply chains, the new “Lieferkettengesetz” (Supply Chain Law) coming into effect in Germany making it a topic and a solution very much in focus right now. Supply chains have never been less transparent and have never been more complex, with large organisations having tens of thousands of suppliers all over the world. Keeping on top of all of these transactions, past, present and future, is almost impossible without the help of technology. Potential scandals, force majeure events, natural disasters We take the hypothetical example of a child labour scandal for a textiles retailer using a supplier in Bangladesh: how could Prewave help to identify this before the story breaks and causes brand damage to the retailer. Harald explains the concept of “known locally,...
Simplifying Tactical and Tail Spend – Henning Hatje from Lhotse
31:17Tactical, non-strategic spend is a time suck to pretty much every organisation, regardless of their size. Managing this through traditional channels - i.e. ERP systems - is a cumbersome process for both the procurement professional who has to manage it, and the stakeholder who just wants a simple, user-friendly interface to be able to buy something. Henning Hatje, Co-Founder and CEO of Berlin-based startup Lhotse is my guest on this week's show. He explains how their solution helps to simplify tactical, non-strategic and tail spend (we look into each of these definitions during the show, too!) Simplifying and Automating Tactical SpendLhotse was founded in 2020 and is growing rapidly, having recently announced a €5 million seed round funding just before the show was recorded. The fact that such a young company has managed to secure this kind of funding is tantamount to the need for a solution on how to manage tactical and tail spend. Deloitte's 2021 CPO Survey points towards more effective management of tactical spendWith companies under new pressure to operate leaner, smarter and faster, it's little surprise that tactical and tail spend is coming under the microscope. Operational efficiency topped the list of most urgent priorities among those surveyed for the 2021 Deloitte CPO Survey. Finding a more productive use of buyers' time when it comes to the huge operational workload of dealing with non-strategic spend will no doubt be high on the wish list. Tactical vs. tail spend?There are many different definitions, and much if it is nuanced and dependent upon how different organisations see their spend. Lhotse views "tactical spend" as: Being non-managed spend by procurement Predominantly indirect in nature Whereas they see tail spend as: Also having some crossover with tactical spend But also encompassing "managed" areas of high volume, low value spend such as certain areas of MRO spend and office supplies which are often procured using punch-out catalogues Much depends on the thresholds that companies use to define how tactical spend or tail spend is seen. What typical policies exist for non-strategic spend?These are some common scenarios for how non-strategic spend can fall through the cracks: Spend that falls below the threshold where competitive bidding is required - i.e. three bids, then a buy - clearly has a lot of untapped opportunity. Here, essentially, stakeholders can purchase from whomever they wish. Diligence with which a policy is enforced. Often this is dependent upon the perception or reputation of the procurement function internally, but also is heavily influenced by staffing levels within procurement teams and their (in)ability to manage all areas of spend. There are massive differences between how these thresholds are applied - from very strict, low spend thresholds right the way through to enterprise level organisations in high profit industries which can sometimes have 6-figure sums considered as tactical spend. When it comes to other ways of handling tail or tactical spend, Integrators and Business Process Outsourcing (BPO) are still common, but as Henning explains, they can often have flaws. It can send the wrong message to stakeholders when low value spend is farmed out to an external organisation. But more importantly, there is now technology that can automate or semi-automate large parts of these processes. This moves the organisation away from functionally managing a BPO or an integrator and instead towards a more strategic process of researching and integrating technology into the procurement function. Other advantages of applying technology to this problemHenning talks about the opportunities that a solution such as Lhotse can leverage existing data in your system to automate or semi-automate: Lhotse can integrate system data into existing processes to give relevant supplier recommendations based on internal and external data points. Using technology can also speed up the...
AI-driven Master Data Cleansing – Adriano Garibotto from Creactives
30:40AI is a term that often scares anyone who is not familiar with the technology and the application. In this episode, we're going to cover some of the different use cases for AI in the procurement space, and then dive into master data as a specific case study. Adriano Garibotto, Co-Founder and Chief Sales & Marketing Officer of Italian procurement data management company Creactives is my guest on this week's show to break down this not-as-scary-as-it-sounds technology! Using AI to Clean Procurement DataCreactives originally set out as a cost reduction consultancy for indirect procurement back in the early 2000s, focusing specifically around optimisation of MRO spend in manufacturing businesses. The constant challenge of poor data, inaccurate or missing taxonomies and battling with free text PO descriptions is what ultimately led them down the path of creating a software business to solve this problem at scale. Origins of what Creactives is today comes from some of the early stage AI utilised by their consultancy around 15 years ago. Together with a collaboration with the University of Verona, they then doubled down on developing a software solution which can help to classify, clean and structure complex master data from multiple ERP systems and sources. Some examples of what AI can do in the Procurement spaceAI must be applied to specific fields to provide tangible solutions. The fundamentals of procurement can be broadly classified into the following 4 questions: What am I buying? From whom do I buy? What price am I paying? Who is doing the buying? Answering these questions is not easy, especially in large, enterprise level organisations with legacy systems i.e. different ERP systems, multiple languages and complex supply chains. AI can play a strategic role in the harmonisation of the data and helping to create a unique visibility. This is the fundamental building block which leads to other opportunities to use AI in the procurement space. How can AI be leveraged as a catalyst for positive change?Addressing resistance to technology is a change management issue, as Adriano explains. At its core, getting the right organisational structure in place is the key to success. Data preparation historically required a large amount of work from procurement professionals. There is the classic Pareto of 80% of the time being taken doing the preparation, and only 20% conducting the actual added value activity for which the clean data is necessary. If AI is able to do the lion's share of the 80%, this then allows strategic resources to be freed up to focus on more value-added activities which can actually implement the changes and the projects to drive the costs down, or reduce the supply chain vulnerability, or whatever the higher goal of the activity may be. Data itself on its own doesn't intrinsically have value - it is the enabling factor that facilitates the journey to be able to deliver the value. Is category management dead as an organisational structure?Adriano makes a controversial - but very valid - point that the category management architecture of procurement organisations which has been dominant for the past 20 or so years will be rendered irrelevant by AI. The way procurement teams operate in future will be beyond the category model, as a result of data being the driver of how organisations drive value in their business. Product launches and lean activities cut across numerous different categories, and the design of procurement departments must consequently adapt to this. To what extent can AI perform data classification?Adriano uses a nice example of comparing master data and AI solutions to motor vehicles. The more sophisticated the engine is, the more sophisticated that the fluid going into the engine needs to be. The same applies to procurement data and the AI solution you are using to clean it. If you have very complex data, then the process to clean and categorise that data will inevitably also...
Real Time Supplier Collaboration w/o Emails – Sheldon Mydat from Suppeco
29:48Business relationships at their heart are all about people, when you put the commercials, the products or services, and the mechanism or process used to manage those relationships to one side. Managing people-to-people relationships, whether with stakeholders or suppliers, through email chains and Excel sheets isn't particularly effective. Especially when it comes to continuity and longer term collaboration based on mutual trust. Sheldon Mydat, CEO of Suppeco is my guest this week to walk us through how stakeholder relationships and supplier development can flourish when these relationships can be managed in one single place. Stakeholder and Supplier Collaboration Without Emails and ExcelEmulating relationships that are based on human behaviour is tricky to do with spreadsheets and presentations. It's highly subjective but it also is key to driving successful, incremental value. But this value often gets lost because it's unstructured. Sheldon explains how he built a tech platform based off the back of what he's tried to build Excel formulas and macros to measure: the performance-related benefits to some of the more subjective areas of supplier relationship management (SRM). Value Creation through a structured approach to SRMThe challenge of course is ensuring that everybody uses a given tool or process to work with SRM, instead of defaulting to type. So, what's in it for the stakeholder or the supplier to use a digital tool? If we look at contract and spend management, we're looking at the bottom of the pyramid. But if we look at the top of the pyramid, we look at other ways to create value such as innovation, shared R&D, different areas of performance management. The result is that these activities all drive the bottom line value at the bottom of the pyramid. Creating a structure and a visibility across all of this activity is key, so as those affected can actually see it bearing fruit. Sheldon uses "just-in-time" (JIT) as a great example of how supply chains have been primarily driven by cost savings activities rather than collaboration. Bringing stakeholders across the whole supply chain into the relationship and to actively drive value and collaborate together is the opportunity to break this cycle. The triangle between stakeholder, supplier and procurementSheldon cites an article from McKinsey about how digital procurement platforms can drive incremental value of between 3% and 10% annually because of the ability to drive instant collaboration between the three points of this triangle. Having a structured process to work on whichever activity it may be is key, and part of that process is clearly being able to work in a platform that enables this. Monthly or quarterly business reviews are often talking shops, and can be the very thing that holds you back because they are too rigid. The savings achievable through immediate and ongoing collaboration outside of formal meetings are real. However, the discipline and the structure to log in and actually use the platform is key to success. Sheldon explains that there is a deliberate intention not to spam users with notifications, and to have smart links in any email communication to avoid the need for users having to log in and enter a password each time to check a project. Is there a niche or sector that real-time SRM works for best?Community-wide engagement is key, and ensuring that everyone is aligned that any digital collaboration platform is the single source of truth is absolutely essential. While certain sectors or departments may be better resourced and tech savvy, the fundamentals for success are always to ensure that the process of how SRM is run and administered within an organisation is the secret sauce. Sheldon cites the construction industry as one sector which has struggled in the past with SRM, but is now starting to make considerable strides to develop this. How to convince CFOs to invest in something that doesn't directly drive...
Managing Services: Both Strategic and Tail Spend – Fabian Heinrich from Mercanis
24:43Historically, there wasn't much technology out there to deal with indirect services spend, both from a sourcing and supplier contract lifecycle management perspective. This has started to change recently. But is it possible to manage both strategic, corporate level service agreements as well as more tactical, tail spend and one-time buys all in the same platform? My guest on this week's podcast is Fabian Heinrich from Berlin-based startup Mercanis. They claim to have a solution for both. We dive into this and find out to what extent their platform can support these requirements. SRM for Services: Managing both Strategic and Tail SpendProcurement volumes have massively shifted from goods to services over the past 10 years, as young tech companies have grown into major corporate entities. Furthermore, IT and marketing have become increasingly important categories and now account for significantly more spend than they used to. How are the sourcing requirements for services different from goods?A services e-sourcing platform needs to be more flexible, due to the very diverse range of products being purchased under the different types of services. Workflows are different in many cases, depending on the type of services and the type of contracts being sourced. Subcategories can often be varied and diverse, and taxonomies are much more difficult to apply to services spend. What's more, the stakeholder collaboration and the level of the relationship between procurement and their internal business partners by necessity requires much more focus during the end-to-end sourcing process. Managing the lifecycle of services spend and its complexityI asked Fabian about how to ensure that the lifecycle of services procurement is reflected, and some of the important characteristics that need to be monitored and taken into consideration. There's the classic trap of having a corporate procurement team negotiate a central or global contract that then ends up on Sharepoint or on a C-Drive that nobody in satellite locations knows about. Stakeholders and local buyers then just continue doing whatever they've always done! Fabian explained that a sourcing tool for services wasn't enough, and that some features from an SRM or contract lifecycle system were necessary to ensure that it was a rounded platform to satisfy the needs further downstream. The "self-service" model for tactical purchasing and one-time buysJust like catalogues have been common for buying tail spend on indirect goods e.g. MRO and office supplies, a guided buying process to enable stakeholders to "self-serve" themselves on smaller, less strategic purchases or one-time buys is a feature Mercanis realised was absolutely essential. If one of the goals is to free strategic procurement teams from the day-to-day operational work of sourcing non-repeatable requirements and low spend, high volume items, then something similar to how this works for goods would need to be part of the user experience. How to avoid maverick spend for local, site level purchasesStrategic spend is (usually) well managed within larger organisations. The problem generally comes once you get down to the decentralised areas of spend. These are often categories or suppliers managed at country or local level. Mercanis has enabled the end users through guided buying to have a better user experience when seeking to buy services locally. This enables the end user to buy from compliant sources, and to find a supplier faster, than having to go through this process in an analogue (Google search and email) RFQ. The other advantage from a procurement perspective is that this frees up resources in strategic procurement teams to focus on the activities which have the most business impact. What preparation is necessary to ensure success with a digital services procurement platform?Like most things in life, you get out from it what you put in. With digital procurement software, this is especially true....
Importance of Subjective KPIs in SRM – Lars Kuch from LeanLinking
26:25We're BACK! We kick off series 2 of The Procuretech Podcast with with a mini-series examining three different Supplier Relationship Management platforms. The first one we're taking a closer look at is Danish startup LeanLinking, and my guest on this week's show is their CEO, Lars Kuch Pedersen. Why supplier performance data can't just be measured in hard KPIsLars begins by explaining how he came to set up LeanLinking following a successful career in procurement as a Regional Category Manager for a pan-European hardware retailer. One of the problems he was commonly faced with during his career in procurement was being on the other side of the table to Account Managers from his suppliers who almost always had better data on him as a customer than he did on them as a supplier. Was the company generally happy with the supplier's performance? Was quality performance acceptable? Were they easy to deal with when it came to scheduling deliveries or accuracy of invoices? How responsive were they when there were quality or delivery problems? The truth was, other than asking every single stakeholder individually, by email, he had no way of knowing. Lars quickly realised that he was far from alone with this problem. Most large companies don't have good supplier performance data outside of the standard on-time-in-full (OTIF) measurements. Hard vs. soft performance dataSpend data and delivery performance data is (relatively) easy to get hold of. In most companies, quality data can also be extracted from ERP systems. The challenges come when it comes to more subjective, "soft" data around performance. How do you measure that in an ERP system or in supplier performance KPIs? Without surveying stakeholders individually, it's extremely difficult. How do you measure hard data for ease of cooperation, responsiveness of suppliers? Some categories of spend make it harder to track Service Level Agreements (SLAs) or KPIs. How do you track the performance of a marketing agency? Much trickier than measuring the performance of a raw materials vendor. Managing performance of direct vs. indirect suppliersYou can't measure OTIF and corrective action incidents on indirect spend like you can on raw materials. Here, you're much more reliant on nurturing and collecting stakeholder feedback as part of the supplier review and SRM process. What are the concrete problems that need to be overcome to improve the overall cooperation with a supplier? These are often not visible when looking at hard KPIs. Not doing proper SRM = value leakageIf you're not constructively measuring supplier performance, you're missing out on driving value. What is the cost of poor supplier relationships? Yes, it's difficult to put a cost on, but not doing it is leaving opportunities on the table. Non-conformance reports or a ticketing system can be managed within LeanLinking. For example, a storesperson can raise non-conformance tickets for packaging issues, or incomplete deliveries of spare parts. What about SRM through ERP systems or enterprise level all-in-one Procurement suites?Lars explains how ERPs are not really built with Procurement in mind and don't offer the opportunity to measure supplier performance. SAP for example have acknowledged this and are opening up their interface to integrate best-of-breed procurement solutions as a compatible add-on to their ERP suite. Likewise, the major enterprise level suites for managing procurement are more focused on Source-to-Pay and don't really touch 360° supplier relationship management. Scorecarding and sharing agendas with stakeholders and suppliers to increase collaboration is not a feature built into these systems. How do "growth" sectors benefit from SRM if cost is not a major focus?In sectors such as tech and pharma, Lars explains that there is less focus on cost savings and more focus on value creation within procurement when it comes to supplier innovation and collaboration. Their SRM strategy is going to...
E-Sourcing, AI and Game Theory – Edmund Zagorin from Bid Ops
36:16Innovation never stops. Alongside the tools that are making manual processes digital, there are also a new breed of tools which are fundamentally changing the way we go about our job. How we structure and carry out tenders hasn’t really changed much over the last 20 years. E-sourcing tools have been around since the late 1990s, and have been pretty mainstream for the past 15 or so years (I used them myself way back in 2003)! There are a lot of cool apps out there that are disrupting the old-school world of procurement. One of these concentrates on simplifying, shortening and using game theory to influence the outcome of sourcing activities. Bid Ops was recognised for its disruptive contribution to the procuretech space when it won Best Startup award at the 2019 Digital Procurement World conference in Amsterdam. This week, I interview Founder and CEO Edmund Zagorin on how they’ve grown, how Covid-19 has changed the landscape and how they’re growing despite cuts to procurement and IT budgets through an innovative business model that delivers value from day 1 to their client base. Making e-Sourcing Faster and More Effective using AI and Game Theory: Edmund Zagorin from Bid Ops2:09 Bid Ops recently won the best startup award at DPW 2019. So, has that propelled growth for BidOps, or is it more down to Covid-19 and everyone needing to deliver more, faster, and with fewer resources? 5:42 I ask Edmund how does BidOps differentiates itself from a standard eSourcing tool e.g. SAP Ariba for large organisations, or MarketDojo and RFP360 as a more accessible, cloud based solution for all businesses. We talk about “Best-in-Breed” cloud based solutions and how the “unbundling" of procurement tech is niching down into more specific applications focusing on one specific area. 12:47 BidOps straddles the two niches of being an eSourcing tool and also a platform to utilise AI for simulation of negotiations. I ask Edmund what he sees as being the biggest challenge here, and whether he sees a move-away from more traditional ERP systems for managing RFQs and tenders. Edmund’s answer about using technology for Sourcing versus using it for P2P optimisation is an interesting insight. Sourcing offers so many opportunities beyond traditional automation and digitisation of operational and transactional practices. 18:15 Budgets are tight right now, so I ask Edmund to tell us a little about how Bid Ops has tried to combat this with a more innovative pricing model. 23:00 It’s a bit of a hornet’s nets from a legal perspective when you work on a gain share model. How does one prove a saving? Because not everything has a last paid price… 25:58 Edmund talks about having to do more with less, and how using gain share to enable immediate implementation of a solution without a lengthy budget approval process is allowing teams to drive results faster. Especially in times where headcount and budgetary constraints are a very real issue for many procurement teams. 27:07 How to deal with sceptics: how is Bid Ops able to distinguish and differente itself from some of the more traditional e-sourcing tools which some of us in the procurement space have had a love/hate relationship with over the years? There’s a great discussion here about how mutually de-risking the first quote and using game theory in negotiations can lead to a more successful (and shorter, more convenient) outcome from sourcing tenders. 32:17 Finally, I ask Edmund the best way to get in touch to learn more about Bid Ops. If you’re interested in giving this tool a try, as a certified partner I can also help you learn more about what it can do and connect you to the Bid Ops team for a demo. How to connect with Edmund: https://bidops.com (Bid Ops website) https://www.linkedin.com/in/edmund-zagorin-41291b13/ (Edmund's LinkedIn profile) Send Edmund an Email How to connect with James:...
Increasing Day-to-Day Productivity – Richard Sains from Acada
31:36There are lots of options out there for software to facilitate and digitise our P2P processes, perform e-sourcing or manage our contracts more effectively. However, the surprising omission up until recently was having something that gets us out of our inboxes. Procurement still relies heavily on email, and the volume we receive means that important stuff can easily be missed. Storing Excel and Word documents, as well as project updates and meeting minutes on Sharepoint was able to do that to a certain extent. But let's be honest, Sharepoint's interface is pretty clunky. It's also difficult to find stuff on there unless you've got an experienced administrator. The solution? One answer is to have a cloud-based SaaS app which shares project updates, stakeholder and supplier communication and delivery objectives all in one space. That's what Richard Sains, my guest today, has developed. He's one of the growing contingent of former procurement professionals turned procuretech entrepreneurs! ! Note - my audio is a bit sketchy on this one due to me recording this outside of my usual podcasting space. Improving our Productivity for Day-to-Day Communuication and Project Management: Richard Sains from Acada1:43 Rich explains what ultimately drove him to make the switch from being a category manager to a SaaS entrepreneur. 4:54 We discuss the biggest changes over the last 5 or so years in terms of developments in the procuretech space, and how the continuing trend seems to be the faster, leaner, more agile tools that are “best-in-breed” modular, niche solutions. With this comes some unique challenges in terms of integrating all of these together to get them to communicate, but technology is evolving to deal with this. Swapping things out and replacing them one-by-one makes it easier to upgrade on a modular basis rather than a major IT project each time there is an upgrade. 7:52 I ask Rich what he sees as the most common forms of waste or inefficiency in procurement teams and to what extent he sees automation or technology as the solution to combat some of these challenges? 12:01 Some inefficiencies of existing working practices will have been laid bare as a result of Covid-19 and the immediate shift in many cases to remote work. What therefore are the biggest challenges to larger organisations if we assume remote work in some form is here to stay? 14:24 Should technology be seen as a facilitator or productivity enabler? Or will it completely replace some manual tasks in their entirety and eliminate some operational or tactical procurement roles? 18:32 Rich in his own words describes Acada as an innovative system for procurement people to manage their workload and give visibility to their leaders and stakeholders. He expands on what he means by this here. 22:29 There are overlaps and similarities to some of the other tools out there, a couple of them have even been on the show. I’m thinking specifically Tarmo from ProcurementFlow (Episode 2) and Pierre from Per Angusta (Episode 13). Rich explains any specific inefficiencies or value adds that he feels Acada solves, that other SaaS tools in the procurement tech space can’t do. 25:56 Acada is a pretty new tool compared to some of the other solutions out there, so what are their next steps in terms of growth or development? 28:12 Rich walks through the business case of if I was a CFO, how would he convince me to buy Acada as a tool? How to connect with Richard: https://www.linkedin.com/in/rsains/ (Richard's LinkedIn Profile) Send Richard an email https://www.acadatech.com (Acada website) How to connect with James: https://jamesmeadsconsulting.com/ (James Meads Consulting website) https://linkedin.com/in/james-meads/ (James' LinkedIn profile) https://bookme.name/jamesmeads/lite/initial-consultation (Book a Call with James) https://linkedin.com/showcase/procuretechpodcast (Follow The Procuretech Podcast on LinkedIn)
Importance of a Data Strategy – Scott Taylor is The Data Whisperer
33:26The topic of data is like a boomerang. It always seems to come back into every discussion when we get into the nuts and bolts of implementing a digital transformation in procurement or even just implementing a software solution to get more visibility into spend analytics. Problem is, investing in it often doesn't yield a visible payback that can be directly tracked to a future P&L statement. So, how can data management ever become top of the agenda? My guest today argues that a significant part of the solution is being able to tell the right story to the right people, to help them better understand the implications of NOT doing this. The message is clear. At the point of putting together a business case and a budget appropriation request for implementing procurement tech, getting your data ducks in a row needs to be an integral part of the calculation. Scott Taylor joins me on this week's podcast to help explain why. Why Implementing a Digital Procurement Solution Must Include A Data Strategy: Scott Taylor is The Data Whisperer1:47 What problems does Scott see when it comes to the causes and the effects of poor or inconsistent data? 5:53 Master data - what are the different types of data in the procurement space and where do the common pitfalls tend to come from? And how can feeding garbage into a procurement tech solution impact your implementation of a digital transformation? 8:46 Why is data management an important component in the various different procurement initiatives that are buzzwords at the moment? 12:02 Scott explains his "4C" concept and how it helps businesses to understand their potential flaws in master data management. 18:12 If we assume that cleaning your data is something that's a non-negotiable, I ask Scott how to approach the discussion with key decision makers. Specifically, how to pitch to CFOs to get buy-in to make the investment in something that doesn't have an immediate, demonstrable payback. 21:10 Scott explains why if digital transformation is part the journey of where a company wants to go, it requires highly structured data to successfully reach this destination. 22:11 Why selling data cleaning as a stand-alone project is likely to fail, and how to make the case for including data management and structure in the budget of any large-scale procuretech investment. 23:59 When it comes to data management, do smaller businesses have the advantage over larger corporations because they have fewer legacy systems and less data to manage, or do the larger businesses have the upper hand because they have the resources and expertise to stay one step ahead? 27:41 As a final question, I ask Scott about whether he thinks data scientists will be an integral part of procurement organisations going forward. How to connect with Scott: https://www.metametaconsulting.com (Meta Meta Consulting website) https://www.youtube.com/channel/UCVQ1YhjNqc77GVsb3Xs4tvw (Scott's YouTube Channel) https://www.linkedin.com/in/scottmztaylor/ (Scott's LinkedIn profile) How to connect with James: https://jamesmeadsconsulting.com/ (James Meads Consulting website) https://linkedin.com/in/james-meads/ (James' LinkedIn profile) https://bookme.name/jamesmeads/lite/initial-consultation (Book a Call with James) https://linkedin.com/showcase/procuretechpodcast (Follow The Procuretech Podcast on LinkedIn)
Spend Analytics with Process Mining – Samir Kharkan from SCALUE
32:19Understanding what you spend is the most important part of strategic procurement. Without this, you can't do much else. You're shooting in the wind, not really knowing whether what you're tackling are the ripest opportunities. While spend analysis tools have been around for a while, they're now becoming old hat. The new generation provides spend analytics and guides you to where the best opportunities may be hiding in your spend data. Taking it to a completely new level, the ability to combine spend analytics with process mining is game changing. If you're not sure https://en.wikipedia.org/wiki/Process_mining (what process mining is), it will save what would previously have taken days, if not weeks of work to find holes and inefficiencies in your processes. The P2P process is a classic case of where this can be implemented effectively, and combined with spend analytics to drive both performance improvement and cost reduction. That's what my guest today, Samir Kharkan, CEO of German startup SCALUE is here to talk about. The Killer Punch for Extracting the Most Value: Combining Process Mining with Spend Analytics 2:40 I start off by asking Samir the same question as I asked Kevin last week, and that is: what makes a vendor “cool”? 3:14 Spend ANALYSIS vs. spend ANALYTICS. What’s the difference, and how does analytics drive businesses forward more than just a standard analysis dashboard? How SCALUE and similar tools (see episode 3 with Eddie from Seaforth Analytics) differentiate themselves from the first wave of spend cube software 6:54 What is Process Mining, and how does this add further benefits beyond the spend analytics function in terms of analysing business processes to view potential inefficiencies and non-compliances? 8:30 Does a powerful tool such as spend analytics combined with process mining enable CPOs or CFOs to employ less experienced procurement managers now that software can do most of the heavy lifting? Spoiler: the answer is NO! 11:45 I ask Samir to walk through what the must-haves or prerequisites are on the customer’s side to ensure that implementation of a tool like SCALUE is successful. Samir’s "Captain of the ship" analogy is absolute gold! 15:47 We drill down into why this type of solution specifically solves a common problem for mid-sized companies, when considering this with the captain, ship and compass analogy that Samir so eloquently explains. 17:53 Is spend analytics and process mining also a relevant tool to use in professional service industries where there is no product being manufactured? 20:43 We drill down into an example of where an automotive supplier discovered 30% maverick spend in indirect services through the data made available by using SCALUE’s solution. Samir walks us through how they discovered it and then put measures in place to reduce this. 26:00 Let’s talk payback calculations…how long does it take for customers to typically see return on investment? 27:18 Samir gives a great example of how looking at invoice discrepancies based on drill down of incoterms can often give return on investment in just one swoop. How to connect with Samir: https://www.linkedin.com/in/samir-kharkan-6b641a40/ (Samir's LinkedIn profile) https://scalue.com/en/ (SCALUE website) How to connect with James: https://jamesmeadsconsulting.com/ (James Meads Consulting website) https://linkedin.com/in/james-meads/ (James' LinkedIn profile) https://bookme.name/jamesmeads/lite/initial-consultation (Book a Call with James) https://linkedin.com/showcase/procuretechpodcast (Follow The Procuretech Podcast on LinkedIn)