Back to Hub

Getting to the heart of procurement strategy at the Midwestern Regional SIGnature Event

05/31/2023 By

The procurement technology market can sometimes confuse developing better solutions for procurement with bettering the procurement function itself. CPOs need the right tools, obviously. But they must also understand how to use their tools, when to use their tools and why they need such tools in the first place. Many practitioners operate in inherited systems and have yet to learn the fundamental questions those systems are meant to answer.

SIG’s SIGnature Events offer buy-side practitioners’ space to network and attend sessions concerning the issues CPOs, heads of procurement and those working in the supply chain in general increasingly face. “In a world with infinite competing priorities and unplanned urgent issues arising at any given second,” Sheena Smith, Chief Strategy Officer at Spend Matters, said, “ SIG events provide a space to keep your phone and computer hidden away and truly be with peers. This event was no exception – a safe place to solve problems, ideate, learn, challenge, and laugh about the absurdity of the procurement space we all love and bust our butts to expand and push the boundaries of.”

So, on May 23, Spend Matters had the pleasure to co-host SIG’s Midwestern Regional SIGnature Event in Chicago. Besides the solution providers invited to give talks aimed at important pain points of the procurement process, the gathering was exclusively dominated by practitioners representing businesses of widely varying focuses, such as Caterpillar, REI and Pfizer. The speakers represented Spend Matters, Keelvar, Zip, SAP and Sphera. Michael Martineau, Director of Global Procurement at United Airlines, and Mike Morsch, Vice President of Global Procurement and Supply Chain at CDK Global, also delivered talks that drew from their procurement experience.

Not everything is a hammer at SIGnature Events

In keeping with the tight-knit atmosphere of the event, attendees spent the day following the same itinerary. Jason Busch, CEO and Founder of Spend Matters, and Sheena kicked off the day with “CRM crushes SRM: how CRM helps Procurement.” The problem procurement people often face is that because procurement works within its own world and speaks its own language, communicating what procurement does becomes a problem.

This prompted a debate among attendees about why Procurement has to constantly justify its existence in the organization and how it can illustrate its value. After all, ensuring compliance does not make for an exciting metric. Procurement could borrow story-telling frameworks like “What, So What, So That,” which show how the need to address a problem becomes a process procurement implements. Ultimately, however, procurement should borrow customer-centric methods to address its stakeholders instead rather than supplier-centric ones.

Using customer-centric methods involves reframing procurement’s thoughts in a way that centers on what the customer needs. Example questions to turn your procurement practices customer-facing include:

  • How well do you digitize your stakeholder interactions, e.g., role-based dashboards for analytics, performance management, task management, etc.?
  • How do you see, segment and shape demand to manage the process/project “funnel?”
  • How do you measure the voice of the customer (e.g., outcomes, customer satisfaction or SLAs)?

When CPOs develop a clear idea for themselves and their stakeholders, then the question of what tools are most useful arises. “The focus on tech is like instinctively grabbing a hammer,” Jason said. “Rather, it is the business using the tech that is key and fitting the technology to the company’s context.” When you grab a hammer without questioning, you might smash a window. Similarly, many in procurement may instinctively assume that savings is their Holy Grail when stakeholders may treasure other goals, such as speed, or even issues of which they are unaware, like compliance.

Breaking out to break down procurement’s problems

The SIGnature Event continued with practitioners rotating through a series of roundtable discussions hosted by Zip, Keelvar, SAP and Sphera. The discussions maintained the close, collaborative spirit of the event, giving more space to the concerns of those wanting to learn.

Many of the discussions reflected topics you would expect to hear of the topics discussed were what one would expect to be reflected:

  • Jim Greenough and David Siedt of Keelvar oversaw a discussion on how CPOs adopt their sourcing approaches, specifically in the light of the coronavirus pandemic and the rise of automation.
  • James Bode and James Kidd of Sphera let attendees commiserate over disruptions and new regulations and share notes about how they have managed and will manage them.
  • Vish Baliga, CTO at SAP Fieldglass, tested the waters for an external worker force system that invited companies to pool skilled workers who have proven themselves with a completed project.

What now for procurement?

One question which really struck at the heart of developing practitioner practices was raised by Nick Heinzmann, Head of Research at Zip, and Nick Golemis, Enterprise Account Executive, when they asked CPOs about when in the process they typically get involved in deals. Is it, as one might assume, early on, or does the contract land on their desk days before it comes into effect? Nick developed upon this theme in his talk “Modernizing your procurement operations: priorities and strategies for the post-Covid world.”

Despite the titular pandemic, C-suites still do not see procurement as an entity that proactively drives strategic agendas. The biggest problems are that procurement lacks a clear governance model between itself and its stakeholders and that it needs to improve the flow of information. Without clarity in governance, procurement becomes a mire to navigate; without visibility into information, the stakeholders have little reason to trust procurement as a true strategic equal.

The way Nick sees the coming evolution of procurement is similar to a change from a UX that gives you lots of outputs, such as a Google search result, to a synthesized answer in the vein of a ChatGPT answer. In other words, procurement cannot simply list out all the things it does; it has to collaborate with its stakeholders and deliver answers that actually engage them. Part of that is bringing procurement’s visibility to the intake-to-procure process, instead of solely lording over the procure-to-pay endgame.

From there, talks from Keelvar, Sphera, United Airlines and CDK Global presented cases in which having the right visibility, the right tools and the right position within the larger organization are key metrics in determining procurement’s success, and everyone left the SIGnature Event feeling surer after returning to the base ground of how procurement needs to function.

If you are a procurement professional who wants the opportunity to develop their procurement strategies and meet with others tackling the same challenges, look out for the upcoming Eastern Regional SIGnature Event in September. You can learn more about it here.