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CPO Masters of Complexity (Part 1)

It sure seems like most everyone’s life is getting more complex. When I casually ask friends how they’re doing, the response is usually something about being ridiculously busy and barely being able to keep their head above water. In this age of constant connectivity, rampant over-scheduling at work and home, and constant barrage of information, complexity seems like the new norm.

The same is true for chief procurement officers (CPOs). According to our eighth annual “Global Chief Procurement Officer Survey,” CPOs largely see procurement-related risk on the rise — nearly 60% of the 481 respondents indicated that risk has risen either significantly (19%) or somewhat (42%). This is part of a broader theme of increased complexity that came out in the survey findings, where we profile complexity in four main areas: external complexity (headwinds coming from outside of the four walls of procurement), internal complexity (challenges of managing internal relationships and alignment with business objectives), talent complexity (building effective procurement teams and operating models), and digital complexity (defining and executing on digital strategies that are aligned with broader digital transformation efforts). In this post, I will focus on the first two areas of complexity. A subsequent post will discuss the last two areas.

5 tips from SIG on presenting at procurement industry events

Presenting at an industry event is an important step in any professional's career. It is also an excellent opportunity to promote, showcase and reward a team for a job well done. But most importantly, it is a critical factor in keeping an industry relevant, competitive and strong. Every professional worth their salt should consider it their duty to share their successes and failures.

Of course, in order to present at an industry event, you must first submit a proposal in the form of a session abstract. Sourcing professionals are well-versed in writing business cases and category strategies, and we have all read our fair share of good and bad proposals. However, when it comes to writing a speaking proposal, many sourcing professionals don’t give it the time or energy it deserves. These abstracts are often used to describe your session, and if the goal is to share your thought leadership, you will want to make sure your abstract grabs your audience’s attention. Consider the following five tips to write a compelling proposal for your next industry event.

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5 Easy Steps to Better Manage Your Suppliers

If you work for a large organization, you most likely have tens of thousands of suppliers, and any of them, to some extent, can pose a risk to your organization's operations, brand or customers. In addition, managing that many business partners is a difficult task that takes time, attention, organization and resources.

You and your suppliers are intimately linked, and what they do affects you, for better or worse. As a result, you need to be able to monitor, manage and collaborate with your entire supply base more broadly and effectively than ever before.

Before you get started, ask yourself these questions:

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A ‘Big Picture’ Procurement Mindset

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There is a considerable difference between what procurement can do with an eProcurement platform, what they should do, and what they actually do. Part of the problem is the level of technology segmentation that exists in the typical enterprise. Procurement has technology, legal has technology, sales has technology, etc. Everyone transacts with and stores their information separately. It may not be intentional, but it prevents companies from getting the full benefit of the technology they implement.

Huge strides have been made in digitizing procurement, but the work is not nearly done. Procurement needs to move into a larger business role where it is highly involved in the development and execution of enterprise-wide business strategy — and therefore enterprise-wide technology and data development.

If procurement is to think “big picture” when it comes to data and technology, it has to include suppliers as well. Corcentric has some reasons why.

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SIG Summit sneak peek: It’s not your average procurement conference

Readers of Spend Matters and SIG’s member companies have a lot of overlap. I’ve read many articles on this site from companies that are part of the SIG community. Through the years, Spend Matters has never failed in delivering amazing content that is actionable and reality-based, as well as non-sponsored ratings for those of us who work with procurement technology.

In that way, SIG and Spend Matters are kindred spirits. SIG provides its members thought leadership, networking and career training so sourcing, procurement and risk professionals can stay on top of the latest innovations — from updated best practices to the technologies that continue to change the way we work.

As the President and CEO of SIG, I’ve seen the industry grow and the roles of sourcing, procurement and risk professionals morph. We’re all staring down the barrel at these new technologies of robotics, automation and machine learning and wondering, Is my job next? Well, it could be. But I not only believe that this technology comes in peace, I want to show you how it can help you be a little bit better at your job every day.

Want to find out how? Join me and over 350 of your colleagues next week at SIG’s Global Executive Summit in Carlsbad, California, Oct. 14-16.

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5 benefits of multi-tier supply chain transparency

Consumers expect brands and retailers to know much more about their products than in the past, such as where it was sourced, how it was manufactured, who was involved or what countries it passed through on its journey to the store. All this requires a deeper understanding of the supply chain.

While multi-tier supply chain transparency is challenging to achieve, it can reap serious benefits for businesses that invest the time and resources. Taking progressive steps to achieve visibility at multiple tiers can benefit businesses in five ways.

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From tactical to strategic sourcing: Going beyond daily battles to long-term victory

Do you ever feel like you’ve been winning the battles but still losing the war? In the art of war, military strategists are required to look beyond short-term skirmishes, where little if any ground is gained, and instead focus on a vision for victory in the longer term. That doesn’t mean suddenly pulling your forces from the front or ignoring enemy advances but has more to do with creating a better line of sight between the guys in the trenches and the generals in the tents.

Joonas Jantunen, Cloudia’s CEO for the Middle East, sees a similar distinction to be made in today’s business procurement wars. Every large procurement function aspires to be strategic, but most are running their operations on short-term tactics.

Strategic sourcing, in contrast, sets out to align all sourcing practices with an organization’s long-term business objectives, with a view to creating new and sustainable value.

Taking the Path of Least Friction for a Successful Payables Strategy

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Inefficient invoice processing is standing in the way of companies achieving their bottom-line targets. The cause is manual, paper-based invoicing systems, which lead to late payments, errors, internal process issues, disputes and damaged relationships with suppliers, among other headaches. In a word, “friction.”

It doesn’t have to be this way. New data is showing that digital AP solutions can eliminate these frictions and streamline invoice processing.

The Payables Friction Index: Barriers to Invoice Automation,” a PYMNTS and Corcentric collaboration, quantifies the issues that businesses experience in processing supplier payments and explains how automated solutions can help ease the pain.

Tame your spend and add visibility with a Data Intensity/Oracle webinar

Procurement functions are increasingly tasked with managing and optimizing what are sometimes conflicting objectives in the supply base, including cost reduction, new product/market innovations and reduced risk. As the complexity of supply is increasing for most organizations, a large part of all B2B spend happens without appropriate governance and oversight. Without this, companies are overspending by an average of 20-25% on goods and services needed to run and grow their businesses. Maximum spend discipline comes from having iron-clad purchasing policies and practices across the business and tied to real-time analytics to know when and where to optimize. Learn to tackle these issues in a webinar from Spend Matters and Data Intensity. Register here.

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Big Savings in Small Spend — Tales from the Tail

In the world of strategic sourcing, realizing 5 to 8% savings is considered to be impressive. After all, these are the high-spend categories and are supposedly already well-managed and frequently revisited for improvement opportunities. In contrast, when our clients work with Simfoni on tail spend management or low-value spend engagements, we witness savings that can easily exceed 20% from time to time. This article explains how — with the right combination of subject matter expertise, leverage and technology — such savings are achievable.

In the world of tail spend, we typically pursue the following sourcing levers: Demand Challenge, Specification Alignment, Volume Leverage, Competitive Bidding, Alternate Solutions, Supply Chain Optimization.

I’ll explain each lever and illustrate how savings can be achieved in excess of 20%.

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Customize your internal payment processing needs with ‘Pay by Invoice’ at Amazon Business

No two businesses are alike. Each one has their own goals, internal policies and procedures. At Amazon Business we obsess around the differences in our customers, and how we can best support their internal procurement, reconciliation and payment teams to streamline their procure-to-pay processes. To do this, Amazon Business is helping innovate on behalf of its customers by offering a customizable invoicing payment method for businesses of all sizes and industries — Pay by Invoice.

Pay by Invoice allows eligible customers the option to buy now and pay later with payment terms and a purchasing line offered on Amazon Business.

Amazon Business believes a trusted invoicing experience enables worry-free purchasing — and we do this by making invoicing configurable, accessible and dependable for customers. Pay by Invoice provides Amazon Business customers access to millions of suppliers, with the convenience of using a single configurable invoicing solution to purchase. The vision of Pay by Invoice was to put businesses back in the driver’s seat. No need to change internal policies to work with a supplier or have separate negotiated terms with each individual supplier. With Pay by Invoice, the customer chooses what works for them.

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Supplier Risk & Ethics Analysis: Time to Get Started

For many buying firms, the quality of goods and services are contingent on their suppliers. Suppliers can indirectly impact brand perception from business to consumer. While delivered goods can be inspected through quantitative metrics, there are a host of other metrics that firms should track related to their vendors, including risk and ethics.