Baltimore Day Two – the Sun Shines on the ISM / Spend Matters Procurement Tech Summit

Day Two in the Big Brother house ... I'm sorry, day two at the ISM / Spend Matters Procurement Tech Summit and the number of delegates was down a little, we presumably lost a few in the harbour overnight. Or in the various bars and restaurants around here. But the whole area around the hotel and the harbour looks much more attractive today in the pleasant spring sunshine.

The keynote session for day two came from the impressive Craig Reed of DuPont - titled "Technology Innovation to Beat the Competition". He is the global director of direct materials and services for the sourcing and logistics function at the chemicals and materials giant, and has previously worked at some other major firms as well as being a Board member at ISM. DuPont has a very centralised procurement structure, with a single unit working globally across all the DuPont business units.

The firm is going through a huge change, with their merger with Dow Chemicals later this year to be followed by a split of the merged business into three new firms looking at Material Sciences, Speciality Products and Agriculture respectively. When you think about the implications of that, it is pretty scary, particularly as there is $3 Billion of synergy savings expected from the merger and procurement is expected to deliver a large proportion of that!

Challenges include oil and gas prices as well as many other commodities. Currency is another challenge - the firm had a lot of dollar based contracts, which could bring opportunities and risks given the dollar strengthening. Reed talked about making use of technology, ranging from the issues with using Excel (lack of sharing) and having a "classic car" type software product - nice to look at but lacking some features you would expect form more current products. The firm had planned to move to the "One DuPont", an integrated tech platform, but that has been put on hold because of the merger.

His view of technology was both forward-thinking and deeply pragmatic - "Cool stuff has to have a purpose", and he accurately pointed out that the pace of technology adoption is very different from the pace of technology availability. He has looked to free data from users' desktops and get an "enterprise-level view of spend and contracts".

DuPont are using SharePoint as the internal collaborative platform for knowledge and project management, and have used GEP to "bring bandwidth in certain categories" with staff augmentation, but then discovered GEP's software and are now using that to drive spend management. Another great point was that "it's good to be a big fish served by little fish" - just like in any supply market. So he's very open to using smaller tech firms that are moving fast and innovating, and using specific technology for specific needs.

Following that, Professor Robert Handfield gave a very data and content-rich presentation - he explained the paradox that procurement functions often can't get investment because procurement doesn't have the reputation to get the cash. But the function needs the data from systems to build the reputation! But, he said, that's not a valid excuse, and then talked about some of the ways you can get going.

The final session was a panel discussion, with Craig Reed, Roy Anderson and David Hearn , three experienced CPOs, who were all lively and pretty contentious in some of their views! There was some excellent material there, so we'll have a full post on that next week.

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