Webinar Notes: Big Data, Big Impact on Procurement
This week’s webinar notes are from a January 13th event run by ISM and presented by IBM. It is available on demand on ISM’s website. The presenter was Steve Peterson from the IBM Institute for Business Value, and he spoke about the findings of their 2014 CPO Study, the results of which were released by IBM in December. The focus of the study was on procurement role models – or leaders – and what they are doing differently than the rest of the pack. There were three ideas that appealed to me as new ‘angles’ on familiar problems presented in this event.
How You See Your Stakeholders is Important
According to the IBM study, role models see their stakeholders as a source of value for them. This includes both internal and external stakeholders. Average performers, on the other hand, see stakeholders as something of a distraction from the work of procurement [my paraphrase]. It comes as no surprise that role models create more value from their stakeholder relationships, but it is not a simple matter of a better customer service attitude. While average performers may be willing to ‘grin and bear it’ through discussions with stakeholders, role models eagerly engage with those outside of procurement for their own sake as well as the satisfaction of their stakeholders.
Automation is Not Just About Efficiency
We are all used to hearing about the need to automate transactions and processes in order to make procurement leaner and meaner and free ourselves up from tactical work. But Peterson also made the point that the more automation procurement implements, the more of a data trail they create – a data trail that then enables more analytics. Even decision making can be analyzed and improved if there is an element of automation or data capture to it. And with automation, and the repositioning of procurement’s knowledge and capabilities, comes the opportunity to hire a more strategic kind of professional and to upskill in house resources to meet the new profile of the function.
Break Down the Silos Once and For All
The Q&A portion of this webinar opened with one of the best audience questions I have ever heard: how can procurement’s data and analysis have an impact beyond the walls of procurement? Peterson’s answer was that the initial data, and the questions guiding the analytics, needed to break through traditional silos of data/systems, perspective, and objectives. And this includes suppliers. Having a better data-based relationship with supply partners allows their performance to be improved through procurement feedback, and for procurement to drive innovative improvement internally as well.
The last memorable take-away from this event for me was the lingering problem of performance metrics. Peterson’s advice was sound and refreshingly clear cut. Performance metrics should be documented and complete. There should be none of this business about procurement being measured on savings and spend under management but expected to also create value or have top line impact. Discuss them, document them, work towards them, and become a role model in your own right.