A CFO-CPO relationship, like any other, is not perfect and is often rooted in a lack of trust and miscommunication, which, at times, makes it seem beyond repair. The CPO promises savings and talks about adding value, but the CFO only sees costs and finds the P&L showing increased spending. This obvious gap between what procurement claims and what finance sees deepens further because the language and terminology used are not aligned. As a result, misunderstanding and communication breakdowns happen.
Before exploring how to make the relationship between procurement and finance work, it is crucial to note how procurement has evolved from having the penny pincher reputation to becoming the heart of supply chain management. Organizations are now starting to see it as a key driver for competitive advantage. With various value-adding superhero functions, it has emerged from being just a cost-cutting function to having its own voice with a newfound organizational influence and corporate visibility. Mastering its potential and knowing its strategic and critical contribution will ensure a competitive advantage in today’s dynamic global business landscape.
In many places, the summer months tend to be quieter than the rest of the year. Take advantage of this “down time” to stay up to speed. Check out the upcoming networking events and webinars, download the SIG Global Summit Presentation Anthology for all the trending topics from the Spring Global Executive Summit, and meet the prestigious panel of judges who will help determine 2018’s Future of Sourcing Awards.
PROFESSIONAL DEVELOPMENT OPPORTUNITIES
SIG is hosting three exciting events in May on the east and west coasts. Pencil in these professional development and networking events to get up to speed before the third quarter sets in.
Join fellow CPOs in New York City for engaging discussions led by executives from Deutsche Bank and Guggenheim Partners, and a keynote presentation on the Transformation Journey for the Mayor's Office of Contract Services in the City of New York, by Ryan A. Murray, First Deputy Director of the Mayor's Office of Contract Services.
Does this statement sound familiar: “We’re cutting budgets and unfortunately we need to reduce spend on professional development.” The balance of my professional career has and continues to be focused on helping teams improve productivity, longevity and deliver the right results. For more than 12 years people leaders have told me that their biggest obstacles to training their teams are that they don’t have enough time and dollars. Is this merely a symptom of a bigger challenge? Why is it that seemingly every time budgets are cut, a line item under the microscope is professional development?
In my experience, two primary reasons exist for cuts to professional development budgets. The first reason is that companies are fearful that if they invest in their employees through professional development, they will leave and go to the competition or somewhere else. Secondly, it has been historically difficult for advocates of professional development to demonstrate a return on investment (ROI).
Recent findings from a survey of chief procurement officers by Deloitte and research on professional development shed some light on those myths and support a business case for investing in your people and training them to be the best they can be.
“If we invest in professional development, people will take those skills and go somewhere else…”
Perhaps. The truth is that people will come and go at every organization; this is a reality that will always be the case. No company will ever experience 100% retention of their people. Besides, is that really what you want? The point is, worrying that you will somehow have a mass exodus of top talent as a result of investing in their professional development is unfounded.
2018 is already shaping up to be a busy year for SIG and we don't anticipate slowing down. In fact, we're accelerating!
SIG INNOVATION ACCELERATOR
SIG recently announced the launch of the SIG Innovation Accelerator (SIA), which offers a portfolio of services to help develop and improve the innovation pipeline for Source through Supply Chain (SSC) and related functions.
The SIA was created to help SIG’s buy-side companies--and ultimately other Fortune 500/Global 1000 companies--capitalize on their combined knowledge, experiences and buying power to facilitate innovation and improve profits while simultaneously reducing risk for both buy-side companies and product providers.
Becoming an SIA Colleague is the first way for a provider to participate in and benefit from SIA’s services. Benefits of becoming an SIA Colleague include:
Eligibility to nominate a product for review and consideration for SIA’s Acceleration Program
Opportunities for product focus groups with procurement executives to get feedback on product and marketing/sales strategies
Discounts for online certification programs or courses offered by SIG University
A Leadership Council comprised of approximately 24 CPOs and select other executives from SIG’s buy-side member companies will lead SIA's initiatives. All of SIG’s buy-side members are eligible to participate in various SIA activities and benefit from its services. SIA is managed and staffed by SIG and Creatze, which is led by SIG’s founder and former CEO Barry Wiegler.
There is a story where a retiring home builder was asked to build a final home. He was known for building wonderful homes with every detail precise, and his boss wanted one last house constructed before his retirement. The builder was very reluctant and agreed despairingly.
The builder did not take his time with the home, the materials were not his usual top quality and his work was sloppy. He was tired, and it showed. At the end of the construction, the boss handed the builder the keys and said, “After all your years of service, I wanted to give you this home.”
In life, we are the home and we must make choices on how we want it constructed. One of the choices many people make is to go back to school to learn a new trade or enhance their skills. Working professionals must weigh the options and determine the best learning opportunity for them. I have worked with adult learners for over 12 years and have compiled five things adults should consider:
1. Learning platform/accessibility 2. Curriculum/content 3. Customer service 4. Continued education 5. Recommendations
The learning platform is the methodology of how the information is transferred from the educator to the student. Adult learners must potentially juggle obligations with work, family, social responsibilities and personal leisure, which could get in the way of knowledge transfer. Educators today are focusing efforts on building comprehensive online learning platforms that support the working adult learner. I would look for online education opportunities, but make sure that they have a thorough onboarding process where they provide the tools for a successful learning experience.
Mark Pollack, Vice President, SIG University and Chief Strategy Officer, SIG
It is increasingly difficult, with jam-packed workdays and busy personal lives, to dedicate time to growing our skill sets. More and more, we are turning to online training or "e-learning." With time at a premium, it is critical that once we do dedicate the time to e-learning, that we gain the most we can from the experience. You can't just click through and hope to magically improve your knowledge and skills. I mean if you are going to take the time and effort to enroll, shouldn’t you engage and maximize your experience?
In my career working with adult learners and technology platforms I have noted a few characteristics that separate the high-achieving student from the just-clicked-through-every-slide student. I'll share a few best practices here.
Guy Hanna, Leadership and Higher Education, PhD (ABD)
As I write this, the UK is continuing to gear up for its forthcoming (June 8th) General Election, called by Prime Minister Theresa May only two years after the last one, purportedly to enable the British electorate to give the government a clear mandate for its Brexit strategy. Purportedly this is because many observers believe May's real motive is her hopes of being able to take advantage of the woeful situation in which the opposition Labour Party currently finds itself.
Regardless of the drivers behind the election decision, however, it's true that voters and the country in general continue to wrestle with significant uncertainty regarding Brexit. With Article 50 now having been triggered, there may now be no doubt that Brexit is indeed happening. The UK is leaving the EU in March 2019, but the terms of that departure are still very much up in the air, and the real consequences - economic, political, social, diplomatic - for the nation remain, frankly, anyone's guess.
I recently attended an event in London featuring representatives of local government from across the UK, intended to foster discussion around what Brexit will mean at a local level - and it was immediately clear that at that level as at every other, confusion continues to reign. Again, we have at least the certainty of departure - and the knowledge that a 'Great Repeal Bill' will be drawn up which will ensure that the state doesn't immediately collapse into lawless chaos on Brexit Day by transposing existing EU legislation onto UK law so that the government can then begin to modify that legislation to suit the country's own purposes and desires (rather than having to draw up, ratify and implement thousands of new laws all at once).
I have always valued the power of communication. When I entered college, I didn’t know exactly what I wanted to study. I realized that although I was “good” at many things in school, there was one thing I excelled at – communication. I was a strong writer, and an even stronger speaker. I saw that when most of my classmates dreaded speaking in front of others, that I always enjoyed the experience, and was excited by it. This was the turning point when I decided to focus my career in communications and marketing.
The power of effective communication cannot be underestimated. It is a critical component of life. I’ve seen the impact of effective and ineffective communication in many types of businesses. Ineffective communication has the ability to break businesses. If you can’t communicate effectively with your customers, your intended messages won’t be received or understood – it’s like you’re speaking an entirely different language from them.
So how can you speak the same language as your sourcing clients?
I’ve worked with many companies that provide services and solutions to sourcing and procurement professionals. It’s very clear what separates the successful providers from the rest of the pack – effective communication with their clients. In order to serve and advise sourcing clients in the best way possible, your team must be able to communicate to them through a common language of sourcing. It’s not just about being highly knowledgeable and educated on all things sourcing, it’s about effectively communicating by speaking their language.
Here’s how you can grow your business and better serve your clients through effective communication:
The build out of the “internet of things” will drive the doubling of knowledge every 12 hours, according to IBM. That means that every time you go to bed for the night, an entirely new amount of information has flooded the world. It wasn’t that long ago that robots were only part of huge factories. Now they have them available for purchase at local retailers for less than $50. Robots are more than mechanical machines…in today’s world, they are incredibly advanced tools that have the ability to automate everything, including driving.
As sourcing professionals, it is necessary that we all understand the new world we are living in, and how it impacts not only our organization, but our daily job. Do you have a knowledgeable understanding of:
How you are going to source these new products?
How you will negotiate contracts for technologies that didn’t exist last month?
How you will incorporate these products into your work?
How contracts will be crafted to protect IP?
Do you have the knowledge, skills and competencies to fully grasp the future that is here and expanding exponentially?
Education is the answer…and there are a few simple things you can do to support your own education:
Make sure you are reading a book a month. That’s an investment of only 15-20 minutes per day. If you don’t know what to read, (I have this problem) ask someone you trust, explore the internet (trusted sites) and determine what the most successful people are reading. Make sure these books are not just about your industry or current role, but about business, innovation, creativity and other areas of focus. By reading a variety of books, you will gather different insights and uncover different views on the changing world.
Teach. When you teach others, you learn. You have knowledge others want and they have insight you need. Learning is a mutual relationship.
Mark Pollack, Vice President, SIG University and Chief Strategy Officer, SIG
In our final installment in the discussion on the importance of education and the value of options like SIG University, Jamie Liddell shares key takeaways from students who hailed from Honda North America, PNM Resources and Florida Blue.
Students Become Teachers An "enthusiasm for feedback" was highlighted by Esteban Valenzuela, a project manager with Honda North America Indirect Procurement, as a critical aspect of SIG University. According to Esteban, the suggestions made by the students as they went through the course as to how it might be improved were assessed, and solutions implemented in real time by the SIG U staff (in Esteban's words, "Throughout the course I have made many recommendations and the SIG staff have already made many changes.")
Having come to the end of the course and with the ability to look back holistically on the experience, we asked our students what other suggestions they could make to keep SIG University firmly on the continuous improvement pathway. Without revealing too much, the depth and variety of the feedback (from the structural - with Tammy Way, a Sourcing Consultant for Generation at PNM Resources, who suggested we launch two new certifications; to the tactical - with Esteban’s advice to develop workbooks, videos and enhanced interactivity) was heartwarming evidence of the degree to which the students had embraced the course and wished to contribute their own efforts to SIG University's success: exactly the kind of philosophy which SIG U and the broader SIG family seek to develop within the sourcing profession as a whole.
Jamie Liddell, Editor, Outsource and Co-Head of EMEA, SIG