3. What will go back to the way it was pre-COVID? Like most of you, when I try to fall asleep and clear my mind, I can't help but dwell on these questions. The world has proven itself to be very small and more interconnected than we might have realized. I also feel that this is a test of leadership as well as a test of people's character.
Impacts to the Gig Economy
4. Do you think about the gig workers and what this might mean to the future of the gig economy?
5. Will people drop the flexibility they once craved for more traditional employment that has PTO, sick time, health insurance and other benefits?
6. Do you think that when half of the workforce embraced the gig economy for flexibility and the thrill of ever-evolving work experiences that they thought about what a pandemic means for them or not being able to file for unemployment?
7. Will we think about localizing and diversifying more of our supply chain to protect against the risk of a future pandemic?
8. Will companies retreat to adding costs to their supply chains by adding inventory to protect against risk, or will we learn to open our inventory to share with other companies?
Impacts to the Government and the Economy
9. In the future, who will you trust to lead you?
10. Have you gained or lost trust in the government or the media; and did it change once the pandemic got closer to home?
11. Do you ever think that people were maybe overreacting, or did you hold firm in your urge to protect every human life, the economy be damned?
I recently went back to read an article that I bookmarked a while back on the predictions for 2020. Forget self-driving cars and flying cars; Popular Mechanics magazine predicted in 1951 that every family in the 21st century would have at least one helicopter in their garage. They also predicted in 1957 that every road and street would be “replaced by a network of pneumatic tubes,” and your car would only need enough power to get from your home to the newest tube.
Dave Evans, the chief futurist for Cisco Visual Networking, actually predicted in 2012 that he'd be out of a job by this time because, as he forecasted, everyone would be able to predict the future themselves.
Automating Everyday Tasks
I wasn’t alive when Popular Mechanics made its predictions, but I was alive for the statement by Dave Evans. What I know for sure is that while his prediction for companies to make data-informed decisions is slowly coming to fruition, we are far off from a world without futurists. What amazes me is that most automation predictions were in the form of self-driving cars rather than taking place in everyday life.
As we settle into the holidays and celebrate with family and friends, we also look to a new decade. Absent a downturn economy, it’s hard for some to understand the importance of a strong procurement and sourcing organization. But we are so much more than just a cost-savings industry. While we are seen as an overhead, we really are the engine that keeps the company on course.
Rather than looking back at all the gains our industry has achieved this year, here are my thoughts on some of the exciting trends that I believe will pick up momentum in the next year.
1. Elevating the Role of Strategic Sourcing
Without strategic sourcing, we would not be able to improve cost, quality and service levels while guarding against third-party risk. Without the strength of our negotiations, contract development, business insights and supplier relationship management, we would fail on safeguarding our supply chains against human trafficking, conflict minerals and child labor.
I’m seeing more interest in third-party risk management from boards and company executives, and in my conversations with them, it’s clear that more resources will be devoted to supporting sustainability initiatives and the ability to act on business insights.
The Fall Global Executive Summit was one of the most well-attended Summits to date. With record attendance, compelling thought leaders, the first-ever Innovation Hall and a glitzy night recognizing the Future of Sourcing Award winners, it was one for the books! During this year’s speed networking, a whopping 207 meetings were booked and this year’s prizes for raffle winners were really spectacular, including a $5,000 donation to the winner’s charity of choice from Givewith, one of our newest social impact provider companies.
Fall Summit Recap
The general session keynotes kept audiences engaged and our thought leaders answered some really great questions from the audience. Coupa’s CEO Rob Bernshteyn talked about how data, AI and community intelligence are impacting procurement; a panel of experts from Bank of Canada, PwC, Adobe and Boeing discussed tried and true best practices to be better at your job; the panel with LeaseAccelerator on upcoming changes to leasing standards elicited lots of discussion; and Kate Renwick-Espinosa closed us out with a look inside VSP Global’s inspiring company culture and commitment to fiscal fitness.
One of the most buzzed about events at the Summit was Innovation Hall where provider companies that are utilizing AI and machine learning for everything from talent management to contract writing and negotiations networked with attendees while the Future of Sourcing Awards talks took place alongside them. It was great to see everyone’s gears turning as they talked about common challenges, potential solutions and learned more about opportunities available to them.
During a panel I hosted at Coupa Inspire on the role of the CPOs as “spendsetters,” the conversation evolved, as they often do, to the topic of third-party risk management. We quickly got around to discussing “tail spend” and the amount of inherent risk in the tail since it is fairly typical to not have done any true sourcing of this spend. Even more concerning, we don’t know who our third or even fourth parties are with any degree of background, let alone the risk exposure. An audience member during the Q&A asked a great question: If you could ask your tail spend three questions, what would they be?
This struck me funny and felt like we were putting a human face on something that is typically so intangible and unknown, almost like being face-to-face with a distant relative who you always speak about in whispers (admit it, we all have one). This made me feel like it was time to get personal and ask all the things that I had thought and whispered about, but never had the guts to ask... and this was my chance.
When I asked my panelists to comment, they did not hesitate.
“Who are you?”
“Why do you even exist?”
“How can I make you go away?”
“How did you even come to be in the first place?”
“I don’t even know you!”
The entire audience became engaged in a lively conversation. I told the person who asked the question (and I hope to find this person one day and thank him, in case you know the man in the second row, with glasses I believe, stage left, please tell him to reach out to me), that this conversation was not over. There was so much left uncovered.
Wow, who would have thought that I would leave a conference hosted by a supplier and feel better about the world and the impact we can have on it? That is exactly the way I felt not once, but twice, at SAP Ariba Live in Texas and in Barcelona. While I adore Tifenn Dano Kwan’s influencer team, particularly Amisha Gandhi, who is the Vice President of Influencer Marketing, and Gale Daikoku, the Global Communities and Ambassador Program Lead, the person who struck a chord most deeply with me was Padmini Ranganathan. She’s the Global Vice President of Sustainability and Risk with SAP Ariba. What first struck me as odd was the combination of “sustainability” and “risk” in her title.
Often when people think of sustainability, they think of one of these two definitions:
We all know the story of Bob, the Verizon employee who outsourced his programming work to China. After a couple of years, he got caught when security questioned why he was Virtual Proess Networking from China. Bob shipped his token to a programmer in China and paid him less than one-third of his salary. Meanwhile, Bob was relaxing in a cubicle, getting great reviews and regular raises for his programming prowess.
I have now met three people who told me they outsource their work. So, do you really know whose finger prints are actually on the keyboard? About six years ago when crowdsourcing was in its early days, I wanted to see what it was like from the employee side of crowdsourcing, so I signed up to be a crowd sourced person. No one questioned me about my application, about why a CEO wanted to make an extra $20 an hour in her spare time. After a few hours of doing task work, I handed my computer to my 13-year old son and asked him to try it. Of course, he caught on in no time and was able to produce work tasks. No one questioned that my work style had changed slightly. The company who hired me is one of the largest corporations in the world, and they never knew that this task was being performed by child labor. Being the ethical person that I am, I didn’t let this charade last long. I resigned in under two weeks… although my son begged me not to. I did it to test the system for my own curiosity and to understand the crowd sourcing model better.
Anecdotally, I have been hearing of huge increases in the amount being paid to sourcing professionals in recent years. From the top down, that has been true. As you know, we have a Career Network at SIG and I keep a folder of executives looking to move on to other senior leadership roles, so I know what kind of packages they are getting since I do a lot of match-making.
In the last five years, I have seen that starting salaries for a recent college graduate are at least 25% higher in the sourcing industry. It is not at all odd for a person with three years of experience to command a minimum salary of $100,000 a year. Ten years ago, I didn’t have a single CPO making over $500,000, and now that is becoming a possibility for fully-loaded compensation. Of course, talent-level, cost of living, and location make a huge difference in the numbers. At the Midwestern Regional SIGnature Event in March, I confirmed the jump in salaries for sourcing professionals.
A master’s degree intern from a strong supply chain or finance school commands $31 per hour for a paid internship and an undergraduate intern makes about $26per hour. What happened to the free internships we vied for when I was an undergrad? Interns now make the equivalent of $54,000-$64,000 per year as an intern. I know someone that was named “intern of the year” at a high tech company who was offered a starting salary of $85,000 after receiving a bachelor’s degree, and they turned it down - that was four years ago.
It was the very best one-day event I have attended in my life! The Midwestern Regional SIGnature Event, held on March 6 at the Minneapolis Central Library, was attended by 66 extraordinary third-party risk management and sourcing professionals. Not only was the agenda amazing, but every speaker delivered insightful content and engaged the audience. At the Executive Roundtable, we had thoughtful conversations about many issues. Tom Lutz from U.S. Bank led a “day in the life” discussion that lasted almost 45 minutes because so many people wanted to discuss what he was doing, and it prompted other conversations as well.
In our opening session, Linda Tuck Chapman, a Sourcing Supernova Hall of Fame inductee, knocked it out of the park by delivering an interactive workshop on third-party risk management. People said that their two hours of training FLEW BY. When the group joined back together, we had an incredible presentation by Rohan Ranadive from BB&T about building an AI-powered digital workforce which prompted so many questions, I had to stop them to stay on agenda! Then we had an absolutely inspiring one-hour talk by Nancy Brooks, the CPO of Best Buy. Nancy shared that she had declined previous invitations to speak, because she doesn’t care for speaking engagements, but she agreed to speak at SIG’s event because she had a story that needed to be shared about her team. We are thrilled that she joined us. She engaged everyone with Best Buy’s story the entire time and Nancy’s team was so proud to be there.
“Impact sourcing results in a more engaged and motivated workforce for companies, and enables them to increase their global competitiveness.” — The Rockefeller Foundation
You need the work done and there are countries that are disadvantaged, war-torn or underemployed that have motivated, educated workers who can perform the work you need. It truly is the correct choice. Why continue outsourcing to developed countries or countries in which the vast majority of people already have access to the middle class?
Did you know that outsourcing to India is the number one reason it now has a thriving middle class? Are you aware that through outsourcing an entire generation was lifted out of poverty in both China and India? Do you know that when you outsource to a country, it can change the trajectory of people’s lives? In a 2003 speech, Anne Krueger, First Deputy Managing Director of the IMF stated that the impacts of globalization have benefited both India and China by lifting millions of people out of poverty since 1980 and putting tens of millions of people firmly into the middle class. In addition, China has seen their extreme poverty rate fall from 84 percent to about 10 percent largely because of trade, reports the Economist.