Vision is a funny thing. Until relatively recently, humans were at the mercy of circumstance when it came to sight – if you had 2020 vision, you were lucky, but if not, you had no choice but to hope for the best. Then, glasses, telescopes and microscopes were invented. Then, flashlights. Suddenly, we could see very near and very far, and even in the dark. With the right tools, our world was transformed.
Similarly, visibility in business is transforming with technology. In the past, we used notebooks and spreadsheets to transfer information. Today, we’ve seen customer relationship management (CRM), enterprise resource planning (ERP), and human capital management (HCM) software take off and transform the level of visibility within the business, allowing for unprecedented impact. Now, it’s Sourcing’s turn to transform and break free of spreadsheets and cumbersome legacy tools.
VSP Global Looks to Transform Sourcing
At VSP Global, the largest not-for-profit vision benefits provider in the United States, this sourcing transformation was a key priority. VSP serves over 77 million members by focusing on quality and affordability in eye care insurance, high-quality eyewear, ophthalmic technology and connected doctor-patient experiences.
To continue delivering the best results for their members, VSP Global set out to transform the way it approached the procurement process to drive better business outcomes, increasing stakeholder collaboration and visibility across the enterprise. The procurement team aligned on prioritizing four specific processes:
Stan Garber, President and Co-Founder at Scout RFP
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A Report on Maverick Spend
The Hackett Group conducted a survey to gain insight into the strategic importance of maverick spend reduction, understand the adoption of specific procurement practices, and differentiate how top-performing organizations approach this topic.
With the pressure to identify the right talent (at the right time and the right price) increasing, companies need to have a more holistic view of the candidate journey. Are you harnessing your plethora of data for better hiring practices?
Kate Renwick-Espinosa is the President of VSP Vision Care, a national not-for-profit vision company. At SIG's Fall Global Executive Summit, Kate will highlight how organizations can adopt a culture of fiscal fitness through impactful activities, engaging content pushed through a variety of communication channels, and a tighter alignment between leadership and different groups. Leveraging more than 27 years of optical and leadership experience, she’s energized by helping people see and feels fortunate to work for a company with similar “care and service” values. She’s accountable and committed to growing VSP membership and product and service offerings to meet diverse consumer needs and VSP’s client base.
Can you share a little more about your day-to-day role and responsibilities as the President of VSP Vision Care?
Helping people see is what motivates me every day. My primary focus is to help lead the direction and key efforts for the company that continue to grow and strengthen our VSP membership. This means we’re aligned and structured to be wherever the customer is making their vision care “purchase” and “care” decisions. Our product and service offerings must meet diverse and personalized consumer needs as well as VSP’s client base both domestic and international. And, they must be straight-forward and easy to use!
I also work closely with our CEO, and entire leadership team, to ensure our growing company is connected and supporting our common goals and essentials as well as delivering a consistent and competitive marketplace presence. Together we ensure that when we all show up to work that we clearly understand where we’re trying to get to and how we make a difference. Collectively across our six lines of business, we’re delivering the kind of personalized eye care experience that creates members for life!
Plenty of Procurement team man-hours go toward tactical execution – there’s a lot that needs to be done to keep the trains running each day. However, Procurement pros are in a unique position to become higher-level strategists within their organization, guiding business forward. To take this position, Procurement teams need to become agents of change.
The Law of Life
Kennedy once said, “Change is the law of life. And those who look only to the past or present are certain to miss the future.” I don’t usually kick off an article with a quote, but this one speaks too well to the reasons for becoming a change agent (and the risks of not doing so). Our competitors grow and evolve. One of the great killers of an established market player is the inability to keep up. I’m not saying anything new here, and the change-or-die edict is nearly cliché these days. So why are so many companies bad at shaking things up? More to the point, how is Procurement supposed to be the catalyst here?
The answer to the first question can be boiled down to a simple answer: Companies are bad at change because change is risky, expensive and time-consuming. The bigger the company, the heavier the lift. And, hey, all of our success came from doing things the way we did them last month, last year. Change introduces an unknown variable.
The second question requires a little digging.
Brian Seipel, Consultant and Spend Analysis Practice Lead, at Source One, a Corcentric company
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:
Many companies are on missions to improve their procurement processes. One technique that caught my eye is an approach used by the U.S. government, which started in 2011 when the Office of Federal Procurement (OFPP) , a unit of the Office of Management and Budget began disseminating a series of “myth-busting” memos.
The concept is interesting because it is aimed at helping procurement people (many of whom have been in their jobs for their entire career) realize that policies and practices are much different than what they have learned over the years. The first memo explains that “with expenditures of over $500 billion annually on contracts and orders for goods and services, the federal government has an obligation to conduct our procurements in the most effective, responsible, and efficient manner possible.”
So what are some of the common myths? One is a major misconception that the government can’t meet one-on-one with potential suppliers as they seek the best way to develop a strategy or prepare for a competitive bid. Sadly, many in government procurement believe this is not allowed, because talking to one supplier can unfairly disadvantage other suppliers that are not also called into meetings.
The myth-busting memo sets it straight, pointing to the Federal Acquisition Regulation (FAR), in Part 15, which actually encourages exchanges of information with interested parties during the solicitation process; this then ends with the receipt of proposals. “There is no requirement that the meetings include all possible offerors, nor is there a prohibition on one-on-one meetings,” the memo says.
Kate Vitasek, Educator and Expert, University of Tennessee
The SIGInnova Product Forum is today at 3 pm. Buy-side attendees will interact with the latest sourcing technologies and see how they can drive strategic impact, improve profits and mitigate risk. Participants will be exposed to innovative and disruptive products that can help shape the future of Procurement.
Jeanette Nyden is an internationally recognized contract negotiation expert. She’s written and co-authored three books to date. Jeanette provides tactical, customized contract drafting, negotiation and management training, coaching and mentoring programs to both sales and purchasing teams.
Jeanette has taught at major corporations, Seattle University and the University of Tennessee’s Center for Executive Education. While no longer practicing law in a traditional manner, she is a lawyer and holds a license to practice law in Washington.
Your presentation at the Western Regional SIGnature Event is about reducing value leakage in complex contracts--why is this such an important topic?
Industry studies demonstrate contract value leakage is from 17% to as high as 40%. Typically, value leakage comes from things like low adoption rates, non-value-added change orders, lack of innovation, etc. Performance- and outcome-based contracting best practices can dramatically reduce value leakage.
Additionally, businesses are seeking greater returns from their customer-supplier relationships at the same time many younger professionals are entering the field. This is a perfect time in the market to emphasize ways to implement performance- and outcome-based principles to reduce value leakage.
It’s no secret that technology, data analytics, globalization, and other factors have completely changed many aspects of modern business. Supply chains are wider than ever, sales and procurement strategies are increasingly predictive thanks to advance data approaches, and more companies are outsourcing work and relying on contractors.
Amid all this, the C-suite has seemed relatively stable. A business might have a CEO, a COO, a CFO, or other executives, but they tend to focus on business processes within their domains of expertise. But increasingly, it looks like those widespread shifts in other departments have reached the C-suite.
Whether through collaborations or new roles, the executive level in many companies has been adapting to new realities. Here’s how they’re doing it.
The technological shifts and trend toward outsourcing have been a boom for bottom lines, but they have also made the nature of business decision-making more complex. Consider, for example, the role of a CIO. For years, information and technology managers chose and oversaw the implementation of network solutions for a company to use in-house. But now that many businesses hire outside firms to handle cloud storage, data security, and other essential IT functions, the CIO’s role has changed. Now they are having to think more about purchasing, contracts and third-party risks, like a CPO, and about strategy and long-term competitiveness, like a CEO.
As a result, the traditional walls between those positions have begun to break down. The CIO in the example above can’t move forward with new contracts or strategy without consulting their peers in the C-suite. Likewise, if a procurement officer or human resources lead want to implement new software solutions that can add value and intelligence to their departments—an increasingly common occurrence—they’ll benefit from consultation and buy-in from the CIO.
Patrick Gahagan, Director of Contract Compliance Audit Services at SC&H Group
“It’s not just about cost savings--which was the traditional mindset of the Procurement function. It's about continually improving and re-evaluating how we’re buying to make sure we’re getting the best business outcomes.” - Neil Aronson, Head of Global Strategic Sourcing for Uber
Across all industries, margin and growth pressures are heating up. By 2021, 55 percent of technology procurement staff will require additional digital and analytical skills to enable their desired business outcomes (Gartner 2017). To succeed in this environment, CPOs must focus on closely aligning their team’s strategy and objectives with broader company goals. That requires changing the way their procurement and sourcing teams operate.
Changes of this nature call for a clear blueprint for transformation. And it starts with taking a closer look into current Procurement processes--and determining how success is being measured. A key insight: when organizations evolve alongside new technologies and market trends, so must the metrics needed to track performance.
Evolving Beyond Cost Savings to Accelerate Change
Historically, Procurement and Sourcing teams have been accountable for cost savings as the ultimate measure of success.
But as teams look to transform, they need to reshape their success metrics to chart a path forward. While anecdotal and periodic measurements are helpful, they are forgotten without a consistent stream of key performance indicators (KPIs) to indicate the overall direction of progress.
Stan Garber, President and Co-Founder at Scout RFP