In today’s highly competitive environment, business and technology strategies have merged as one and are irrevocably linked. Technology leadership is a true differentiating factor and is a key component in any holistic Procurement strategy. Global supply chain solutions and tool sets have developed at a rapid pace and, as a result, the make versus buy decision has taken a pronounced swing in favor of buying capabilities over the past twenty years or so. With this swing, CEOs are looking to their supply chain leaders more and more to deliver a significant competitive advantage through strategic sourcing with a credible supply base, quality assurance,  inventory control, and compliance.

Progressive procurement organizations go a lot further and deeper than just “dialing for dollars” now. Maintaining the equilibrium between cost, quality and delivery requires skilled talent coupled with leading edge technologies. Using our Indirect Procurement journey at Jabil as a backdrop the following content outlines how we have built out people, processes and technology, in tandem, as we pursue excellence in this space.

Source: Jabil Procurement Intelligence 

Impact on people is as important as the technology selected

Each phase of our journey has been centered around people at the anchor. Harnessing the power of gold standard  procurement solutions proliferates authority driven buying power, through intelligence, across the organization. The Covid-19 crisis has further highlighted how, now more than ever, organizations should embrace digitization and connect to their employees and strategic partners in ways considered unconventional previously. Enterprises that choose to move along the analogue to digital spectrum are those that will not be disadvantaged or “left behind” longer term. Consideration of the impacts that introducing enabling technologies can have on an incumbent and prospective workforce is paramount.  

Organizations constantly evolve and move on as does their people. Human capital is very generational and the expectations that younger generations have of a workplace, their employers and the maturity and prevalence of a digital environment is very different than from previous generations. This has direct impacts on employee performance, retention, emotional investment, wellbeing, loyalty and in the ability to attract talent. A positive Digital Transformation, driven by invested people armed with intelligence, should be focused on elimination of non-value add activities, efficiencies and creation of time to capitalize on higher yield activities.

In general people are core to any success. Providing education, and end to end understanding of process and training is a key investment all organizations should consider. We have found that providing a full suite of structured training courses and access to software allow our team to stay current and constantly skill up. Our internal learning and development system offers over 300 courses dedicated to strategic sourcing, compliance, and leadership development. We have also partnered with the University of South Florida to offer certification in Diversity, Equity, and Inclusion, areas of prime importance to us.

Ask any good educator and they will tell you one of the hardest things about teaching is adapting to all the different ways their students learn best. Education is not a homogeneous one-size-fits-all approach. Smarter training tools allows content to be delivered in a variety of ways. A Digital Adoption Platform (DAP) is one tool that we are utilizing to deliver immediate assistance to our team, in real time, with the software they use every day. The platform sits between the user and the software tool in use to provide hands on walkthroughs and interactive smart-tips to maximize efficiencies. DAP technology helps to automate complex business processes and boost employee productivity and deliver new strategic content enabling provision of more competitive solutions and cost leadership for direct and end customers. 

Location of Site Users 

Source: DAP Insights Dashboard

In the past, measuring the success or usefulness of training content could only be done via interviews and surveys. With modern DAP tools, we can gain real-time feedback on the interactions with the content we generate. This includes unique user interactions, repetitions, or content that was abandoned prior to completion.

Source: DAP Insights Dashboard 

Diving deeper into individual process steps allows content authors to gain precise indications of non-value-add steps or points at which content gets most frequently abandoned. These insights are invaluable to system administrators in their constant struggle to drive end-user experience and ultimately gain more value out of the technology investment.

Utilizing modern training tools such as a DAP is vital to ensuring your workforce is realizing every benefit and unlocking each hidden feature the software tools you invest in can provide. The cost of these types of tools should be built into the business case upfront for each software implementation to avoid the fight required to add them on after the system is rolled out. 

Setting the right foundation prior to technology selection

Engagement with employees not only facilitates understanding needs when selecting technology but allows leadership groups to develop a critical foundational element i.e., Policy. Developing a comprehensive Procurement Policy drives decision making criteria in technology selection in areas often overlooked. Paper based policies allow Procurement to drive consistent messages around expectations for Sourcing, Spend Approvals, lines of demarcation and more. Establish manually what you want to automate with business rules and use the procurement solutions as a “digital twin” for process and policies to be complied with. Most technology implementations fail due to a lack of time investment in the planning phase. “Planning as you go” during the implementation phase consigns projects to failure from the onset.  

Actively engage all functional areas to participate in technology selection and design decisions and ensure “the voice of the user” resonates loudest. These components, supported by tangible executive sponsorship, will result in rapid deployments regardless of complex or geographical challenges. 

Where do you start with technology investments?

With all the recent advancements in procurement tools, sourcing speed has accelerated along with the technology. This makes the tradeoff between speed vs risk an even more difficult skill to hone. So, where do you start?

For some organizations gaining visibility to global Indirect spend is notoriously difficult. The process tends to be disjointed, manual, not systemic, unreliable and the data is historical. This forces Procurement to spend time on “patching” data versus analyzing trends and opportunities. Technologies that collate and classify commodity spend, with drill down to transaction details, enables the ability to formulate strategic category plans to set direction internally and with external partners. Deep analytical insights into spend helps align sourcing cycles, aggregates ostensibly disassociated spend, improves leverage positions and identifies under-utilized preferred suppliers. 

It would be worthwhile to provide some real context as to the magnitude of the task if performed manually. Our portfolio encompasses many billions of dollars, tens of thousands of suppliers, hundreds of categories  and in excess of a million transactions per annum. It is clearly not tenable to gain scalable and actionable intelligence, or establish underlying trends, using manual data mining. The Spend Analytics market has significantly matured and now offers AI based solutions to manage this level of transactional volume and data complexity. These “push” insights such as for example demand spikes, rouge spend and policy violations allied to dashboarding analytics and suggested action plans are not only invaluable, but are necessary, in today’s Indirect Procurement business environment. 

Beyond Category Management, analytics solutions provide insights that provide Procurement Organizations data to identify areas for AVL control, catalog pricing and supplier rationalization.  Once the visibility is gained, strategic initiatives around Tail spend management and identification of maverick spend is achievable.

Source: Coupa AIC & Platform

Equitable competition, in a fair market-place, is a healthy thing. It brings together willing buyers and sellers, it maintains market price equilibrium, necessitates and drives innovation, sustains quality and avoids any commercial or enterprise torpor setting in. Our global ecosystem requirements, comprising tens of thousands of suppliers, drives +10,000 strategic souring events per annum, before we consider everyday tactical  sourcing activity. Efficiently facilitating competition, with this level of activity and complexity, is a clear challenge and is where sophisticated e-sourcing platforms come in to play.

E-sourcing platforms should be simple to use, and intuitive, but with a functional sufficiency to handle even the most complicated sourcing events. Market leading platforms, including our current partner, offer many option types for e-RF(x) events and e-Auctioning. This not only drives fully optimized commercial outcomes but also an appreciation within the supply base that we promote equity and transparency in our selection process. It is, however, critical that with technology selection comes process development and partner training support. One of our favorite sayings is “I don’t buy technologies, I buy partnerships.” This is especially relevant in this space as sub optimal results can be inadvertently driven, especially on auctions, if used in the wrong way so training guidance is crucial.

These platforms significantly increase efficiencies in the end-to-end sourcing process that could not be attained using manual negotiation strategies. Efficiency is realized in two ways: