Views on Strategic Procurement from Coupa Customers
The first panel session of the day at Coupa Inspire recently was a customer Q&A moderated by Chandar Pattabhiram, Coupa’s CMO. He had lined up Karin Hagen-Gierer, CPO of Sanofi, Thomas Sebastian, Global Head of Sourcing & Procurement at Zurich Insurance, and Dan Cameron, CPO at Pearson, all big Coupa customers. They were quizzed on their values and experiences: this was a ‘lighter’ session, to warm up the audience, than some of the more ‘gritty’ product and transformation stories that came later in the day. It bore some nuggets of best practice from some very experienced people:
Karin, prior to joining Sanofi as CPO, spent 24 years with Unilever where, as senior exec with both Finance and Procurement, she led the transformation and acceleration of value delivery of the firm’s Marketing and Business Services Procurement team. Prior to joining Zurich, Thomas held leadership and consulting roles in strategic sourcing, technology transformation and services across multiple sectors. Dan, prior to joining Pearson, was the Co-CPO at Goldman Sachs and Procurement Transformation Director at the Royal Mail. He is also a qualified chartered accountant with experience in Audit and Corporate Finance.
Chandar began by setting the theme for the discussion, citing how all the seemingly small things in life and business, if recognised, can be joined up to make for something very big and really quite important. He used the story of penicillin, and how its saving of many lives might not have happened had it not been for the (albeit later) recognition that the mould which had blighted the experiment was in fact what would save it. When it comes to making an impact, he said, it’s the putting together of all the small ideas that make for the big wave effect. (This was also a subtle reference to the Coupa Community, 25 of whom were speaking there that day, all contributing to the bigger impact that is effective Business Spend Management and the power of information sharing).
And so to the panel members: he asked about their vision of strategic procurement. Dan argues that to have strategic spend management, you have think about how you spend money everywhere, across the whole business. And to make it work you have first to make procurement more ‘fun’ and a value-add experience for everyone, by that he meant engaging your staff, executives and suppliers. He sees the CEO as the company’s storyteller, and procurement has to give the storyteller an interesting narrative – not just reporting on savings and growth. Procurement has to be the ambassador for digital transformation. Thomas agrees: to be a strategic function we must make sure the CEO ‘sees’ our enhancements to operational metrics, and our improvements to stakeholder engagement.
Karin’s advice was to be careful not to stretch yourself too thinly in your transformation role. Adopting an 80/20 role worked for her – 20% of your tasks will account for 80% of the value you produce. So it’s vital to concentrate on that 20% and that might include building a solid leadership team.
When asked how impact is measured, the good old scorecard is still a good tool, but, they say, you must add metrics of ‘total spend optimisation’ and ‘contribution to top line’ to the effectiveness and efficiency KPIs – thus expanding the outlook to the business of how procurement contributes.
It’s important to cut costs, of course, the panel felt, but you have to be able to maintain that. What’s more important is encouraging your team to innovate and not be afraid of experimenting. That will lead to being able to solve your own challenges.
Of course not everything is easy to measure. They felt that ‘time to market’ of a service, and distilling insight from data, are two of the challenges in that area. And they would encourage an eco-system of partners to help with those challenges, especially smaller, more innovative partners.
When it comes down to digital transformation, technology is important to all companies in one shape or another, so Chandra asked the panel what is most important for them from a technology perspective.
The key points included being able to see all data, especially regarding customer behaviour; management of risk as we navigate the changes we have to make (especially as we figure out new channels to engage with our customers and the supply chain); getting valuable insight from all the apps the technology offers. Thomas said that Zurich has taken a big step in that direction with Coupa software, that after only three days they started to experience ‘richness.’
The team also reminded us that transformation is as much about people as technology. Digital procurement can make us smarter, but we need the talent that can help us understand the business needs and what our eco-system can offer, with analytical skills and a mindset that can distil and spot opportunities, articulate ideas and bring vendors together. Those soft skills will always be important, so we need to re-invest in our teams.
To wrap up Chandra touched on the power of Coupa Community Intelligence, giving us access to a bank of customer and supplier behaviour we haven’t had before, insight on which we can base actions. Read more about that here.
And in a final quick-fire round the panel gave us their views on:
What makes you successful as a CPO?
Answers: ability to navigate, curiosity and journeying as a team
What’s the most important trait of spend management technology?
Answers: ease of use and intuitiveness; ability to give a risk profile of providers (delivery of suppliers, can they do what they promise); community intelligence we can learn from
What’s your most important piece of advice about strategic procurement?
Answers: get your data sorted out – visibility is key (not just data hygiene, but distilling it right down for spend management insight); run your spend optimisation as a business initiative, not a procurement project; invest in a high-quality team, they are your biggest ambassadors.
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