During my long career in procurement, I worked withmany folks striving to get recognition, senior-level engagement and ultimately move to a higher level of the organization. I often saw the aspirations of these talented individuals frustrated because they weren’t operating in a way that was going to get them where they wanted to go.
Most companies can benefit greatly from the skill sets procurement brings to the table. So, what can procurement folks do to strengthen their position with CFOs, the finance team and business leadership so they can benefit themselves and their organizations? Operate differently.
A lot of it is attitude and approach. Too often, procurement is the group that is more apt to tell people what they can't do, versus helping them find solutions. Starting work with a new team, I always used to ask this question: "If you were our customer, would you do business with us"? In many organizations, the answer was no. They were not there to help. They were not engaging. They were there in a stand-back way, waiting for people to come to them.
I’m not saying that’s easy. It's always a challenge to break into organizations and get people to change from doing things themselves to working with procurement. One of the things that many people ask about procurement is "Do you have a mandate?” Meaning, "Is senior leadership telling people that they have to use you"?
That may sound easy on the face of it, but having that kind of mandate is about one of the worst things that can happen to a procurement organization. Work instead to become someone people voluntarily want to partner with. Here’s one example of how to do that.
At one company I worked with, we were having a challenge with a group that went off and did their own thing quite often. One of their deals, a major contract with a services provider, needed the Chief Financial Officer's approval. This was about a $10-15 million deal, and the CFO came to me and asked, "Jack, have your folks been involved in this"?
I looked at it and I said "No." He reached for the phone, preparing to issue a mandate.
I said, "Let me handle it."
"What are you going to do?,” he asked.
I said, "Let me work the process through and see. If you handle it, it's going to be a whack. They’re going to feel that the CFO is telling them what to do. Then they’re going to have to come and work with us and it's going to be a negative. Let me try to turn it into a positive."
Fortunately, he agreed.
I called the executive responsible and told him I had heard about the transaction, that I had been asked to take a look at it, and that I would I be happy to do so. I already had seen most of it, but I asked him if he would provide me the information.
He readily agreed, and we sat down and went through it. I offered some thoughts and suggestions and he looked at me and said, "Wow, those are some pretty good ideas."
I said, "Yeah, but here's the challenge. Where are you with your deal"?
"Well, it's already done," he said.
I asked, "Can you go back and make some of these changes"?
As it turned out, there were a couple of changes that he felt he could make, but several more that he didn't think would fly. I went back to the CFO and said, "None of these are deal breakers. But, I think it could have been a more favorable deal for us had we gotten involved in the beginning." That was fine; it was the best we could do and we still did a little bit better than his original deal.
The big win, and the longer term benefit, was that as part of that conversation the fellow on the business side agreed to make sure he got us involved in future deals.
It was a quid pro quo for the two of us. I told him, "You know what? You don't really have the best deal out there.” We agreed on that. I told him how I would prefer to have had the deal structured. We went back and forth, and ultimately agreed on that.
I also agreed to tell the CFO that the deal was an okay deal, which it had to be because it was already done. But the commitment going forward was that his functional area and our functional area would work together on transactions like this.
The easiest thing to do at the time would have been to go back and tell the CFO the deal was terrible, and let him pick up the phone, chew the guy out and tell him he had to work with us.
But what would that have gained for anybody? In my view, nothing. It would've put everybody in an antagonistic mode and made working together difficult. I thought it was better to work with my colleague, demonstrate the fact that we could add value in transactions like this, and win his trust. It worked. He met his commitment and we worked together as business partners on many deals from that point on, to the benefit of everyone.
Partnering and engaging is the key to advancing your goals and those of your organization. Don't take an arrogant approach where people have to come and work with you. Avoid building mandatory, governance-type relationships that position you as a bureaucrat or a roadblock in the process.
Instead, develop collegial relationships. Help people accomplish what they want to and in the time frames in which they want to do it. You'll get a lot more people wanting to engage and partner with you and everyone will get a lot more benefit.
Jack Miles is the former Secretary for the Department of Management Services for the state of Florida. He serves on Coupa's Visionary Council. A version of this article previously appeared on ProcurementLeaders.com
Earlier this month, Procurement Leaders ran a guest post from Are eCommerce Network Fees For Suppliers a Barrier Too Far? in which he takes on the perennial controversy of whether network fees are a fair charge for value received, or a barrier to adoption.Forrester Research’s Duncan Jones titled
Jones supports the view that suppliers should pay for the value they receive, but with some caveats. He states, “In a market in which many networks are free to the supplier, procurement chiefs should consider whether that is the right approach for them.”
He says procurement chiefs should ask themselves three questions, which he considers at lenghth in his post:
Jones concludes that while both options are valid, companies ultimately need to decide based on their individual context.
Since the Coupa network is one of the many aforementioned free supplier networks, you can probably guess where we stand on this issue. CEO Rob Bernshteyn tackled this question head on, elaborating on his point of view during our recent live “State of Coupa” webcast. Here is an excerpt of his remarks.
“The broader vision that we see over the course of the next few years is the ability for buyers and sellers to seamlessly interact with one another. To collaborate, to order goods and services, to send in invoices, to monitor receipts.
All of that is going to be moving more and more online. And here, Coupa is really in alignment with most of the competitive environment and the community out there that's thinking about this.
Of course we're going to get rid of paper over time. Of course we're going to get rid of sending purchase orders via PDF or fax. You'd have to be delusional to think we're not going to get there. Of course we'll be sending invoices electronically one-hundred percent of the time at some point in the future.
The question is how are we going to get there? There are two schools of thought.
One is, "Let's move a lot of people into proprietary environments and charge both sides of the equation for having that seamless interaction." We don't believe in that. We think the way to do that is approach it in the most frictionless way possible.
If you want to continue doing things the way they are today; if you want to continue sending purchase orders via cXML, fax, e-mail, PDF; if you want to continue receiving invoices via paper from a whole, long tail of mom and pop suppliers, sure, we're going to support that.
Over time, you can move those people onto the Coupa supplier network, which is going to remain open for business, with no charges whatsoever to these suppliers. It makes no sense to charge a supplier for doing something, but no incremental value is being created.
Our focus is on helping companies get their arms around spend and optimizing that spend through a seamless interaction with the supplier base that's out there. Our pricing, our methodologies are focused on that. Our platform is focused on that, our go to market is focused on that, our services team is focused on that. That's what we believe.
With this mindset, we've grown our network of suppliers to over 800,000 in a few short years, because we're open. We're open for business. It's taken other companies over a decade to get to these types of numbers.
I think embracing that way of doing B2B electronic commerce is the path of the future. And we're really excited to continue growing that.”
Get Rob’s full February 13 State of Coupa webcast here.
Earlier this month, we held a live “State of Coupa” webcast at recent results and highlights from 2013 and then we turned it over to the audience to have Rob take a crack at their most pressing questions. Here is one.our headquarters in San Mateo featuring CEO Rob Bernshteyn. We went over our most
Q: What do you see technology enabling in the next five years in the terms of purchase-to-pay processes?
Rob: A lot of systems, whether they be CRM (Customer Relationship Management), HCM (Human Capital Management) or in what we call the spend optimization or financial applications area, today are systems that take data in and pull data out. They take transactional data in and then show it with some analytics around it. That's really very interesting and it's part of the information revolution.
My view is in the next five years, we're going to be transitioning to more of a knowledge revolution. These systems are not just going to be pulling data and
What exactly does it mean for procurement to be strategic?There are a lot of things wrapped around that, but at a high level I define it as being engaged with your colleagues within the company, being perceived as a valuable resource and ultimately, being decision makers—people who can say yes as well as no.
To do this, procurement people need to take themselves out of governance-type mindsets where they sit back and wait for people to come to them with something that they want to do. They need to get out and engage with the business to see how they can help. They need to take a more customer service- oriented approach. Here’s an example.
At one point in my career, I was in an organization where procurement was set up in charge-back mode, so the business units had to pay for our time. This organization wanted the overhead areas to
Last month Coupa released PayStream Advisors' seventh annual Electronic Invoice Management: A Move to the Middle is based on a survey of 300 AP and procurement professionals at U.S. based companies ranging in size from $250 million to $2.5 billion in revenues.look at the “state of the state” of eInvoicing use. The report,
We chatted with Henry Ijams, one of the principal researchers, to get his view on the results of the survey and what the key takeaways are. Henry has been following the eInvoicing marketplace for the past twelve years.
Coupa: What’s new in this year’s report?
Henry: We're seeing more activity in the upper-middle market, especially from organizations that have not previously participated in EDI or enterprise-level automation. What’s
Undertaking any kind of business transformation involves changeand change always introduces risk. Careers, cash and your company’s competitiveness are at stake. The key to a successful transformation is proactive risk management.
There are two areas of risk: that which you control internally, and external risk associated with vendors and partners—whom you’re buying software from, who’s implementing it, and so forth.
Internal risk can be controlled by having well-defined goals and KPIs, having strong executive sponsorship, and putting governance and change management processes in place. Everybody knows and recognizes these are good things, like motherhood and apple pie. Putting these into practice is
There are only two ways a company can increase profitabilitythinking more like sales.—make more money or save more, and the two are equally important. I've written previously about how one of the ways procurement can become more strategic is by
Salespeoples' sole job is to go out and bring in money. They forecast, they measure and salespeople get paid in part on their revenue contribution. Procurement needs to think like sales in that they need to make pursuit of the dollar saved the driving force behind all of their activities.
The other part of this is that salespeople have a quota to meet—a big fat KPI staring them in the face on the first of every month, and it’s not too difficult to measure their performance against that.
Naturally, they think and behave differently than people on the spend side because
Reading supplychain.com recently, I came across this ten point procurement fraud prevention checklist by Paul Guile, a CIPS global procurement fraud advisor from across the pond. Paul outlines some basic best practices that your organization should put in place if you haven’t already.
I want to recap and add to Paul’s list, because while his list is a great starting point, most of the fraud I’ve seen in my career did not and would not have shown up solely through following these best practices. There is still more you need to do. Here Paul’s list:
1. Ensure the risk of procurement fraud is acknowledged on your company risk register, and there is a risk owner who has overall responsibility in the organisation.
Earlier this month, we hosted a webinar on managed travel with Charles Bacharach of Orbitz for Business and our own Tony Darugar, Product Manager for Coupa Expenses. Back in April of 2013 Coupa bought a travel and expense management company called Xpenser which Tony founded. We thought we’d take the opportunity to properly introduce you to Tony, who has quite a passion for expense management.
I believe the best business are born from scratching your own itch,and in my case the itch, managing my expense reimbursements, had gotten to be very painful.
I lived in San Diego but worked primarily in Los Angeles and the Bay Area - in a typical week I had multiple flights, train rides, hotels, lunches, coffees, and plenty of other miscellaneous expenses to submit. The expense management tool we were using was painful and time consuming, and as the project I was working on got more intense I just didn't have the time or patience to deal with it. So I kept putting it off.
My wife is a financial planner. She’s very good at cash management, investment options, and keeping on top of things. She kept telling me to submit my expense reports, and as much
Travel accounts for over sixty percent of employee-submitted expenses, sogetting a handle on travel spend can have a big impact on the bottom line. Corporate travel booking platforms allow travel managers to define and enforce travel policies, and to take advantage of the best possible negotiated pricing.
But how do you ensure employees are making use of the travel booking tool, and that their submitted travel expenses match what they booked through the tool?
By integrating your travel booking system with your expense management system, booked itineraries automatically generate employee expense reports, and travel booked outside the system is automatically highlighted.
Paystream Advisors’ 2013 Travel and Expense Benchmark report shows that this is a big opportunity for a majority of companies. This is why Coupa was so excited to