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Beyond buying: Automating the transactional to become strategic

 

dawn-beyong-buyingOne of our favorite parts of Coupa Inspire are the expert panels. There’s nothing we love more than getting smart people together to talk shop. If you missed Inspire, you can read excerpts of the analyst panel and the CIO panel on our blog.

 

Today we’re talking with Dawn Tiura as a follow up to the analyst panel. Dawn is CEO of Sourcing Industry Group (SIG) and has been observing the industry for 25 years from her vantage point as a CPA turned sourcing consultant. There’s no one smarter on the topic of where sourcing is heading, so when she remarked during the panel that in her opinion, the term buyer should be eradicated, that piqued our curiosity. So, we got her on the phone to learn more.

 

Coupa: You had some provocative things to say during our panel discussion. One was that you wished the ‘buyer’ title would go away. We were hoping you could expand on that.

 

Dawn: I sure could! To me, buyer is such a demeaning title. The only time somebody is excited to say, "I'm a buyer" is if they're in the fashion industry, because that's cool and exciting and sexy.

 

Coupa: You're a tastemaker.

 

Dawn: Right! That's totally fun, and if you say "I'm a fashion buyer," people get that. But when you just say, "I'm a buyer" what it denotes is more like buying groceries. Somebody gives me a list, I go to the store and fulfill the list. It doesn't say that there’s any thinking that goes into the process. You do as you are told.

 

That is how buying took place historically. The buyer had little opportunity for input, or improvement. We ended up in a situation where we had thousands of suppliers for given categories, before we went into strategic sourcing.

 

Today, we shouldn't be employing people as buyers. We need sourcing professionals.

 

Coupa: Do you think there are some people who are buyers in title only, but their role is really strategic sourcing? Or does that title just automatically put you in that box?

 

Dawn: I think the title puts you in that box and it keeps you there. If that's how you're treating people, as buyers, that's dumb work. Why don't we automate it? Let people buy out of a catalog, off a contract. Why don't we raise the bar and evolve so that we're all strategic contributors?

 

Until we do that we're going to be seen as an overhead organization. A good strategic sourcing organization should be seen as a group that can drive top line revenue and bottom line improvement.

 

Coupa: What should the title be?

 

Dawn: Sourcing professional, or sourcing specialist.

 

The other part is that as long as we are only focused on savings, we're not going to be seen as strategic. I like your tagline, ‘Savings as a Service’ insofar as it means automating to get to savings. Longer term, we really need to position ourselves so that people want to do business with procurement and sourcing because we add business value to the company.

 

Coupa: Do you think savings is just the first step?

 

Dawn: For companies who have not gone through a transformation or multiple sourcing waves, certainly savings is the first step. Just by consolidating the supply base they can save a lot.

 

For example, I worked with one company that bought $24 million a year in office products from 1,700 suppliers. They had lots of buyers who bought from wherever people told them to. If it's never been addressed, even a simple category like office products can be strategic. You take the complexity, put it in a catalog, limit people's choices so they no longer choose from 150 different types of pens, and you get some volume consolidation.

 

Now you can get somebody to pay attention to you, create a catalog and automation so that everybody can buy appropriately, get desktop delivery, and all kinds of value-added services. You can, at the same time, save a lot of money.

 

But you can't rest on those laurels. If we only talk about savings, people get burned out. Maybe that's not my pain point this year. Maybe it’s getting more work done, or getting a faster time to market. Savings alone gets attention the first time, but once you've been through the transformation, and people have seen budgets reduced as a result of savings, you need to do something more.

 

Coupa: It seems hard enough for most companies to measure savings. How do you measure more strategic but less tangible contributions when you can’t even measure savings?

 

Dawn: I agree, the skill set is not in a lot of these organizations today. That was the reason I got into this profession. I was a CPA, and I was brought in by a consulting firm to create a tracking mechanism because they knew they were getting savings, but couldn't see where. We introduced total cost of ownership, and activity-based costing and we could tell you the savings right down to the budget line item.

 

I started this in 1991, sold my CPA firm '92, and went into sourcing consulting and have been teaching people strategic sourcing since then. But the kind of people who do this work are not yesterday's buyers.

 

There's so much more that you have to be able to do to be a good sourcing person. The buyer role didn't have to be analytical. They didn’t have to sell ideas. They didn't have to know change management. The role of the buyer is no longer the same. But a lot of the people who came up in that role are now in senior management positions.

 

Coupa: Do you see that transactional buyer role in the future at all, or is that just a completely automated function?

 

Dawn: I think it is 95% automated. It will be 100% as artificial intelligence improves. But, if you haven't consolidated your supply base, you will never be able to automate.

 

Coupa: If you could give one piece of advice to someone who holds the title buyer today, what would it be?

 

Dawn: If they want to be a sourcing professional, then they need to train up. And they need to convince their organization to automate the tactical so they can be strategic once they have the capabilities.

 

Coupa: Where should they start?

 

Dawn: I'm going to be completely self-serving: SIG University’s certification program. We have an associate level that we will be rolling out this fall, then we're having a manager, director and senior executive levels being rolled out. It will be fully accredited, and is the only the second accredited training in sourcing.

 

It’s also nice if people have a hard science undergrad degree and then go back and get their MBA. That's another path that I think is great. The hard science teaches you systematic thinking and rigor that’s very important in sourcing. But you need to wrap it in the soft skills that you get from business school, like leadership and sales training, public speaking and change management. That's what I’d recommend to develop from a buyer to a sourcing professional.