Month: January 2019

Are you one of the 42 million weekly podcast listeners in the US? If so, we have some new suggestions to add to your playlist. If not — what are you waiting for?

Podcasts have exploded in popularity in recent years. They offer great stories, inspiration, education, and career and life advice. The digestible audio format is great for multitasking, so you can tune in on your commute, on the treadmill, in the waiting room, or while doing the dishes.

There’s truly a podcast for every topic, including procurement. Here are our three top podcast recommendations for public procurement professionals:

1. Public Procurement Leaders, presented by Public Spend Forum

This podcast provides a unique opportunity to be a fly on the wall in candid conversations about “successes and innovations in the public sector, and the people who are making them happen.”

Interviews range from procurement leaders at the federal, state, and local level, from the Chief Procurement Officer for the State of Alaska, to the Procurement Benchmarking program coordinator at the World Bank.

Try this episode: Public Procurement Leaders Podcast with Jack Pellegrino

This interview with Jack Pellegrino, Director of the Office of Purchasing and Contracting for the county of San Diego, discusses how his department adapted their procedures to help the County respond quickly to forest fire threats. He also covers who the ‘customer’ is in county procurement, and how the department collects and measures internal customer satisfaction as a measure of performance.

2. GovLove: A podcast about local government, presented by Engaging Local Government Leaders (ELGL)

Broadcasting from City Hall in Durham, North Carolina, this podcast will definitely lift your spirits and energize your efforts towards continuous improvement. Hear interviews with ambitious public servants who are working hard to improve government and overcoming many of the same challenges you face. You’ll also gain insight into the day-to-day experience of local government officials and pick up tidbits of career advice along the way.  

Try this episode: Episode #201 Data & Procurement in Boston, MA with Laura Melle & Stefanie Costa Leabo

In this interview, hear more about some of the procurement reform efforts Boston has undergone in partnership with the What Works Cities initiative. Guest speakers discuss how they are reframing the narrative around procurement from ‘the people who say “no”’ to capacity-builders helping other city departments help address their challenges.

3. Inside Public Procurement: Heroic Stories from the Frontlines by Bonfire

Procurement professionals like you are the lifeblood of public sector organizations, dedicated to supporting your agency and the constituents you serve. That’s why we created the Inside Public Procurement podcast here at Bonfire—a unique place where we share stories and discuss topics that matter to public procurement pros. Each episode brings you the latest trends, tips, and real stories from other procurement trailblazers who work tirelessly to bring positive impact to the agencies and communities they serve. 

Try this episode: Episode #1 Driving Efficiency (And Impact) with Cooperative Bids

This interview with Jennifer Frates, Chief Procurement Officer at Barnstable County, dives into the benefits of transparency and cooperative purchasing. We discuss the importance of transparency, the benefits of cooperative bids, and why the public sector should take better advantage of technology.

Listen to Inside Public Procurement on our website, Apple Podcasts, Spotify, or just search “Inside Public Procurement” on your favorite podcast app.

Controlling rogue spending is the most ubiquitous challenge that procurement teams face when it comes to their indirect spend, according to ProcureCon Indirect East. At the heart of rogue spending is a disconnect between procurement and the rest of the company.

When stakeholders resist the procurement process and ‘go it alone,’ they introduce risk to your organization and leave cost savings on the table.

For that reason, getting stakeholders engaged with the process deserves to be a top priority for your procurement team.

What’s behind poor stakeholder engagement?

There are various reasons that stakeholders may want to avoid participating in the procurement process. Realistically, some of these opinions or misperceptions are out of your control. However, one common concern which is well within your sphere of influence is stakeholders’ resistance to a slow, cumbersome, or difficult process.  

RELATED: 5 Step Guide to Better User Adoption

According to a 2019 report by ProcureCon Indirect East, one of the underlying issues here is that many procurement teams do not have the technology support to help them run a modern and efficient process, or involve stakeholders easily in the process. Too many teams are trying to get things done with only the limited procurement functions of their ERP, or no technology at all.

Challenges of using an ERP for procurement

There’s no question that ERP systems are powerful. However, they’re also notoriously complex. Even for seasoned users, navigating the system can be a challenge. For occasional users — such as a subject matter expert participating in an evaluation — the challenge is magnified. Furthermore, ERP systems are not built with the workflows to support collaborative decision-making, providing only limited ways of involving stakeholders.

As a result, teams either struggle through the evaluation process in their ERP, or forgo technology all together in favour or paper, Excel, and email. This makes the procurement process time consuming and prone to error, which doesn’t help with procurement’s outdated image.

Modular eProcurement software offers two main advantages: it is specifically designed for the procurement process, which means it is easy-to-use and has the flexibility to support more collaborative evaluations.

How modular eProcurement software promotes user adoption

“Modular cloud-based solutions provide stakeholders with an easy-to-use and easy-to-understand system that allows them the ability to get involved only when they need to be,” says Andrew Wolfe, a seasoned CPO and now principal consultant with Wolfe Procurement. “A modular system that is easy to use means great visibility and accessibility for team members at all levels, whether an executive role or an administrative manager.”

Modular eProcurement software employ the same principles of user experience that underpin mainstream consumer apps (such as Google Maps or Netflix), so the systems feel familiar and work like stakeholders expect it to. Modular software platforms are also very agile, evolving through direct consultation with clients to fit their process and serve their needs better. As a result, little to no training is required for occasional users to participate, a crucial advantage over ERP system.

“In modular sourcing platforms, we’ve seen that stakeholder engagement has significantly increased,” says Wolfe. “In some cases, adoption is above 98% within that process.”

Easier collaboration for better outcomes

When stakeholders can participate easily in the procurement process, it enables fruitful collaboration to take place.
“Whether a company has multiple ERP systems, multiple operating entities, or they’re around the globe in terms of physical location—you need to get everybody putting all sourcing activities in that single spot,“ says Wolfe.

Conducting your procurement in one user-friendly platform means you can:

• Ensure all stakeholders have seen and thoroughly reviewed supplier proposals;
• Include more stakeholder perspectives without increasing your workload;
• Collect and tabulate scores automatically, reducing manual steps and risk of error; and
• Ensure consistency of data throughout the full lifecycle of the decision.

This result is timely, confident spending decisions that drive better outcomes  — not to mention better stakeholders relationships throughout the organization.

Read more about the risk of trusting your procurement to ERP systems in some of our previous articles.

Is implementing metrics to measure your procurement one of the items on your to-do list for 2019?

If so, we’re here to help you get started. In last week’s post, we covered the basics of procurement metrics: why you should track them, where to begin, and some key considerations to set you on the right track. Now, it’s time to select the metrics that make sense for your team and will help you advance towards key organizational goals this year. Here are some options to get you started. 

Procurement metrics for RFP Quality

First things first! If you’re looking to measure the quality of the RFPs you’re sending to market, these metrics offer a great place to start:

• How many amendments are asked?
• How many vendor questions are asked?
• How many times is your closing date extended?
• How many RFPs are cancelled after go-to-market?
• How many vendors responded?

Procurement metrics for service improvement

In public sector procurement, internal client satisfaction is among the most important measures of performance — just as important as supplier performance and cost savings, according to the Deloitte CPO Survey Report 2018. Here are some metrics to capture this:

• Speed of response to internal requests
• Project cycle times, from RFP inception to award (benchmark to establish a baseline for different types of solicitations)
• Vendor performance (measured via ongoing end user surveys/vendor report cards)
• Speed of response to Freedom of Information requests
• Client satisfaction Survey

Further reading: How State of Michigan uses Net Promoter Score (NPS) to measure internal client satisfaction

Procurement metrics for cost reduction

This can be a difficult metric to define, depending on your organization’s process, the types of projects you typically run, and the amount of historical detail you have. Some of the metrics which may be relevant include:

• Hard savings:
  • Purchase price that is lower than the previously delivered price
  • Dollar value of negotiated savings
  • Reduction in a planned contractual price increase
  • Price lower than the budget allocation (where no previous pricing history exists)
• Percentage of procurement spend under management
• Percentage of spend using cooperative contracts
• Procurement operating costs as a percentage of managed spend
• Number of sole source procurements

Procurement metrics for employee satisfaction

The talent gap in procurement is much-discussed, so it is good practice for teams to keep tabs on the happiness of their workforce. Some of the basic metrics for this include:

• Progress towards professional designations
• Hours of professional development training
• Employee retention
• Employee Net Promoter Score or other form of pulse survey

Final thoughts

For many procurement teams, it can be difficult to find the time for any non-essential reporting or measurement. However, getting some key metrics in place can help you save time in the long run by providing clarity on how your team is performing against your goals. With this knowledge, you can direct your resources in the most efficient way possible towards improvement.

Hear more about how public procurement teams can track and benchmark their procurement process in the State of the RFP Benchmarking Study Webinar.

The New Year heralds another set of predictions and priorities for the evolving procurement profession. Among the usual discussions of AI, millennials, and cybersecurity, one deceptively simple directive emerges: the need for procurement teams to measure and share their performance.

Measuring procurement performance is listed among the National Association of State Procurement Officials (NASPO) Top Ten Priorities for State Procurement. It’s also highlighted in SourceOne’s 2019 Procurement Predictions and outgoing Spend Matters editor Peter Smith’s article “Six Procurement Truths for the New Year.”

Why track procurement performance?

So, why is measurement considered a priority by procurement professionals at many prominent organizations?

The reasons are twofold: firstly, numbers are a powerful means to demonstrate procurement’s impact. Well-defined metrics can help tell the story of how procurement contributes to overarching organizational goals. As Smith notes, procurement needs to “demonstrate the value we can continue to add in a rapidly changing and digitising world.”

On the flipside, procurement metrics also help your team identify shortcomings and allocate the time and resources to improve these areas, fuelling better performance in the long run.

Defining goals

For public procurement teams, ‘a job well done’ is not as simple as hard dollar savings. Some of the other important metrics of success include:

• Customer Service
• Risk avoidance
• Transparency
• Employee retention

Before choosing any metrics, it’s valuable to ask yourself or your team “what does success mean?” Spend some time determining the key high level goals that your team seeks to accomplish. If this is new to your organization, NASPO’s Critical Success Areas for State Procurement offer a helpful jumping-off point.

Once accomplished, you can then select key performance indicators (KPIs) and metrics that advance those goals.
Taking time in this step helps you avoid ‘vanity metrics’ and ensures that the metrics you choose have a meaningful impact on the overall strategic goals of your organization.

Leading and lagging metrics

When it comes to KPIs, there are two types:

Lagging indicators: output-oriented, usually an outcome. 

Example: Client Satisfaction survey result

Leading indicators: input-oriented, usually an activity

Example: Adherence to agreed-upon project cycle times

Leading indicators help you to see how you’re tracking on an ongoing basis and make changes if necessary while there is still time to impact the lagging indicators. In the example above, this may involve ensuring that you adhere to agreed-upon project cycle times consistently, as this is likely to cause an increase in client satisfaction.

While lagging indicators may be your objective, leading indicators are a good way to ensure you are improving over time in order to positively impact the lagging indicator.

Need some ideas of what to track? See these Procurement Metrics to Start Tracking in 2019.

Putting the process in place

The next step is to implement a process for collecting and sharing these metrics.

Many procurement software solutions remove much of the manual work of collecting and analyzing your procurement data, providing KPIs in at-a-glance visual dashboards. If this is not possible, seek to devise a system for pulling and preparing metrics that is realistic given your team capacity.

The key to making metrics stick is consistency and visibility — ensure that you have a method for consistently sharing these metrics with your team or key stakeholders so they, too, take ownership in them and can adapt to continuously move the needle forward.

For many procurement teams, putting procurement metrics in place is an impactful step not only to improve your performance but also to share the story of how your team is helping the rest of the organization achieve their goals, too.  

Hear more about benchmarking your procurement performance in the State of the RFP Benchmarking Webinar.

ERPs are nearly ubiquitous in organizations. Common to the accounting and HR fields, they excel at the core transactional activities of a business. However, they often fall short when it comes to handling processes that require flexibility, adaptability, and collaboration.

Let’s face it — procurement is one of those processes that require flexibility and collaboration. Trying to conduct procurement through an ERP system such as Oracle or SAP Ariba can often feel like trying to ‘fit a square peg in a round hole.’ As a result, procurement teams often resort to conducting decisions outside the system via spreadsheets and email — leaving you with incomplete visibility over your spend, unsatisfied stakeholders, and inefficiencies in the process.

Modular eProcurement solutions provide a good alternative to address this challenge. Working alongside ERP systems, they provide a purpose-built software environment to manage the complexities of procurement, contract management, and supplier management. With an emphasis on ease-of-use and adaptability, modular solutions can be implemented quickly, require little to no training for stakeholders, and deliver a quick ROI — often within the first couple of projects.

In a recent ProcureCon webinar, Andrew Wolfe (Wolfe Procurement) and Cam Davies (Bonfire), tackled the topic of how procurement teams can employ modular eProcurement solutions to fill the gaps left by traditional ERPs.

From their discussion, here are the top three advantages of using an eProcurement tool alongside your ERP:

1. Procurement tools are flexible to different types of purchases or procurement strategies.

ERPs can easily handle simple quoting if you have incumbent suppliers from whom you need to request quotes according to pre-loaded parameters. However, they typically provide only one way of doing things from a procurement perspective.

Most organizations need a tool that covers a broad range of purchases and purchasing strategies. Modular eProcurement solutions offer that adaptability for teams and include purpose-built tools to manage the complexities of RFPs with multiple geographies, stakeholders, and suppliers.

2. Modular procurement tools facilitate easier stakeholder engagement.

In a transactional environment where all the buyers are centralized on one team, ERP procurement modules may fit the bill. However, that’s just not the reality for most teams. Especially when the goal of the department is to capture indirect spend, procurement activities are required to be highly collaborative, involving multiple stakeholders whose input is crucial to the success of the project.

Often, ERP procurement modules do not support stakeholder participation in the evaluation process. Even if they do, ERPs are notorious for a steep learning curve — and for occasional users that are in the system infrequently, it can be insurmountable to repeatedly re-learn how to use the system in order to participate.

“Once you train an evaluator, they may only be in the project for a week and then not use the system for another few months, which makes it very difficult as you’re constantly having to retrain your users,” explained Andrew Wolfe.  

Echoing this statement, 42% of procurement practitioners surveyed in the ProcureCon webinar reported that stakeholder engagement was a key challenge in their procurement function.

eProcurement solutions have the advantage of being extremely user-friendly, often requiring little to no training for stakeholders. Furthermore, the flexible set-up enables procurement teams to segment the evaluation to give stakeholders only the parts of proposals they need to evaluate.

The result is a smoother process for both evaluators and buyers. Your evaluators can get in and get their job done quickly, and you have a direct line of sight into where everyone is in the evaluation process, so you can easily manage the project and ensure evaluators have done their part.

3. eProcurement tools foster more innovation.

For companies that want to stay competitive in an ever-changing marketplace, procurement must be a partner in delivering innovation. But it’s hard to do that with a tool that does not adapt to your changing needs and challenges.

“When it comes to fostering innovation, this really comes down to looking for a tool that moves with your business,” explains Wolfe. “I find these SaaS based tools are constantly up-to-date not only with current technology but also with the way things are being done.”

eProcurement tools are purpose built; they’re specifically designed to support the procurement process, meaning they are built to help achieve your goals. As a result, you benefit from continuous improvements to the software as well as general adaptability to your needs — which helps you to deliver a competitive edge to your organization.

For more on how modular eProcurement platforms can address gaps left by your existing ERP, listen to the full webinar.