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Supply pros wary of updated technology but aware of its potential

Moments of transition can be difficult at the highest levels of business. Being too slow to adopt new, technology-aided solutions brings the potential for organizations to fall behind their more daring and forward-thinking peers. However, moving to systems that haven't been vetted or tested sufficiently is a mistake, as department leaders may throw money away on tools that aren't ready for wide adoption or are quickly eclipsed.

This battle between the need to modernize and an inclination toward caution is playing out in procurement organizations around the world. While managers have heard the benefits of the next generation of IT features, including artificial intelligence and blockchain technology, it can be hard to commit to a groundbreaking upgrade.

Survey reveals cautious approach
EPS News reported that a recent JAGGER and Austrian Association for Supply Chain Management, Procurement and Logistics survey of supply chain leaders revealed a split approach to the use of new technology. While these officials see the value of upgrading their systems, they have largely held off on starting a frenzy of adoption. The majority of polled leaders still wouldn't commit to the idea of using blockchain technology as a supply chain communication method, and a mere 10 percent have big data, AI or smart workflows in place.

This slow pace of adoption reflects a cautious mindset and an interest in watching other companies' successes and failures before jumping into the fray. According to the survey, general knowledge about the available technology tools and their value for procurement is on the rise. At the moment, there is an even split between companies that rate their awareness highly and those that don't, with 50 percent of respondents in each camp.

There are a few clear next steps that will lead procurement departments from their current in-between state to competent use of advanced technology. The study concluded that sourcing departments should take pains to be one of the most tech-savvy parts of their respective companies, taking the lead as the businesses digitize. Leaders will have to stay up to date with the latest trends and priorities in enterprise IT and decide which of those will help their operations. This need applies to both new products and updated strategies.

Powerful tech concepts such as AI are close to becoming viable options.Powerful tech concepts such as AI are close to becoming viable options.
AI on the rise
While potential buyers are still holding off on making major tech purchases for supply chain use, the solutions they're considering are making an impact in early deployment. Manufacturing Business Technology contributor Anand Subbiah explained that businesses are starting to see the benefits of AI deployment in their supply chains. Major industrial players such as Coca-Cola have begun to analyze their data, which has improved day-to-day processes from inventory monitoring to predicting future demand for goods and services.
Subbiah explained that widespread return on investment from AI is close and that companies should be anticipating their use of advanced tech in the near future. Even if a solution isn't quite ready for prime time, supply chain leaders can lay the groundwork that will make it easier to upgrade their processes in the years ahead. When modern tech solutions begin to deliver value, well-prepared sourcing departments could open up an efficiency gap with their less advanced competitors, turning anticipation into advantage.
In spite of rapid digitalization, Direct Mail campaigns are still a popular marketing tactic.  For over a century, companies have relied on catalogs and mailers to reach new consumers and build upon relationships in existing markets.  Why mess with success?  After all, the best campaigns produce a high return on investment for their organizations.  

Postage, however, can prove a costly and complicated spend category.  Even after designing their mailers, creating mailing lists, and coordinating printing, companies still have their work cut out for them.  Achieving the maximum possible discounts from USPS and determining the optimal delivery strategy is no small feat.

Source One's Procurement and Strategic Sourcing experts have helped companies across numerous industries develop and execute impactful Direct Mail campaigns.  Check out their latest infographic to learn more about reducing costs and reaching your audience: 

Are you looking to develop and execute a Direct Mail initiative? Have your previous efforts failed to meet expectations? Contact Source One's Direct Mail Optimization experts today.  They'll leverage their experience in both Procurement and Marketing to optimize the content, creation, and delivery of your mailers.

ICYMIM: December 11, 2017

Source One's series for keeping up with the most recent highlights in procurement, strategic sourcing, and supply chain news week-to-week.  Check in with us every Monday to stay up to date with the latest supply management articles.

Charles Dominick, SPSM, SPSM 2, SPSM 3, Next Level Purchasing, 12/6/2017
Every Procurement professional can recall an experience with an intimidating manager.  Dominick recalls his own experiences with a leader who produced results exclusively by spreading unease throughout his Procurement team.  Instilling fear, he suggests is not a sustainable method for driving success.  Good managers should instead focus on promoting investment.  Employees are far more likely to produce results if they care deeply about their work and take pride in successful initiatives.  Managers shouldn't have to rely on scare tactics to foster this sense of engagement. 

Michael Lamoureux AKA The Sourcing Doctor, Sourcing Innovation, 12/8/2017
Though 3-D printing won't reach its full potential overnight, it already stands poised to change Procurement in a big way.  New product development, for example, becomes simpler and more cost-effective thanks to this technology.  Suppliers and buyers no longer have to pay thousands to ship parts or products across the globe for assessment.  The ability to locally print replicas of components dramatically reduces costs for Procurement groups working in certain spend areas.  Even in their relative infancy, 3-D printers are changing sourcing.  

Sydney Lazarus, Spend Matters, 12/7/2017
Leading companies are challenging their Procurement teams to take a more entrepreneurial approach to managing supplier relationships.  Excellence in SRM typically means establishing dedicated roles for members of your Procurement unit.  Even without dedicated roles, organizations can nurture better SRM practices by focusing on their employees' communication skills and cross-functional expertise.  Engagement, too, is key to successful SRM initiatives.  Senior management needs to invest in Procurement's efforts and each team member needs to seek out opportunities to interact with suppliers directly.

In this new monthly Strategic Sourceror series, I’ll be reviewing all matters in New and Emerging 

Tech. My goal in this series will be to share insightful considerations on emerging tech trends and the respective sourcing implications/implementation for your businesses and stakeholders.  This series will be kept at monthly review to cover only the most relevant information in the industry - so please feel free to sign up for our monthly News Letter to keep your business in the know and innovating.  Next up in this series ---
Machine Learning can cause alarm in its very name, echoing notions like:
 “Machines Learning? Great…… they don’t need Health Benefits or 401K either…..”
With the new software’s that can classify financial expenditures and spend, like the in-built machine learning capabilities of SpendConsultant via Source One, these thoughts might cross the mind of the analyst or the spend management category teams. 
Fundamentally, Machine Learning is not thinking. It is little more than intermediate levels of math and applying it to unstructured data with pattern recognition at mass computing power scales. The unstructured portion of this is what makes it this more involved than a macro and officially giving it recognition of Artificial Intelligence Sciences. Computervisionblog 1 
In the workflow above, the unstructured data isn’t exactly fully unstructured. It just isn’t in the clean format structure required of databases for predictive modeling. 
In many instances, it isn’t that the computer is thinking. It has just been able to recognize more convoluted formats of data; for example, unstructured data as oppose to a CSV, Excel file, or in more cutting-edge example, a rock on the road for the driverless cars.
A better way to think of applications for Machine Learning is to liken it to supply chain of water: Think of structured data as a cup of water from a known source like Poland spring filtration. All the water molecules have been qualified to be in that cup and able to consume. While the unstructured data is water pre-filtration and the tech that powers this are filters structuring the data. The wake of the machine learning is an advent comparable to the impacts of desalinated seawater to the third world or the Californian coast.  A breakthrough that is truly seeing a renaissance in many industries over - where we know there are things happening we just do not know what. 
The ability to develop this Machine Learning Tech has been in such high demand that there are jokes of salary caps, as seen in football- with these tech experts having starting salaries able to reach $500K. Looking at the extreme end of this example, for your Tom Brady, in a court filing this year, Anthony Levandowski head of Googles self-driving car division had received $120MM in incentive pay (attributable to his patents he acquired prior) before joining Uber.
 (while it is too late to be the next Serena Williams or Tom Brady, it’s not too late to go back to school [placing thought emoji here])…
And with this being said – the talent pool is shrinking due to the pent-up demand, bidding wars, and global HR strategies with the Tech, Automotive, and Consulting Industries all desperately vying for this talent. 
The dramatic rise in the application of Machine Learning across industries is creating efficiencies that are potentially dating your department and Critical to Quality (CTQ )analyst job requirements. Roles as decision support is no longer defined as the ability to provide data to clients as Machine Learning Software is now able to lead the charge on vast swaths of inputs for data and with greater efficiencies. They are needing higher level skills with the ability to craft more insights, thus requiring a new professional.    
The Hybrid Professional
To further compound and reflect the growth of Machine Learning trends, business schools are coming to terms, Companies now need to be more stringent about hiring candidates with explicit relative backgrounds. Simply relying on the department to provide on-the-job training isn’t sustainable.
Business schools are building degrees and requirements that promote unique hybrid professionals. Those able to demand control over these Business Intelligence (BI) tools and manage this data with cutting-edge sleek software like Qlik, Tableau, and programming with R. The Bureau of Labor Statistics forecasts the demand for the Business Analytics profession will increase by 22% up through the year 2022.

Is your business searching for the hybrid of tech and business professionals, if not, it will need to, to remain relevant due to capabilities of new SaaS solutions.

The changes to procurement departments' everyday duties in recent years have been numerous and well-studied. These evolutionary steps, away from transactional basics and toward a more strategic mode with influence over organizational decisions, are top priorities because of two categories of factors.

First, organizations are shifting because they are discovering pressing priorities, new ways to lead and organize their teams and the ability to put a better product in front of customers. Second, they are adjusting their approaches because recent IT developments have freed them to put long-held goals into action.

The following are two examples of concepts changing the day-to-day tasks of procurement leaders in recent years, one from each side of the equation. These adjustments and more have created the new reality facing the supply chain, and there are more steps yet to come.

Priority change: Organizational culture first
There is a dawning realization within company leadership of just how intimately connected every business function is. The Harvard Business Review recently pointed out the role of a company's operating model in getting that business to a new and better position within its market. The operating model is the plan that defines how everything is done, and the HBR explained that it should align customer-facing operations with back-end functions, procurement included.

There may be a temptation to leave sourcing and other supply chain operations alone when revising a company's overall approach. That approach would be a mistake, however, as the procurement department's practices, from workplace policies to ethical sourcing initiatives, may feed the organization's culture and its ability to serve customers consistently and well.

The connection between the visible parts of an organization and back-end processes is especially powerful when organizations make responsibility and public service into corporate values. Those concepts should extend to all corners of a company. In this connected and information-rich age, a business failing to live up to its professed standards in the supply chain could drive a wedge between it and customers.

New IT and new priorities have combined to improve sourcing departments.New IT and new priorities have combined to improve sourcing departments.
IT change: Tech that relieves pressure
While operating model changes are often based on new information technology developments, there are more practical and immediate ways for tech developments to affect back-end processes. According to The Enterprisers Project, chief information officers are able to revolutionize internal and external practices through the use of automation. Procurement and supply chain leaders have traditionally been saddled with tactical responsibilities, managing suppliers and contracts but rarely taking a larger role. Make these individuals' transactional loads lighter, and they'll be able to branch into new, higher-level operations.

The data collected by sourcing departments can be a valuable wellspring of insight for companies on the whole. When IT-enabled supply chain operations shed some of their hands-on transactional work, they become better able to take on such a cross-departmental advisory role. This transition is the crux of strategic sourcing, and a new generation of technology makes it possible.
The combination of new and powerful IT developments with updated organizational priorities is a powerful force. The change sweeping supply chains can thank these two factors for its continued relevance.

December 7, 2017

Here's a look at where Source One's cost reduction experts have been featured this week!

New Whitepaper: 

5 Pro Tips for Impactful Procurement
Drawing from thousands of successful sourcing initiatives, Source One's Procurement consultants offer advice for maximizing the department's value.  In their latest whitepaper, the Strategic Sourcing leaders provide strategies for aligning Procurement to meet enterprise-wide goals and manage change across organizations. There's obviously no one-size-fits-all approach to great Procurement.  These five tips, however, should help any organization get on the right track.

New Podcasts:

Bridging the Gap Between IT and Procurement 
Procurement groups often face resistance when collaborating with IT.  Many IT departments still think of reckless cost-cutting and inferior products when they think of Procurement.  Strategic Sourcing expert Torey Guingrich joins the Source One Podcast to discuss strategies for optimizing the relationship between Procurement and IT.  It's important, she suggests, for Procurement to present itself as a decision support group rather than a spend-slashing adversary.  Working together, the two departments can produce savings and drive efficiency across their organizations.

5 Essential Procurement Metrics
You can't measure what you don't know.  This might seem obvious, but many companies still lack even basic methods for measuring Procurement's performance.  Procurement and Strategic Sourcing analyst Jennifer Engel offers 5 simple metrics for assessing the department.  Including cost savings, cost avoidance, and spend under contract, these provide the foundation for a thorough assessment of Procurement's value.  Companies should find it much easier to perform more sophisticated analyses once they've established these systems.

Are You Letting Your Telecom Spend Go Unreviewed? 
Procurement professionals working in telecom must contend with countless taxes, surcharges and fees.  These mysterious charges typically make up as much as 30% of an organization's total telecom spend.  Many Procurement groups fail to look closely enough at these costs.  Assuming they are unavoidable, they get stuck in wildly inefficient and expensive service agreements. Telecom sourcing expert Dave Pastore suggests closer auditing can reveal considerable savings.  In this podcast, he discusses the benefit of looking into telecom spend more thoroughly.  Procurement teams, he suggests, should find the process surprisingly rewarding and painless.

When I was growing up, we had a family tradition of not putting up our Christmas tree until Christmas Eve. This meant that we could usually take our time in picking out the perfect Douglas Fir because it would just be sitting in a bucket in the shed until we were ready to bring it inside to decorate on the 24th. Even though we would wait until late in the season, we rarely had troubling finding our tree. However, forecasts are showing that may not be the case this year for those of us Christmas tree shoppers who wait until later in the season.

For anyone who has ever gone to a Christmas tree farm to chop down your tree, you may remember learning that it takes about 7 – 10 years for the trees to reach the ideal height for most homes. So working backwards, that means that this year’s crop was planted during the years of the Great Recession.

During the Recession fewer Christmas trees were sold as families were forced to budget during the holiday season. With fewer trees being sold, farmers planted less seeds to replace the previous year’s crop or, in some cases, were forced to leave the industry all together. As a result, there were not as many fully grown trees ready to be chopped down for the 2017 season. For consumers, this means that Christmas tree sellers are selling out of their supply faster than normal, with some locations selling out in the first weekend after Thanksgiving. While tree prices have been on the rise for years - with prices nearly doubling what they were 10 years ago - customers are seeing increased price for their trees this year because of the constraints on supply.

Often when disaster strikes we think about the short term ramifications on markets – a hurricane in the Gulf is going to lead to increased gas prices – but over time we tend to forget about how these events could impact us in the longer term. This year’s Christmas tree shortage is only one example of this and we will likely see the effects over the next few years as crop ages out of the Recession years. The wine industry may see a similar impact in coming years as vineyards in Northern California recover from the recent wildfires.

Rest assured that even though we'll have to get it earlier and it may cost more this year, we will still have a real tree at my house. 

Though leading Procurement groups have grown increasingly essential across organizations, many still have trouble making an impact in IT.  Procurement and IT share a common goal, but the two departments have historically butted heads.  This is partially due to the critical role IT plays within organizations. The department is responsible for a number of technologies and processes that provide the foundation of business operations. Oftentimes, companies consider IT's spend concerns too critical for outside interference.

Friction also comes from outdated notions about Procurement.  In the past, many Procurement teams earned themselves bad reputations by wantonly cutting costs. Oftentimes, when other departments hear "lower costs" their minds immediately conjure images of inferior products and services.  This has created the (all-too-popular) idea of Procurement as an adversary rather than an ally within organizations.  The best Procurement teams, however, have continually refuted these stereotypes by offering value well beyond cost savings.

IT sourcing expert Torey Guingrich joins the Source One podcast to discuss strategies for aligning the goals of both departments.  Procurement is capable of helping IT better leverage its budget and drive more value from its initiatives.  To do so, they've got to position themselves as a support group for better decision making.  It's up to Procurement groups to clue other departments into the value more strategic purchasing can have.

To learn more about promoting collaboration between IT and Procurement, check out Source One's recent whitepaper: Equipping Procurement to Tackle IT Spend: Building Successful Relationships with Stakeholders.

Whenever a new hire starts his/her first day of work at a new company, there should be certain levels of excitement that are palpable within the workplace. Your organization is growing, and you should welcome the latest addition as a sign of growth and strength to your current state. However retaining those new hires and their talents beyond a couple years is proving to become more and more of a challenge for companies of any size. According to a November 2016 Human Capital Bench-marking report conducted by the Society for Human Resource Management, annual turnover rates are close to 20%, and cost companies up to 40% of the employee’s salary when they do leave. While not surprising, a key factor in employee turnover is due to disengagement in the workplace. A 2015 Gallup Poll found that only 32% of U.S. workers truly felt they were “engaged” in their current job, while over 50% felt they were not engaged at all. There is no coincidence that employees who do not feel as if they have a voice within an organization leave – regardless of industry.

So your company spent all this time, money, research and resources recruiting, interviewing, vetting, and hiring this new employee. How do you keep them? Here are a few ideas to keep in mind to help you retain that top tier talent you worked so hard to get.

Laying a Sound Foundation
It is critical that your new employee becomes familiar with your company culture and practices as soon as possible. The quicker they get up to speed the sooner they can begin to focus on adding value to your company by performing the role they were brought onboard to do! Recently Source One developed and implemented a new “onboarding” process that all non-executive new hires are required to go through. Through our process, new hires are trained on the various levels of Source One’s best in class sourcing practices which includes reading our book Managing Indirect Spend, meeting members of the team, learning about the various roles within the organization, meeting with executive management to discuss the history of the company, as well as career paths. Employees aren’t actually assigned to any formal client work until the end of their second week on the job. This way they can shadow, learn, and become familiar with the inner workings of Source One without having the pressure of having to perform right off the bat.

Let Them Take Ownership
Some believe the best and only way to learn is through baptism by fire – which can be an effective method to evaluate how your new hire handles adversity and pressure right off the bat. However sometimes this can push competent employees out the door after a while due to burnout. Having your new employee work on a project or with a client that can help set them up for success is something that they will recognize more often than not. Once put in a familiar position and one in which opportunity is there for the taking, chances are they’ll deliver.

Check In So They Don’t Check Out

Nobody likes a micro manager, but keeping in touch with your new hire by having weekly or bi monthly meetings during their first few months will help keep you in the loop of how things are progressing, and potentially avoid any disconnects or your new hire becoming frustrated. Transparency goes a long way during the early stages at a new job, and letting your new employee know he/she can come to you with any/all concerns is a great way to establish a level of respect and trust.

The first few months of a new employee’s tenure are critical to long term growth and retention. Keeping in mind these management techniques and approaches will help make sure you give your new hire every chance to succeed, and grow along with your business.

New procurement processes refocusing sourcing attention

There is a reason behind every change that occurs in the world of sourcing and procurement, some changing characteristic that makes the new model inevitable. Information technology is one of the prime movers today, impacting supply chains in ways similar to how it has affected other corners of business.

Fast and accurate data transfers have changed the calculations behind sourcing, and organizations have stretched around the globe on the back of better IT. Even the next generation of potential supply chain game-changers, such as the use of blockchain features, have a heavy technological component. Digital innovation and strategic changes have never been more closely related.

Old responsibilities replaced
A recent Supply Chain Management column by contributor Kalpesh Swali quantified how much is changing in the world of sourcing. The old responsibilities assigned to procurement departments in the pre-strategic days, mostly consisting of driving savings during transactions with suppliers, have changed. The priority to set up contracts and transactions hasn't become unimportant; it has simply been automated and made to work with drastically reduced amounts of human input.

With their old roles automated, procurement professionals aren't superfluous or unneeded. In fact, freedom from some of their day-to-day duties has given sourcing leaders more time to throw themselves into the more significant and strategic elements of their roles, according to Swali. This can involve implementing analytics systems to improve decision-making, working closely with suppliers to deliver innovative products and services, or integrating their work more closely with other business departments.

Swali suggested that increased digital focus in the procurement department is a hallmark of companies that are interested in truly transforming themselves and making the most of the digital "revolution" ongoing across industries. Considering the innovative tech tools set to debut over the next few years will likely be just as effective and influential as the ones that companies use today, transforming isn't a one-off event. Rather, this evolutionary process will keep happening for years to come.

Tech and the supply chain are closely entwined today.Tech and the supply chain are closely entwined today.
Fighting tech lag
When it comes time to actually make an investment in the IT that will let procurement move into a new era, companies may not always make the right choice at first. Chief Executive contributor Chris Crane explained that businesses today are better at adopting technology in customer-facing roles rather than less visible offices. This could lead to a situation where organizations could appear advanced to the outside world but still rely on inefficient and old-fashioned operations where it counts. Businesses that end up in this situation could have a hard time with getting sourcing to a strategic state.

Crane added that getting processes to catch on becomes easier when systems gain champions who promote those solutions to the rest of the company. If technology is driving early positive results and return on investment, adopters shouldn't keep that information to themselves. The value of strategic sourcing is clear once these tools and practices take hold. The early days of using the related systems could be defined by a struggle to ensure the products catch on. If the company's approach to sourcing starts to change, this evolution may continue.

For most procurement teams, speed to savings is critical. And, crossing the metaphorical finish line to savings often requires added resources in the form of a well-oiled procurement machine. While the need for conducting comprehensive, but concise sourcing engagements is crucial the success of a sourcing initiative, companies often face an array of pitfalls that can obstruct the track to savings.

Throughout the sourcing process, there are a number of challenges that can arise to delay the end-user adoption or implementation of cost reduction solutions. In my time as a sourcing professional, I have seen several recurring sourcing process delay points. One of the most frustrating instances is when a stakeholder group explicitly decides to take no action or ignores a request to take action to realize savings – the equivalent to a never-ending red light. This means for a given sourcing event or direct negotiation, savings have been identified, but the decision maker for the given category will not move on the savings opportunity in a timely manner. This can be extremely painful for procurement professionals as we get to watch other cars on the road driver merrily on their way while we have to stick it out waiting (hopefully) for our turn to go. Another common delay in speed to savings is contract negotiations. Often we will see seemingly simple, straightforward sourcing events get delayed or even derailed during the contract negotiation process between legal and commercial teams. These two specific instances of savings delays risk the magnitude and speed to saving your company money.

The most obvious risk by not accepting a proposal in a timely manner is the possibility of losing the savings opportunity altogether – AKA damaging your procurement vehicle. Though sometimes it’s a matter of fixing a flat tire and regaining momentum on the sourcing track, for others not acting promptly means totaling the vehicle altogether.  Many vendor proposals are time sensitive, the typical proposal guarantee from a vendor is 30 days from proposal submission. I have seen decision teams unable to come to a consensus and see savings from a well-run sourcing event slip through their grasp. Another, somewhat related, risk is when there is an extended period of time proposal submission and contract execution, while vendors may agree to extend their proposal validity date, the longer a team takes to sign on the dotted line, the more savings float out the window. These types of delays, in addition to risking the financial benefit of a given sourcing event, also put the quality of the vendor relationship at risk. Luckily, these risks are generally avoidable.

While there is no way to evade Murphy’s Law, “If anything can go wrong, it will,” there are processes you can build into your organization’s sourcing practice to help avoid unnecessary decision-related or negotiation-related delays in the sourcing process. Before going to market, ensure you have identified the decision-making team and discuss their expectations for the sourcing event. Aligning at the outset of an event can go a long way to avoiding selection delays or stakeholder disagreements once proposals have been submitted. Build approval and alignment checkpoints into your sourcing timeline prior to going to market. These will serve as the necessary pit stops that will keep your procurement vehicle well-equipped and on track.  Requiring all decision makers to provide sign off before going to market should alleviate some post-event decision issues. So often the reason for a decision delay is because the stakeholder team was not aligned before going to market. To help avoid contract-related delays, start the contract review process with your event solicitation. Clearly outline non-negotiable commercial or legal terms in the event documentation and attach (or request) the relevant contract template with the bid documentation. Coach your supply base that they should have a redlined agreement prepared along with the proposal submission.

There may be no way to ensure strict timeline adherence for a sourcing event, but there are processes your organization can adopt to help mitigate common savings roadway obstacles that can prevent you from crossing the finish line. Identify the decision makers, enforce alignment on any given event amongst the relevant decision makers before going to market, and start the contract process with your bid solicitation with clear expectations.

Let us know how these sourcing tips work out. Happy sourcing!

This blog is brought to us by MRA Global Sourcing

An increasingly contingent and increasingly young workforce is challenging traditional employee management programs.  Even leading companies have to consider more flexible staffing models, quicker avenues of communication, and more nuanced hiring practices.  Even if they hire the perfect Procurement professional, retention has emerged an increasingly complicated issue.

To retain top talent and optimize Procurement’s value, many employers are rethinking their approach to performance reviews.  In the past, conventional wisdom suggested an annual review was sufficient.  Today’s sourcing professionals, however, demand more regular and more detailed assessments of their work.  Managers are responding by introducing new transparency and flexibility to the process.  Failure to do so could mean losing top-notch individuals to more forward-thinking companies and missing out on opportunities to develop employee skillsets.

Recently, the Institute for Corporate Productivity surveyed leaders from 244 companies.  67% of respondent said that they are actively reworking their performance management operations.  More than half of these companies are doing so because of internal feedback.

Consider these four strategize for modernizing performance reviews within your organization:

1. Make Performance an Ongoing Conversation
Don’t save suggestions and constructive criticism for an annual session.  Instead, find ways to work feedback into regular conversations with you employees.  This could mean setting up quarterly, bi-weekly, or even weekly sessions.  Check-ins remind employees that their managers are committed to their long-term success.  These reminders should keep employees engaged and motivate them to continually produce great work.

        2Embrace Career Pathing
Establishing clear career paths means actively investing in your employees’ professional development.  It reflects a proactive, strategic approach to management.  The process requires managers to sit down with their employees to determine what they hope to accomplish.  Learning their employees’ personal aspirations and interests enables managers to take a more participatory role in their professional growth.  Together, they establish a tangible plan of action for reaching these goals.

        3. Create an Open Culture of Feedback
Mutually beneficial performance reviews depend on honest, open lines of communication.  This kind of dialogue is only possible within a culture of workplace transparency.  Employees should feel comfortable sharing their questions and concerns with management.  Additionally, criticism should be delivered in a constructive manner.  Leadership can encourage comfortable communications by keeping everyone informed of changes in the office and encouraging all employees to speak up when necessary.

        4. Ensure Reviews are Fair
      According to a recent Gallup poll, only 29% of employees believe they've gotten fair performance reviews. The organization suggests that irregular reviews contribute to these feelings.  A yearly review can hardly account for all of the shifts that occur over twelve months.  Gallup proposes that managers can remedy this situation by establishing more realistic benchmarks.  Tailoring expectations to the actual time and resources employees have will make for more effective reviews and better workplace relationships.

        Performance reviews aren't going anywhere, but it's clear some changes are in order.  Today's Procurement professionals want frequent, constructive, honest, and realistic assessments of their  performance.  The companies that best meet these evolving needs are most likely to attract, retain, and optimize industry leading talent.