ICYMIM: November 20, 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.

Creating a Successful Third-Party Risk Management Strategy: What You Need to Know
Sydney Lazarus, Spend Matters, 11/15/2017
It's almost 2018.  That means it's the perfect time to start thinking about third-party risk management strategies for the new year.  Most unsuccessful plans fail due to a lack of planning.  It's essential to tie risk management goals into the broader objectives of your business.  Successful businesses will determine methods for aligning their risk mitigation and cost reduction efforts while also driving revenue.   In addition to poor planning, Lazarus suggests many organizations have trouble creating measurements for success.  These are all things to consider as 2017 draws to a close.

Why You Need to Capture the Flag Sooner Rather Than Later 
Michael Lamoureux AKA The Sourcing Doctor, Sourcing Innovation, 11/16/2017
Companies of all sizes are leveraging Procurement in search of savings.  Many have found themselves coming up short. They're failing to meet expectations and missing out on potential billions. The Doctor suggests that "dirty data" may be to blame for these disappointing figures. Failure to get data under control leads to lost savings in the form of unnecessary RFXs, wasted buyer time, and missed opportunities for consolidation.  Those are just a few of the ways bad or insufficient data can hurt your savings initiatives.

The Amazon Effect: Competition for Procurement Talent
Nick Lazzara and Naseem Malik, Spend Matters, 11/15/2017
As Amazon's service offerings and technological solutions expand, they continue to disrupt hiring and retention throughout Procurement.  It's not hard for the number one supply chain company on Earth to lure industry leaders away from their companies.  Procurement organizations should be wary.  There's still hope, however, for companies who take Lazzarra and Malik's advice.  By setting realistic career paths, offering workplace flexibility, and leveraging their CPO's brand, top Procurement organizations can still compete with Jeff Bezos and his behemoth.

Increased sourcing focus may fuel competition for talent

A major change of corporate priorities has ripple effects throughout any company. When organizations reorder their goals and decide to pursue new objectives, they'll have to revise the way they operate from the chain of command to technology use. Strategic sourcing represents such a high-level turning point, which means it's time for businesses to consider how to correctly support this new form of supply chain management.

Staffing is one area due for a serious rethink in the era of strategic sourcing, as the day-to-day productivity demanded of a strategic procurement department is different from the expectations placed on a traditional setup. Whereas in the past, officials were mainly called upon to cut costs at the contract negotiation stage, their input into all areas of the company's supply chain approach has become critical.

The talent crunch
In the midst of a revolution in the way companies look at sourcing and procurement, it shouldn't be surprising that top corporations are igniting a talent war for the services of the best procurement employees. Spend Matters explained that businesses such as Amazon are in the market for effective new workers, and that supply chain leaders will have to work closely with their top contributors to ensure they feel like staying rather than taking a role with an industry giant.

Procurement managers can get closer to their employees by working out customized and preferred roles and paths for progression. When workers' contributions are recognized, and when they are serving in roles that suit their talents and interests, offers from other companies will be less appealing. As with any department, procurement is the sum of its employees; losing even a single top contributor could have a lingering effect on a company while it tries to replace that person's production.

When teams have trusted leaders, they are better equipped to attract and retain people. Spend Matters explained that chief procurement officers have a strong personal impact on their departments. When companies seek high-quality new recruits for their supply chains, applicants will look at the CPO's history. If there's leadership who can get results, the prospective employee will see a chance to join a successful group.

People make the supply chain - so procurement departments must learn to make their people stay.People make the supply chain - so procurement departments must learn to make their people stay.

Retention is a challenge
Getting ideal new workers is a difficult task worth focusing on, and so is retaining the best members of today's team. A Procurious study warned that a significant percentage of procurement professionals are considering moving on from their jobs. Looking two years into the future, 40 percent of respondents anticipate finding new work, and 70 percent want to make a change within five years.

The report found that more than half of sourcing workers surveyed do not believe their present leaders will be able to help them progress within their careers. This data should worry CPOs and serve as a sign that they have to try harder than ever to create an environment that will incubate and retain talent. If they fail to convince their top performers to stay, there are many other organizations searching for talent to shore up their supply chains.

November 17, 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
Today's best-in-class Procurement groups serve as a valuable, strategic, influential business units that deliver value across entire organizations.  Calling upon thousands of successful initiatives, Source One's consultants provide tips for optimizing Procurement's performance and emphasizing its value.  Obviously, there is no one-size-fits all approach to employing a Procurement team.  These tips, however, should provide an effective starting point for any business looking to align purchasing with their enterprise-specific goals.

Recent Blogs:

Redefining Modern Procurement 
William Dorn, Supply & Demand Chain Executive, 11/15/2017
Source One's VP of Operations looks back on the last 25 years of Procurement and Strategic Sourcing.  Though some Procurement groups have evolved from purchasing teams to more strategic units, Dorn argues this is hardly the norm.  Many organizations are still far too comfortable with purchasing as usual.  He suggests that Procurement's continued maturity will depend on its ability to produce value beyond cost savings.  Then, it can align itself with company-wide goals to drive future initiatives and promote innovation.

Recent Podcasts:

25 Years of Service from Source One
Take a look at how Source One Management Services, LLC has matured into a leader in Procurement and Strategic Sourcing with this short video.  Over 25 years, we've grown from a small firm specializing in contingency-based MRO and Telecom purchasing to a best-in-class provider of sourcing services.  Today, our clients trust us to produce savings across myriad industries and spend categories.  What's more, our expert procurement consultants and innovative tools are a driving force for innovation throughout our industry.

Entering college, the discussion surrounding majors in the business school focused mostly on the basics: Accounting, Finance, Marketing, and Management.  Soon after arriving and introducing myself to other business students, I started to hear more about Minors or Double Majors in Management Information Systems (MIS), Computer Sciences, and similarly tech-based fields. Personally, I like to describe my as nearly tech-illiterate.  I can barely operate a TV remote.  However, as unfamiliar as many prospective business majors are with technology, it’s becoming an essential part of life and work for us.  Without developing some background knowledge in technology, without keeping an eye on where the industry is headed, we can say goodbye to the prospect of reaching our full potential.

Throughout several internships, I would constantly hear about the future of artificially intelligent technology.  Robots, I was told, are continually growing more capable of performing human jobs.  This projected disruption of the workforce seems to thrill employers while it terrifies employees.  How are people going to provide for themselves and their families if robots can perform their jobs for less?

I grew even more aware of this during my first few weeks with the procurement specialists at Source One. Working with colleagues to analyze strategic development among companies in the consulting and advisory field proved particularly educational. We analyzed where competition in the workforce was and how companies typically allocated resources.  Technology ranked highly across the board.  This wide range of companies, including many brand-new start-ups, considered emerging technology essential for growth in Procurement.  What’s more, it became clear that employees with backgrounds in programming and data science are increasingly sought after. 

This can look like cause for concern.  Young professionals looking for work might feel especially worried about entering ever-evolving, unpredictable fields.  Job security is a key consideration for students and graduates, and it’s unfortunately difficult to assess. Today’s recent graduates, however, also enjoy distinct advantages. We’re the youngest members of the workforce and our innovative, collaborative, and tech-savvy qualities can help drive the future of our industries. There’s also no reason that technological advancements should eliminate the need for diverse skillsets in Procurement.  Certainly analytical skills will help anyone looking to establish themselves in supply chain management and strategic sourcing.  It’s important, however, for both employees and employers to seek out a balance of hard and soft skills.  There’s no one-size-fits-all strategy for approaching sourcing initiatives, and there’s certainly no single model for an effective Procurement professional.
E-procurement now and in the future

The increasing use of technology in procurement and sourcing is one of the most visible and urgent trends in the global supply chain. Communication in particular has become drastically faster in recent years. Failure to incorporate this new speed of contact into sourcing and procurement strategies is a missed opportunity for companies of all kinds, and it may open up an efficiency gap between businesses with competent information technology in procurement and those without.
The potential positive effects of a technology refresh are among the many reasons to embrace strategic sourcing. It will likely be easier to find an effective IT improvement plan for the procurement department when this section is more closely integrated with overall organizational leadership and direction.

Searching for a workable solution
As Spend Matters recently indicated, the tech tools powering modern procurement are complex and powerful. These products are also customizable, and no two sourcing departments will have exactly the same requirements. When it comes to adopting such a program, the best approach may involve gradual progression. First, the teams can select a spend analysis tool. Next, the company can add on a related e-procurement tool - or replace the vendor entirely if the first implementation has gone poorly.
The mere act of buying a software tool doesn't ensure it will provide value. Spend Matters noted that companies have to deal with possible confusion and a lack of familiarity with the potential outcomes of their new platforms. The source reported that better implementation and usage of software tools is necessary and added that as of now, numerous sourcing departments that have e-procurement products use them only one-fourth of the time. With a little extra knowledge and some collaboration with analysts and consultants, companies can get these statistics up.

Data is the basis of procurement's future evolution.Data is the basis of procurement's future evolution.

Anticipating AI's rise
hat comes after today's IT tools? The answer to this important strategic question will likely involve better procurement analytics and data use. Artificial intelligence programs that use a flow of valuable data to make key decisions are in development, and they promise to be a fruitful next step for tech-conscious supply chain participants.
PYMNTS recently spoke with Xeeva CEO Dilip Dubey about how this technology will make its impact felt in procurement departments. He explained that supply chain executives shouldn't be afraid to think about moving into AI use if they still have trouble digitizing their transaction data and making it structured and machine-readable. Indeed, the powerful algorithms being considered for industry use could help make analog data into a usable resource for a company, without having to digitize it.

One of the most promising elements of AI is that these decision-making algorithms can fit into several different roles when integrated with more standard procurement technology. Dubey pointed to processes from sourcing to cataloging; anywhere there's data to assess, an AI program could help. Companies that want to ensure their supply chains run smoothly may soon have help from these new programs, with their own data serving as the fuel. For businesses still struggling with the early stages of e-procurement, this future enhancement can serve as further motivation to evolve.

Since 1992, Source One's procurement consultants have executed thousands of strategic sourcing initiatives.  Clients in a variety of industries trust us to reduce costs across all areas of spend and drive efficiency throughout their organizations.  Though every company and every initiative is unique, a number of fundamental strategies always help produce success.

We've spent the last few weeks sharing some of these foundational best practices.  Check out our latest infographic to learn more about standing tall in procurement and building future savings

Contact Source One's team of sourcing specialists today.  We'll assess your operations and help you construct a more strategic approach to purchasing and supply chain management. 

25 years as a leader in strategic sourcing provides a unique vantage point.  Source One’s procurement experts have both witnessed and inspired monumental shifts in the nature of their business.  While our diverse offerings still set us apart, we were practically an anomaly in the early days.  Just a decade ago, most of the purchasing groups we encountered were purely reactive; they employed age old tactics, and relied on 'conventional wisdom.'  Procurement and purchasing were more or less synonymous.  So long as stockrooms stayed stocked, there was little cause for concern.  Even many of our larger clients lacked the structures and resources for sourcing indirect spend items or accurately assessing risk.  A number of Source One's veterans can recall explaining the very idea of strategic purchasing.

Persuading clients to abandon the ease of the three-bid process and the comfort of preferred supplier relationships was no small feat.  After all, bad or inefficient purchasing habits are just that – habits.  The worst ones are never easy to break.  What’s more, cost reduction can make people uncomfortable.  Reduced budgets often conjure images of inferior products and subpar services.  Even seasoned Procurement professionals still face friction during early discussions.  This continues to ring especially true during collaborations with areas like IT and Telecom for whom Procurement can look especially unfamiliar.

Reducing costs is still a key objective for Procurement groups.  The best, however, know that their advisory role must go well beyond savings considerations.  Locating the right suppliers and markets for our clients depends upon our ability to establish, nurture, and maintain amicable relationships.  Strict budget policing encourages the exact opposite sort of partnership.  Focusing on costs not only inspires resentment, but undersells Procurement’s considerable potential for shaping a business’strategy

In its newest iteration, Strategic Sourcing is increasingly linked to category management.  Successful organizations appoint sourcing leads to oversee particular departments (IT, Marketing, etc.) or spend categories (Telecommunications, MRO, etc.).  Dedicated subject matter experts do much to inspire meaningful collaboration between business units.  Working across organizations, Procurement teams can better gain a comprehensive understanding of stakeholder needs and deliver results that can profoundly reshape an entire enterprise.  Though these changes are still very much underway, Procurement's new role in negotiations suggests more change to come.  

Tomorrow's Procurement organizations cannot hope to reach best-in-class status without further developing management skills and building credibility across businesses.  Simply put, many companies retain internal structures that could discourage Procurement from fulfilling its potential.  Successful procurement departments will navigate corporate politics and continually emphasize the broader implications of the word 'savings.'  As always, some Procurement groups will drive these changes while others watch from afar.  Count on Source One strategic sourcing specialists to remain the former.

ICYMIM: November 13, 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.

Supplier Rationalization - Revisited
Tom Finn, Spend Matters, 11/8/2017
Finn reminds procurement professionals that supplier rationalization does not have to mean consolidating or reducing your supply base.  In fact, securing more strategic relationships can often mean increasing the number of suppliers utilized, routinely shifting a supply base, or developing a strategy that allows for continuous changes to supplier relationships.  It's important to remember that the process of supplier rationalization is a constant one.

Cottrill Research's Open Access Research Provider List of Honor
Cottrill Research, 11/2/2017
To commemorate Open Access Week, Cottrill Research has announced their annual list of honorees.  These are organizations and publications who reject traditional, exclusionary publishing models and choose instead to provide valuable information absolutely free. This year's Top Honorees include Spend Matters and Buyer's Meeting Point.  My Purchasing Center also earned an Honorable Mention.  Thanks to each of the recognized organizations for the vital service they provide procurement professionals everywhere. 

Leveling up to E-Sourcing Mastery: A Collaborative Approach
Nick Heinzmann, Spend Matters, 11/8/2017
It's clear that many e-Sourcing providers have failed to adequately inform procurement teams of their tools' benefits.  Heinzmann suggests a number of options for encouraging adoption.  The key, he suggests, is to treat it like a game.  For example, providers could introduce modules that provide "selective access" to their e-Sourcing platform.  This would encourage users to continually employ the tool in hopes of earning access to more sophisticated features.  Consultants, too, can stagger their on-boarding procedures to ensure tools are introduced more effectively.

Jennifer Engel, one of Source One's Senior Procurement Analysts will attend and address the American Supply Association's Fall Dinner on Monday, November 13th.  This annual event has become a valued tradition for a reason.  Bringing together supply chain professionals from across the Midwest, it always features impassioned discussion and expert insights from industry leaders.

Engel has years of experience helping best-in-class organizations produce cost savings in their MRO and Facilities purchasing.  As a result, she possesses considerable insight into the motivations and considerations behind procurement decisions.  She'll call upon her history of successful initiatives to discuss recent developments in the ever-evolving field of e-Commerce.  In particular, she'll address how online transactions have affected supplier relationships and the potential threats posed by industry giants like Amazon.

Amazon Business, introduced in 2015, has quickly established itself as a rival to more traditional industrial distributors.  Though Amazon offers convenience in the form of its Prime delivery services, they have yet to develop a customer service apparatus to match that of their more established competitors.  Engel will take special care to discuss the value-adds that can help veteran firms not only stay competitive, but continue to outperform these emerging challengers.

Check out Source One's recent infographic 'Can Amazon Business Really Compete with MRO, IT, and Office Product Suppliers' for more information on how Amazon Business compares to similar services.

November 10, 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
Today's best-in-class Procurement groups are not merely tactical purchasing teams.  Instead, they serve as a valuable, strategic business unit that delivers value across entire organizations.  Leveraging 25 years of sourcing experience, Source One's consultants provide tips for maximizing Procurement's influence.  Obviously, there is no one-size-fits all approach to employing a Procurement team.  These tips, however, should provide a starting point for any business looking to align purchasing with their enterprise-specific goals.

Recent Blogs:

Managed Print Services Models Part 2: Actual Volumes or Allowance + Overages?
Torey Guingrich, Buyer's Meeting Point, 11/07/2017
Guingrich concludes her series on procuring copiers and printers by taking a closer look at maintenance structures.  First, she says, it's important to determine whether you'll pay for the actual volume of printing, or make payments based on your adherence to a predetermined allowance.  Companies that opt for the latter need to pay particular attention to their organization's overall print strategy.  They should also push suppliers to underline cost-savings opportunities during quaterly meetings. Without a detailed look at this spend area, it can prove especially challenging to optimize savings.

Recent Podcasts:

25 Years of Service from Source One
Take a look at how Source One's become an industry leader and helped drive the evolution of Procurement over the last 25 years. In this short video, you'll see how a small firm specializing in MRO and Telecom purchasing matured into a best-in-class service provider.  You'll also learn more about Procurement's decades-long shift from a mostly tactical function to a more nuanced, strategic business unit.

How Much of your Telecom Spend is Going Unreviewed?
Taxes, surcharges, and fees often account for as much as 30% of an organization's total Telecom spend.  Many companies lack and the time and tools necessary to effectively audit these charges.  Others are simply unaware that a little effort could mean huge cost savings and efficiency boosts.  In this short video, David Pastore takes a closer look at the potential benefit of assessing these charges.

Upcoming Events:

American Supply Association Fall Dinner: Oakbrook Terrace, IL
Senior Project Analyst Jennifer Engel will speak at the American Supply Association's annual fall dinner on Monday, November 13th.  Drawing from years of procurement experience, she'll discuss the emergence and ongoing evolution of e-commerce.  She'll pay particular attention to the ways it has affected relationships between buyers and suppliers.

Strategic sourcing can fit into any field imaginable. The value provided by this close alignment of organizational leadership with the supply chain can provide helpful direction that goes beyond the raw cost savings procurement and sourcing managers have been called on to deploy in the past. It's easy to see how this information-rich methodology can improve complex industries such as auto manufacturing, defined as they are by the many specialized parts that make up each finished product.
Furthermore, the importance of strategic sourcing is only likely to increase. As years go by and the auto industry expands the complexity of vehicles it produces, there are opportunities to add value.

The complex, autonomous future
As Manufacturing.net contributor Partha Mukherjee recently explained, there are changes coming to the way automakers source their components. These developments will be enforced by the mainstream introduction of autonomous vehicles, which differ from standard cars and trucks in a few critical ways. To truly create cars that can direct themselves, manufacturers will have to commit to new software and hardware alike. Developing these components and manufacturing them in the quantities necessary for mass-marketed vehicles is better suited to a new supply chain model.
Meaningful exchanges of technology and ideas between the developers of various components will be critical to the years ahead, according to Mukherjee. When organizations learn to collaborate instead of forming stratified supplier networks, they will be able to move the industry forward as a unit. The next few years will bring especially complex supply chain models: Companies will be producing the same kinds of cars they've always made, while they're also ramping up to full-scale manufacturing of advanced autonomous vehicles.
Creating links between today's automakers, parts manufacturers and the tech partners they'll need to adapt to the coming market could be a job for strategic sourcing teams. It's clear that the bonds needed to collaboratively develop and deploy new capabilities at scale have real value, which means that leaders can benefit from setting their sourcing departments to this task rather than merely having the teams work with contracts after the fact.

Every piece of cars will change over the next few years.Every piece of cars will change over the next few years.
Everything will change
As a demonstration of just how many components on vehicles will have to be redesigned in the years ahead, consider doors. WardsAuto spotlighted electronic latches in the process making a greater point about the challenges that come from turning limited-production automatic components into standard equipment. Driverless cars will require latches that react automatically when the vehicle is in the right location, even if there isn't a motorist in the traditional sense. This requirement will mean taking a part that has seen use in some niche cases and putting it on every car to roll off an assembly line.
The sensors involved in autonomous door latches must be able to tell when someone or something is going to crash into the vehicle. Furthermore, the components should be light and efficient to keep the cars from getting too heavy. Mike Hietbrink, global sales director and general manager of auto supplier Kiekert, told WardsAuto that despite the drastic nature of the oncoming changes, they aren't necessarily unprecedented. Door locks, as with many other auto components, have been evolving for decades.

This year, Source One celebrated 25 years as an industry leader in procurement and strategic sourcing.  We couldn't have made it nearly this far without a wealth of dedicated experts on our side.  Last week, we shared some sage advice from two members of our spend analysis team.  Here are more lessons from some of the people who've helped make Source One a best-in-class firm.

Vernon Griffin
Senior Consultant, Joined Source One in 2017 
Even a championship team can always use another star player. Vernon says he hopes to be Source One's Kevin Durant.  Boasting nearly two decades in procurement, he's already proven a winning addition to the Warriors of strategic sourcing.  Looking back on his experiences as both a consultant and coach, he offers the following tips for professionals looking to excel:

"Confidence is Key"
Always remind yourself that you're where you are for a reason.  On top of that, you know what you know, and need to feel empowered to present that knowledge.  Without personal confidence, you can't hope to instill confidence in a client.  "Imagine a doctor walking into the waiting room nervously,"  Vernon says, "I think you'd be looking for another doctor."  Thankfully, Source One is an environment that nurtures confidence in its hires to optimize their talent.  The best workplaces do.

"Don't Be Afraid to Fail"
Offering this advice, Vernon recalls the experience of writing his first RFP.  Elation and relief quickly gave way to dejection and disappointment when he realized how many important questions he'd forgotten to include.  Speaking to a reassuring manager turned things back around.  Vernon realized what a valuable moment this was.  His manager had experienced failure, so had the manager before him, and so on. Never forget that everyone you meet has gotten to where they are by trying and failing to get there more than once.

"Nothing Great Can be Accomplished Without Enthusiasm"
You'll never succeed unless you're truly committed to your work.  Part of that commitment is meeting even your least favorite aspects of the job with the same level of enthusiasm and energy you reserve for your favorites.   Passion can be contagious, but so can dispassion.  A single unenthusiastic, unmotivated, unambitious person can bring your entire team down.  Don't be that person.

"Keep at It"
"You can't be a great chef unless you cook," Vernon says, "in fact, you've gotta cook a lot."  In that sense, working in procurement and strategic sourcing is an awful lot like working in a kitchen. Source One's team of analysts and consultants are great at what they do because they've all 'cooked' extensively.  They've never settled for 'good enough.' Invest in honing your skills, put time in every day to learn and grow, and you'll go far.

"Be Flexible"
The people who achieve great things in procurement - in any field, for that matter - embrace change and uncertainty instead of fighting them. Few things ever turn out exactly the way you plan.  It is not enough, however, to simply expect the unexpected. You've got to mentally and physically prepare yourself to improvise.  Your ability to concoct creative solutions during unpredictable situations could make all the difference in successfully executing an initiative and distinguishing yourself as a capable professional.

Jennifer Ulrich
Associate Director, Joined Source One in 2009
Since joining Source One as a Project Analyst, Jen has provided the determination and know-how necessary to distinguish herself as a true asset.  Today, she tirelessly collaborates with internal resources, suppliers, and customers to streamline operations, reduce costs, and create value. Reflecting on her successes, Jenn presents the following advice:

"Find Your Team"
Even a star player performs better with a collaborative and supportive team on their side.  It's especially essential for young professionals to find an environment that promotes confidence and professional development. Surround yourself with the sort of people who'll push you to grow both personally and professionally.  You'll likely find these are the same people capable of driving growth for the organization.

"Remember that Everyone's Different"
Be careful, there's not a definite formula for interactions and collaborations.  Every co-worker and every client necessitates a specific approach.  What works with one person could easily alienate or offend another.  Finding the balance between professionalism and levity can be difficult enough, but it's important to do the extra work and determine the appropriate balance for each individual in your professional network.

"Find What Speaks to You"
Flexibility is important, but equally important is making efforts to find your own personal niche.  You'll do far better work and feel more excited to come to the office every day if you find a particular subject area that challenges and thrills you.  Better still, the enthusiasm you inject into the workplace could prove infectious.

"Have an Open Mind"
This principle, Jen suggests, is at the heart of Source One's continued success.  When looking to fill a certain position, we don't limit ourselves to applicants who eat, breath, and sleep one area of focus. Rather, we consider the myriad talents and experiences of a diverse pool of applicants to make the best decision. Treat your work the same way.  Avoid pigeonholing yourself.  You'll enjoy what you do more and perhaps offer the creative solutions your employer didn't know they needed.

"Don't Over-Commit" 
Don't spread yourself too thin in the name of flexibility.  Not only will it upset your work/life balance, but it tends to be both unnecessary and unhelpful.  Source One has enjoyed enough success that we no longer need to "oversell" ourselves.  It creates scope creep and contributes to situations in which we could end up working for free.  We don't want that, and neither should you.  Have enough respect for yourself and your employer to place the appropriate limits on customer service.

Nick Harasymczuk
Senior Project Analyst, Joined Source One in 2016
Nick has come a long way since his post-grad stint as an "unemployment statistic."  At Source One, he not only channels those early disappointments, but also his years as an outstanding supply chain and logistics professional to deliver the excellent service that's become his trademark and helped him acclimate to Source One's culture so quickly. Here are a few key takeaways Nick has learned over the years:

"You Have to Want It"
People who work hard, seek opportunity, and ask the right questions almost always manage to get recognized and rewarded.  Go into work every day eager to set yourself apart and get better. Don't let anyone get away with saying they wanted it more. You'll find that enthusiasm goes a long way in reaching your goals and achieving a sense of personal accomplishment.  Laziness and disinterest, however, never fail to cause trouble.

"Always Stay Calm"
No matter how hard you try, not all of your conversations are going to go well.  Unhappy clients and customers shouldn't be a regular occurrence, but even the best negotiators can't avoid them altogether.  Keeping your cool in a tense situation could mean retaining an account or other business relationship.  You can't lose sight of what's best for the business.  This is still true when somebody's yelling in your face.

"Leverage your Mistakes" 
Like everyone who has ever lived, you are going to experience failure.  You differentiate yourself, however, by treating each negative experience as an opportunity to learn.  There's no time for feeling discouraged, nor for wallowing in disappointment.  A constructive, level-headed, and determined attitude toward mistakes makes for a far more successful future.

"Slow Down to Go Faster"
Learning to work efficiently is both challenging and necessary.  To do so, you first have to learn how to take your time.  Quick results are not necessarily good results.  In fact, the exact opposite tends to be true.  You'll save yourself worlds of time in the future if you take a deep breath, assess the situation, and tackle a task the right way the first time.

"Listen to Understand, Not to Reply"
"This is often easier said than done," Nick admits.  That does not make it any less essential.  Listening and appearing to listen are two immensely different things.  Active listening is not only a sign of respect, but also helps drive efficiency and produce results while keeping you in the moment.  You'll slow yourself and your co-workers down if you're constantly asking questions you should already know the answer to.

This is just a small sampling of our team's collective wisdom. Contact Source One today and learn what lessons our strategic sourcing experts could teach you.

As a part of Source One’s continued 25th Anniversary celebration, today, our Beneath the Surface Employee Spotlight series commemorates none other than Leigh Merz! As a Source One veteran, Leigh has served Source One for more than a decade as a consultant focused in Telecomm SME.

Leigh’s role frequently has her highly involved with clients, discerning the complex nature of the Telecom industry – between deciphering complicated contracts, negotiating renewals and terms, conducting in-depth data collection, to baselining and going to market, Leigh has been at the forefront of serving small and medium businesses, using her years of experience to leverage opportunities and deliver value to clients. 

Outside the office, as a New Jersey native, Leigh is passionate about New York City and fashion. In her free time, she collects fun hats, memorizes film quotes, and loves to spend time with her daughter.   

To learn more about Leigh, check her out below in the Beneath the Surface Spotlight Series!

As more companies continue their quest to become world-class organizations and gain a competitive advantage in the marketplace, Procurement and Strategic Sourcing teams will be called upon to deliver more value than simply cost savings. In the latest free Whitepaper, 5 Pro Tips for Impactful Procurement, Source One dissects the most common challenges Procurement groups face on the road to best-in-class, and provides executable solutions for overcoming the one-size-fits-all approach to better align with enterprise-wide goals. 

Source One’s VP of Professional Services recounts how many clients turn to Source One as a Procurement services provider to help them identify and implement ways to optimize their tools, technology, metrics, processes, and people, both internally and externally. The whitepaper mirrors this ideology that with the right approach, Procurement organizations can deliver significant value, and truly become best-in-class.

Source One’s free whitepaper aims to help Procurement groups become true business partners as one of the few functions that influences new innovations into the organization. With the right people, technology, and metrics, Procurement will more effectively execute on transformative initiatives that enable ongoing success.

To learn more about Source One, visit our Procurement Transformation Advisory webpage.

To read the whitepaper, visit http://www.sourceoneinc.com/news-research/research-and-whitepapers/research-papers-overview/.
Just over one year ago; Source One, the procurement advisory and strategic sourcing consulting company, launched its client-facing spend analysis and strategic sourcing opportunity assessment platform, SpendConsultant.com.   

In the first year alone, the category management team at Source One conducted nearly two dozen spend analyses and cost reduction-focused opportunity assessments for their existing clients using the SpendConsultant.com platform.  In addition, the SpendConsultant platform also was engaged by several stand-alone customers.   All of the users and customers of the SpendConsultant platform have provided overwhelmingly positive feedback about the features, functionality, and rapid deployment capabilities of its spend analysis and opportunity assessments; and several new spend visibility tools have already been incorporated based on customer feedback.

In addition to building new new spend visibility functionality into SpendConsultant, Source One just announced a new informational website available at https://About.SpendConsultant.com   This new website helps prospective procurement professionals seeking spend analysis or strategic sourcing opportunity assessments with an easy to navigate and intuitive site that describes some of the functionality provided by the SpendConsultant platform and the procurement, sourcing, and data services that are available from the procurement subject matter experts at Source One.

Blockchain's role in procurement is just beginning

New tech trends can be easy to underestimate when they represent a real change from what has come before. The use of blockchain systems to transfer information in supply chain scenarios is one such development, as the concept first rose to prominence as the power behind cryptocurrencies such as bitcoin. Those currencies' early association with speculative investment and the dark web may have caused some procurement professionals to overlook blockchain as a business tool.

Today, with international supply chains becoming larger and more complex constantly, it's wise to take another look at the progress blockchain has made in becoming the basis for business data exchange. The ability to securely and quickly exchange data between partner organizations is valuable today, and any promising chance to seize this capability is worth pursuing.

"The blockchain will allow organizations to be sure their data is consistent."
Expert projection
Supply Chain Digital recently interviewed SAP's Paul Devlin for his thoughts on the next steps blockchain will take within the supply chain. He explained that the technology's disruptive potential comes from the increased governance and surety that is possible when transferring information through such a system. The general format of blockchain, which serves as a centralized transaction ledger, can allow organizations to be sure their data is consistent - when all partners in a transaction are using blockchain, their information matches by default.

Security and protection from miscommunication are two blockchain draws identified by Devlin's overview. Ensuring that shipments have been dispatched as planned and ensuring fraud hasn't occurred are two of the major practical uses of blockchain in the supply chain. Devlin explained that in the years ahead, there is room for companies to get more creative and ambitious with their implementation of blockchain.

Visibility and verified information, two of the benefits coming from blockchain technology, can be used for more than just ensuring fraud isn't occurring. Devlin added that employing the technology is a way to ensure supply chains are free of any kinds of unacceptable practices that companies have pledged to stamp out, from child labor to slavery.

Spreading beyond banking
Entrepreneur included blockchain usage on its list of up-and-coming trends that will affect the way business is done in 2018 and beyond. The implementation of these systems will have to move beyond finance to become truly influential, but the news source believes the technology is ready to make this jump. The fact that banks have found ways to use blockchain is a heartening sign that it can transcend its dark web associations and become a backbone technology for companies in need of quick transaction accounting.

In addition to procurement, Entrepreneur named cloud storage and legal matters as areas that could be disrupted by the increased use of blockchain. With the ability to check data from a centralized and neutral ledger, organizations operating in these spaces will be able to count on one another, quickly verifying that the facts they are working with are accurate and that all parties involved have access as needed. The combination of speed and security seems too good for these companies to pass up.
As part of the Communications and IT (CIT) team at Source One, I am continually looking to grow our team of sourcing analysts and consultants to support the growing IT and Telecom needs of our clients and prospects. Many of the resumes I’ve reviewed in the past are focused on service delivery, implementation support, technical or functional consulting, and coding/development experience – which is all well and good from an experience standpoint – but does not always translate into a strong candidate for a Procurement & Strategic Sourcing position.

As I’ve been working on a podcast about the convergence of IT and Procurement groups, I’ve thought through many similarities between why it may be difficult to get these groups to work together and why it may be difficult for Procurement teams to find experienced candidates within IT sourcing:

Evolution of IT and Procurement
As IT has traditionally been left to its own devices in terms of selecting vendors, services, and products, so too has the Procurement function developed independent of IT. Traditional Procurement has rarely established itself as a partner for IT and IT groups rarely have enough bandwidth to employ sourcing, category management, and supplier management practices, therefore there is no natural overlap that builds strong IT sourcing professionals. We end up with a group of Procurement practitioners that are inexperienced (and/or completely uninterested in IT), and a group of IT practitioners focused on service delivery without the skills to excel within Procurement-based management methodologies.

The Complexity Hurdle
For more technical categories, there tends to be a perception that Procurement adds little value because they can’t speak the same language, they don’t understand the technology, or they will simply focus on cutting costs without understanding the implications this may have on the service. As a truly supportive Procurement organization, it is important to work with stakeholders and suppliers to understand each category that Procurement manages – IT is no exception. If you have stayed away from IT categories because you don’t consider yourself a “technical” person or if you are leading a Procurement team that has avoided the IT category, some easy ways to start getting up-to-speed specific to your organization’s IT environment are to:
  • Review your organization’s IT spend from a GL level perspective, review current contracts in place with the larger suppliers, and start to understand the leading products/services offered by those companies
  • Understand the current major systems in place within the organization, e.g. knowing what ERP is in place is usually a good place to start, and start to understand the business processes supported by those systems
  • Look for credible industry news and blogs – understanding the supply base and how it changes and adapts is a great place to start building a foundation
  • Meet with IT stakeholders to understand their priorities, planned projects, and technology roadmap so that you can understand where the organization is today, along with where it plans to go

Fundamental Skills for a Strong IT Sourcing Professional
The reason that Source One has had such a long period of success across many categories (25 years and counting!), and especially within the CIT team, is that we know what skills translate into a successful Procurement & Strategic Sourcing consultant and have built a team with a strong foundation of skills to support our clients from an IT and Telecom perspective. When looking to expand the Procurement function with staff that is able to effectively serve the IT organization, look for individuals with:
  • Sourcing & Negotiations Experience: This may seem obvious, but those with sourcing and negotiation experience under their belt will have a smoother transition into doing so within the IT space, i.e. they may have a subject matter expertise (SME) learning curve to battle, but have experience to draw on from other sourcing events and supplier negotiations and be able to adapt and bolster those skills with the IT space.
  • Analytical Skills: Certainly necessary for many areas within the organization, but highly required when looking at complex invoice, service guide, licensing, and contracting structures.
  • Research/Aptitude for Learning: Those ready and willing to support the IT organization need to be able to keep up with the changes in the market and with the changes in the organization's priorities and concerns. Look for individuals who have shown that they can research complex areas and those who can demonstrate a clear desire to learn and grow within a category/specialty.
  • Strong Interpersonal Skills (but with technical aptitude): Those who do well within Procurement tend to have the ability to build strong relationships as well as have an analytical eye towards those relationships and the categories with which they work. Those who do well working with IT will likely have an added layer of technical aptitude to better understand the “language” of IT stakeholders and have a natural draw to learning more about the technical components of the category, allowing them to be more effective in understand their stakeholders, managing sourcing events, and negotiating with suppliers.

Ultimately, as Procurement organizations get better at increasing their scope and building partnerships within the organization as a whole, the need for Procurement professionals with IT subject matter expertise will only grow. If being in Procurement teaches nothing else, it is that we should expect to continually grow our category understanding and develop strong research and relationship-building skills to expand our SME and develop stronger relationships with stakeholders.

For those you out there that have true IT or Telecom sourcing experience and want to help other organizations bridge the Procurement/IT gap, visit http://www.sourceoneinc.com/contact/contact-source-one/career/ to learn more about joining our team of fellow unicorns!

ICYMIM: November 6, 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.

Why Do Law Firms Exclude Procurement Professionals from the Budgeting Process
Sydney Lazarus, Spend Matters, 11/2/2017
According to this year's HBR Consulting Law Firm Procurement Survey, only 12% of procurement professionals described themselves as "heavily involved" in the budgeting process.  In fact, the vast majority consider their role in the process "minimal." This is largely the result of perceived skill-gaps that may or may not actually exist. Procurement groups can increase their involvement by demonstrating their ability to boost efficiency, improve projections, and promote greater transparency.

Why Millennials are Tailor-Made for Procurement
Kris Lindahl, Corporate United, 10/31/2017
Estimates suggests that millennials will constitute half of America's workforce by 2020.  The negative stereotypes that surround young professionals are continually proven false by savvy and successful individuals.  Those born between 1980 and 1995 could prove especially valuable to procurement organizations thanks to their familiarity with emerging technologies and desire for more collaborative office environments.

Embedding Procurement Across the Enterprise
Tom Finn, Spend Matters, 10/31/2017
Leading procurement teams serve as change managers across their organizations.  To continue increasing their importance, these groups will need to physically embed themselves in all business functions. This means gradually moving away from a strict focus on project-to-project-based collaboration.  If they're successful, they should help their organizations more comprehensively and effectively measure their value.
Procurement's new place in business: Everywhere

When strategic sourcing takes hold, silos among clearly defined departmental roles come down. While it isn't always easy for companies to welcome new voices and insights into processes that have traditionally been isolated, it's clear why this period of growing pains is necessary to realize savings down the line.

With the improvement of data collection and analytics tools over the past few years, procurement and sourcing professionals have a window into important metrics. The rest of the company may benefit extensively from receiving insights discovered in the supply chain, both before contracts are signed and on an ongoing basis.

With this concept taking hold, it may soon be common to hear procurement input in departments that have never had it before.

Measuring procurement's real impact
Spend Matters recently highlighted some of the processes that will have to take place for procurement to become a true team effort. The sourcing departments of the near future will become embedded in other departments' plans, helping to create valuable strategies. This kind of involvement will help establish the kind of assistance procurement officials can provide beyond simply signing contracts for less money, the traditional duty assigned to these employees.

This new way of showing off the value of procurement will be necessary as that worth increases. Spend Matters pointed out that in the years ahead, procurement departments will be brought in for spend optimization outside of the basic supply contracts that have been their main responsibility. This calls for a lens that truly measures the impact of collaboration, rather than old-fashioned metrics used to determine what is working.

Adopting a serious new focus
As with all corporate departments, procurement is defined by the people who serve in the role. A recent Purchasing B2B discussion focused on the ways that new, strategic types of supply chain operations are affecting talent strategies. One of the participants, Hays' Sean Naidu, stated that facing a new world in which procurement is a strategic function rather than a cost facilitator has caused employers to become more dedicated in the way they staff their teams. They want individuals who can easily address the new priorities facing the sector.

Adding to the talk of embedding procurement within other departments, Canadian HR Solutions CEO Caroline Cole Power explained that procurement and general finance are now closely joined in their operations and objectives. Rather than two departments - one which handles the strategic budget and the other managing the contracts - the two teams will work together at all stages. This strategy makes sense, as they safeguard the same bottom line.

Leaving the pre-strategic era behind
Taking on strategic sourcing and procurement as a main mode means that the older, silo-based approach will have to be shelved. Companies that turn to their supply chain professionals for only transactional help, not tapping their strategic knowledge or potential analytics findings, may end up behind those that maximize the potential of the department.

While implementing changes in personnel expectations and relationships between departments may be a strain at first, the financial benefits are becoming clearer and harder to resist.

November 3, 2017

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

Recent Blogs:

Sanguine Strategic Sourcing 
Jennifer Ulrich, Sourcing Innovation, 10/31/2017
Over its 25 years, Source One has helped its clients purchase some strange things.  Surprisingly, sourcing human blood proved no spookier than procuring any other commodity.  Ulrich looks back on the experience to assess the differences between multi and single-source purchasing strategies. She concludes that, whatever the product or service, the same basic principles of effective sourcing always apply.

Managed Print Services Models Part 1: Lease vs. Buy?
Torey Guingrich, Buyer's Meeting Point, 10/31/2017
The ongoing shift toward digital technology has not eliminated the demand for printing services.  Sourcing these services typically comes down to assessing whether buying or leasing would better serve an organization's needs.  Key considerations for answering this question include: replacement rates, financing rates, and additional value-adds. Next week, Guingrich will take a closer look at service component structures.

A Word of Advice to the Young Procurement Professional 
Samantha Hoy, MRA Global Sourcing, 11/1/2017
Procurement and strategic sourcing has recently become an especially appealing industry for young professionals.  Drawing from her own experience, Hoy offers five pieces of advice for millennials looking to succeed in the industry.  She particularly emphasizes the importance of conducting thorough research and maintaining a consistent, professional tone in all communications.

New Podcasts:

25 Years of Service from Source One
Source One is the oldest firm around that focuses exclusively on strategic sourcing.  Take a closer look at how they've helped set themselves apart over the last 25 years with this short video.  You'll see how procurement evolved from a tactical function to a more nuanced, strategic one and how Source One's offerings have matured and expanded throughout the years.

How Much of your Telecom Spend is Going Unreviewed?
It's not a secret that taxes, surcharges, and fees are both vague and ubiquitous when it comes to telecom purchasing.  Though these charges often constitute as much as 30% of total spend, many procurement groups lack the time or resources to effectively audit them.  As a result, they miss out on potential savings and remain locked in inefficient vendor relationships.  Source One's David Pastore explains the potential benefit of more closely assessing these costs in this short video.

Upcoming Events:

American Supply Association Fall Dinner: Oakbrook Terrace, IL
Source One's Jennifer Engel will speak at the ASA's annual fall dinner on November 13th.  Calling upon her years of procurement experience, she'll discuss the ongoing evolution of e-commerce.  She'll pay special attention to its effect on relationships between buyers and vendors as well as the threat posed by giants like Amazon and Build.com.  

Last week I had the pleasure of attending ProcureCon Pharma. The two day event in Philadelphia presented an opportunity for Procurement professionals in the pharmaceutical industry to come together to gain insights from one another and network among their peers. This year’s agenda was focused primarily on transformation of the procurement organization and developing procurement strategy as well strategic supplier relationship management. The following were some of the key challenges pharmaceutical procurement organizations are facing today based on feedback from the conference this year.

One of most noted challenges facing the pharmaceutical procurement professional today is determining how to effectively bridge the gap between global strategy and local resources. Within the Pharma industry category management in many organizations is still incredibly siloed and regional. As companies in this space expand and contract the business is not focused on procurement, obviously they are focused on R&D and Marketing, and other elements of the business that will support their bigger corporate strategy. Procurement is the last thing on their minds, until they turn around and realize it is a function that has gone neglected and even at times non-existent. All of this benign neglect in the establishment of the function leads to locally driven strategies and processes that do not align with one another, let alone with the business.

Another area that procurement professionals indicated as a concern was aligning business unit strategies with category strategies. The business is focused on running the business, and procurement is focused on procurement – at least in an ideal scenario that is the case. Considering this ideal situation, a good example might be where Marketing is focused on the launch of a new product in the market. The Marketing team is NOT considering how the procurement team’s strategy aligns with their strategy to launch the brand. The effect – Marketing does not engage Procurement at the right time, or at all in some cases, to ensure they align on the category strategy. This creates a potential loss for Marketing to align with top suppliers, at competitive costs, with critical performance measures built into the contract – all based on procurement best practices that Marketing does not have the time or expertise to focus on.

A poll conducted at the conference asked participants what they saw as the largest barrier to positively impacting stakeholders’ business strategy. The results were interesting and a bit all over the board. 
  • 5% indicated barriers are a results of Procurement Leadership 
  • Senior Leadership in the business was highlighted by 14% of participants 
  • 17% of participants said it is the Stakeholders themselves 
  • The capabilities of the Procurement Organization were cited by 25% 
  • The highest number of those taking the poll at 37%, indicated barriers are based on Goal Alignment 

The topic of procurement strategy overall and how to align most effectively with the business was also noted by several presenters and attendees as a challenge. In Procurement we hear the phrase, “getting a seat at the table”, quite often when we talk about engaging with the business. Procurement needs to align its strategy with the broader corporate strategy and long term business plan. In order to do that we need to be a part of the discussions at the planning phase. Furthermore, it is not just about getting a seat at the table, but having the right seat (having an influential position), keeping that seat (demonstrating the value brought by Procurement), and maximizing the impact at the table (as a trusted advisor to the business).

While these challenges are not necessarily new, they are being highlighted because of the impact they are having on procurement organizations as they move towards evolving into higher performing functions within the business. The siloed nature of procurement in Pharma is being cited as a roadblock on the journey to becoming a best in class procurement function that can effectively serve the business, but this is certainly not unique to Pharma. Organizations across all industries are looking to Procurement Transformation to assess where their most prevalent gaps exist and developing actionable, long-term plans to fill those gaps. The pains of having a laggard procurement function are being felt throughout the business, based on this we are starting to hear from functions outside of procurement wanting to see change enacted and improvements made. By engaging in a transformational effort Procurement leadership is essentially telling its internal business partners that they resonate with them on the challenges they face, and demonstrate that it is taking corrective action to build a stronger support mechanism.

When Source One came on the scene in 1992, sourcing was a largely tactical function for most of our clients. The term 'procurement' was often seen as more or less synonymous with 'purchasing.' Our founders set a goal to introduce procurement departments to the considerable benefit of more strategic, proactive purchasing.

Even the greats start small.  We were no exception, offering contingency-based cost reduction services for MRO and Telecom purchasing.  Our success soon made it clear that the principles of strategic sourcing could produce savings across all indirect spend categories, optimize supply chain operations in various industries, and enable our clients to reach best-in-class agreements with vendors.

Today's leading procurement teams function as fully-integrated business units that make strategic impacts on their organizations' bottom lines.  They each owe something to our efforts over the last quarter century to shape and aim the future of procurement.  Countless firms have come and gone, but Source One and its imitators are standing stronger than ever. 

Check out this quick video to learn more about how we've set helped shape the last 25 years of strategic sourcing and set ourselves apart as an industry leader.