We were thus very happy to have Bill present on his experience with building a new procurement team from the ground up. He took us on his journey through the process, and offered us his lessons learned through it all. Bill began with what should happen on “Day 1” of this process, starting with an honest self-assessment that, to be frank, should never really end. He then talked about “minding the gap” between perceptions of what procurement does (“they’re only focused on price,” “they operate in a silo,” “they slow us down,” “they don’t know our business or our market,” “they make us bid on everything!“), versus what procurement should actually do. Bill then gave attendees some advice on how to change those perceptions to re-position procurement as a strategic value driver.

“It is incumbent upon the CPO to engage and educate, then collaborate and execute,” he said.

Bill and his nascent team then had to face their reality. At Carbonite, they had:

• No procurement tools at all
• A decentralized, local approach to sourcing and procurement
• No visibility into spend and, therefore, savings

Thus, Bill and his team found themselves having to transform the procurement organization from glorified purchasers to strategic business partners, with or without the requisite tools.

Based on his and his team’s experience, Bill then gave some advice on how to start the actual transformation process (assess, address, and execute). Bill advised to break the plan down into several manageable steps — addressing stakeholders, real opportunities, the process, capabilities, and constraints — while keeping the bigger picture in mind.

He advised us to not “boil the ocean,” which can be tempting for any leader who’s starting out on this journey. Instead, procurement leaders should focus on collaborating with stakeholders — from the CEO to the line-of-business — getting access to any and all pertinent data, and employing data analytics and management tools to wrangle and make sense of that data.

“These,” he said, “led to impactful results and a pathway for future investment.”

Bill then talked about transformation disruptors, such as lacking resources, technology solutions, having multiple stakeholders, mergers and acquisitions, executive turnover, reorganization, and economic factors. But perhaps the biggest challenge all procurement teams have is managing data. Common data challenges for him and his team were having no formal spend reporting, no procurement support tools (again), multiple data sources with different owners, the data lacking sufficient detail. Bill then talked about making a business case for data management and analysis tools, and reiterated the need to derive valuable insights from data.

Bill then gave us some initial results from his team’s growth and transformation initiative, which included generating savings of $1.1 million to data (11%), establishing a network of stakeholders (breaking down more internal walls and establishing a regularly collaborative cadence), and continuously driving savings and process efficiencies — something that never ends and truly should never end.

Bill then closed out by providing a list of lessons learned for the audience, which are:

• Understand that there’s immense value in data — you cannot chart a course if you do not know your current position, and you can cannot adjust what you cannot measure
• Value internal stakeholder relationships — break down silos, reach across the aisle, seek first to understand and then be understood
• Continuously nurture your relationships — “a greenfield must be watered.” Once you’ve established relationships, work to communicate and collaborate and keep them aligned to your team’s mission
• Building brand is key to long-term success — in order to be known as strategic value drivers, you have to establish your team as strategic value drivers, and show up every day to prove it

We are so grateful for Bill for sharing his and his team’s experiences, and we wish them the best as they continue to grow the procurement function at Carbonite.

The ABCs of New Procurement Tech

AI: On AI, I gave some backstory on the term, and sought to clarify what AI is and what it isn’t, including some popular definitions and distinctions – like how there’s Narrow AI (like machine learning, natural language processing, and robotic process automation), and Artificial General Intelligence (like deep learning, neural networks, and fully-autonomous, self-learning systems). I then gave some examples of procurement use cases for AI – like guided buying and predictive purchasing.

Blockchain: On Blockchain, I again gave some historical context (it was invented only a decade ago), and really tried to explain what Blockchain is – a distributed, decentralized database that acts as a ledger for all transactions, changes, and movement. Everything you do on a blockchain is permanent, cannot be changed, and is open to others to see (especially on “open” blockchains). So it drives great transparency into transactions – especially those across extended supply chains. On that note I shared a couple of use cases for Blockchain, such as supply chain track and trace, and smart contracts that are written into the Blocchain’s code that automatically execute and fulfill.

Connected Devices: On Connected Devices, or what we also call the Internet of Things, I talked about how advances in sensors, processors, and transmitters enable them to be embedded within everyday items, machines, and products – like thermostats, utility poles, gas/electric meters, commercial equipment, and so on. This enables the automatic transmission of critical business intelligence point-to-point, or machine-to-machine. They’ve long-been used by manufacturing, and use cases for procurement have started to emerge, like helping procurement teams get ahead of managing maintenance, repair, and operational services (MRO) spend, and syncing with Blockchain digital ledgers to link the physical and digital supply chains to enhance track-and-trace.

Summary

Artificial intelligence for procurement has already started to become a reality, even if for now we’re still applying “narrow” AI to the discipline. Blockchain use cases for procurement, such as supply chain track and trace, smart contracts, and now supply chain financing and payment reconciliation, continue to be modeled, explored, and piloted, although the technology has some issues of scale to work out, like high energy consumption and effective aggregation of disaggregated commodities (like bulk coffee).

For their part, connected devices / IoT continue to collect and transmit vital operational intelligence to procurement, manufacturing, and services, allowing these departments to get ahead of MRO and budget accordingly. If industry can iron out some integration and deployment issues, IoT-integrated Blockchain can be the missing link for linking the physical and digital supply chains and enhancing track-and-trace.

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How Far Can We Apply Industry 4.0 to Procurement?

Anyway, the Ardent team is once again reflecting on the event in a series of articles here on CPO Rising. Today’s article is the first installment — three primary takeaways from CPO Rising 2019. So if you missed the event and want to catch up, this is for you. But if you were there and want to quickly refresh, we’ve got your back, too.

Three Takeaways

One — The Face of Procurement is Changing. The crowd at CPO Rising 2019 was more diverse than in recent years, and that’s something for the procurement industry (and us) to both acknowledge and celebrate. Ardent welcomed a beautiful array of men and women from all walks of life — Baby Boomers, Gen-Xers, and Millennials; people from all over the country and all over the world; and professionals from other industries and verticals, whose roles are touched by procurement and supply chain. Speakers, panelists, and roundtable hosts brought their authentic selves to the event, and looked out at an audience that not only looked like them, but also represented them and their challenges and opportunities to make an impact in supply management today.

Two — The Paths to Procurement are Winding Still. Speaking of diverse backgrounds, I was thrilled to see two friends in the audience who typify the ways in which professionals find their way to procurement (names and employers are being withheld to protect the innocent).

• One, a college friend who has spent nearly two decades climbing the ranks in procurement. A social sciences major, she decided instead to pursue a career in business, earning her MBA and progressing from vendor management, to category management, to sourcing, to ultimately procurement. As a senior manager, she is one procurement pro who is continuing to rise.
• Another, a dear friend who I’ve known for nearly a quarter century, returned to Boston after working abroad for more than a decade. As a former country Chief Information Officer for a major insurance company, the breadth and depth of experience he brought to this conference — as a collaborator of procurement, as someone who has vetted and implemented procurement technologies — was so unique. Although he was not a procurement pro, per se, his exposure to and experience with enterprise procurement teams offered delegates an opportunity to share perspectives with one of procurement’s most important stakeholders.

Three — Procurement Runs in the Family. 2019 saw the second consecutive parent-sibling duo at the conference. Last year, we had Meghan Truchan, VP and head of procurement at Bain Capital, in attendance. She is a third-generation procurement leader and a rising star in her own right. This year, we had Mary Kachinsky, CPSM, CPM, and VP of Strategic Sourcing at Kaleido Biosciences, and daughter, Amanda Kachinsky, senior manager of global sourcing at blue bird bio, not only in attendance, but also delivering a keynote presentation and sitting on a panel discussion, respectively.

While we are our own persons — few of us are still “directed” or “told” to pursue this or that career — we are also the products of our environments. Many of us grew up watching our parents climb the proverbial corporate ladder and hearing them tell us what was so special about each rung. We look up to our parents, even as we see them occasionally struggle to reach that next rung. We admire them even more for the struggle. So then it is no surprise that some of us follow in our parents’ literal and figurative footsteps, up that procurement ladder, rising towards the coveted CPO title.

Final Thoughts

I’ve written in past reflective articles about how the event amounts to months of prep work, late nights, and early mornings, only to come and go in a whirlwind of keynotes, breakouts, panels, and roundtables. That was as true this year as in year’s past. But every event is unique. This year’s event was more diverse, more representative of procurement pros and stakeholders, and in a literal sense, more familiar than in past events. Indeed, it does keep getting better.

P.S. I want to personally invite you to a new webinar, the Voice of the CPO Rising 2019 Summit, on November 14th at 2 PM ET, where the Ardent team will highlight the key speaker presentations and discussions that took place during the event.

David Kern

Andrew Bartolini: How did you get into procurement and how did you move up into your current position today?

David Kern: I fell into procurement when I worked at Staples. I was at a point in my career where I had to decide if I wanted to work in public service (police and or fire department), or if I wanted to stay in corporate America.  While working in Staples internal audit, I had an opportunity to take on an audit of our transportation division; and at the same time I was on a path to explore becoming a police officer. I quickly found in my audit that a transportation division at Staples really needed someone to manage the transportation portfolio for its final-mile delivery, which at the time was roughly thirty million dollars in annual spend. Staples leadership offered me this unique advancement position but I turned it down and chose to stay on the path of exploring becoming a police officer.

After successfully completing the Police Academy, I was once again approached and re-offered by Staples to take over the final-mile delivery supplier oversight function.  Feeling as though I had accomplished a personal goal and could remain semi-active in helping the local community; I accepted the Staples offer and continued to volunteer as a Police officer.  Over the next nine years, I led efforts to help grow the transportation portfolio to a half a billion dollars.  It was during that course of time that I was able to recognize my own personal talents in driving value – whether it be through collaboration with vendors, or through identifying synergies to yield better service, expense, and overall healthiness for the space that I was overseeing.

AB: That’s awesome. So, it sounds like even though you were within a fairly well-established business, you really got great experience in managing a high growth business?

DK: In the span of nine years, I was able to see something later commonly known as transformation; and not even really see it – I actually lived in the middle of it.   Staples has a well-defined North American final-mile delivery footprint; as that business started to grow within North America as one of the few next-day service providers, it was critical they continuously build out network capabilities.  This included adding fleets and couriers on top of increasing the reliance on UPS/FedEx/USPS; along with other non-traditional modes of transportation. During that course of time, it was important to focus not only on domestic transportation growth, but expand into Canada and other international locations.

When you take all that explosive growth and scale into consideration, and you then layer in the purchase of Corporate Express, a large next day office supply corporate retailer, my role within transportation and transformation became instrumental overnight.  I found my passion as a change agent focused on transforming different business operations and value add services.  My mission was clear, to focus on driving a common service offering that provided the highest level of service at the lowest sustainable price. So when I hear about transformation as the new buzz word in today’s boardrooms, I quickly smile as I had an opportunity to experience transformation very early in my career – and for that I am extremely grateful.

AB: You’ve hit upon two great things: dealing with a fast-growth environment and merging organizations.  What are some of the takeaways you have in bringing two organizations together and managing that change?

DK: When two companies merge, sometimes the assumption is that the acquired company doesn’t have the best processes; and so the acquirer may assume that what they’re doing is best in class.  Taking this mindset can be a real disadvantage. Rather, taking time to seek to understand and brainstorm as a collective group, open and honestly, will often find that you both have solid best practices and process.  It’s a matter of augmentation and tweaking to get to the best process for the combined entity going forward.

In addition to just seeking common ground and best way forward, it is critical that you approach opportunities by “looking underneath the hood with a trust-but-verify” mindset.  This applies daily to procurement as we are constantly being pitched from a variety of sales folks. Information provided needs to be validated for accuracy of what is being sold and to confirm what is being purchased solves the business requirements.   So when you start to look at bringing operations of like-minded intent and structure, you’ve got to make sure that you don’t overlook what you think or what you’re accustomed to thinking is the best process – everything we touch has opportunity for improvement.

AB: So talk about your current role and what’s happening at TripAdvisor.

DK: Awesome stuff; I started at TripAdvisor just under four years ago. It was a new role – they didn’t have a procurement team. It’s been an amazing journey, both professionally and personally, being part of such a great organization. What I probably learned the most is that companies like Trip have highly talented people who are willing to just roll up their sleeves and help do whatever they can whenever they can.  It’s just fascinating to see how quickly things evolve, and how every day there’s something new to learn. Any day you’re not learning doesn’t put you behind, but it sure makes you have to catch up the next couple of days because the world is moving fast. There’s so much to learn and plenty ways to grow professionally – I truly feel very lucky to be part of the TripAdvisor team!

AB: As you look at the industry and the profession going forward, what are some of the things you see that are emerging and interesting, or some of the things that get you excited about working in the profession?

DK:  I’m excited about the profession because it seems like it’s more of a new / growth area than an established defined function.  What I mean by that is when you hear the word “procurement,” not everyone knows what it means; and for those that think they know I often get asked “what does TripAdvisor procure?” In my opinion, Procurement is simply explained as a core group of skills and experiences for which someone leverages and represent opportunities as an agent working on your behalf.  The core focus is to secure an outcome that provide sustainable value for shareholders and or customers.

Independent of the basic efforts outlined above, Procurement is becoming not only a trusted partner but gaining valuable insights into operational aspects that not everyone within an organization can see or synergizes.  Procurement professionals have a huge opportunity to acquire operational exposure and insights.  Providing such insights to other business units that may not know internal opportunities/solutions exist can be ten times more valuable than saving a few points on a contract.  I’m super excited about what procurement is becoming and will be in the future – value creation through process improvement, operational enhancements, and supplier value creation; combined driving meaningful shareholder and customer value.

AB: As an industry leader, what is some advice you can give to other professionals.

DK: One thing I love most about Trip Advisor is that we have a great culture, and a core focus on “acting like an owner.”   This allows my team to talk with people about how procurement can drive variety of benefits and solutions.  We see the operational enhancements that people don’t necessarily know exist because they either don’t know who to talk to, internally, or they don’t necessarily know where to start. Procurement can be that gateway into some really impactful things that will be meaningful to all folks – customers, shareholders, and employees.

AB: Thank you so much David!

DK: My pleasure, Andrew. I’m passionate for this space and I appreciate the opportunity to help others find Procurement and grow within their personal journey.

Post Script: Catch David’s keynote presentation, “GIG, Liquid, Agile Employee Procurement Opportunities,” on Day 1 at CPO Rising 2019 — next week!

Bill Browning

Matthew York: Tell us a bit about your background, as in your education and early procurement career.

Bill Browning: I have a Bachelor’s degree in biology from the University of California, San Diego, a Master’s degree in Education, and an M.B.A. from Boston University. After I moved to Boston I eventually I got into coaching (I played baseball in college), which was my first foray into “corporate” or structured buying. When I was an assistant softball coach at BU, I was in charge of our budget, travel arrangements, and buying our equipment. My job was to ensure that we stuck to a strict budget so that our dollars would last as long as possible. So, that was my first exposure to buying and procurement – not even knowing what procurement was. I then moved to the university’s budget office where I helped the different schools and colleges at BU manage their budgets. I also went back to school to get my MBA.

Right after graduating business school, I became the capital budget analyst at Massachusetts General Hospital where I was in charge of all capital expenditures. And that’s when the procurement wheel started to turn for me. When capital budget requests came through, like when MGH started building the Yawkey ambulatory center, I had to ask questions, like “Why this equipment? When do you need it by? Who else did you check with? Does this have to come from this vendor? How can we make this budget work for you in the long run?” So, that’s where procurement really solidified for me.

Shortly after finishing my MBA, I got into consulting with a company whose whole focus was public-sector procurement (state and municipal government). That was really where I understood what procurement is and what it does, and how it can impact things; and, that it’s a formal career path that I could follow and figure out where I wanted to go.

Over the past 15 years, I’ve been on the consulting, corporate, and analyst sides, where I learned the operational aspect of procurement, how technology enables procurement, and what comprises a Best-in-Class team. It’s fascinated me as I’ve seen different stages of it throughout my career. It’s also gotten me to where I am now: trying to build out a procurement organization at Carbonite, trying to figure out what the scope is and what my company needs (particularly as we organically grow and acquire other companies), and understand what it means to have a procurement organization.

MY: Tell us what’s going on in your world today – what is your team focused on?

BB: We’re focused on building out the procurement team here at Carbonite. As we continue to grow and acquire other companies, like Webroot, it presents challenges in terms of what the other company does, especially considering that the procurement organization is still just me. We’re still able to manage the spend that we have, but it’s not without its challenges. So in the next six-to-twelve months, we’ll be focused on building out the procurement team and infrastructure, assessing what procurement means for Carbonite, and reassessing what we want it to mean (especially with the last acquisition wherein we doubled in size). So we’re still addressing some basic questions, like “How centralized do we want it to be? Do we want it to be center-led and give more autonomy to the stakeholders?” We’re evaluating our financial ERP options, and one of those considerations is going to have to be procurement.

MY: What are some other challenges?

BB: I think the biggest challenge, overall, is change management. Carbonite is still a fairly small, entrepreneurial company, even after the acquisition. Our revenues are in the $500 million range; we’re not a large company by any means, but we’re still looking at $200 million in spend at that level. It’s not unmanageable with a small or very streamlined team. But as a result of the previous acquisitions, and only being a public company now for five years, we’re still trying to get into the public stakeholder type of model where we really need to figure out how to tighten things up.

Change management is probably my first, second, and third challenge in terms of getting different stakeholders on board. Everyone’s on board to varying degrees: some bring me further upstream in terms of working the process and strategies, but there are others where I don’t get full visibility until the contract is submitted. That’s the biggest hurdle – figuring out how to make that change, how to get people within the organization to change, and how to do it myself. Another big challenge is figuring out the optimal time to expand a team or even just to create one.

MY: All that said, what are some of the opportunities for the profession moving forward?

BB: I think there are a lot. Procurement is becoming more and more of a profession every year. You see companies adding procurement functions, or trying to expand the scope of their functions. That’s always good to see. I think, especially in the last few years, there’s been an explosion of tools that are sometimes embedded in, or sometimes supplemental to the traditional spend analytics, sourcing, contract management tools – the ways that software companies are trying to leverage artificial intelligence to hone in on better data, or provide fresh viewpoints of the data (especially on things like diversity spend, tail spend, etc.). I think pushing the boundaries is going to be great going forward, but it all comes back to it being a data-focused function. Without good data, you won’t be able to produce good results; or if you are, it’ll take a lot more heavy lifting to get there.

Within procurement organizations, I think there’s more of a focus on developing and retaining talent, and when necessary, letting that talent leave for other functions, because they have good analytic capabilities or they’re good leaders. So, I think that’s a good sign as well for the procurement profession.

MY: What advice would you give other procurement leaders that are starting to go through the building or expansion process with their teams?

BB: One of the big things is to come in with a plan and a few ways to prove out your plan. This can be difficult from a procurement perspective when you’re asked to be streamlined; and you’re asked to bring savings into the door that you can justify reinvesting (e.g., by bringing in x-more people, you can add can x-savings or exponential value). But I think you have to look at all different aspects that could drive efficiencies, like card programs and different types of management programs, and be willing to dig in and figure out what might make sense.

I also think that soft skills are really critical, like being able to communicate. If you have the resources, figure out some of the organization’s priorities, try to embed or align yourselves with those groups (e.g., HR, IT, Marketing). Dig in, understand their business, and be able to have that back and forth so that you can become their trusted advisor or the person/group that is looked to when it comes to a procurement matters. This could be sourcing, contracts, leading a negotiation, or even sitting in the background and helping to form the strategy for that negotiation. There are all kinds of service models, but it starts with communication and trying to understand the business of your partners – not just your company’s business, but your partners’ specific business needs.

MY: Thanks so much, Bill – this has been great. Looking forward to seeing you in October at CPO Rising 2019.

BB: Likewise, Matt.

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Andrew Bartolini: What drew you to procurement? Or, if you weren’t drawn to it, how did you end up in procurement?

Greg Tennyson: Interesting story. I landed in procurement purely by accident. My first role after graduating was in sales. What drew me to sales was solutioning with the customer, the interactions. What I realized however was selling a product with minimal upside into a difficult market segment was not going to be profitable. I pivoted and landed in an administrative role where contracts and procurement were an element of the role. I realized that I thoroughly enjoyed procurement and wanted more. I went seeking opportunities that were more focused on procurement and contracts management. My first procurement gig was at Lawrence-Livermore Lab (an R&D center founded by Edward Teller, who was part of the Manhattan Project). I gained extensive experience at Lawrence-Livermore Lab. I went back and got my Master of Science in Management with an emphasis on procurement contracts. I got credentialed by ISM and NCMA and have been thriving in the space ever since. I saw procurement as a means to get into a leadership role. So, again, it’s more by accident than by design that I found myself in procurement, and I have thoroughly enjoyed it for the past 30 years.

AB: What are some of the large changes that have occurred since the early 1980s?

GT: Technology has fundamentally changed the role of procurement enabling it to become a trusted advisor to the business. When I was at Oracle in the late 90s I witnessed the advent of self-service purchasing. Oracle introduced self-service purchasing to compete with the likes of SAP, Ariba, Commerce One, et al. Other events like Enron, Sarbanes-Oxley and more corporate oversight would change how company’s bought goods and services. Difficult economic factors would drive procurement teams to take a more holistic view of what was being bought, how and the resultant money left on the table. Procurement teams were taking disaggregated data and trying to make sense of it to strengthen their negotiation position. Fast forward and Salesforce.com drove everyone to the Cloud. Now your data is managed by your provider and it can be enriched, amalgamated with more thoughtful analytics provided. Compound that with what is happening now with AI, RPA, machine learning, block chain, etc. and procurement couldn’t be better positioned to be that trusted – strategic – advisor to the business.

It’s interesting though you have had this titanic shift in technology, but the procurement function’s skillset has been lagging behind. I’ve seen, just in the last five-to-ten years, the skillsets catching up. A greater focus on soft skills and ironically solution selling into the business are bridging the gap. Today depending on the maturation of the procurement team and business needs of the company procurement has morphed into an advisory role. We’re more consultative than we were 10 years ago. My point is that the technology led the way, and the skillsets are finally starting to catch up.

AB: Technology has been a big part of your career – both on the usage side, but also in your work with some pretty progressive companies. You seem to have been an early adopter of solutions from some newer companies. Is that a mindset of looking for innovation, or does that have something to do with the companies being nearby, and you getting comfortable with them? I’m thinking about Coupa and Scout RFP. What has drawn you to those companies versus, say, some of the more established companies?

GT: It’s interesting, Andrew. The Interest kind of spawned, grew, and flourished when I was at Oracle. Oracle was a relational database provider back in the 1990s. It was dabbling in the application space, and really started to develop a suite of products around source-to-settle. The leadership team there sought out insights and points of view on how to evolve the product. I guess that was my first real experience sitting on an advisory board and contributing to a product roadmap. So, it started there, and that’s what created this interest that has allowed me to partner with Coupa. When I was at Salesforce, we were really the first major brand/logo to go with Coupa, and it was because we had the opportunity to influence/persuade how they evolved the product (and we were driving a lot of their product innovation at Coupa at the time). And, similar to Scout, right? I look at Scout’s product offering, and I’d like to think that the interactions that we’ve had with Scout’s leadership led to their intake and pipeline, and to some of the capability of the RFX tool and its contracts-lite functionality.

I’ve always been open to new opportunities to invest in companies and influence their product development. When I look at technology companies that are in that early-stage startup-mode, I really look at their leadership. If there’s a good chemistry and a similar mindset, I’ll take the leap of faith and invest. I’ll look at the product and ask, “How can we influence it? And does it meet our needs?” I’ve done that with Coupa, Scout, and CXO Nexus; with Suplari (a spend analytics provider); and with Fairmarkit (whose solutions manage tail spend). I mean, there are quite a few companies out there like these. I enjoy that entrepreneurial approach to evolving a solution and solving a problem. So, it’s been a lot of fun.

AB: Given your long-standing career in procurement (30-plus years), when you look out over the next decade, what are some things that are emerging or starting to take hold?

GT: Let’s continue the thought on technology. The procurement professional, based on my vision of the technology and where the skillset is going, will no longer be involved in conducting or managing transactions. They will no longer conduct analysis, run sourcing events, or even form sourcing-wave strategies. They are going to be purely focused on soft skills, and on being advisors to the business. The business driven by technology will have sourcing opportunities presented to them, and procurement will partner with the business to decide if they want to run a sourcing event that will already be queued up based on a very deep spend analysis that is tied to a sourcing event.

Imagine walking into your office, opening your computer and having a conversation with it on running a sourcing event. Maybe it’s some type of Alexa that asks, “Greg, do you want to run a sourcing event today?” Then it lays out the economics of the event and the options to consider based on current trends in the industry. Think back to the day of Mattel and the red paint coming out of China. They didn’t have the supplier intelligence to say, “Don’t use this supplier because of trends in the marketplace, or their social aspects (like sustainability, quality, etc.). In the future, you’ll get that aggregated view of the opportunity just queued up for you. And you’ll have that exchange with the computer wherein you’ll say, “Yes, run the sourcing event – what do you suggest we run it for?” It’ll just fire it off and you’ll get the results. We’ll use more decision-based systems than transaction-based systems. That’s where I think procurement is going.

AB: Yeah, that’s great. I always say, “There’s no better time to be working in procurement than today,” just with the potential impact on the profession in general. Thanks for your time today.

GT: It’s my pleasure, Andrew – looking forward to seeing you in October!

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Like so many other Chief Procurement Officers (CPOs), Steve Listzwan, the senior vice president and head of procurement at Shire Pharmaceuticals (and the recipient of CPO Rising’s 2017 Leadership/CPO of the Year award), began his career outside of the profession. He earned a BS in Civil Engineering from Union College and for the first five years of his career, Steve designed environmental engineering projects for O’Brien & Gere Engineers in Syracuse, NY. Not long after beginning his career, Steve enrolled in a part-time MBA program at nearby Syracuse University. In June 1995, with his new degree in hand, Steve took a temporary assignment within the procurement office at Merck & Co., Inc., one of his firm’s clients, covering for a maternity leave. After six months, he was offered a permanent position within the Merck procurement organization, the first of many over a six and a half year period that would have him relocate to Italy and Ireland. He capped his tenure there as a Manager in Global Procurement responsible for implementing Merck’s first electronic P2P platform.

“Merck was great for my development as a young procurement professional,” he said. “I was given great opportunities, had the luxury of a great mentor, and learned the fundamentals of the procurement profession.”

In September 2001, Steve joined Cambridge, MA-based Biogen when it was a much smaller company than it is today (at the time, it was spending only about $400 million a year and has since grown significantly). He reported into the controller of the company and established Biogen’s first strategic sourcing team. In moving from Merck to Biogen, Steve went from pharma to biotech at a time when the two industries were still largely separate (now they are often intertwined). After more than seven years, Steve left Biogen and became the Director of Global Strategic Sourcing at MedImmune (the biologics division of Astra Zeneca), headquartered in Gaithersburg, MD. In 2012, he was recruited out of MedImmune to become the Global Head of Procurement (CPO) for Novartis Vaccines, a position he’d hold until the company was purchased by GSK in 2015.

Coming Home to Shire

Steve joined Shire in April of 2015 as vice president and head of procurement (CPO). “Being at Shire has been especially interesting given that it is such an acquisitive company,” he said, adding that the company has purchased four companies since 2015. When Shire acquired Baxalta in the summer of 2016, Shire’s annual spend doubled from $3 billion to $6 billion. Steve and his team “used that opportunity to accelerate the transformation of Shire Procurement” by finding synergies between the two companies (for example, 30-40% of the total integration synergies were delivered by procurement). Steve and his team merged and reorganized the two procurement teams and “used that opportunity to create a truly world-class procurement function and deliver substantial value back to the business.”

Earlier this year, Steve and his team learned that Takeda was interested in purchasing Shire, and as a result, they are in the process of preparing for that acquisition, which they expect to close in the first half of 2019. A majority of the team is focused on continuing to drive the procurement function and delivering results for the company.  Steve has a small team that works with a team from Takeda to map out the future of the Shire-Takeda procurement operation – how they will merge, what kind of spend opportunities they intend to pursue, and standing up “clean teams” resourced by independent third parties to look for those opportunities.

The Procurement Game has Changed (and that’s a good thing!)

When Steve began his career in procurement, “it was thought of in a certain way as a transactional support function.” It’s gone from managing individual deals to managing categories and delivering total company value. For Steve, “the biggest transition has been procurement being looked at as a strategic partner by the business. That’s something that needs to be earned by procurement.” Procurement had to work hard to elevate itself to that level. Steve’s team at Shire has been very deliberate about creating a standard operating model for how the whole procurement team functions around the globe. There are four fundamental pieces:

1. Stakeholder Engagement – Formal mapping and regular scheduled interactions with key stakeholders around the company to understand spend, needs and progress initiatives that deliver value. “Stakeholder engagement is not always a top skill of the average procurement professional” Steve said, “but it’s very important to build that skill to be successful in our model.”
2. Category Management – “Procurement is the only group that has the ability to see spend across the whole company,” to see market trends, and find ways to optimize spend.  Developing multi-year global category strategies in partnership with stakeholders transforms the relationship between the procurement function and stakeholders from tactical to truly value added and strategic.
3. Sourcing Projects – Using standard processes, tools, and procurement team skills to implement strategic initiatives that are generated by the Category Management process. “The main process has stayed relatively the same over the years but the tools and techniques have advanced significantly,” Steve said.
4. Supplier Management – Partnering with stakeholders and preferred suppliers to get the most out of each relationship.

A Sneak Preview of Steve’s Main-Stage Presentation

At CPO Rising 2018, Steve will deliver a presentation entitled, “Faster, Higher, Stronger: Building the Data-Driven Procurement Athlete.” As an avid cyclist, Steve will draw parallels between athletic competition and the procurement function – how technological innovations in both spheres are used to help individual performers, teams, and their managers improve their performances and realize their potential. As Steve will illustrate, given the use of modern procurement technology platforms, there is a significant amount of performance data available to procurement professionals and their leaders. The challenge for CPOs and procurement teams, as it is for coaches and cycling teams, is to collect and leverage that data in real time in order to measure performance, create custom improvement programs, and ultimately improve performance.  Steve will demonstrate that, just as there has been significant technological innovation in sports and cycling, in particular, the procurement space abounds with innovation and robust business tools able to collect and analyze data in real-time and provide almost instantaneous visibility and control. He will then illustrate how Shire’s procurement teams use these innovations to measure and ultimately enhance their performance as individuals and as a total function.

Want to hear Steve speak at CPO Rising 2018? Register by clicking here and take advantage of standard pricing while it still lasts (expires after 11:59 PM on October 16). 

BOSTON, MA (PRWEB) July 27, 2017

The advances of the procurement profession and the rise of the Chief Procurement Officer (CPO) are hallmark business achievements of the early 21st Century. Despite the rise of the CPO, however, many procurement organizations struggle to meet the demands of the larger organization.

“We are excited to announce our CPO Rising 2017 event this November in Boston to help CPOs better understand what they can do increase their relevance, engagement, and results,” said Andrew Bartolini, Ardent Partners’ Chief Research Officer. “The accelerating speed and complexity of business has placed procurement and its leader, the Chief Procurement Officer, in the crucible of business operations, relationships, and results. Procurement departments, their operations, culture, and systems, the way in which they transform knowledge into strategies and those strategies into performance, must all keep pace.”

This exclusive event — sponsored by SAP-Fieldglass, Coupa, ZeroChaos, EC Sourcing, Aquiire, Ivalua, and Determine — promises valuable networking opportunities and the interactive exchange of ideas for Chief Procurement Officers and other business executives. Attendees can expect to return home with a collection of new and innovative ideas and strategies that will help improve the performance of their organizations and increase the impact that their teams will have on business results.

From keynote presentations to CPO panel discussions, case studies, and breakout sessions, the unparalleled speaker lineup will highlight procurement-led innovation within the enterprise and across the supply chain. Register for the CPO Rising 2017 Summit today at https://events.cporising.com. If you would like to read the Delegate Prospectus please send an inquiry to sales@ardentpartners.com

Event Details:
CPO Rising 2017 Summit
November 8 & 9
The Harvard Club
374 Commonwealth Avenue
Boston, MA 02215
Register today at https://events.cporising.com

About Ardent Partners

Founded in 2010, Ardent Partners is a research and advisory firm focused on defining and advancing the procurement and supply management strategies, processes, and technologies that drive business value and accelerate organizational transformation within the enterprise. Ardent Partners delivers “Research with Results.” To learn more about the company, visit http://ardentpartners.com/ or call us at 617.752.1728.