Episode 27 – Quarterly Podcast Review
In this episode of ProcurementZen I provide a brief overview of various podcast episodes that can benefit both negotiators and buyers stemming from the Procurement Talk with David Byrne, Art of Procurement podcast with Philip Ideson, and Sourcing Industry Landscape with Dawn Tiura.
Hello my dear negotiators. In this episode we're starting something new. I listen a lot to other podcasts on a regular basis and I want to share the best episodes from each quarter with you so you don't have to dig through endless episodes but rather get the best stuff served on a silver plate. These podcasts are not only limited to other procurement podcasts, although they do occur as well. We will also have a joint look at sales podcasts and how we can apply their wisdom. Sales? Yes, sales. Sales and procurement from my point of view are both negotiating functions and they are both sides from the same medal, so to say. Not only do you learn the tricks of the trade, knowing them when you experience them is an advantage in itself. But you can also translate these tactics into procurement tactics as well, but we will also cover other podcasts where I think they might help you in your career as a procurement professional or negotiation professional as well. By the way, if you want to propose a podcast I should cover, there is an easy way to do that. Go to procurementzen.com/propose and leave a short voice message with your name and the podcast and I will cover it. So without further ado, let's dive right in.
Are you looking to up your negotiation and procurement skills? You're in the right place. Welcome to ProcurementZen with your host Phil Kowalski.
So the first podcast we'd like to cover here with a special episode is Procurement Talk with David Byrne. And as always, you can find all the resources I mentioned in this episode at our show notes page over @procurementzen.com/027, that's 027 for episode 27 and of course the link to David's podcast is as well there. David provides biweekly short snippets of information, but they're always of a high quality and they are always not very long, but you can really get a lot out of it, especially when you're somewhat newer in the procurement, function and in negotiation function because some of these episodes are basic, but nevertheless, it's the essence, it's the core of the tactics that he shares. And I'd like to highlight a special episode. It's an episode out of season three. It's episode five. It was published on March 17th, 2020 and it's called Communicating Your Narrative. And David talks intensively about communicating the right way.
So one thing that really stuck with me was that he said the single biggest illusion about communication is that it has taken place. And I think that's a quote from George Bernard Show but it's true. It's always these assumptions that we think, yeah, this and this and this will happen and this and this and this is in the other person's head and this communication has taken place and no it has not. The problem with these types of communication is that the listening part actually didn't happen. So a narrative, your story, and we'll cover that in the future in much more detail, your story should be well thought out and planned. Avoid assumptions and be clear. So you can apply a little test that David introduces in his episode. I call it the traffic sign tests. So traffic signs works so well because they are usually easy enough to understand if you bypass them with 30 40 50 miles an hour.
So is your narrative that clear and it's easy enough to understand? Could you put it into one picture and people get what you want to say? One other quote from Abraham Lincoln was something I really, really liked and it is a statement about when Lincoln prepared a speech or wanted to convince someone, he spent about two thirds of the time thinking about what the people want to hear and only one third about what he wanted to say. So this is quite important I think because I personally do believe as Lincoln and obviously as David does as well, that you have to tailor your message to your audience. The second topic that he mentioned is that visuals actually do work. I know of recent studies that visuals work up to 60,000 times better and faster than the written word. And the third and maybe easiest message is repeat, repeat, repeat, repeat your message multiple times and then repeat it again. So that was the core essence of communicating your narrative, episode five, season three of the Procurement Talk with David Burn.
The next podcast is also a very famous industry podcast I'd like to cover and we may cover more of that in the future and it's the Art of Procurement podcast with Phillip Ideson. And the episode that I want to cover here is episode 290 and it covers the value of digital procurement with a strong focus on the manufacturing sector. Phillip does a lot of interviews with people in our market, be it service providers, be it other procurement professionals and all this kind of stuff and all this kind of people and in this episode he talks to Sundar Kamak from Ivalua and Ivalua describe themselves as the procurement empowerment platform and I don't want to talk very much about the service provider, Google them if you want to, that's just the background of Phillips guests in that episode number 290.
Again, you find the resources over @procurementzen.com/027 that's 027 for episode 27. So first Sundar and Phillip dive deep into the history about early digital procurement solutions, what they were and what it was all about. And it's quite interesting. They then focused very much on digitalization in manufacturing and what it's all about also compared to, and we come to that in a second, also compared to direct versus indirect material. A lot of procurement digitalization solutions if you want, and that's what they say in the episode as well, cover indirect spend, not so much on direct. And what does digitization in manufacturing mean or what's the most important part is efficiency. There's only so much you can achieve with digitization and indirect procurement, but there are also huge opportunities in direct materials. And if you look at systems, landscapes and tools that are out there, ERPs usually are the drivers in direct.
So how does digital tie into that? And that's what they cover in depth. They say that ERP systems mainly help with internal alignment and more benefits, however lie in the collaboration with external partners. And I like that very much because it gives a holistic view on the whole direct material procurement part. And it's a small balance between cost of course, cost is always a topic in procurement but also quality and of course also security of supply. It's not that one outweighs the other, it's a mixture of these factors. And in the episode Phillip and Sundar say that they should be somewhat evenly weighted. And I think that's a very interesting approach. So far, these systems where oftentimes simply spreadsheets because the systems that were there were not made for managing product development and organizing the procurement of these items because handling bills of materials and endless spreadsheets going back and forth attached to our piece and whatnot makes it quite hard to handle these type of demands and also to source it the best way. Again, looking at the three factors that Sundar and Phillip have talked about before.
So product development demands, so in direct material product development usually demands which suppliers procurement needs to work with. So this oftentimes blocks procurement early involvement because systems are simply not in place to support these kinds of multi-tiered alignments and they go into deep discussions about this topic and we know procurement early involvement is always very dear to my heart, so it's quite interesting. And this in return, this gap and this not happening procurement early involvement is so to say the perfect strategy to create artificial monopolies, which are never a good thing, not from a procurement side and also not from a quality side and usually in the long run also not from a product development side. So then they cover, now that they have identified the problems, they in the episode start the journey to bridge the gap.
So one factor that Sundar says that is quite important is mobile IT systems getting more and more attention in the B2C space and users, no matter if in a B2C or business environment, expect basically the same experience in their office systems and the systems they use at work. So that means user experience, but also visibility and lack of visibility is really what kills the cooperation. So they go back a little bit rambling again about Excel and I like it very much because I think they are totally right. Excel is a good one-on-one tool and has served great purposes in the past. Don't get me wrong, but as we're moving into more of these collaborative platforms that they also speak about makes alignment and communication on a spreadsheet base really, really hard. So then they look at some of the requirements that these platforms, these future digitization platforms need to fulfill and they say it needs to provide speed, meaning that product development these days is pretty fast pace. It needs to provide a good user experience because basically these systems nowadays compete with Amazon or eBay when it comes to user experience and maybe the most important factor as they say is that these systems need to integrate with external sources.
Then they talk about implementation of these types of systems and of course Ivalua is maybe one of those systems and the systems also tend to replace internal portals that have worked as a bridge in the past but become harder and harder to maintain because they are custom developed. So overall that was a very hands on strategic discussion about digital procurement history in the direct space, but also a lookout on what may be key influencing factors if you are in your organization needs to make a decision for any such system. So again, go to procurementzen/027 that's 027 for episode 27 and you'll find a link to the Art of Procurement podcast in general, but also to that specific episode.
ProcurementZen with your host, Phil Kowalski, will be right back.
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Back to the show ProcurementZen with your host Phil Kowalski.
The third and last podcast that we want to cover today is also from the sourcing industry and it's the Sourcing Industry Landscape podcast with Dawn Tiura and we will have a look at the episode that's called Procurement leaders Guide to Working Strategically With Finance. And what is quite interesting here are the guests that Dawn interviews here. It's Todd Ford who is the CFO of Coupa. Again, a service provider or a service platform and Linda Tuck Chapman who is an expert in third party risk management and that's actually what the whole episode is all about. So risk in the supply chain and sourcing contracts, that's what they say is a topic that gained more and more importance in recent years. The great recession of 2008 made risk management more apparent also due to governmental regulations, regulatory influence in these areas and board members nowadays need to be much more aware of risk management and that led a little bit to the evolution of it. And then they cover a lot how the conversations both from a risk management experts point of view but also from a very strategic and forward thinking CFO, Todd Ford, in this case as a guest to that podcast, how these conversations have evolved over the last years from their points of view.
So initially they say risk really wasn't that much of a huge topic. Yes, you had to have risk management system, but it was not a major topic, but it became more important and shareholder value focus evolved more into a wider stakeholder value focus and that is a good change. Also, Dawn confirms that, she says, it's not just the shareholder, but it's the stakeholder in general and shareholders are a part of that. What I like very much, they introduced the concept of an appetite for risk as a more holistic approach rather than there is risk and I don't want it. I really like that statement in the episode. And then they dive a little bit deeper into tail spend on there is maybe a lot more risk and the reason why is that tail spend usually is not so sexy and you cannot win any laurels with it and nobody wants to take care of it hence
This could be more risky than the A-list suppliers because you put not so much work into this and actually they also ramble a little bit, that seems to be a theme, ramble a little bit about spreadsheets and Excel and they say you cannot manage risk using an Excel spreadsheet, but you have to use some kind of sufficient technology. And I think they also talk about dynamic technology. So the solutions they consider in the episode that they might want to introduce, they also use automation technology to manage risk better. So it's often times... and oftentimes these discussions happen between it and the business, but risk management, no matter where it is located in a company, it's usually not involved. And they also say risk management nowadays needs to be dynamic so they suggest that risk management systems and automation technologies in there have some kind of a learning algorithm that is maybe key differentiator. And another advantage of automation especially is that it can free up resources so people can have a closer look at risks.
So then they move on to how one can get procurement and CFO more aligned with each other. So they say in the past a hold back for the CPO could have been that it's also risk management is also about value creation and Todd clearly says, and I like this approach very much, he says procurement should not only raise problems but rather provide solutions and be more strategic. And that's where the discussion ends. Again, that is the Sourcing Industry Landscape with Dawn Tiura. It's a great interview. Landscape also a lot of the award winners from the sourcing industry group award ceremonies in there. So you find a lot of good value in that podcast. So that's basically it for this episode.
So if you did like this episode, you'll find all the links with all the resources that I mentioned over at procurementzen.com/027 that's 027 for episode 27. And as I said initially, if you want to suggest a podcast that I should listen to and it doesn't have to be out of the procurement space, it could be something completely exotic and just tell me what you like about it. Just go over to procurementzen.com/propose and leave a short voice message and your name and we make sure that we'll cover that podcast in the next episode as well. Until then, always happy negotiations. Yours truly Phil. Bye.
Thanks so much for listening to this episode of ProcurementZen with Phil Kowalski. For more great content and to stay up to date, visit procurementzen.com. If you enjoyed today's episode, please review and subscribe and we'll catch you next time on ProcurementZen.
- Procurement Talk with David Byrne Series 3 Episode 5 – Communicating the Narrative focuses on clarity.
- Art of Procurement Episode 290 covers the value of digital procurement with a strong focus on the manufacturing sector.
- Artificial monopolies are never a good thing.
- Mobile IT systems are getting more attention in the B2C space.
- The Sourcing Industry Landscape with Dawn Tiura episode called ‘A Procurement Leader’s Guide to Working Strategically with Finance’ with Coupa’s CFO Todd Ford and risk management expert Linda Tuck Chapman.
- Having an appetite for risk is discussed as a more holistic approach.
- Automation can free up resources so risk can be focused on.
- Visuals work up to 60,000 times better and faster than a written word
- Repeat your message multiple times, and then repeat it again
- The 2008 recession made risk management more apparent with governmental regulations
- Ask me anything: ProcurementZen.com/Ask
- Procurement Talk with David Byrne: procurementtalk.com Series 3 Episode 5
- Art of Procurement podcast with Philip Ideson: Episode 290: artofprocurement.com/episode290
- Sourcing Industry Landscape with Dawn Tiura: sig.org/procurement-leaders-guide-working-strategically-finance