“Amsterdam is known for two things, bikes and canals”, said SAP Ariba President, Barry Padgett as he opened the SAP Ariba Live event in Amsterdam on April 23, arriving on stage by doing a few circles on a bicycle.
Greater connection, greater technology - the future of procurement.
With the homage to bikes covered, he next turned to the ingenuity of the Amsterdammers to keep their city functioning through an elaborate and co-efficient systems of canals, dykes and causeways to leverage the most of the Amstel river.
Padgett seamlessly segwayed into the wider picture of the ‘hyper connected’ nature of the procurement network and that there needed to be a greater focus on collaboration to foster innovation.
“Whether you’re in sales, financial or marketing, you all have the chance to be chief collaboration officers - I expect many new business cards printed” said Padgett, eliciting the first laugh of the day. But that objective is only possible with innovative new technologies and shedding legacy stuck-in-the-technological-mud.
“We all have our technological demons that have made it difficult to innovate over the last 20 years,” Padgett said, “but now, let’s dream a little”, explaining how he wanted this SAP Ariba event to be future-focused, beyond current technological capabilities.
“We can now use things like artificial intelligence (AI) and ML to help us not just make smarter purchasing decisions, we can now make sustainable ethical supply chains,” he explained. “We can sprinkle AI and blockchain and ML to eliminate risks and, as a community, we have real opportunity to scale as Alibaba and Amazon have done.”
In sum, for Padgett, “we need the collective power of a rich ecosystem.”
The digital tipping point - the case of Shell
In a similar vein, Ashley Bates, Vice President of Shell, took to the stage to talk through the oil and gas utility’s objectives for their procurement strategies.
“Environmental sustainability has to be our top priority. We want to reduce our carbon footprint by half by 2050 through going over the tipping point with our procurement”, said Bates.
And it is some supply chain to attack with 3.2 million invoices per year, $45 billion 3rd party spending, 27,000 active contracts and 34,000 suppliers. But working alone, Bates suggested it is quite impossible to innovate successfully.
“We have to work with our partners for sustained success. That means governments, NGOs, technologies, industries and suppliers.
“We have to move away from a transactional and customer-supplier focus. We must move from behaviours of today to behaviours of tomorrow,” said Bates.
Making a positive impact through your supply chain - Save the Children
Last to speak was Jim Ridgwick, Head of Procurement at Save the Children, who spoke of his novel technique to stay focused on values. “Whenever my wife and I have big life decisions to make we write our values on the wall and debate that life decision looking at those values”
And that principle can be pretty simply translated into a handy business formula:
“We can impact what our organizations buy and who from. We can influence how our suppliers run their business, we can impact how they treat their employees, where they get their resources from and even how they treat their suppliers as we’re their customers,” explained Ridgwick.
“Procurement has an enormous impact and can fundamentally shift how a company conducts its businesses. It’s not just do-gooding for do-goodings sake.”
“The key is how do we turn that into the organisations DNA? Procurement can ensure sustainability objectives go into the companies supply chain selection process,” he added.