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Transforming the Spending Behavior of Procurement Workforce
By Greg Tennyson, Chief Procurement Officer, VSP Global
With data volumes mounting at an unprecedented scale, there is a high industrial focus on bringing unified dashboards to enrich, normalize, process, and analyze disaggregated information residing in the company’s various systems of record. The procurement function frequently needs to deal and transact with vendors and third parties where on average, indirect spend accounts for 13.5 percent to 22 percent of a company’s revenue. A comprehensive dashboard provides decision makers the visibility into relationships, helping them allocate budgets appropriately to fulfill the unmet needs of various internal departments. While there is a heightened awareness around making data more impactful and powerful for the C-level executives, it calls for a robust solution to translate the unstructured data into an insightful report to support leadership teams in their decision-making process.
Barriers to the Procurement Function
The procurement industry has been slow to adapt to cloud computing—transitioning away from dated on-premise solutions. The transition cost can be prohibitive and as such an uphill task for procurement teams. Cloud-based technologies are predicated on driving an intuitive self-service experience, at a lower total cost of ownership. As you move to the cloud, you are no longer just managing the data but are on the receiving end of it. How does one improve the quality of data and make it more impactful? It was recently reported that most CPOs adopt a best of breed strategy as opposed to a wall-to-wall, end-to-end solution within on software solution. This best-of-breed strategy created a dependency on integration points between various technologies. It’s critical to understand how best you can do that—whether by leveraging robotic process automation or creating application protocol interfaces between your best-of-breed solutions. Although technology is an enabler in most cases, it can cause a massive distraction to the organization, if not executed strategically.
When I joined VSP Global five years ago, we had a purchase order tool tagged as “SRM” and have since added a multitude of solutions including contract lifecycle management solution, spend analytics, quote/proposal tool, intake, and pipeline, among others. I am a firm believer that technology is an enabler and some people want you to start with the process, refine it, and then collaborate with a technology partner to deliver the outcome.
Although technology is an enabler in most cases, it can cause a huge distraction to the organization, if not executed strategically
By starting with technology, it allows you to take the solution set “out of the box” without customization. You modify your process to fit the vanilla solution set to maintain a lower total cost of ownership. Along the journey, we realized the need to make some key investments in our people, technology, and process to seize cost-cutting opportunities and at the same time achieve efficiency.
Spend it Like It’s Yours
In 2013, VSP Global launched an initiative—Spend It Like It’s Yours or S.I.L.I.Y with a focus on enforcing the right spend behaviors across five semi-autonomous lines of business to achieve economies of scale. Our mission was to become the center of excellence when engaging with third-party purchases for indirect materials and services, and then subsequently provide a connection for our legal and information security teams to become better connected to the purchase transaction. The result: more effectively vetted suppliers, mitigated risks, synergies around engagement, and better contracts. In a nutshell, my team now has greater visibility into the transaction with various parties, and they have been able to save 12 to 20 percent through efficient spend management, a win-win situation for all parties.
We quickly recognized communication would be a key to drive change. Who best knows a company culture than the employees, managers, and the leadership? After extensive interviews, we engaged with HR and our then Chief Marketing Officer to build out our communication strategy. Their support led to an engagement touch that not only helped our message resonate within the employee community but also achieve a better outcome.
Listen, Learn and Lead
"Listen, Learn and Lead (LLL)." A lesson that I learned several years ago, LLL forms the core philosophy of my leadership approach at VSP Global. Starting with the word listen, the philosophy explicitly states that listening to your customer (internal stakeholders, technology partners, and third parties) is critical to understand the problem in question.
VSP Global is 64-year-old organization, focused on providing access to affordable, high-quality eye care and eyewear. VSP’s five lines of businesses combine eye care insurance, high-quality eyewear, customized lenses, ophthalmic technology, and retail experiences to strengthen the relationship between patients and their eye doctors. Procurement aims to deliver and be a trusted adviser to each part of the business. The journey has been exciting, as we have invariably provided the right business outcome through our leadership.
A Remarkable Journey
Having served in leadership teams of technology giants such as Salesforce and Oracle, I have amassed expertise in finance, procurement, travel, expense, fixed assets and accounts payable, among others. Now, I have the pleasure of applying the knowledge and learning to VSP Global, which is known for its entrepreneurial thrust and growth culture, unlimited opportunities, and thought-provoking leadership. In addition to being the Chief Procurement Officer, I mentor other companies on their product roadmaps as well as the peers in my team—which I refer to as my “payback to the profession.” We have come a long way in five years but at the end of the day our commitment holds steady in contributing to our corporate mission of helping people to see by providing access to affordable vision care and eyewear.
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