Webinar Replay: The Value of Connecting Best-of-Breed Procurement Solutions
On our recent webinar, Pierre Laprée joined Tom Beaty, Found of Insight Sourcing, and Lukas Wawrlra, Founder of Archlet, to discuss the benefits of building a custom digital procurement ecosystem by connecting best-of-breed procurement solutions.
Webinar Transcript
Tom Beaty
Okay. Well, so we’re going to, go ahead and get started. First of all, thank you very much for joining us. Tom Brady, I’m out of Atlanta, Georgia. And, so I’m going to introduce myself, and then let our esteemed speakers, introduce themselves as well. But today we’re going to talk about maximizing procurement value by connecting your digital tools.
We’ve got a whole lot of procurement experience on the panel today. I’ve got more than I even like to admit. I’ve been in the procurement space about 30 years. I started a firm called Insight Sourcing Group, which is a management consulting firm focused primarily on strategic sourcing. And we became the largest strategic sourcing and strategic procurement services firm in the United States.
And recently, sold the business to Accenture. However, a few years ago, I started SpendHQ as a tool that we used internally to, you know, really understand where the opportunities might be for Procurement, within our clients and, turned it into a product and, and it’s independent and separate. So I’m still involved in that business.
And the chairman of the board for that. With that, let me let Lukas and Pierre introduce themselves.
Lukas Wawrlra
Thank you, Tom. And nice to meet you, everyone. Thanks for joining. I’m Lukas, I’m one of the founders of Archlet, and I’m representing the sourcing view today. So Archlet offers modern, user-friendly, AI powered sourcing and optimization platform with the main mission to drive better in-database sourcing decisions. We actually really focus on different kinds of sourcing events, from RFIs to RFPs to RFQs.
And we work with companies across the globe, Europe, US, but also the Middle East. And we recently just, kind of awarded the Cool Vendor award from Gartner last year, which of course makes us very proud. And I’m really happy to join the session today with you both, Tom and Pierre. And I’m really looking forward to delving into the topic today.
Tom Beaty
Great. Pierre.
Pierre Laprée
Hi, everyone, I’m the Chief Product Officer at SpendHQ. Before that, I was the founder and CEO of Per Agusta, where we practically invented procurement performance management. And before that, I was a practitioner, like, I was the deputy of the Global Chief Procurement Officer for the Adecco Group staffing company.
I’m now leading the product vision, strategy and execution, for SpendHQ. So we now have two main pillars in the solution, the Spend Intelligence part, that will help us, well help you get a sense of your data, consolidate, normalize, enrich, and get insights from that, insights that will turn into action and value for your organization through performance management. That means, yeah, procuring your sourcing pipeline, following up with the team, measuring the value and making sure it’s shared and understood overall in the organization. So we’re headquartered in Atlanta, Georgia, and in Lyon, France.
Tom Beaty
Well, great. So just, before we get going, just a couple quick housekeeping items, we’ve got a, about an hour.
We’re going to have the panel for about 40 minutes or so. Feel free to put questions into the group chat, and we’ll address those as we go along. And then we’ll have, 10 or 15 minutes at the end to get into anything you want to talk about. But before we get started, let me just throw out a concept or an idea.
One of the things that we did, the way we thought about procurement is like a factory. So if you consider procurement the organization itself as a factory, and you have inputs that come into it and then values added somehow within that factory, and then outputs are produced from it, you can think about it in terms of capacity constraints.
You can think about it in terms of getting the greatest utilization out of the assets that you have. You can think about it in terms of ROI. There’s a lot of applicable things, if you think about Procurement as a factory and as we helped clients over the years think about it, it’s how do you take those assets and get the absolute most out of them?
Because it’s a lot easier to ask for more resources, to ask for additional investment into technology, into different types of things if you’re already maximizing what you have, you’re able to demonstrate that and prove it. Because measuring results and measuring output, much like a factory, is a lot easier in procurement than in some other areas because we have savings.
And of course, not everything’s about savings. But, but oftentimes, you know, that’s an easy one to talk about because of the measurability of it. And it certainly is the one that’s, easy to drive the ROI. So I know for some that might be a new idea, and for some that might not be a great idea.
Pierre and Lukas, what do you think?
Pierre Laprée
So I when we started discussing the idea, I think it makes a lot of sense because as you say, a factory needs to get some output. But for that you have an input.
And so in the case of procurement, that could be two things. That could be the people, because we know that it’s all about the supplier or the relationship. So one of the most important inputs will be your team and your people. but as you have people on the factory floor to produce, things, well, they need raw materials.
They need the thing they will put together to actually produce your output. And I think that in the case of procurement, this is really about the data. And your output can only be as good as your input. So when it comes to procurement, you can only be as good as your data. So and that’s really what we were doing on the Spend Intelligence side of the house.
That SpendHQ is how can we extract the raw material that is your data where it leaves in the different ERP or places where you have transactions and refine it? And this notion of refining the raw material, the raw data is really important because it’s never easy to extract. It’s never completely clean, and it’s never completely consistent across different systems.
I mean, we have clients with north of 90 ERP systems. Maintaining consistency is really hard and that’s where we we held them. So the the real key around the Spend Intelligence here is how do we equip our clients with the best possible data, the best possible raw material, that will be then used throughout all of the process, that will generate value for the organization.
And as you say, that could be value. but that could be also innovation. That could be a relationships with suppliers. That could be risk mitigation. So all these things, you need a solid data foundation to get there.
Lukas Wawrlra
And maybe if I, if I may add something Pierre, next to that data foundation and your question or the analogy, Tom, regarding a factory resonates quite well with me because I studied mechanical engineering, actually, and I landed in procurement, as many of the listeners, probably by coincidence, a few years back. And one principle we learned during the studies was really called Lean Six Sigma, the methodology, which was kind of minted in the automotive and also electronic, area.
I think, for everyone who does not know the concept, I did some research to be very precise here. Lean, the part of Lean really stands for reduction of waste. So you really want to reduce waste. And of course, in terms of factories, that’s scrap reduction or inefficiency reductions. And then the Six Sigma part is really the main goal to reduce defects and optimize the output by effectively solving problems.
And that concept of reduction of waste, but also reduction of defects can be, in my eyes, quite well mirrored on a procurement process or on a procurement function. And what’s also quite impressive is, in that Lean Six Sigma thinking, there are five principles. It’s all about defining a process, measure them, analyze, improve, and control. And of course, you can now spin that further and kind of again, try to make some procurement examples as you did Pierre with the raw material. Measuring process efficiencies can be like, how long does it take from PO to invoice? How long does the approval flow take from, like to launch an RFP, for example? Or simply how many clicks do you need to set up an RFP? And, in the past, I can tell you that there were far too many clicks.
So the goal is to reduce the amount of clicks and become more efficient. And I think my learning is, of course, in that factory environment, you need to be more efficient and you need to be more effective. Otherwise you lose competitiveness in the market. Sometimes I feel like in procurement, specifically the improving portion, which is one of the key drivers in a factory is not so well established as, I was used to it when I was in a factory because we literally stood there with a, with a pacemaker.
Stopwatch. Thank you. We checked each process length and then we stopped and said, okay, how can we shorten it? I’ve never seen that happening in procurement, so I feel like we can still learn a lot from factory businesses and kind of translate even more from that methodology into that world we are in now.
Tom Beaty
Yeah it’s really interesting. And those are great points because it’s really about the pursuit of excellence. It’s about every single day getting a little bit better and being able to measure yourself in such a way so that, you know, for, you know, you’re actually getting better. So just as an example, if you were to take in data and have a portfolio of projects and just to simplify it, call them strategic sourcing projects, and you’re able to examine how long each one took and begin to remove time and people hours out of it, either leveraging technology or building templates or whatever the case may be.
If you were able to conclude a project a month faster than you would have otherwise, and let’s say that project saved €1.2 million, then, you know, you’ve created €100,000 in additional euros through your company by being able to do that. And if over time you’re able to do one extra project a year or two extra projects a year, you know, again, it just racks and stacks, if you will, those savings in such a way that drives just a higher and higher ROI in your organization.
And so the procurement team has the potential to be an extraordinary force multiplier for the performance of the business, because those savings typically drop straight to the bottom line, and they can be you know, and a lot of organizations, they’re reused somewhere else very quickly. And, you know, best practice, of course, is to put a little fence around the savings and, you know, and to be purposeful about how they’re spent.
And that’s one of the things these solutions enable you to do is to really identify those savings and track them. And then hopefully your organization will make a decision on how to use that. But I think the future of procurement and the present is of high performing procurement teams who drive a measurable impact across their company. One of the ways they do that is this pursuit of excellence. And then leveraging best in class tools that are fit for purpose and that are innovative and agile. And that’s what we aspire in our pursuit of excellence to bring to the table.
So let’s kind of continue on with that thought. You know, Lukas, why don’t you talk a little bit more about how specifically Archlet and how specifically some of these capabilities can remove friction from the process?
Because really, friction is the waste, right? That is the waste that we’re trying to eliminate.
Lukas Wawrlra
Exactly. Yeah. And looking at friction, I think that’s something I mean, I can only tell stories from the past. Right. But people told me that, when they started digitizing their processes, they never really asked the end user because it was more or less a top-down decision.
But the friction you will only recognize if you look into the end user process flow and into the end user kind of daily life and daily experience. Because when I think about where we get friction, it’s always then when the user has a high effort with a low value out of it. And every, every person in every organization thinks the same.
Like if you have a high effort to do something and the value is low, you will not do it again. So optimizing friction is key to drive value, because that equation is very simple and usually you only do it once. So identifying how you can reduce the effort and increase the value, that’s kind of one of the key things to achieve excellence.
Specifically, if you think about connecting best of breed systems. And when we look into our example between SpendHQ PPM and Archlet, we literally try to understand how can we reduce the friction from creating an initiative in SpendHQ PPM to then launch an RFP in Archlet without doing all the manual steps and kind of duplicating of work, because we realize that it’s much more likely that they launch an RFP directly out of an initiative.
If it’s done with a click of a button, versus if they have to duplicate all the information and kind of do it twice, which was friction, and it was also a risk of adoption. And in the end, but like for all of our businesses, adoption is key because without adoption, no ROI. And if you have a high friction, you have a low adoption.
So I think that’s how we look at it. But Pierre, I’m sure you have something to add here.
Pierre Laprée
Yeah. And, clearly this notion of friction is becoming more and more prevalent because, I mean, the amount of procurement technology solutions that have been created in the past five years is absolutely mind blowing. And so it’s very tempting for the people to say, hey, that solution is great, I need it.
But the moment you start adding new solutions in the mix, you’re creating a lot of friction. And that’s exactly what you hinted at, in order to go from one solution to the other, there’s a lot of duplicated effort typing the same data many times with the risk of error, with the time it takes, and simply with the drag it creates on the whole experience.
And that was a bit the, you know, this age old debate on integrated suites versus best of breed. And I mean, this story is probably as old as procurement. Nut I think that what has changed now is that it has become a lot easier, to integrate solutions. And clearly, despite the promises from the suites, they have failed creating these best solutions for the buyer at the lowest possible friction.
Yeah, maybe data is more or less integrated. But it’s often not that integrated because they grew up through acquisition, and clearly they are not as deep as you or we can be there. So changes in the technology paradigms have made it better and easier to run these best of breed setups.
And I would actually argue that, when you look at the transactional side, really about, the POs, orders, invoices, payments, orchestration has emerged as the main new concept in the past, probably 1 or 2 years as a term. And that’s really about providing a holistic view on the whole transactional process.
And to a certain extent, that’s also what we do on the procurement performance management side. But for the upstream part, for the strategic sourcing side, and I think that when we want to become that force multiplier to reduce friction, it’s really key to have this overarching layer that will give you the helicopter view on everything you’re doing from originating the data, generating the insight, planning the actions, executing the action, and driving the value, all of that.
So the only way to to make sure you have a frictionless, process is to have the overall view and to be able to jump in at any stage to say, hey, that’s what we can improve, and unlock a bottleneck that is well impeding our ability to drive value.
So that’s really, I guess what has changed in the past few years is this ability for best of breed solutions to be really, in lockstep to each other to have the data flow freely between the two. To generate that adoption, to reduce friction and ultimately to increase the value and in ways that is extremely important. Tom, you were talking about that force multiplier. I mean, the value you can extract from an advanced RFP that you run in Archlet versus a typical RFP that you do in Excel. I mean, the leverage you get on the value is just absolutely mind bending.
And it wasn’t possible before. Now it is because, as you said you have this bunch of different number of projects and you can prioritize them better and use the best tool to deliver each of them. And that’s how you create this somehow flywheel effect of accelerating value in procurement.
Lukas Wawrlra
Yeah. And if I add something here, like I love the story regarding suites versus Best of Breed, which is a topic since we started the company.
And actually, when we started the company and when I told procurement experts, hey, we’re starting a sourcing optimization slash advanced sourcing tool company, they said, are you crazy? There are already hundreds in the market. You will never going to make it. And when we then realized and when we talked to potential clients, they said, yes, we have a sourcing model, but it’s offered from a suite and adoption is super low.
So what we realized is just because they have a sourcing model doesn’t mean that that’s actually something they actually also execute and do. So just because you have the model offer, it doesn’t mean that you are transformed in that area. So what we realized, also by continuing our journey as Archlet, was that it’s super key that you connect the tools in the different areas with high adoption.
And it can also be a success moment for the excellence teams, because suddenly they plug together these, let’s say, best of breed systems. And you don’t need 20 to cover the whole upstream process from spend analysis to contracting. Let’s say you need three or maximum four. And if you pick the right four, you can connect them, and we’ve proven that it works.
And what’s interesting is the kind of the success feeling for the excellence team is usually much higher because they have high adoption in all of these different areas. People are actually satisfied because you have expert solutions and it’s really cool for their career. Like they move on, like sometimes we have cases that people get promoted because they pushed Archlet in combination with another system.
And they kind of had, they were brave enough to do it. So I think that’s also a trend we see more and more because in the end, as you said, you need to deliver value. And value only comes with adoption. And then you can justify your ROI. And if you spend XK on a license fee and you can’t justify the ROI in a year because low adoption, your career is at risk kind of as well.
Right? So it’s a it’s a very interesting, development. I don’t know if you also came across it, but for us, it’s actually quite it’s kind of it’s a great journey with the clients who do it.
Tom Beaty
Well, I couldn’t agree more. And I, you know, I have the benefit of two things. One is being in the space of a while.And then secondly, having also been on the consulting side, and so we get to see, you know, what the output of all the different systems are in the marketplace because we need that data in order to, you know, do consulting projects. We need the visibility, just like a procurement organization does. But one of the things that’s counterintuitive to me, it was a big surprise, throughout my career has been the quality of data that our, that procurement teams that are out in the marketplace have to work with.
It’s consistently been very poor. and it doesn’t seem to be getting any better. And, we every single client we used to go into and we had thousands, their data wasn’t sourcing ready. We were not able to really fully understand where the opportunities are. And some of you on this call may not have that problem.
You may have great data, but I can assure you that’s somewhat rare. And the more typical experience due to historic M&A, due to people putting data in incorrectly, due to different systems, even if it’s multiple instances of the same system in different countries, the categorization in the organization of the data tends to be very different for a different purpose than you would probably need it.
As you well know, as many of you, have that experience. And so we actually built SpendHQ, unlike Lukas, who went into a market where there were a lot of solutions, but built a unique, you know, user friendly version, we went out to the market and had no intent to build anything. We were just simply looking for a tool to use internally.
And we couldn’t find one because the output of the tools at the time, this is a number of years ago, just weren’t usable for what we needed it, because people didn’t think about sourcing the way you need to think about it to actually execute results. For example, they’d use UNSPSC. I see USPS, C code, I see coding, whatever.
And, you know, which isn’t the way the supply market is organized. And so we’d have to clean it up. So we built SpendHQ specifically to solve that issue. And consistently you’ve seen that it, you know, continues to drive value today because a tool sitting on the shelf is not very valuable. And it’s hard to run a factory in the dark.
And so the data is the analytics and SpendHQ brings the spotlight to where the opportunities are. And then you’re able to be selective about those opportunities to figure out, hey, I have limited capacity. What’s the best way to utilize it? And then you select your projects and then what’s the most efficient way to execute?
And that’s when Archlet is able to very quickly streamline that process, because people actually like to use it. And so all those things are kind of intuitive. But yet again and again and again, there’s this concept of, hey, I’m going to get a giant suite and it’s going to do everything for me. And particularly when it comes to sourcing, it’s more of a custom manufacturing factory than it is, production with conveyor belts that does 10 million units of the same thing. And so it’s very difficult, and arduous sometimes to use it. Would y’all like to add to that or you have any additional thoughts around that.
Pierre Laprée
So that’s actually interesting how you explain how your solution came to be. and so I have pretty much the same story from the formerly Per Angusta side, the performance management side. That was literally scratching my own itches.
I was looking after 18 different countries and we had Excel files. I mean, there was a lot of procurement technology out there, but none that could help me manage the sourcing pipeline and conveyed the sense of value, that we were delivering. But one thing that I’ve learned in the past, and that’s actually one of the very reasons we’re here today, is that that you need to create delight with your users, either by providing the more fit-for-purpose solution that will help them with the problem and in a way, that they will not hate, and potentially even love, because that’s how you really get the, the adoption and the value. So solving a real problem in a way that people don’t hate, I guess this is what we’re all standing for. But I think that the key element here is also to somehow break some of the old mold of enterprise software has to be an all encompassing stuff that will solve every problem.
And the next, and I actually, there is a question from Dave in the chat, that I will put there because I think it’s actually quite interesting. It’s about integration to have real time data in front of us. And yes, Dave. That’s the key. You know, when I started my career, we were all talking about EDI, where in order to send an invoice to a supplier that was 450 mandates project just to share some some data.
Now with the advent of API, Json, and this kind of thing, I mean, you can develop an integration with a with a partner in a day, and think that would make sense. So, that’s why we and Archlet share the same vision.
You need to go for the open platform. The one that will not constrain you within their four walls. It should be easy to get data from the outside. It should be easy to send data on the outside, because that’s how you start composing your own procurement suite. You need Archlet for your e-sourcing and you might need three different data providers for financial risk, CSR scoring, and cyber threats.
So how do you do that? If you have a system that is not open to receive and to send data, and that’s really the key. Technology has made it a lot easier, and one of the advice to the audience, because we’re telling you that open is great and best of breed is great, the best way to start on this journey is, ask the software provider you’re talking to, what does it mean to integrate with your solution? Do you have pre-built connectors? Do we need to build them? Do you have open APIs that we can leverage. How much of the data is exposed incoming or outgoing? Those are very concrete questions that you can take and that will somehow make your technology roadmap more futureproof.
You might not have a use case now, but what happens to that? You don’t know. So yeah, always select technology with this in mind, that you can connect your digital tools to cater for future use cases. And I think that it’s really key.
Lukas Wawrlra
And I think it’s a great question. It starts with asking, as you say. Because it’s not impossible anymore. It’s really possible actually, meaning like you can connect with tools and it works, like APIs are a common thing now. And oftentimes the effort to do it is also less than you might expect. And maybe I want to build on your point, Tom, regarding that a sourcing like a machine can be really compared to sourcing because it’s very customized, because you have different categories with different needs, with different supplier markets, etc., and that’s definitely something which for us creates friction automatically because you have to define structures and templates for different categories, and therefore only if you have great structures and templates you can reduce the friction again. So it’s definitely a challenge, but it’s also something super exciting actually because you can add categories at the time, get know how, and then distribute the knowledge again across your clients.
Yeah, absolutely. One of the funny things, you know we did over 10,000 strategic sourcing projects, so pretty much across any category you can imagine.
And despite the fact that there’s a tremendous amount of variability project to project, there’s also a finite number of frameworks that define how industries operate. And so after a while, you essentially have developed all those frameworks. And this is going to sound a little funny, but I was sourcing chicken and desserts for theme parks. And as I was in the middle of sourcing chicken, which I’d never done before, I realized it’s structure, just like the MRO space or the maintenance, repair, and operations supply space with back end rebates and distributors and all kinds of flow through, pass through kind of money, in terms of like the financial structure of it.
And so ultimately, as you continue on your journey in procurement, if you gain mastery over those frameworks, not necessarily the categories, but the frameworks themselves, and you build those into a tool like Archlet, every time you essentially step onto the field to compete for margin with the supply base, you just get a greater and greater advantage and your outcomes come faster and easier and, you know, with greater impact.
And so that’s, in my mind in terms of like building excellence in Procurement, it’s all about how do you think about all the things you do more than a few times, and how do you take the time to optimize them and tweak them just a little bit? And just like a factory, when I worked as a kid in a warehouse, we didn’t have forklifts.
And so I had to carry everything manually, unloading trucks and so forth. But then a forklift, you know, is obviously a giant force multiplier, allowed you to lift, you know, a thousand times more than you could possibly do on your own. And it’s much the same way with these agile tools that are available in the marketplace.
And we do the same thing with SpendHQ, because we have clients, for example, that have 380 data files that represented their entire spend data. And it’s almost impossible for a human to consolidate that. And if you did do it, you know, it’s just simply a point in time that you then have to do again and again. And it’s just inefficient and not possible. But once you get through that and you have a system that does that for you, then that time can be deployed in higher value areas and it’s all about how do you shift that time to higher value areas. And there is no world class procurement organization that’s not leveraging, you know, best in class tools because there’s just no way to, you know, get that return on time without executing around it.
And so the question is what do best in class tools look like and what are the things that we’ve talked about that make them so important? One is of course usability. And the second is integration. And I think the third is, you know, deep expertise. One of the funnier things I’ve noticed in procurement is many of the founders of different procurement organizations, they don’t have as many people on their team that actually have procurement experience like you all do. And, you can see that expertise reflected in Archlet and SpendHQ, that expertise baked in. Anyway, just some thought.
Pierre Laprée
It’s actually so much easier to solve a problem when you know it. And there are ways to explore problems, and I mean, what the Archlet team is doing is incredible.
Knowing a problem just makes it so much easier to find the right solution, and the one that will actually resonate because, unless you have had your feet on the ground, and, as you said, lifted pallets manually before you get the forklift, how do you know what a good forklift looks like? So I guess this s important to point out. We’re not trying to optimize for potential or theoretical use cases.
We’re actually optimizing for concrete day to day problems from procurement. And, we’re seeing this every day. We probably have, I would say, a third of the team that has direct firsthand experience in procurement as a practitioner or as a consultant, and that means the world to our clients because they can relate. They can share a very deep problem, knowing that we understand the basics; they don’t have to color and explain everything from scratch.
And that makes a big difference. So yeah, that’s key because, a lot of that friction that we see, if you’re new to procurement, there’s no way you understand all the subtleties and the nuances, that actually create that friction. Being equipped with that procurement experience actually helps us better see the friction. Sometimes it might be specific to a client, but sometimes it might be common to the whole industry.
So. Yeah, fully agree on on that.
Lukas Wawrlra
I might need to challenge you a bit on this one unfortunately, because, different than you, Pierre, I did not have multiple years of experience in procurement. I think you said 12, right? Mine was very little. So what helped us though, to develop that product is listening to the people who have the problem.
And I think because we did not know it much better, we literally had to listen to hundreds of different people. And what we did was we consolidated their inputs, prioritized, and saw where their overlaps and their product with the largest overlaps, which was, in the end, always also very helpful because we had a completely different view on things than we would have had if we would have done ourselves for the last years.
Right. So I think if you have experience, you also need openness that maybe the, as you did it in the past is the best way of doing it in the future. And if you don’t have experience, you need to listen to your end users. And I always bring that example of the founder of Uber was no taxi driver.
Right. So he didn’t drive taxis and had the idea of kind of getting rid of taxis. He actually was a complete outsider to that market and disrupted it with an amazing technology by addressing the need of kind of the future, environment or the future, people. So that’s also very impressive in my eyes, if you can do that.
But I wanted to add one point. You asked like how do you identify the best of breed solutions, which are actually top in class. Right. And you mentioned 1 or 2 topics like usability, openness, focusing on added value. Just one point I would love to share is kind of, the scalability topic in terms of how do you actually develop your product and what’s very often, not assessed in the right way, in my eyes, is ahealth of a software tool.
Usually in RFIs,, people ask us questions like how much funding do we have, how many people work at Archlet, etc. I mean, these are all metrics to see if we are working well and if we exist in the next couple of years. But questions they don’t ask is, for example, how often do we deploy our software?
Like, are we actually able to ship innovation, on a regular basis or do we have a lot of tech debt we’re not able to release software daily as an example, which is crazy. And it’s kind of obviously the North Star, Amazon deploys 125 times per day. And because they do that so often, they develop their new product super close at the production product and they can fix bugs much quicker.
They can ship innovation much faster, and they can, in the end, increase value, much faster to the end users. And I think that’s also something which I would look into if I would assess products. If I need to deploy a certain product, how often do we deploy? Because if you ask that question to a suite, they will tell you once a quarter, kind of, right?
So you will already know, well, that means probably not so fast in shipping innovation. If you ask us, if you ask SpendHQ or Achlet or any other best of breed supplier, they will say most likely daily, weekly, or much more frequent than the others.
Pierre Laprée
Yeah, that’s a that’s a very good point. And that’s how you get the value. Yeah. That’s how you get the value basically. yeah. Sorry.
Lukas Wawrlra
Yeah. Shipped in the end. Well sorry.
Tom Beaty
Scalability is ultimately the key because you, we used to have a saying in our business that, you know, you can grow into oblivion. Hey, you can continue to grow and grow until you just absolutely blow up.
And one of the things that is critical is that maybe your average client is mid-sized, but that you’re able to handle kind of industrial level clients because that creates that scalability. And all those things are really important. And, you know, we certainly see that with both these solutions that there’s some just really big clients that are able to use them successfully, as well as that they also scale very easily to any size.
And, ultimately, I think that that’s important because you don’t see it every day. But, certainly we’ve all used tools that, believe it or not, it, you know, overwhelmed Excel on a frequent basis. And, it’s not a lot of fun. And, yes, it that certainly changes your pace of operation. So let’s see one of the, one of the comments, I guess, for Maurice. Pierre, do you want to throw that on screen? It’s not so much a question.
Comment
Interesting to see your perspectives on the value of Procurement experience…I still believe it is essential to keep nurturing your R&D with actual procurement feedback.
Tom Beaty
Yeah, yeah, yeah, absolutely. I think that’s a great point. One of the things around, you know, whether you’re coming from a place of determined experience or a place of a clean sheet of paper where you’re able to execute, I think both create value. I think both are interesting ways, because ultimately the problems, you know, exist in the marketplace.
And I would argue on spending analytics, they still exist in a lot of ways, just simply because we get data out of pretty much every system you could name and, had to clean it up, continuously. But ultimately the market is moving really fast. I mean, we’ve never in our lifetime with AI and everything seen it move quite as fast as it is.
And that’s why I love the positioning of these two solutions. Because they’re the teams are just very, very focused on innovation and on change. As the old guy who originally developed the software, I got out of the way really quickly because ultimately, there is so much changes, both within procurement as well, in terms of the technology and the capabilities.
And again, all that’s doing is making the factory just far more efficient, far more productive. It’s creating a greater full force multiplier and greater capacity for scale. And I think that the one thing I would, would hope to leave you with is this sort of concept of, is thinking about the, the procurement as a limited a finite capacity limited system that, if finely tuned to its optimal performance, can drive an extraordinary ROI.
And then once you do that, then the search is on for what are the tools that can take it to the next level, to the next level, and more. The clients that we love the most are the ones that push us to say, help me do more. Here’s my idea, help me do more. And yes, certainly, you know, to Lukas’s perspective and as well as Maurice’s, it’s really critical to get that client feedback, because even though Pierre and I used to be procurement professional practitioners, we’re not anymore.
And because it is a dynamic market, it’s just critical to stay as close as possible. so we’ll call for questions here. I’ll let you while the questions are coming in, I’ll let you all continue to talk. but if we don’t get too many we’ll end a little bit early.
Lukas Wawrlra
I love also the quote from Henry Ford. He said once, “If I would have asked the people what they want, they would have said faster horses.” But he built cars, right? And so I, I really believe there needs to be both like you need to talk to procurement people. I am absolutely convinced that obviously without that you miss the problem you solve to understand the problem and then how to solve it.
You can also be more, let’s say a bit, distance sometimes helps. Not always, but sometimes. So we really try to also explore and innovate, but always with the problem in mind. And that’s the key thing. And we don’t know the problem. So we need procurement to tell us the problem.
Pierre Laprée
There are two interesting questions. One more related to the technology and one to the organization. So let’s maybe start with, with Patrick, who’s asking, If or what we’ve planned in terms of integrations. so maybe I can start on that, Lukas. We’re probably dedicating half of our, capacity these days on integrations because we believe this is so essential.
And this is about pulling in data from various sources. I’ve mentioned that earlier, but that’s, financial information from the company. CSR scoring. I think we’re both working with EcoVadis and these elements are really key in providing a much broader view on what is your data, what is the ship with the suppliers? Are they exposed to cyber threats? Are they exposed to sanctions? So you need to feed from outside data. And I, for one, believe that we shouldn’t demonstrate hubris here. We cannot do that. There are people building businesses on doing just that. Let us work with them. They have so much value when we work together.
Enriching the data is one, creating a more seamless experience for the buyer is another. And the very reason we’re working with Archlet is exactly this. We know that, any given sourcing pipeline, probably half of the projects will end up one way or another in an E sourcing solution. So let’s make it easy for the buyers.
Let them save time. Let’s let them create transparency and auditability into everything they do, regardless what the data or the activity is coming from. So yeah, clearly this is, this is one of the, the main areas of focus for us, integrating with th,e basically, we want to work with whatever in conjunction with whatever our clients are working with and look at that. Maybe you can add to that?
Lukas Wawrlra
That’s the same for us. However, for us, it’s also sometimes we need the openness of the tool providers kind of more upstream of us, right as SpendHQ in your case, and I have to say that I think SpendHQ and your philosophy Pierre kind of really shaped our philosophy because whenever we started, you were from the beginning, you were so convinced that we need to connect these systems to drive more value for our end users.
And that mindset, we really kind of took it over and tried to do the same with with other tools as well, but also have the same mindset in terms of what do our clients need to make the best possible sourcing decision and to have the ideal frictionless process from identify the opportunity, create an initiative, and execute on it during a sourcing event, then ideally reported back and close the circle.
And that’s an ongoing process because obviously you you have so many ideas. Like for example, we talked together like how can we include spent data in supplier negotiations. Wouldn’t it be super interesting to have a negotiation with a supplier and you know, how much revenue you have with that supplier. So you also know your buying power. Specifically interesting if it’s not a multi-billion dollar company.
All of these things, there are so many options and so much possibility. And of course we need to prioritize well, and we usually prioritize by end user value, which we always done so far. So whenever we go ahead with some additional integrations, I think we will need to prioritize and in the end, we try to make that one first, which adds the most value for our own client base.
Pierre Laprée
And one of the concepts I like here is the notion of pervasiveness of the data. You should be able to use the data you have anywhere you need it. And it’s not because you have a spend analytics tool that tells you how much you spend with your supplier, that the data should be constrained to the four walls of your spend analytics solution.
The example that Lukaa is giving is great. Whenever your team or you’re sitting in an e-auction with a vendor, that’s when you need to know how much you spend with them. You shouldn’t have to go to another system, run a query, wait for the data to be available, and then come back to the tool. Everything should be done in context of the current task you have at hand. And again, when we’re talking about connecting the dots, all the digital tools, it’s really what we’re talking about here.
Question
Are there certain points in the development of a procurement organization to grow into the use of your tools? What are some of the foundational skills a procurement team should have to effectively adopt your system?
There’s a very interesting question from Dave, I think, on whether there are certain points in the development of a procurement organization to grow into the use of our tool. I’m actually writing right now, a piece on Centers of Excellence and bringing in perspectives on what they bring, I think that when you want to make the most out of your set of solutions, you need an expert, you probably need to have someone who somehow owns the tool who’s the ultimate decision maker to, what functionality are we running out? How do we set it up? And you need that person to be accountable and to show the way for the rest of the organization. So that that would be one. First key is having someone who owns digital and understand the business, in order to make the right decision for the business.
But then you also need to, to foster, and that’s not competencies, it’s more soft skills, around savviness for technology. You need to have people who understand the value it can bring to them, and you need to turn them into champions. Because the champions that you might have in a decentralized organization, will actually help create the echo chamber for your technology.
Your person who owns everything cannot be everywhere. So how can they delegate knowledge, expertise, enthusiasm for technology, in your local organization so that they can further amplify the message. So those two things, digital skills and digital savviness, are two things I believe can tremendously help your organization grow and make the best of the technology you have in place.
Lukas Wawrlra
And from our perspective, as briefly already mentioned by Tom, like rolling out the sourcing tool you need to convince different stakeholders from different categories. And one of the biggest difficulties for us is literally change management, like supporting the process of tendering as you did it in the past, to actually launch an RFP with a clear data structure with already some desired outcome in mind, and then put that into your template in your that you ask the right questions, that when you get the data back from suppliers, you’re actually able to make more holistic decisions, because usually what happens is you want an RFP, you have the data, and then your boss comes in or your peer and says, hey, but what about, our sustainable strategy? And then like, oh, I didn’t ask these questions. Let me go back to the suppliers and it will become a back and forth, very inefficient process. But if you start to think, what is your desired outcome, what would you like to achieve before you launch an RFP? That’s a big, big, change management effort for us. So I think going back to your point, Pierre, if you have a digital skills, but also digital savviness, if you are also, kind of start to think more strategically and start to embed your desired outcome into the preparation, that’s something we try to also educate our clients in doing so, because that will ease the whole process, specifically in sourcing.
Because if you don’t think about it first, then you will actually miss the right data points to make better decisions. when you have launched.
Tom Beaty
Well, great. So any, any other questions?
Question
Lots of people are now talking of a “backbone” concept to move away from the old best of breed verses full suite debate…What is your view on this?
Pierre Laprée
There’s one more from Maurice, asking the question about, the fact that, we’re more and more what we hear a lot more, about the concept of backbone, to stop the eternal fight between best of breed and integrated suites. any take on that?
No, that’s actually something that that I believe is extremely relevant because, and I like to refer these as, the Citadel, you know, the, the Middle Ages Citadel where, you have the castle, the stronghold, on top of the, of the mountain or the hill. and for me, that’s the backbone.
And that could be the P2P of your company. You need something that is extremely strong, robust, dependable. So, yeah, it might come at the expense of flexibility or agility, but that’s a system of record. And that’s something you need as an organization to function, to meet your compliance or statutory obligations. So you have to, that’s a price to pay.
But then very often when you are talking about the citadel at the bottom of the hill, you have the village and the life of sprawling there. Houses could be being taken down, improved, increase. And I like to think of, of the tech landscape as exactly this. You need your, your backbone, your, your, for example, your P2P, and then for all the strategy, the things we’re doing concretely, you need more agility.
You need to be able to say, hey, you know what? I’m not happy with my current sourcing solution. Let’s go to Archlet, and that shouldn’t disrupt the overall life of the whole organization. So really, this notion of backbone is key because you need stability to drive the business, but you also need agility on the fringe of that, to drive the value.
There are things that you have to do and there are things that you can or want to do. So the backbone is really about getting the basics right and then the rest is, is really those point solutions that you connect and, the notion of backbone also lends itself very well to that because, it somehow irrigates all the other solutions with data because your spend data, your supplier information, almost all information, all of that comes from your backbone. and then you find, more focused, more expert solution that will actually magnify the value you get, from these data points. So, yeah Maurice, I’m always, I’m fully aligned with you on this one.
Tom Beaty
I would challenge you a little bit here. I would say that the promise of the ERP system and the promise of the P2P system is that they’ll be the backbone of the data. But I think the reality is, a lot of times data has to be transformed for certain specific, targeted purposes. And so it’s a really interesting question because as you were talking, I was thinking, well, maybe the backbone itself is a data lake, you know, is just simply the data itself and not necessarily a system because, you know, systems, what I use to describe, P2P systems as a system with a lot of errors with a low tolerance for errors and, you know, not just some sloppiness. So it just kind of requires perfection, but it just seldom started to achieve that. And the, and so the question is maybe the future state is to, take data in a central place that isn’t necessarily a source of truth, but is the original source of the data, and then it’s transformed and enhanced, or whether that goes back into a P2P system or goes into a system that then AI is able to sit on top of and to, you know, essentially extrapolate value out of it otherwise, you know, beyond just the purpose for which we developed the data.
But the goal, of course, is data coming out of something like SpendHQ or coming out of Archlet should be world class, right? Because the one thing you can count on with the best of breed is they better be the best at what they do, because that’s all they have to focus on.
Whereas an ERP system could get away with not being great at sourcing or not being great at spend analytics. And so the question is that I don’t think I have an answer, but I think it’s a very intriguing concept of how you can deal with the reality as it exists, of imperfect systems producing imperfect data that then need to be cleaned up and then sustain that data in such a way that it can be used for other purposes. You know, it’s interesting.
I was actually coming there. It’s, you probably need to see this in a dynamic manner and evolution because, you might have the end goal in mind, but you cannot get there. So how do you better realign your organizational model, the state of your data with the state of your technology, and how do you grow them together and not have goals that are too ambitious compared to where you are in terms of technology?
And. Yeah, and maybe all we have right now is a backbone is P2P. But down the road, the data, the data and the data lake should be the backbone. So the question is how do we get there.
Tom Beaty
We’re down to like a minute. So do you have any comments on this topic. And then we’ll close it out.
Lukas Wawrlra
Yeah. No, no I think it’s a perfect open ending.
Tom Beaty
Yeah. But yeah that’s right, that’s right. intriguing. Intriguing. A lack of conclusion on that one, but, but it’s good. It’s an exciting thought. Well, thank you, first of all, for coming in today. I mean, there’s just the very fact that you’re here means that you’re pursuing knowledge and you’re pursuing excellence.
And ultimately, you know what’s a better a better thing to do in life than try to get better, to be more effective and to get better every single day and pursue excellence in your chosen area. We all know Procurement is by far the most fantastic career path because it’s incredible. There’s nowhere else that you can actually measure results.
There’s no other functional area that you actually compete with other people for margin and for success. Even in sales, you’re not competing against other salespeople from your competitors directly, whereas you’re actually sitting across the table from the people who want to win the margin game, and they also want to take you to a sporting event. So let’s go out and and pretend to be your friend.
So you got to have really good tools to level the playing field and be able to compete. Thank you so much. We really appreciate it. Hope everyone has a great week.
Pierre Laprée
Thanks to everyone.
