Wednesday, 31 August 2016

[Guest Blog] Five Takeaways from 20 years in Contracting and Procurement

Bruno Alvarez is regarded in Latin America and the Americas as one of the Leading Contracting and Procurement Experts in the region. Bruno’s background comes from the Energy and Gas industry and working at global “Fortune 500” companies such as Royal Dutch Shell, Duke Energy, ICI and Zeneca.

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Being a procurement professional for the past twenty years has been very interesting. Exciting in a sense that I have had the chance to negotiate a very wide set of goods and services. From small things like office supplies to complete power plants. From simple consumables to radioactive equipment which need a very complicated stewardship to import into Central America. Many of these experience have left me with some takeaways, here are five of them.

1. No matter how beautiful the strategy is, don’t forget to measure the results

When there is a need to put ideas on the table we have ways to get that strategic cap on and produce beautiful, creative, inventive solutions. Which is great! But in my experience, the hard part is following up, implementing and measuring the solution. Perhaps it is because what comes after the strategy is not as glamorous or fun as developing the strategy itself, or that nobody likes to follow up. Yet if you neglect to do so, then you are doing nothing. Because how can you expect to have results, if you don’t track what you are doing? Going blind on a winding road is not the way to do contracting and procurement. Set up your KPI´s from the beginning, monitor closely, and, adjust when necessary.
   
2. Do your research before a negotiation

You might not believe it, but many many procurement professionals go into negotiations every day with very little knowledge of the terms, market trends, historical data, etc. Take time to prepare before going into any negotiation and when I say negotiation I mean in the broad sense of the word. Not just a one to one session, but in contracting any service or product. Before conducting RFX events or asking for a price quote, gather all the information you can get your hands on whatever you are going to acquire. Failing to do so is more harmful than anything else. 

3. Create a collaborative relationship with stakeholders based on communication

When I do workshops on contracting and procurement best practice, I dedicate a whole chapter to communication. For a procurement professional, it is essential to make all information flow to the right level of stakeholders. Map out your stakeholder matrix and make sure everyone there, gets the right information timely and with no exceptions. 

4. Develop relationships with your key vendors

There was a time back in the days that you would see your vendor on the opposite side of the table and treat them like an opponent. Old school negotiation practices taught how your “opponent” will or will not out-power you. It was all based on leveraging power. Now we have come to realise that vendors are allies. Obviously, this makes sense because vendors depend on your business and you depend on their product or service. The best procurement practice now proven and widely used is to get close to your vendor and work together in a relationship. Synergy is more powerful than leveraging on power amongst each other. Work on your vendor relations at all times.

5. Always ask for a discount

Being born in Guatemala, Central America. We learn to negotiate everything. Negotiation is basic for survival in Latin America. You can get fresh produce from the street markets and many other products from vendors that will price according to how much “they think” that you can afford. That being said, we learned the importance to ask for that last time additional discount on everything. To my amazement, there are times when vendors are withholding a little bit just in case, and because of that, you lose for not asking. On top of that, it's good practice to test if you are actually getting the best price and believe me, this one is a good one to open to debate with your peers’ procurement professionals. Remember, just don't forget to ask


Contracting and procurement is a function that requires a lot of communication, relationships, problem-solving and creative thinking. These five takeaways are examples of such skills that can easily be put into action. I hope that as procurement professionals you can relate to them and remember to use them when encountering such scenarios in your everyday work.

Bruno Alvarez
Procurement Professional - SS&PK
LinkedIn: Bruno Alvarez


Market Dojo helps procurement professionals negotiate better with our on-demand eSourcing tools. If you’d like to find out more, get in touch or register for free and play around with our software for yourself!

Wednesday, 24 August 2016

[Guest Blog] How Consultants Provide Value - Part 1

Today we are pleased to welcome a guest post from Terri Hudson. Terri is the Managing Director of Baker Wanless. They are a UK based procurement consultancy who have been shortlisted for the ‘Best Business for Customer Service’ at the prestigious Croydon Business Excellence awards. 

Baker Wanless provides a wide range of Flexible Sourcing Solutions to their clients from different sectors that are looking to review, monitor and reduce costs around the globe.

This is the first part of a series on how consultants can add value.

Many large businesses use consultancies like ours to provide additional or specific resources to identify opportunities to reduce costs, find alternative suppliers to their incumbents or simply to accelerate the speed of their procurement projects. 

In the last 3 years, we have helped our clients to buy the 'same for less' by addressing £384.7m of spend across goods and service contracts, identifying savings of £47.5m (12.35%) on spend. This is the power of eAuctions.

Our average return on investment ratio is 30:1 meaning on average for every £1 spent with us, we find £30 to give you back in savings. We also guarantee to save you money or you don't pay us.

Why is it important to consider new suppliers?

“The wider you cast the net, the greater value that can be gained...”

New suppliers can provide a vital role in challenging the incumbent supplier. Often in our experience, clients will wish to remain with their current incumbent supplier. This is typically due to the evolved relationship between the companies and the potential cost of changing suppliers. However, by considering new suppliers and using a format such as a Ranked Reverse eAuction, you drive competition for the tender in a fair and transparent manner. 

An eAuction also provides the ability to deliver price compression. Creating an environment in which all suppliers are inclined to offer their best value, this might be of particular importance if a single supplier is unable to facilitate the long-term demand. 



One key feature that we encourage is ethical bidding, ensuring that suppliers offer values that are sustainable in the long term for their business. The importance of this can be highlighted in cases where thorough research hasn’t been done by the supplier prior to negotiations.

Stay tuned for parts 2 and 3 where we discuss cost avoidance and diminishing returns.

Terri Hudson
Managing Director of Baker Wanless
Twitter: @BakerWanless
Website: BakerWanless.co.uk
LinkedIn: Terri Hudson

Market Dojo helps procurement professionals negotiate better with our on-demand eSourcing tools. If you’d like to find out more, get in touch or register for free and play around with our software for yourself!

Thursday, 18 August 2016

[Guest Blog] What does Lean Procurement mean for you?

Tony Lockwood is a published author, lifestyle entrepreneur, high-performance business coach and senior consultant who works with Executive teams to orchestrate the development and delivery of strategic plans to advance market share/penetration and achieve profitable growth.


What competitive advantage can you deliver through Lean Procurement?

Many organisations are facing financial pressures such as the challenge to deliver against targets where economic confidence is low. An obvious option in the face of such a challenge will be to tighten the belt – most likely in the form of variable cost reduction, the most severe being headcount reduction. However, the loss of experienced procurement staff now when you may want them on the payroll when the weather vane starts to turn later, might not be the best option if your organisation is in a position to consider alternatives.

Lean is traditionally linked to manufacturing operations, and even there, something for the shop floor. However, Lean principles can – and should – be implemented across the whole organisation. So, focussing on procurement, where’s the link, and what are the options?

First, a quick lesson in Lean:

The key aim of Lean is to deliver greater operational efficiency through the elimination of waste and continuous improvement. In a procurement context, one example would be to optimise your processes to reduce the overall procurement cycle, thereby delivering any savings achieved faster. By reducing the ‘cycle time’, you can run more projects, deliver more savings, ensure better quality SRM… the options are there. Don’t forget, procurement can easily be the biggest contributor in an organisation looking to cut costs.

It is a well know fact that, assuming a net return on sales of 10%, a 1% procurement saving has the same effect on the bottom line as a 10% increase in sales. By having the additional capacity to deliver a greater number of improved commercial agreements, outsourcing non-core business activities and so on, the procurement function can either be a real profit contributor, or give the business the opportunity to reduce prices whilst protecting net profit.

So, what are the ‘wastes’ associated with Lean? The classic seven wastes and how they could relate to a procurement context are:

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1. Delay - This could be an internal customer waiting for Procurement to help them with their purchasing requirement; a report that is not delivered on time; or taking too long to respond to a request. The cost to Procurement is that internal customers could decide to do it themselves next time instead of involving you.

2. Duplication - An example of this is where you have to re-enter data or copy information into another system because the two systems do not talk to each other.

3. Unnecessary movement - If a process means that you have to queue several times between activities or you do not receive a one stop service then the unnecessary movement has been created. Processes should pull work through when capacity is available rather than force you to take work to the activity.

4. Unclear communications - This waste is the result of having to seek clarification before taking action or confusion about how to perform an action. This wastes time in having to get the answer to your questions.

5. Incorrect inventory - Being out of stock, being unable to get exactly what was required or having to use a substitute service are all examples of waste from incorrect inventory.

6. Missing the opportunity to retain or win customers - A speedy and effective service is the way to win the hearts and minds of internal customers and have them returning for more. This will not happen if the providers of the procurement service fail to establish rapport, ignore their customers and are unfriendly or even rude.

7. Errors in service - This results in a defective service to internal customers and creates work to rectify the situation.

‘What did you improve today?’ should become a foundation principle in the organisation, underpinned by strong senior leadership. In isolation, any one waste might be seen as a triviality that is not worth looking at, but this is where the concept of ‘continuous improvement’ (Kaizen) makes its contribution. The principle of continuous, small incremental steps to improvement is one of the bedrocks of Lean.

Putting all of this in place is undoubtedly a challenge, but the benefits can be immediate, sustained, and above all make one of the single biggest contributions to your organisation’s financial health in these challenging times.


Change Management Consultant
Twitter: @tonylockwood
Website: tonylockwood.com
LinkedIn: Tony Lockwood


Market Dojo helps procurement professionals negotiate better with our on-demand eSourcing tools. If you’d like to find out more, get in touch or register for free and play around with our software for yourself!

Wednesday, 17 August 2016

[Case Study] Kent County Council generate a 40% saving for their public sector needs through Market Dojo eAuction Platform

Katherine Clark is a Procurement Officer at Kent County Council. Her duties involve the strategic sourcing for the information technology needs of one of the largest county councils in the UK.


Tell me about yourself?

I’ve been working in the procurement team for Kent Council for the last few months, my role revolves around the IT needs for the council.

How do you use Market Dojo?

We use Market Dojo in our procurement departments for eAuctions and questionnaires to weight auctions. Typically we use it on tenders greater than £50,000 however we have auctioned for values of only a few thousand pounds.

What is your most notable success using Market Dojo?

My first eAuction involved comparing suppliers for an identification tracker system. Kent county council had been using an incumbent supplier for a number of years on the same contract terms but we wanted to discover the current market value and whether we could produce savings as a result.

We choose to conduct a Weighted Ranked eAuction, with 70% based on value and 30% based on the quality. The result was a huge success with our incumbent and preferred supplier offering a value that was 40% less than the previous price we had been paying.

We also received very positive feedback from the suppliers that took part in the eAuction, some of the suppliers mentioned that they found the system easy to use and were happy to have taken part and been considered in the eAuction.

How will Kent County Council continue to use Market Dojo?

Here at Kent County Council, we are always looking at ways we can use Market Dojo. The success we have had has changed the mentality of our procurement teams into a focus on generating greater savings turning us into a team that thinks “why should we not use Market Dojo, rather than why we should”.

Lastly, what is your favourite thing about Market Dojo?

We love just how easy it is to use. When I was first tasked with creating an eAuction I was quite daunted with having had no prior experience of conducting an auction or using an eSourcing software before. But after creating a few demo events using their Sandpit tool and the support from Market Dojo, I felt confident in my ability to use the software and produce great results.




You can read more about our work with 
Kent County Council here.





Market Dojo helps procurement professionals negotiate better with our on-demand eSourcing tools. If you’d like to find out more, get in touch or register for free and play around with our software for yourself!

Thursday, 11 August 2016

3 ways eSourcing could benefit the Olympics

The Olympics, that time once every four years you become heavily emotionally invested in sports that you forgot had existed, or do not understand the rules, or in our office, embroiled in a debate over whether synchronised diving requires more skill than clay pigeon shooting (it does).



Whilst the world marvels, and rightly so, at the athletes who have invested the last four years of their life, and considerably longer, into ensuring that they are in peak condition to go for gold, there has been an undercurrent of issues surrounding the Rio Olympics (I’ll come onto these shortly). Before working for Market Dojo, I would have taken a moment or two to reflect how bad these issues were and moved on, but now I feel compelled to write a blog article on how an eSourcing system could have helped to prevent these issues.

Corruption

Brazil has had it’s fair share of corruption allegations in recent years. The scandal concerning national oil company Petrobras has seen over 100 people arrested for their alleged involvement and now Reuters has reported that Brazilian investigators are looking into possible corruption around the staging of the Olympic games to include all venues and services. The use of an eSourcing tool would make the tender process more transparent; providing a clearer framework of how an organisation is going to market for goods or services, with a clear audit history of questionnaire responses and bids.
Thousands of protesters march to the National Congress building in Brasilia


Overbudget 

A recent Oxford University study found that the Rio Olympics is $1.6 billion in cost overruns, equivalent to 50% over budget. Whilst there are many ongoing procurement practices, for example, contract management, KPI’s, etc. which may have helped to curb these costs, the use of an eSourcing tool at the front end may also have assisted. How could an eSourcing tool help with this? Simple, by finding the market price in the first place. At Market Dojo, we’ve seen that the use alone of an eSourcing tool gives the impression to suppliers of a more professional experience, and suppliers tend to ‘sharpen their pencils’, even with their RFQ bids. Taking an event to a reverse auction can generate further savings.

Ticket Allocation

If you’ve watched any of the Olympics so far, you may have noticed that there are lots of empty seats. Rio’s ticketing director has stated that 78% of the 7.5 million tickets have now gone. With 1.1 million tickets left to sell, it’s not too late to use Market Dojo to run forward auctions on the remaining tickets! 

The Olympics is synonymous with the celebration of the human spirit; where lifelong dreams become reality and even a place where political differences can be put aside in the name of sport. Whilst there are a lot of other issues, for now, let’s sit back, and enjoy the spectacle of the world’s best competing on the largest stage.


Lee Eun-Ju of South Korea takes a selfie with Hong Un Jong of North Korea in a gymnastics practise session during the Olympics in Brazil.
Market Dojo helps procurement professionals negotiate better with our on-demand eSourcing tools. If you’d like to find out more, get in touch or register for free and play around with our software for yourself!

Monday, 8 August 2016

The Dojo 6 years later....

August 2nd marks an important date in the Market Dojo calendar, as each year on this day our firm becomes one year older. This year we have now successfully reached our 6th year in business. 



According to Statistic Brain, there is a 60% chance that we should have failed by now - may the odds be ever in our favour! As it happens, the last 12 months have been fantastic.

Here are some of the highlights:

Continued growth

This time last year we were delighted that our registered users had increased by 53%. Well, this year we’ve seen a further increase of 57%, showing no sign of slowing down.  We’d also like to congratulate Daymark for becoming our 100th paying client, joining some other fantastic clients this year including:


We’ve also seen a 100% renewal rate on our annual clients, a testament to the value our software has brought them, giving us such a great foundation to grow from. We even have our first client, Hamworthy Combustion, still on our books since joining us when we were just a few months old!   

Anyhow, bottom line, or should we say the top line, is that our revenues expanded by 53% compared to last year, exceeding our 50% target. But we’re not going to stop there. Our target for the next 12 months shall be 62.5% growth, which we think is realistic because….

Our expanding team

In the last 6 months, we’ve brought in Lewis, Pete and Craig to bolster the sales and marketing team. For reference in the photos, purple shirts are not our corporate uniform, must be a millennial thing!

We’re not stopping there either, as we’re currently advertising two further roles, one in sales development and the other in software development.  

New office

This summer we’ve had the enjoyable view of watching our new premises being built across the road from our current office. It’s nearly double the size and will give us room to grow for at least the next 12 months. Here’s how it looks today, taken on a classic British summer’s day!

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Roadmap

Lastly, our year of success wouldn’t be complete without some amazing progress across our product offerings.  This year we’ve announced 8 major releases, plus countless minor enhancements.  

We even managed to launch a whole new module, SIM Dojo, developed in collaboration with PHS Group, who simply could not find an intuitive, self-service and affordable supplier information management solution on the market.  

We also released the multi-currency feature to let participants bid in their preferred currencies, yet keep the bid comparisons in the currency of choice for the client.


And finally, another highlight was the MBA student project where we released our initial Analytics tool to be able to assess your eSourcing efforts at a high level across your company. We’ve seen some hugely impressive statistics as well, with some clients averaging over 50% saving across more than 1000 spot eAuctions - more on that to follow!

So, in summary, it has been a great year but really, the journey is still just beginning. Thanks again to all our wonderful clients and partners, look forward to more to come.

Market Dojo helps procurement professionals negotiate better with our on-demand eSourcing tools. If you’d like to find out more, get in touch or register for free and play around with our software for yourself!

Tuesday, 2 August 2016

[Guest Blog] How to find top procurement talent

We are pleased to welcome a guest post by Adam Maidment from Portfolio Procurement, a market-leading procurement recruitment specialist. Discussing the unique challenges to recruitment in the procurement industry.



How to find top procurement talent

Genuine procurement talent can be hard to find. To succeed in the industry, procurement professionals need to be good negotiators, forward thinking and have a keen eye for detail. 

Working in the procurement industry has a lot of advantages, yet is still an extremely challenging career choice. New employees have to prove their worth by taking charge of their own projects from start to finish. They also have to deal with senior members of staff including MDs and CEOs, difficult suppliers, manage through drastic company changes and work in an industry that is constantly evolving with the development in sectors such as eSourcing.

For such a vital and challenging role, do you know what you should be looking for in procurement staff? How do you know if you are hiring the right people? 

Look out for non-learned skills

Learned skills, such as financial management, contract management, and cost reduction are all vital to anyone working in the procurement industry, but these can largely be learned on the job. When hiring talented procurement staff, a candidate's personality is just as important.

Procurement staff deals with almost every department across the business. They regularly speak to suppliers to negotiate good deals and work closely with customers to ensure they get what they want. Good staff know the type of skills that help them thrive in this environment are not taught in a classroom; skills that include listening, understanding, empathy and communication. 

Ask your candidates about times they have had to use these skills and try and discover if they have developed them throughout their course of their working life so far. They tend to be easy to spot - interviews are all about communication, so ensure you test their listening and understanding skills. 

Have they been relationship managed before? 

Relationship management is arguably the most important skill for procurement professionals. Even if a candidate has no background in procurement, there are many roles where they would have been able to develop this skill. Project managers, account managers and candidates with experience in customer service will have experienced relationship management in some form. Relationship management as a skill can be used in any sector of procurement, such as eSourcing. 

Ensure anyone you hire understands the importance of good communication and can demonstrate times they have had to use relationship management in their previous experience. 

Do they keep updated on changes in technology? 

The use of technology is playing an increasingly large role in the procurement industry. With the rise of eProcurement helping businesses consolidate supplier information and the use of technology in both the approval and the transaction process, it’s now important for procurement professionals to have a strong grasp on technology. 

Do they have a forward thinking attitude? 

Other departments spend a lot of their time looking backwards; finance, legal and HR have to analyse and interpret what has already happened. 

Procurement professionals spend their time looking forward; it’s their job to help shape the future of the company. Whether it's choosing next season's stock or designing more effective supply chains, you need to ensure your procurement staff has a forward thinking attitude, always with the end game in mind. 

How to pick the right person

Procurement can be a great career choice for people looking for a varied and exciting role with good career prospects. You need to ensure you hire suitable candidates as the role can be largely independent and high pressured. 

During interviews, ensure candidates demonstrate the soft skills required to succeed in the role, evidence of being able to manage relationships and their ambitions for the future. This way, you can be confident that you have found capable and talented employees, who will be able to handle the senior staff, various departments, and suppliers. 

Market Dojo helps procurement professionals negotiate better with our on-demand eSourcing tools. If you’d like to find out more, get in touch or register for free and play around with our software for yourself!