Procurement 'ready to take centre stage in supply chain'

Ivalua's director for Northern Europe, Ian Thompson, on why the pandemic is seeing procurement transformation becoming a business priority

Tell us a little of your role at Ivalua

Ivalua was founded in 2000 on a disruptive idea: that organisations can transform their business by how they manage their spend and suppliers. Our mission has been steady ever since: to empower Procurement leaders to do just that. As Director for Northern Europe my role covers new sales, customer care, people management and creating an environment for Ivaluans and customers to thrive in.

Does old school procurement still work?

Not really. Many organisations’ procurement processes are in dire need of transformation, as they are still reliant on manual and paper-based processes. In fact, recent research we’ve done found almost two-thirds (64%) of procurement professionals say lack of digitisation is holding them back from doing their jobs, and stopping them from gaining competitive advantage.

For procurement teams still reliant on old-school processes or disparate legacy systems it is far more difficult to anticipate risk, make strategic decisions, or have the visibility needed to bolster supply chain resilience. 

Centralising data onto a single platform helps to build the solid foundation needed to move away from these old-style procurement processes. It gives them the tools required to enable effective collaboration with suppliers.

Has the pandemic impacted late payment?

Severely, for many organisations. With organisations looking to safeguard their bottom lines, problem of delayed payments has escalated. Many suppliers say late payments are putting them at financial risk. 

Organisations need strong partnerships during such difficult times, or they’ll find themselves struggling at the negotiating table. Strong supplier relationships drive efficient collaboration, and this helps with becoming a supplier of choice. Improving the timeliness of payment is the best way to achieve this. Being at the front of the queue is critical.

What’s the biggest barrier to change?

Procurement transformation is costly, and convincing the board to spend more money on laying the appropriate groundwork can be difficult.

Yet the lack of digitisation in procurement is costing organisations time and money, but many firms have a culture that is averse to change. Procurement leaders must convince the board of the benefits of digitisation - how it can accelerate product innovation, unlock strategic value, and bring a competitive advantage to organisations. 

Firms need to be investing now, or they risk lagging behind competitors, losing market share and missing critical chances to innovate.

Where will procurement be in 10 years?

In ten years, it will be more central to every business. AI will help with transactional activities, leaving procurement professionals to focus on strategy and relationships.

Unfortunately, it seems supply chain disruption is here to stay, thanks to the pandemic (and, in the UK, Brexit). 

To address these challenges, clients are embedding supplier payments in procurement process. Such strategic payments bridge the gap between the finance team and procurement. This gives both the supplier and the buyer visibility into supplier payments. 

Equipped with this information, procurement teams can identify and address the issues that create late payments in any new contract. 

Strategic payments put procurement in the driving seat, helping it to take control of the end-to-end process, while early payment allows suppliers to offer better prices and also secure future deliveries. 

Such a level of precision payments is one way procurement can demonstrate its strategic value over the coming years.

Who inspires you?

I believe if you take the time to understand people, most of them can inspire you in some way. It may be that person who is cheerful in the face of adversity. It could be someone who  runs a kids’ football team for no personal gain. It might be a famous statesperson. If you look hard enough you can find inspiration almost anywhere.

Best piece of advice you’ve been given?

When I started in a junior commercial role aged 20, my first manager always stressed the importance of persistence and politeness. I’ve always stuck by that. Both oil the wheels of progression.

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