How to get it right when buying complex services, personas and the end-to-end procurement process.

Intro | 00:03.23
Welcome to the Procurement Unplugged podcast, the podcast for procurement professionals. Great to have you with us today.

Fabian | 00:13.51
Welcome from my side to another episode of Procurement Unplugged. I'm extremely happy to have Bob Booth here today from IBM, who is a well-known procurement veteran and who's happy to share. some knowledge and insights today with us. Welcome, Bob.

Bob | 00:34.03
Yeah, thank you. Thank you very much, Fabian. Thank you.

Fabian | 00:36.95
Yeah, maybe it's interesting to understand what was your way into procurement. I mean, you've been around since quite some time, I would even say two to three decades. You've seen a lot. So what was your first entry road into procurement or what is always kind of your dream to work in procurement?

Bob | 01:00.02
Yeah, no, actually, so I started my career as an accountant in practice, and I spent the first 10 years working in the accounting profession and also in industry. And then I read an article by a company I'd never heard of called Anderson Consulting about a piece of technology I'd never heard of called SAP that was going to fully automate finance within five years. This was in 1997, right? So I thought, well, I better go do that.

So I joined Ernst & Young. as an SAP consultant in finance and then did my first finance implementation. And then I heard in sort of 99 about something called B2B. So I said to my colleague, I want to do B2B. And he said, well, there's this piece of technology we've never heard of called Ariba. We're implementing it at an insurance company.

So, I went along and implemented version five of Ariba in 2000 for a UK insurer, and from there, I found it challenging, dynamic, and interesting. For the 15 years thereafter, I’ve been implementing systems, transforming operating models, fixing data, and driving change. But all the way through, I’ve been looking for interesting and new pieces of technology.

In the early 2000s, it was RFID and EPOS technology. Then, as I went through and moved into more organizational transformation, it became more about automation and analytics. As I reflected at the end of my career at Accenture and then joined IBM, I started to focus on AI. But actually, all that AI technology just sits on top of the core enterprise systems. Interestingly, it needs to be added to something that is already well-founded. For me, that’s why I enjoy understanding clients' problems and then working out what all the ingredients are that help to solve them around those.

The Disruption of Digital P2P in the 90s and Its Evolution

Fabian | 02:56.60
Around those dimensions, yeah, I mean, that was a very interesting journey, I’d say. And, I mean, you’ve pretty much described that, kind of, in the mid to late '90s, it was a huge disruption to have a digital automated P2P process. So, apart from that beginning of the journey, what would you say were the biggest changes or transformations over the last 30 years since then?

Bob | 03:29.24
I think I think I mean, some things have kind of moved forward dramatically, but I think some things are still the same old things we're trying to solve 2000 and the sort of decade thereafter. Right. So the heart of this thing is the the core enterprise system, the SAP or the Ariba Cooper or whatever it might be.

But actually getting it to be usable by someone is continues to be a challenge. making sure that the experience they have when they receive this piece of data, and, you know, kind of corporate experience on systems like procurement compared to the Amazon experience, there's a vast gulf between the two things. Data was always a challenge, and it continues to be a challenge.

I think the thing that's really different is, and I see some of my peers in the industry talking about the future of procurement, and I think the future of procurement is kind of now, because the thing that's really changed is you can now... Join together technologies, make them genuinely interoperable, connect them and integrate them seamlessly. It's actually really, really easy.

And that means if you think about the things I talked about, you know, the end to end experience, think about the things that are going to drive value that really make a difference. And then you get the data right. You can actually deliver that sort of, you know, kind of beyond Amazon experience in corporate systems as well. I think that's different. This is a problem. Experience is a problem. Systems are a problem, as they always were. but the technology gets to layer on top of it.

So if you go and solve those core problems, you can have some kind of exquisite experiences to really really reinvent the procurement process.

How Technology is Transforming Procurement Beyond Automation

Fabian | 05:02.54
Yeah, I mean, you mentioned like to solve the client's problems and then you just mentioned a ton of problems. I mean, well, what you say in the last decades, you can put a check mark and say, okay, from those hundred clients, we solved the problem and actually, I mean, for sure, P2P automation, but I mean, probably there are a ton of other topics in the intersection of finance and procurement where you can say, okay, that is solved now. And yeah, that will be interesting.

Bob | 05:36.46
Well, I think I'm actually all the things that I talked about organizations are solving, we work for a farm company recently, and implemented a procurement solution there. And they got someone who really thought about structure, a strategy for the technology.

Our role then was to, you know, make sure the data was right, go through all the contracts, and cleanse them. We then created all the different buying channels to ensure that the insight in the contracts translated into things they could buy. We also did the human-centric change piece, making sure we considered the personas that were going to be receiving this—the people in accounts payable, requesters, approvers, or suppliers—and then ensured the whole process was seamless. So, all those things were getting solved, and the new...

Fabian | 06:24.03
Plugins and technology make a big difference, and I think, again, it’s just about having thought about how to solve them in a holistic way, thinking about all the aspects of the transformation program, not just the technology. Yeah, I think it’s very interesting to understand the different layers that you have: the data layer, the technology layer. Because, I mean, like you hear many people saying in procurement, “garbage in, garbage out,” so I think the foundation of an analytically and AI-driven procurement center needs to be the cleansing, as you just mentioned, and the master data management. I think building that foundation is the key.

Bob | 07:06.90

Yeah. And I think the key thing is, if you start with the experience of the persona, if you understand what actually... And we ran a session for a consumer company a couple of years ago, kind of when they started. We brought in accounts payable, we brought in the strategic sourcing people, we brought in the accounts payable. When we started, they were kind of all in separate corners, like a wrestling match, right? Ready to kind of… because they were sure that all their problems in terms of their process were generated by their colleagues.

But then, as we started to do some persona exercises to understand, you know, what does someone say, think, feel, and do, and then sort of say, you know, "I can't get access to this particular data because this contract's not properly loaded," when you then sort of mapped all their problems onto the end-to-end source-to-pay piece, you could see that everyone had problems all the way through.

And so everyone understood that all the problems were cumulatively created, and actually, if they just worked together on the five or six things that were really key — the elements of data, the appropriate pieces of workflow and approval — they could solve them together. And they kind of went from being in three corners around, like, a wrestling match to forming into a family photo.

And it's really nice using the persona-based approach, the experience-based approach. You can not only hone in on the really critical things you need to do, but you can also kind of bring people together and align around the fact that you want to transform. It's a really powerful, powerful transformation.

‍Fabian | 08:33.51
Yeah, I can imagine that because, I mean, that method would also foster collaboration and would also think from top to bottom about the end to end experience. And I think only if you build upon the end-to-end experience, you can drive value. Because I mean, just with fragmented technology and system breaks, you don't drive really that incredible value.

Bob | 08:57.12
Exactly, exactly.

Fabian | 09:00.97
And with regard to the personas, do you think if you differentiate by the different sourcing categories, do you think all personas have been served? Or do you think some... Some were kind of underserved, where certain sort of inefficiencies or under digitization is still happening.

The Complexity and Risks of Services Procurement

Bob | 09:23.07
Well, I think there's probably from a persona perspective, I think there are kind of, we typically break into two. The sort of, you know, the complex, the buyer of complex services is often a kind of frequent buyer compared to the sort of, you know, the occasional shopper.

And the occasional shopper need to make it relatively intuitive. as kind of amazon-like as possible and then and then how to self-serve around the around the uh the the systems and the learning and everything else right so that's just kind of that that that tranche of people didn't can be can happily shop and get on with their job um for the for uh the regular buyers the frequent buyers who tend to be a commodity more of a commodity expert as a as a as a requester uh where it's services you kind of have to think differently um and i think you have to because services offer so much complexity right there's complexity and the dynamic nature.

So why why is it so complex with regards to services yeah well so i think there are sort of three parts right so it's there's a sort of dynamic nature of what you buy drives complexity um there's also some risk in in services right which doesn't it doesn't happen with goods uh and there's a piece around the fact it just really kind of doesn't fit into um a p2p system which is really a p2p system is kind of almost based upon the requisitioning process kind of from the army or whatever you went to the stores and said i need abmc and that's turned in in in kind of modern erp systems into a pr and a po and a receipt that really

Fabian | 10:54.96
Really doesn't matter so so just to talk about if i may ask you i mean many people these days talk about the supply chain risk but um i haven't heard much people talking about the risk with regards to services maybe you can elaborate on on

Bob | 11:13.30
That, uh, topic a bit, well, yeah, maybe just talk—I mean, just talk a little bit about the kind of dynamic nature, right? So, of course, with the service, you don’t fully understand what you want until you’ve co-created it with a supplier. Ideally, you’re in control of that process, and the scope is controlled.

Then, as you start to execute it, things change, so you need a mechanism to be able to manage the change. Um, and then, as you consume it, of course, you’ve got different dimensions. You might have, you know, different people over different times, at different rates, different periods, partial delivery of milestones—a whole bunch of complexity around that.

That’s one dimension, but then, if you look at the risk, I guess we’ve all kind of been in the consulting buying situation where you think you’re buying someone at a certain grade and a certain experience, but actually, you get a different person at the wrong grade.

So, there’s risk around key resources, making sure you actually get the people you really need to do a particular piece of marketing advisory or whatever it is. And then there’s risk around the commercials—whether it’s fixed price, time and materials, or milestones. So, actually, the whole component of risk involves not getting the quality of service you need to deliver what’s required to advance your business, at the price you’re expecting to pay.

Fabian | 12:32.17
Yeah, that sounds about right. I mean, like listening to you, the dynamic nature itself feels like a huge risk because like only if you navigate it in a certain framework, I think you're able to later on mitigate the risks, if I understood you correctly.

Bob | 12:51.73
Yeah, absolutely. Because I think there are a couple of parts here, right? The first one is, are you maintaining control of something you’re looking to buy and making sure that you’re identifying it, specifying it, and controlling it? But at the same time, you don’t want to stifle supplier innovation. You want to ensure that you get the best ideas from your suppliers in a controlled manner. It’s really a case of how you combine those two things and sort of...

Fabian | 13:21.41
Kind of jury-rigging that into a sort of ERP solution, yeah. And I mean, if you look at a broader scheme of things from a macroeconomic level, there’s a massive trend from goods to services. So, you would think that the persona you’ve just described is gaining more and more attention. How do you see that in the current ecosystem?

Bob | 13:46.59
I mean, I think our services are critically important, right? You need the right people to help transform their business and deliver on their marketing asks, absolutely. So, I mean, there’s a real need— we kind of provide advice around elements of securing goods across the supply chain. I do think it’s more important than ever. And it’s almost like there are sort of two or three ways of dealing with it, right?

So, on one hand, some people are just accepting that it’s complex and raising their million-pound blanket order, and then there’s a lighting audit—colleagues and their colleagues and the supplier deal with it through offline Excel mechanisms. On the other hand, some people are trying to use solutions like Fieldglass to address this, which can help manage temporary labor and contractors. And then there’s an evolution of kind—

Fabian | 14:38.01
Of technologies that are being much more specifically designed to solve this problem, yeah. So, you kind of think that now there are more and more providers coming up which go beyond the traditional temporary labor but focus on the more complex services, in order to cater to those personas and deliver an end-to-end experience.

Bob | 15:01.50
Yeah, I mean, there are as well, I mean, there's kind of, there's, I think there's a, uh, a clear leader in the market. So, so, globality of, of taking a really. A really, uh, strong position, um, and but there's also, you know, companies like mechanics who have also kind of startups are going fast, uh, making progress. And those, those companies have really embraced the. sort of dynamic nature of services. They're making it easy to use sort of AI conversation tools to be able to have a conversation and chat with the system to understand what you need and properly gather your requirements.

Actually, you know, collaborating with multiple requesters. And then you can go into a process with suppliers where you can iterate the solutions and run a dynamic tender to get the best of all of the above. They’re also offering some really nice diversity features, providing extra options in terms of suppliers, particularly where there are diversity targets, such as in certain countries like the US or South Africa. Generally, it’s a good idea.

And then, once you have agreed on the service, they’ve got really clever ways of consuming the service that leave people in control while offering flexibility. At the very end, you can get feedback, building up a kind of Glassdoor or Amazon rating-type sense of how well they’re performing. I think that’s great for ongoing supply management because, actually, managing service providers is really hard. It often ends up being a bit anecdotal; you might get a net promoter score at the end of a six-month period, but it’s really hard to assess individual pieces of work. Tools like Globality and Merck Arm make it really effective to engage, work with suppliers, generate collaboration and competition, and then understand whether they’re doing a really great job.

Fabian | 16:50.91
Yeah, I think that was very well described and to me come across two major topics. And the one topic is collaboration across the buying, but more importantly, maybe the supply relationship journey. And the other topic, I think what many people tend to forget is the challenges which usually occur in the delivery phase of a service.

So, like, how do I track the milestones? How do I make sure a service is being delivered? Because a lot of fraud is also happening at that particular stage or when the risk is not being mitigated properly. So, what do you think about the delivery stage of a service, which might be kind of your expertise lies at the intersection of finance and procurement?

Bob | 17:40.81
Yeah, I think it’s really important, actually, and we’re starting to see—not wanting to make it too much just about the UK, but in the UK and other places—we’re starting to see some major capital projects coming through. We’re beginning to reinvest in areas like nuclear energy, which involves increasingly complex services with milestones against them. It’s really important that organizations are both clear and collaborative, and that the tool allows you to capture progress, handle partial milestones, and manage complex commercial services. For example, you might have a time and materials payment mechanism with some sort of discounts and increments.

So I think it is the setting up of the relationship initially, being able to collaborate around sourcing is really important. And by the way, to do that, you've really got to go back and solve the data. I referred to it before.

You’ve got to go back and understand your service suppliers. You’ve got to classify them properly. You’ve got to make sure all the contracts you’ve created are properly reflected in the system. But then, as you say, I think these technologies are making really good progress in terms of allowing you to manage milestones.

However, I think there’s still more to do in terms of technology, and there’s still a lot for organizations to understand about how best to use it. The best way to approach this is to get used to it, start to consume it, and then actively focus on how to continually improve to ensure we’re using this technology as effectively as possible.

Sustainability Trends in Procurement and the Rise of Service Providers

Fabian | 19:13.90
Yeah, I mean, you mentioned already kind of some other trends like diversity or sustainability. So if you look beyond the complex service buying persona again, what kind of trends do you see in kind of procurement land?

Bob | 19:36.19
I think the really big thing now is sustainability. So measuring your emissions and kind of most organizations, I mean, I was working with a consumer goods company recently that had 95% of their emissions were scope three, right? So generated through the supply chain.

So, as a minimum, organizations are looking to put in sort of reporting systems that allow them to understand, you know, what is my scope for emissions across my supply base, be able to understand for individual suppliers what their emissions rating are, what their mix is.

Fabian | 20:13.90
And with that sustainability, I also feel like that that is mainly been taken care of for the big supply chains, but not really for service providers. So you see that also as a.

Bob | 20:28.71
Important topic for service providers? Well, yeah, I do. I think there are a couple of things, right. So, I’ll come on to sort of answer that question in a second. But maybe just to come back to my point, I think, on one hand, reporting is the minimum: you know, what is my scope for reporting my existing supply base, where am I? But the more leading organizations are starting to make decisions around, and actually, therefore, I’m going to make some different sourcing strategies.

So, I’m actually going to choose suppliers based upon their emission levels, and I’m going to start to play—it’s going to start to become a really key criteria for my selection of suppliers, both at the contract stage, well, the MSA stage, and then subsequently.

So, definitely for materials and goods suppliers, we’re also seeing services suppliers actively taking steps to reduce theirs. So, I think it is important, and I think it will be an important component going forward. I mean, there are some obvious things around, you know, reducing travel, which has some impact on this, but I do think it’s an important topic, and organizations are thinking it through.

The great thing about a solution like Globality or Merck Arm is you can build that criteria straight into your selection criteria, and you can then manage it dynamically. Yeah, no, I mean, that’s kind of what is...

Fabian | 21:49.81
The topic of our time, I think, is going to net zero. I think it’s great that finally the awareness is widespread, but I feel the same as you that many people tend to forget that for many professional or complex service engagements, this also should matter and should be incorporated into the respective solutions.

My last question will be...

I mean, there are probably not many people in the world like you who have worked for three decades in consulting companies like E&Y, Capgemini, Accenture, and now with one of the leading tech companies, IBM. You’ve seen so many different procurement buying centers, as well as financial organizations, from the inside. What would you advise organizations regarding transformation and technology?

I mean, everyone talks about digitization, and organizations hire CDOs and CIOs, but what is your practical advice or words of wisdom from all your experience?

Bob | 23:03.24
Yeah, I mean, I agree with your conclusion that I’m much older than anybody else. I think that’s not the case right now. I’ve been doing this for a while and have been lucky enough to work with some great companies and colleagues. So, I think, for me, you’ve talked about it all the way through, right? And I’ve sort of talked about it as well. I think, as people are designing their journey from here, they’ve got to think about all the dimensions.

They’ve got to think about what the experience and process are that we’re trying to drive. You know, what’s the content and data we’re trying to convert? What are the skills of the people, having identified the key personas? What are their skills, and how do we need to serve them? And then, how do we make that enduring as part of the service that sits around it, like the health service? The way we go about that is really just kind of simple; it’s actually in two parts.

On one hand, there is a capability model, which involves identifying the five or six areas that are really important. For example, it might be supply risk for a consumer business, commodity pricing, sustainability, or indirect procurement compliance—these are all critical areas. What are those critical areas that need to be differentiated to allow you to deliver your business strategy effectively?

And then, where indeed on the same chart are you spending your time? Where is the effort? Oh yes, okay, it’s in mismatching the accounts payable; it’s in helping solve help desk queries. That’s on one hand, and thereby, doing a sort of persona exercise that we talked about, the pain points, allows you to understand, actually, here’s all the things that are difficult.

Quite often, those sort of two things kind of tie together. And then, using this sort of approach, you can then, and actually, once you start to analyze the issues and analyze what you need, they fall out neatly into an experience problem, a data problem, or a system problem.

Then you can put it down on a roadmap over time, having worked out whether those things are short-term, medium, or long-term. Um, and actually, I’ve sort of written this down. I’ve been developing it for all those years that you talked about, Fabian, in terms of my career—sort of the last 10 years or so—and I’ve written it down in a paper we just published with ProcureTech 100.

Which actually calls out some of those procurement technologies that are up and coming. We’ll post the link to that at the end of this podcast. So, for those organizations, keep it simple, work with the personas, understand what you really need to enable, and then focus on the pain points. Build yourself a roadmap, and then use the process—and you alluded to this—to actually get everyone bought into the transformation program, get everyone agreeing they’re going to prioritize it, and that they intend to progress against the plan you’ve agreed.

Fabian | 25:59.58
I think that was a great final statement and a very wise piece of advice for many organizations. So, thanks a lot for the very exciting conversation. I think we could go on for hours; it’s super interesting to pick your brain and dive into such challenges and topics. Thanks a lot for your time, and, yeah, maybe we’ll see each other in another episode in the future.

Bob | 26:29.82
Thank you, Fabian. It's been a pleasure. Thank you.

‍Final | 26:31.04
This was the Procurement Unplugged podcast. Thanks for tuning in today. For more podcasts and expert content, visit us at procurementunplugged.com.