From Contingent Workforce to Strategic Services Procurement
The shift from contingent labor to total talent management is reshaping how organisations approach services procurement. AI, data, and stronger oversight are enabling better control, visibility, and value from complex services spend.
With Betty Sweetman, Indirect Procurement Leader
04:31 - How AI Helps Address Complexity in Services
17:30 - From Contingent Labour to Outcomes in Total Talent Management
30:45 - Sourcing and Alignment in Services Procurement
52:11 - The Structural Bias Toward Direct Procurement
59:44 - Why Services Procurement can be a Competitive Advantage When Leveraged Properly
Episode Highlights
Transcript
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00;00;00;03 - 00;00;07;19
Jonny Dunning
Well, without further ado, I'd like to welcome Betty Sweetman to the podcast. Betty, welcome. Thank you very much for joining me. How are you doing?
00;00;07;24 - 00;00;11;16
Betty Sweetman
I'm doing fine. Thanks for inviting me. And I'm really thrilled to be here.
00;00;11;23 - 00;00;34;05
Jonny Dunning
Excellent stuff. So you are an indirect procurement leader and you've got some great experience in the industry. You've worked at some really interesting places and done a few kind of slightly different angles along the way. Do you want to just for the benefit of our audience, do you want to just give a little bit of introduction to you, your background and kind of your journey through procurement thus far?
00;00;34;08 - 00;01;12;27
Betty Sweetman
Okay. Well, I actually didn't start in procurement. I my bachelor's is in business business administration, but I focused on transportation. So that's where I started my my career journey early days and transportation global logistics. I worked for several companies that were engineering and construction, high tech in a variety of different roles, all related to more of the back end of supply chain, the warehousing, the transportation, which I'm really glad I started that way, because it really gave me a practical understanding as to how supply chains really work.
00;01;12;28 - 00;01;40;07
Betty Sweetman
So, and see where procurement fits into that whole scope of supply chain. Over time, I moved into to roles related to travel services. You know, just kind of a quick aside, I always treasure the conversations that I have with people that have helped me along the way. And I had no aspirations to get into travel management. But I had one person that said, I think you'd really be good at this.
00;01;40;07 - 00;02;14;18
Betty Sweetman
I've got this idea over here in this job that I think would be perfect for. And so I ended up immersed in managing a travel program for a big media company, and then I was able to parlay that into roles at at Genpact. Excuse me, Amgen. And then managing the travel services role at BP. From there, I had another one of those conversations with someone else that said, hey at it.
00;02;14;20 - 00;02;38;24
Betty Sweetman
Amgen then you had experience at contingent labor as part of your responsibilities. How about you come over to GE and manage our entire contingent labor program for all of our businesses? We're consolidating our business and we want to be able to manage it all under one consolidated program. Is that okay? Sounds interesting. Wow. I fell in love. Quite honestly, it was.
00;02;38;24 - 00;02;59;01
Betty Sweetman
You really understand from that immersive immersion, that contingent labor is one of the things that makes the world go round. You know, it's all about the people that do the work. And I think it's a forgotten group of people that aren't that don't get benefits from a company, but they do do a lot of work for a company.
00;02;59;05 - 00;03;45;00
Betty Sweetman
It was always surprised at how many people came into a contingent labor program versus the employee count. So, you know, all of that support is so important to be able to establish and look at what available across the business where. And the other thing I learned in that position was that contingent labor is not paid through HR. So it's a budget line item that is managed by stakeholders, which was an important piece because while there were no more hires, there was budget to bring on people for projects and and do things that needed to be done to continue moving forward for the meeting, the business expectations for the functions that we worked with.
00;03;45;02 - 00;04;03;26
Jonny Dunning
Yeah, it's really interesting. I think I love the fact that you mentioned some of the kind of colleagues and mentors along the way that have kind of helped you steer a path. I totally agree with you. It's those conversations that make a light bulb go on, or it's it's somebody that recognizes something in you and says, hey, you know what?
00;04;03;28 - 00;04;18;26
Jonny Dunning
Have you ever considered X or Y? I think that's so important in in many people's careers, and certainly something that resonates with me. And yeah, you always hold a sort of bit of a soft spot for those people along the way, don't you? It's it's quite critical.
00;04;18;28 - 00;04;26;22
Betty Sweetman
Absolutely. There, there are people I go back to and that, you know, remember me fondly, which I always appreciate.
00;04;26;24 - 00;04;40;24
Jonny Dunning
So, so just just a couple of points on that. So so so within GE you were obviously doing the contingent workforce side of it. Did that cross over into the services procurement side of things as well.
00;04;40;26 - 00;05;08;01
Betty Sweetman
It did in a way, because of some of the buying channels that we had created related to contingent workforce. And one in particular was a buying channel we created with a workflow process for engineering, GE engineering services, you know, in an engineering environment, they're working on products, but, you know, they really don't have a lot of sourcing activity.
00;05;08;02 - 00;05;34;08
Betty Sweetman
We needed an outlet for a requester that needed a project with people to be able to to move it forward, get a good contract in place and then be able to execute on that scope of work. So we set up a master agreements. And an SOW workflow for GE to be able to make that happen. And it was it was quite successful for the businesses that chose to use it.
00;05;34;10 - 00;06;02;04
Betty Sweetman
And then when I went to to Genpact, we we weren't able to use that same workflow. That's when we decided to go and look for what was in the market. And that's where these our Introduction to Zivio came in to be able to bring a, an AI driven tool that would support that buying channel. And that was an important piece to be able to then at Genpact, provide that service to multiple customers.
00;06;02;05 - 00;06;29;25
Betty Sweetman
And we had some really good successes with it, with it and some some customers didn't want to go to that level yet. They weren't ready for it. But then we had others that were like, yes, let's go, because we really want to to move forward with when AI based tools, as well as being able to have that human in the loop, to be able to guide their folks through the SOW process for a successful outcome.
00;06;29;27 - 00;06;52;07
Jonny Dunning
Yeah, it's so interesting. And it is amazing for people like you and I that are kind of on the sharp end of this when it comes to the whole services procurement part of that workforce conversation. Some companies are scared to move their stick to their they might not have. They might have a very, very poor situation, but they're sometimes fearful of moving out of it.
00;06;52;07 - 00;07;19;16
Jonny Dunning
And I think that's something that will only change over time is the same with the AI side of it. You know, for some people it's they're being very, very cautious with it. But that feels like that is that resistance is being reduced almost on a weekly basis. And it's moving very, very quickly. I mean, having just been procurecon in Vegas, the amount of conversations that and the way that they're advancing around the use of AI is just incredible.
00;07;19;18 - 00;07;45;07
Betty Sweetman
Yeah, I would agree. Last week I was able to go to an ISM local chapter meeting in Houston, and they had their guest speaker was a one that's playing big in AI space. I won't name the company, but so they were able to give us a demonstration of what what their tools do. And I think, you know, it's it's all pretty I think it will work well.
00;07;45;07 - 00;08;17;16
Betty Sweetman
But I sitting in the chair, I felt a distinction between what is category strategy and strategic sourcing versus operations. And at Genpact, we had a very different operations group that once we did the contracts, the stakeholders and those customers, the way they purchased processed Pos all the way to to the AP process as well. That was the sweet spot for AI, and I think that that's going to be piece that continues to grow and evolve.
00;08;17;18 - 00;08;45;08
Betty Sweetman
I think that the pieces that are more human in the loop, like creating strategies, are going to benefit by having the ability to be able to get good data, get market Intel in a much different way, much quicker than in what we had been doing in the past, and going to multiple locations just to find market rates for for labor, for example, or engineers or project rates or, you know, legal or whatever the services were.
00;08;45;10 - 00;09;02;23
Betty Sweetman
So I think that that's coming, but I haven't seen any evidence of that really taking place to be able to help a category manager. Yet I think if anything, that's the piece that's going to be a little bit behind. But the the operations side, man is it's going full force and it's really exciting to see.
00;09;02;25 - 00;09;32;19
Jonny Dunning
Yeah, I totally agree. And I think, you know, as the availability of data and the sophistication of the organizations being able to manipulate that data, I think that's going to speed then then feed through to the strategic side of it where people are looking at forward planning, category strategy, supplier strategy, all that sort of stuff is going to feed out of it, because for a lot of organizations where their start point is, is just very, very little data or very poor data.
00;09;32;19 - 00;09;57;17
Jonny Dunning
And so they're kind of stuck at this point at the moment where they can't they haven't got the efficiencies in place or the capture in place to be able to leverage that. And as you say, the the impact that AI has had, I always say it had its had two impacts, two major impacts on services procurement. One is it's kind of taken away the excuse of organizations and departments saying it's just too complicated.
00;09;57;21 - 00;10;21;13
Jonny Dunning
You know, large amounts of unstructured data, lots of variation, giant scopes, hard to write scopes, hard to measure, compare, all that sort of thing, hard to define stuff. Well, AI takes away the lot of the excuses there because it can be extremely valuable in those workflows. But the other area where it's had a huge impact is empowering or enabling technology providers to make the user experience better.
00;10;21;14 - 00;10;46;28
Jonny Dunning
And I think that's the critical thing. You know, you can put technology and tools in place, you can try and engineer great processes, but if people don't follow them, it obviously doesn't work. So that for me is the second one is just that, that user experience. Now with modern tools, especially when you've got dedicated approach to whatever problem is you're trying to solve, AI can be very, very useful at helping out in all the different areas just to make that journey much easier.
00;10;46;29 - 00;11;17;21
Jonny Dunning
Just like we see if we're using an internet browser these days where you've got Copilot or Google Gemini helping you along the way, or whatever it might be, it's becoming integrated into how we do stuff these days, and I think it is enabling some great leaps forward, which as you say, is very exciting. But just going back to some of the kind of some of the stuff that you've worked through, a question that springs to mind, just bearing in mind today's, let's just say, complicated geopolitical situation.
00;11;17;23 - 00;11;45;11
Jonny Dunning
Having worked in the logistics side, having worked through Covid, looking at it from a supply chain angle and a procurement angle, the more and more chaotic the world seems to get, it seems like the more important procurement and supply chain gets. And what in terms of in your view, do you think that is helping to kind of elevate the profile of procurement and supply chain within businesses in general?
00;11;45;14 - 00;12;24;00
Betty Sweetman
I think so, and two examples come to mind. So one, working at BP, I was there at the time when the Deepwater Horizon event happened in the Gulf of Mexico. And, you know, I remember the day distinctly because the travel team was working on tracking the travelers that were impacted by the volcanoes in Finland. The day that we were ready to report out our final to senior leadership, we were I remember sitting in a room and the senior leader that we were reporting out to was called out to the to the hallway.
00;12;24;03 - 00;12;57;06
Betty Sweetman
Ten minutes later, he came back and said, clear the room. Good job. You look prepared to be able to bring everybody home. And then Deepwater Horizon started for for my group, for, for the indirect sourcing team. We were all hands on deck to one make sure business continues. So there was continuity and then provide the resources needed to be able to get people to the to the sites, to be able to get them hotel rooms, rental cars, those kinds of things as kind of an all hands on deck.
00;12;57;09 - 00;13;22;10
Betty Sweetman
So I think that one gave me a lot of insight to risk management. The value of the relationships you have with suppliers were much, much more intense and necessary than it was price. You didn't want to be gouged, you wanted to pay a fair price, but you wanted to make sure that you got either the boom in the right place, you got the you got a system going.
00;13;22;11 - 00;13;46;20
Betty Sweetman
It was hurricane season as well. So we had to plan for hurricane season. So that kind of that kind of event really helped me look at sourcing services differently. So that brings me to my second one at at GE was just a matter of transition. It's nine companies with almost $1 billion in contingent spend. That's temp labor spend.
00;13;46;21 - 00;14;17;02
Betty Sweetman
Wow. That wasn't we. We didn't get our arms around the spend that was across all the businesses until GE decided to buy a VMS tool. That helped, but it still didn't get to that process. So that that measure of transition also taught us a lot. And I would say that what what we had done in terms of category management was to put a strategy in place that that was an annual strategy with projects.
00;14;17;02 - 00;14;43;08
Betty Sweetman
But we also put a 3 to 5 year overview outlook. What did they want? How do we reach total talent management? And along the way we did find some some opportunities to highlight that there are some good wins here. For example, we were able to use the temp labor data as just from the MSPs to be able to look at tenure and location.
00;14;43;10 - 00;14;59;14
Betty Sweetman
So as a result of that, what we were able to do was to look at those that had a very long tenure, sometimes as many as 15 years. So we were able to look at that and say, are you sure you don't want to bring them on as an employee? If you value them that much, then think about that part of it.
00;14;59;15 - 00;15;38;24
Betty Sweetman
We were successful in being able to mitigate some of that risk by either replacing or ending their their tenure or their relationships. The the other one was to look at the data and look at location, how many were in mid cost countries that could go to best cost countries. So we were able to kind of lift and shift to move groups of people with suppliers that could manage at a best cost country position, which, you know, made our sourcing leader for that business very happy to be able to see that, you know, we were able to lift and shift.
00;15;38;24 - 00;16;08;22
Betty Sweetman
It was it was a boatload of work. But I think those were some of the progressions towards looking at total talent management that, you know, if we didn't have the data and we couldn't identify them, they helped us to be able to do that. So good relationship developed with stakeholders to be able to make that happen and look at what the options are and the opportunities are for them to be able to shift, to source differently, to think about their workload differently, to think about risk differently.
00;16;08;24 - 00;16;35;19
Jonny Dunning
Yeah, I think it's fascinating when you look at when you look at the work that you've done, there's this interesting crossover between procurement and contingent workforce and and this kind of you mentioned it earlier. You said looking at the concept and the opportunities with contingent workforce headcount versus full time employees and the restrictions that may exist around one that enable the other to compensate, for example.
00;16;35;21 - 00;17;03;22
Jonny Dunning
And and what you said is something that really resonates with me. As you said, it's important for the organization to be able to understand what is available across the organization. And that, for me, gets to the very heart of it, really with regards to total workforce management, total talent management, strategic workforce planning for the executive team to be able to say what is the most effective use of our resources, you know, what's our capacity, what's our capability?
00;17;03;25 - 00;17;30;23
Jonny Dunning
We have to do work to deliver either our product or our service to the market, to our customers, and that's going to be full time employees. It's going to be contractors and temps, maybe freelancers, maybe gig workers, definitely services procurement. So it's this is where we're getting into the really interesting stuff around the mix and how this becomes truly strategic for an organization.
00;17;30;25 - 00;17;51;04
Jonny Dunning
But but you know, you and I know in terms of maturity, if you look at something like contingent workforce, that's been a fairly well solved problem in terms of service provision, technology and things like that for probably. Well, it's been going on for a good 20 plus years, and it's a pretty mature level for a lot of organizations.
00;17;51;04 - 00;18;19;27
Jonny Dunning
When you get into the services space, this is where it's far less mature and the statement of work services procurement stuff. But but that kind of comes into one of the first points that I wanted to discuss with you, which was something that we've spoken about before, which is this evidence of a shift in some cases from a contingent approach to more of an output and outcomes, deliverables based approach.
00;18;20;00 - 00;18;40;27
Jonny Dunning
And I think, you know, as you've as you said to me before, that ties into the bigger underlying shift from kind of like a contingent labor mentality to more of a total workforce mentality. But what what is it for you that that is making that visible, that shift? And what for you do you think is driving that behavior?
00;18;40;27 - 00;18;44;27
Jonny Dunning
If that's if that's something that you're seeing happening?
00;18;45;00 - 00;19;11;25
Betty Sweetman
Well, I think it as I mentioned before, we we put together a category strategy that was, you know, on yearly, yearly increments to be able to determine which sourcing projects would take place. But it really was that 3 to 5 year outlook. That was total talent management. We knew that it was going to take the businesses some time to be able to get their head wrapped around what total talent management meant.
00;19;11;27 - 00;19;37;16
Betty Sweetman
And and I think to this day, as I mentioned earlier, that split between where the budget sits is a big part of that. HR, all employees, they don't want to talk about total talent management because they've already managed their total talent of employees. So one of the things that we did in, in our strategy was to make sure that we started to execute on the different variations.
00;19;37;17 - 00;20;23;13
Betty Sweetman
So contingent labor, temp, the independent contractors, freelancers and the SOWs. So those were the three that we focused on. So I think in that consolidation, we had a really good handle on being able to bring the temp labor population to place at a person that at GE that had developed a workflow process for SOWs very successful, he was able to not only put a workflow in place that shorten the amount of time for processing, but he was also able to grab the data, grab the data in a way that the VMS tool couldn't grab.
00;20;23;15 - 00;20;48;11
Betty Sweetman
So we decided to continue on with that buying channel and not use the one size fits all that an MSP is offering. So we separated that out. And then lastly, we also did the same thing for independent contractors. There's that unique need for independent contractors. I think some of the challenge in the the scope of work and the independent contractors come with who manages the budget.
00;20;48;15 - 00;21;12;02
Betty Sweetman
The function manages the budget. So they're going each function. That's where that partnership comes in so heavily to be able to make sure that one you can sell them, that that procurement can help them. You have to demonstrate that over and over and over, and then you have to have the data across a pretty long period of time to prove that it works.
00;21;12;04 - 00;21;41;05
Betty Sweetman
And it was successful. It's not wasn't successful in every client at Genpact, with the exception of putting together a strategy with a hope and a prayer that they might get to total talent management. But again, that was a business decision that as they were going through transition, they weren't ready for it yet. So I think there's some businesses that are ready, and I'm sure there are several that are functioning in the same way that are looking at those three components and putting it together.
00;21;41;05 - 00;22;12;02
Betty Sweetman
But that, I think, is where the the evolution that we're going through with AI is going to be able to help a lot. And, you know, I think from our last conversation, the the pieces that you showed me about what you're doing on the supplier side, as well as all of the back end milestone reporting and all of that, give that more context to be able to prove that what was bought and paid for was received, and that the company got good value from being able to go through that process and, and have a good result from that.
00;22;12;03 - 00;22;42;03
Betty Sweetman
SOW so I think, I think there's a movement afoot more towards a, I would say a guided buying channel specific for SOWs all sorts of SOWs. I will say the last SOW that we put through Zivio for one of the clients at Genpact when I was there really successful opportunity the the, the stakeholder involved had hated, literally hated working with sourcing.
00;22;42;04 - 00;23;08;16
Betty Sweetman
It was very cantankerous. He was he was just very difficult to work with. And we said, we're going to do it anyway. And lo and behold, it was it was an enormous success because of the savings and the collaboration that was evolved to be able to turn him from an adversary to an ally. So it was, you know, I think those kinds of stories, you know, get out, leak out, say, hey, wait a minute, we did this over here.
00;23;08;16 - 00;23;26;02
Betty Sweetman
If we can do it for a tax department and we can do it for engineering, who are very, very different, it's an opportunity for others to try it. And they're some of their either most their best partnerships or some of their worst.
00;23;26;04 - 00;23;51;00
Jonny Dunning
I love it. That's a brilliant example. I think one of just going back to what you were saying earlier about that, taking that total talent approach. Ultimately, if you've got all of the data across your different channels, you can make an assessment. You can then strategically evaluate that and start doing planning and predictive analytics. Obviously, the data is going to be different, multiple.
00;23;51;02 - 00;24;19;25
Jonny Dunning
Several of those channels are going to be individuals and time. And that is well handled by the kind of VMS landscape they're designed for contractors temps to a certain extent freelancers. But it's all people in time. Obviously, when you get into the deliverable based projects, that could be a block of consulting allocation. It could be a sprint in an agile process, it could be project deliverables, it could be works where there's, you know, it's a telecoms installation.
00;24;19;25 - 00;24;43;23
Jonny Dunning
So there's there's kind of like professional labor involved and there's also items involved. So it gets more complex. So you start having different types of data to compare. But but that's not really the problem for most organizations. The problem is they don't have that data, particularly in services. I had a really interesting conversation with Lisa Williams from Dow Chemicals recently, and she was talking about that within their strategy.
00;24;43;23 - 00;25;04;16
Jonny Dunning
And they've got quite an evolved situation. And again, within the engineering services side of things. But SOW was the bit that was missing that, you know, they could they couldn't do total workforce management because there was one channel, one fundamental channel that wasn't there. And it's such a big part for organizations now of their overall capacity and capability.
00;25;04;23 - 00;25;30;25
Jonny Dunning
It's like 50% of organizational spend. Is that broader kind of services services procurement. So it's kind of crept up on organizations a little bit in the sense that it's become bigger and bigger and bigger. But without AI, it was a very thorny problem to try and solve. But that's now nowhere near the case. It was even two years ago.
00;25;30;27 - 00;25;59;26
Jonny Dunning
And it's I think it's really a bit of a an awakening for some organizations to understand the kind of art of the possible, which was fantastic, to see what you and the team were doing at Genpact in, getting out to people and being able to bring that into their organizations. But just coming on to the latter point you made there, I love it, Tiger teams, I hear that, you know, quite often bringing the difficult characters, bringing the ones that are going to be most opposition for what you're trying to roll out.
00;25;59;26 - 00;26;13;06
Jonny Dunning
And if you can make it work for them, then you're really in a good position. And that's certainly something I've heard from a few organizations. So it's brilliant to hear that that was something that that you came across as well, because you really have to solve the problem for people like that, don't you?
00;26;13;09 - 00;26;45;26
Betty Sweetman
Definitely, definitely. And I also see that procurements role is evolving to not only advisory but to oversight. And the, as you were speaking, the example of another client that we worked with, with at Genpact was had created quite a mess for the company because they allowed the supplier to have too much control. So as we went back to that budget discussion, those budgets that are held by individual senior leaders, they're going to spend their money the way they want to.
00;26;45;27 - 00;27;18;09
Betty Sweetman
It's my budget. Leave me alone. But they were all different trying to meet the same end. So what the company had done was to put together a BPO contract with one supplier, and then they just SOWs were going in. There was no control, no one knew how much money or people were involved with with all of those SOWs so when we started to kind of look around the corner at the data, we also found that people were saying people were working on multiple projects over and over and over again.
00;27;18;09 - 00;27;41;09
Betty Sweetman
Tenure then became a problem. Risk then became a problem. Outcomes became a problem because no one knew what the outcome of those SOWs were no one. In fact, we had some that SOWs that were still stuck in somebody's drawer. So I think that that oversight role, once we pointed those things out, it's like, well, here's some real obvious problems that that that need to be handled.
00;27;41;09 - 00;28;03;26
Betty Sweetman
But procurement can help you not only source but have that oversight role so that you can do your business and function as you need to. And we can help you with that and support the outcome of that by giving you data that you need on the outcome of the SOW itself that you've negotiated. So let us help negotiate first and get the right terms.
00;28;03;26 - 00;28;11;23
Betty Sweetman
And then second, let's put that oversight in place to be able to get controls over it. Because it was it was pretty messy.
00;28;11;26 - 00;28;43;06
Jonny Dunning
Yeah. And you bring up a great point about the fact that the outcome in a services engagement can be a kind of a moveable feast. Yeah. And with regards to SOWs sitting in somebody's desk drawer. Absolutely. I mean, metaphorically, quite often it's, you know, just a scan, signed PDF, dumped in a SharePoint file or somebody file folder on their, on their computer, which may have milestones or deliverables in it if you're lucky.
00;28;43;07 - 00;29;06;28
Jonny Dunning
But they might have changed. And if they're not captured digitally, you can't see that process of knowing at all times what was promised versus what was delivered. Exactly. As you said, in terms of assessing performance, did we get value for money? It's just something you here all the time. Just the simple thing of capturing changes within a within a services project can cause so much harm for businesses.
00;29;06;28 - 00;29;26;21
Jonny Dunning
And actually I would say suppliers as well, where suppliers can sometimes get blamed for overruns and extensions were actually if it was audited correctly, there might be visibility that actually that project took twice as long because the internal stakeholder didn't scope it correctly or they were off ill or people weren't turning up to meetings or whatever it might be.
00;29;26;21 - 00;29;37;02
Jonny Dunning
So, you know, it's you need to be able to cater, you need to have flexibility in services procurement because things can go many different ways.
00;29;37;05 - 00;30;09;27
Betty Sweetman
Yes, very much so, very much so. So if I look at the evolution for for procurement in that 3 to 5 year period, I think of course AI is going to to be prominent in that procurement operations. I think the pieces that are going to still need alignment are going to be category strategy, partnership with the businesses, understanding that business budget impact and and then taking AI where it serves best.
00;30;09;27 - 00;30;32;15
Betty Sweetman
But that's the piece where human in the loop still needs to stay. I, I can't foresee a procurement operation or procurement function without at least a good solid category team to be able to put those strategies together and a flow to be able to execute on them, to make they make sure that the stakeholders get what they need.
00;30;32;18 - 00;31;00;07
Jonny Dunning
Yeah. And I think it's, you know, it's moving procurement professionals away from transactional work towards more strategic thinking. And it's, you know, people can dedicate their time to that higher level activity. So, so when you were talking earlier about we were kind of talking about tiger teams and dealing with stakeholders that maybe are quite will reject that approach from procurement where procurement, I'm trying to say let us help you.
00;31;00;07 - 00;31;19;05
Jonny Dunning
And they're just trying to kind of put up a bit of a wall and say, just leave me alone. I want to do it how I've always done it. And in terms of the adversaries that can sometimes bump heads with this when it comes to services, what are the different kind of key adversaries that you've seen in these types of situations?
00;31;19;05 - 00;31;27;19
Jonny Dunning
And what do you think is the key to bringing them together for to make sourcing successful?
00;31;27;21 - 00;31;50;16
Betty Sweetman
Well, I can think of a couple of examples. I had an example at Amgen with somebody that came into new to their HR team, and they basically told us, go away, we don't need your help. We are subject matter experts. We know exactly what we need. We know how to go get suppliers. We know how to negotiate pricing.
00;31;50;18 - 00;32;18;02
Betty Sweetman
So I, I had a conversation to support my category manager that had reported to me at the time and said, let's go see if we can just set up time with them and break the ice, and we'll use some different tools. We'll use a different approach rather than we're sourcing. We're here to help. We're going to use a different approach, and we use a couple of tools that basically put a mirror in front of them to say, okay, let's talk about your current situation.
00;32;18;06 - 00;32;38;12
Betty Sweetman
What don't you like about what's happening? What. And that that was surprising because although they said that they were experts, they had a boatload of stuff that they didn't like about their current situation. Like, okay, so we got through that. That was probably a good hour conversation that helped cleanse and show the light on what they didn't want.
00;32;38;14 - 00;32;58;12
Betty Sweetman
And then to the next stage of it was to identify their target state. What was what did they want the program to look like? And then after they we kind of had a Kumbaya moment and said, yeah, we hate this. We want this. How do we get there? So that's where we started to develop a phase plan that was mutual.
00;32;58;14 - 00;33;17;13
Betty Sweetman
We would help them with things that we had control over, and they wanted to do other things that, but they put it into a project plan and were able to execute on it. That one stuck in my head because after an hour and a half conversation, we walked hand in hand and we were able to execute on what their needs were.
00;33;17;14 - 00;33;35;10
Betty Sweetman
And man, that really felt good. I've had a couple of examples of that where you can go in and kind of show that mirror to them on what they don't like, what they want, and how do they want to get there. And I think that's been my most effective tool throughout my career is it's a situation target proposal.
00;33;35;17 - 00;33;54;10
Betty Sweetman
It's a simple problem solving tool. And I love that tool more than any, because it does highlight so many things that are or opportunities for a business function. It also shows a light at the end of the tunnel on how they can achieve what they want.
00;33;54;13 - 00;34;24;03
Jonny Dunning
Yeah, I love that because it's it's basically it becomes a true problem solving exercise. You're focusing on what's the pain here. And it's very interesting. The way you described it as their initial approach was I don't have any pain. Everything's perfect. And that's something that I've seen many times within organizations and within within services procurement. We have we use our tool, the Wheel of Pain, which just talks about the kind of key problems that people come up against in services procurement.
00;34;24;03 - 00;34;45;14
Jonny Dunning
And it's that is the thing that really gets through to people where they look at it and go, actually, yes, misclassification is a real risk for us or yes, scoping is an absolute nightmare or we can't track changes or we don't have standardization in contracts. Whatever it is, it's actually the pain that is the most important thing to focus on.
00;34;45;14 - 00;35;08;06
Jonny Dunning
So I think, you know, I totally agree with you in terms of that is how to provide the best service to a stakeholder in whatever situation it might be, because not only are you understanding their pain, but you're helping them understand it as well. So I think that's, you know, that's a critical part of it. And, you know, you talked about relationships earlier in procurement.
00;35;08;13 - 00;35;30;29
Jonny Dunning
That's one of the things where the human in the loop side of it is, is always going to be extremely critical and just getting more important. And I think, you know, you mentioned about building those stakeholder relationships, but I think I then also look at it and go, well, do you know what that supply chain that those suppliers, those relationships are becoming more and more and more important?
00;35;30;29 - 00;35;57;18
Jonny Dunning
The more the organizations rely on these external suppliers and the more data you have, the more closely you work with those suppliers, the more you can make assessments of who your best suppliers are, and the more opportunity that gives stakeholders and procurement within an organization to say, we need to really stay close to these guys because they are helping drive our new product development or our bottom line growth or whatever it might be.
00;35;57;20 - 00;36;05;08
Jonny Dunning
So I think that relationship side of it, as always with procurement, can can never be underestimated and never be overestimated.
00;36;05;10 - 00;36;32;19
Betty Sweetman
Yeah. One of the things that I did for myself early on my, in my career was to go through intensive coaching training. I thought maybe one day I'd want to be a career coach. When I went through the training, I found that there were so many elements that applied to a business that I pull from those tools regularly to be able to work with stakeholders using coaching techniques.
00;36;32;19 - 00;36;53;06
Betty Sweetman
And I think for anybody that has gone through any kind of coaching training, not just career. Coaching, but coaching training to be able to ask the questions, to get to the heart of the situation, to understand what someone wants to become, what a function wants to become, what they want to achieve, and then a plan for how to achieve it.
00;36;53;07 - 00;37;08;16
Betty Sweetman
It's it's well worth the time and effort to be able to change a mindset from activity driven to coach. It's a different place to come from in those stakeholder relationships.
00;37;08;18 - 00;37;40;04
Jonny Dunning
And when you look at the the kind of way that you're managing relationships in these situations, particularly if we take sourcing, that's that's kind of a coaching mentality really across the board, isn't it, in terms of you're trying to you're trying to smooth everything out and get everyone to to gel together and see the bigger picture, which I think for a lot of people who are in organizations, that's one of the big problems, is they they're not necessarily either thinking about the bigger picture or they're not being kind of steered towards it.
00;37;40;04 - 00;37;44;09
Jonny Dunning
I don't know whether that's something that you've come across at all.
00;37;44;11 - 00;38;15;03
Betty Sweetman
Absolutely. I think that there's a in many companies, I think there's a disconnect between what the business does and how the support functions can support that, I think and I also think that supply chain is used as broadly to define, you know, a subset of a lot of activity, all which affect the business. But it's it's I think I appreciate that there's a lot more emphasis on the overall supply chain.
00;38;15;05 - 00;38;38;02
Betty Sweetman
I also appreciate that there's emphasis in some of the organizations that, like procurecon, that give the emphasis to procurement and our role in that supply chain. So kind of coming back to my my early days that I got to see the supply chain, but I also got to see how procurement plugs into that supply chain to make it function.
00;38;38;02 - 00;38;39;27
Betty Sweetman
Well.
00;38;40;00 - 00;39;01;26
Jonny Dunning
So so another area that I'd like to come on to and get your take on is this just this whole topic of services I used to always say probably two years ago, but services procurement is the biggest thing that isn't a thing in procurement in terms in terms of the fact that I feel like it is way more of a thing now.
00;39;01;27 - 00;39;27;12
Jonny Dunning
I'm seeing way more people with job titles that are services, procurement and people talking about services procurement and all of that spend that sits under those generally kind of statement of work output driven contract contract types. And it's so massive and it goes across so many categories that that one of the big problems has been in a lot of organizations, there's no centralized responsibility for it.
00;39;27;15 - 00;39;51;15
Jonny Dunning
And I think that is a little bit like the fact that in a lot of organizations, there's no central responsibility for total talent management, strategic workforce planning. It's like, where does that information all go? And you're going across the workforce side of it, and procurement and its services sits in a little bit of a gray area to a certain extent in the sense that it is procurement procurements world.
00;39;51;16 - 00;40;12;24
Jonny Dunning
And but it's also part of the workforce stack. It's part of that capability. So yeah, it's interesting to see how that is kind of coming through in the way that people are trying to deal with this, but it feels like it's much more of a conversation now where people are recognizing it and saying, this is a huge area of spend for us.
00;40;12;24 - 00;40;32;14
Jonny Dunning
This is something that's absolutely strategic about how we get work done. And people companies are wrestling with how to kind of get that in a proper, focused view. And it's how have you seen that change over time? Is that something you've seen people kind of working towards addressing?
00;40;32;16 - 00;41;00;28
Betty Sweetman
Yes and no. I would two functions come to mind that I think are are really challenging in that complexity. And add to that, I think HR is of course the top one, you know, in trying to put together category strategies for, for GE and for clients at Genpact, we realized that there were over 20 subcategories, all with their own industries.
00;41;01;01 - 00;41;31;07
Betty Sweetman
That complexity makes up all of HR. But you've got, you know, everything from benefits brokers and insurance brokers to learning and development to anything that's any service that's provided for an employee. And then on top of that, you've got the the workforce solutions that are, you know, SaaS tools, workday, all of that, that are all built for employee management.
00;41;31;09 - 00;41;55;06
Betty Sweetman
You know, for the most part. And I think that that because they're in a different industries there, that disconnect takes place. So even within an HR function, you've got, you know, a leader responsible for relocation, you've got a leader responsible for learning and development, another one for performance, for benefits administration, another one for, you know, so it's very fragmented.
00;41;55;06 - 00;42;27;11
Betty Sweetman
All under that umbrella of HR. It takes a good CHRO to be able to to look at the whole picture. But even at that there are some places that they don't even want to touch. Learning and development is a great example of that. It's it's it's one that has a lot of different suppliers to it. So I think that there are some opportunities for sourcing to be able to go in and have that conversation about hey did you know that you spent this much here, this much here, this much here.
00;42;27;11 - 00;42;58;24
Betty Sweetman
Where's your focus? How can we help? But at the same time, you're also running against that, that same adversarial relationship, particularly when brokers are involved, they want to deal with a broker. Broker does great consolidated sourcing but they they're reticent to to bring procurement into the picture. The but I think that's changing. It has to change. And I think that just this conversation I think that there is hope that they'll see HR as a function.
00;42;58;24 - 00;43;23;24
Betty Sweetman
We'll see that it's not just employees, that it is broader base that they need to pay attention to that in sourcing can help because they they're the ones that have been managing it for quite a while. The other one that that comes to mind is legal. Legal is in terms of a not only an adversarial relationship because that's all they that's the majority of what they do is negotiate contracts.
00;43;23;27 - 00;43;46;15
Betty Sweetman
But litigation is an important piece in terms of how sourcing can come in for litigation. That's that's another area that I perceive can be helped. But there's probably a bit more work that needs to be done on a more holistic strategy for for legal, because it's a lot of their activity is not run of the mill day to day.
00;43;46;15 - 00;44;29;27
Betty Sweetman
It's, you know, a lawsuit was filed and you have to bring resources to manage that lawsuit. So it's those things make it inherently messy. So, I mean, of the of all the categories, I think those are the two messiest within the, the services categories. But that also means that there needs a level of expertise on the sourcing side to be able to know how to talk to a broker, what how that conversation will go, managing it with the stakeholder, helping the stakeholders see that they there's a partnership with three way stool to be built here to be able to manage better, more effectively with better data.
00;44;29;28 - 00;45;01;27
Betty Sweetman
But I mean, it's kind of a for some companies, it's a hope and a prayer. It truly is a long term goal. But if you don't look at that as a goal for the future and have it in mind, then you're just going to continue on with doing what you're doing. The I think it'll be interesting in terms of the, the, the AI trajectory, what how those kinds of complexity problems are going to be resolved because it does come down a lot to relationships.
00;45;01;29 - 00;45;47;28
Jonny Dunning
Yeah, I think, I think the, the, the job of AI is to resolve complexity and provide data. And a lot of these situations if you kind of really break it down. But in terms of the categories, you're absolutely right. When you talk about the variation and the breadth of services categories, which is why, you know, services procurement is becoming much more a thought process for organizations now, where the thinking like, we're buying these things in the same way, in the sense that we're, we're we're paying an external service provider to deliver some sort of service, which includes, you know, expertise, IP people doing work and sometimes stuff around that that is delivered on an output
00;45;47;28 - 00;46;31;00
Jonny Dunning
or outcome basis. So that that is fundamentally that. So concept which is actually quite simple is fundamental across all of these categories. They all have their nuances and they require their subject matter expertise. But but when you look at those categories, I mean for us we typically see that like IT services will always be one of the biggest areas of spend for a lot of organizations, engineering services as well, particularly in that kind of engineering types automotive, aerospace, you know, sometimes areas like oil and gas for what do you see as the categories that you think will kind of be able to set the examples for other categories to follow?
00;46;31;00 - 00;46;48;05
Jonny Dunning
Because I it doesn't have to be like a complete cookie cutter approach, but ultimately it's still managing a services category. It's still managing statement of work engagements. Do you think areas like IT services and engineering services will be easier for organizations to get things moving in?
00;46;48;07 - 00;47;11;18
Betty Sweetman
I think so, I think engineering services, definitely, because they're already in that specification mindset. They know what they they have a project, they know what they need to do or they're developing a product. They know what they need to do. The the issue that we had with engineering was for for them to commit on paper what they wanted and really think through all, all of the elements of the SOW for a good outcome.
00;47;11;18 - 00;47;38;28
Betty Sweetman
So I think that there's some, some transition that can help with engineering services. It I have to say I don't have enough exposure to it, but the comment I have is that a lot of IT solutions are owned by, you know, a function. Let's take workday as an example. It's owned by HR, but the sourcing generally is perceived to happen.
00;47;38;28 - 00;48;09;21
Betty Sweetman
in IT so you know it's a good sourcing but the user base is over in this other services group that has to be able to pick it up and and implement it. So one of the things that we did at at Genpact was to align with the IT team to be able to say, okay, you guys got the ball for the SaaS or the tool or whatever tool was needed for this, but we need that intermediary and that coming together to execute on the implementation.
00;48;09;23 - 00;48;34;23
Betty Sweetman
So that worked well, but I haven't seen that work well in in every company that I've worked for, I think it has. There's a I'm going to a mistake about it about what they do. But yet at the end of the day, everything they do supports a business function somewhere. And there's a business owner that that benefits from their work but still needs that transition.
00;48;34;25 - 00;48;36;21
Betty Sweetman
Yeah. Can help with that.
00;48;36;27 - 00;49;08;06
Jonny Dunning
Yeah. And it's interesting when you talk about that potential disconnect between the sourcing side of it and the actual delivery of what it is you're procuring. And yeah, I mean, one of my colleagues literally released an article on that today talking about the importance of managing the whole process because you just don't get the full picture otherwise. You know, if you don't scope it correctly and, you know, you and I have done loads of work around that in terms of how AI can help organizations scope far more effectively and far more rapidly.
00;49;08;06 - 00;49;28;27
Jonny Dunning
But if you don't scope it correctly, you're on a loser to start with. You know, if you don't undergo a proper sourcing exercise, you're leaving money on the table and you're not necessarily using the best supplier, but with the best, well, in the world, all that great upfront stuff up to the point of contract can be wasted if it's then not managed downstream as well in the delivery phase.
00;49;28;27 - 00;49;51;26
Jonny Dunning
And I think it's interesting where you see that some in some organizations procurement, I've seen it many times, will kind of shrug their shoulders and say, well, that's not our problem at that stage. But ultimately in terms of procurement delivering value, it's about the value that the organization gets from what it's procured, not just the initial purchase. And that's particularly true in services where stuff changes along the way.
00;49;51;28 - 00;50;13;22
Jonny Dunning
Organization chooses consultancy A over consultancy B because consultancy A have got a cheaper day rate, but then they take twice as long or they don't do a good job. And it's never as simple as just buying a thing. Buying a as one of my, one of my industry contacts always says widgets and digits. You know, it's kind of like buying stuff is more binary.
00;50;13;23 - 00;50;44;10
Jonny Dunning
The supply chain is very complex and inherently has all these, these issues with it. But the thing you're buying, it's easy to define, it's easy to measure. It's even if it's a complex thing, like an engine, you can still define it. Whereas a service is this kind of thing that's difficult to pin down, more intangible in nature. So, so yeah, I think that that connection between sourcing and delivery, ultimately, that is where the business is going to really drive value in terms of understanding it.
00;50;44;16 - 00;51;13;27
Betty Sweetman
Absolutely. And it's the value of the supplier relationship. So we didn't issue any SOWs at at GE or at Genpact without having an MSA for terms, you know, that that that anchor being able to define what, what the basic agreement is and then start the scope of work based on calling off services from that MSA. That structure was really important to us because we always had that anchor to go back to.
00;51;13;29 - 00;51;34;17
Betty Sweetman
That said, we we know that we had several SOWs that just the stakeholder forgot to mention something when they, you know, when the negotiation. So, you know, at least you've got a smaller anchor to be able to say, this is what you said you were going to do on the project. This is what happened, and this is the recourse to make.
00;51;34;17 - 00;52;01;15
Betty Sweetman
Well, and I think, you know, those two pieces combined work so well together. It also lays the ground for the continuing procurement operations piece for POA issuance, change orders, those types of things to flow through the system for the for the invoices to get paid. So it's it you know, it starts from that good relationship is the big anchor all the way through to the operations teams.
00;52;01;21 - 00;52;41;25
Jonny Dunning
And it's better for the supplier. Yeah, yeah. If like you say in terms of making good it's a joint effort isn't it. It's working towards the same outcome. But just going back to the kind of the difference between the approach, the mindset that is required when procuring goods, materials, kind of more that direct MRO space versus services. And something that you and I have discussed before is about how for many organizations, the structure of their procurement organization is very much geared more towards that kind of direct goods, materials, MRO type approach.
00;52;41;27 - 00;52;49;20
Jonny Dunning
I've got some I've got some views on that. But but from your point of view. Why do you think that is?
00;52;49;22 - 00;53;21;20
Betty Sweetman
It's an interesting question because I wouldn't consider well, MRO isn't considered an indirect category. It's always kind of the redheaded stepchild because it's all about SKUs. It's more closer aligned to direct than it is indirect. But there's so many SKUs that the, you know, on, on and all the subcategories within MRO that I understand why a lot of companies do bring it into indirect.
00;53;21;21 - 00;53;52;29
Betty Sweetman
Do the same principles apply for indirect for MRO is that they would for more services related like delivering consulting services. There's a disconnect for me and how that alignment on the procurement process happens. For both of those, there are two very different. Can they be managed under the same function? Yes, but there has to be an acknowledgment that they're very different.
00;53;53;01 - 00;54;11;15
Betty Sweetman
So most of the organizations I've worked for have it and covered under indirect, partly for the same reasons, is that it's complex and messy and indirect, seems to collect the messy and, you know, pursue them.
00;54;11;21 - 00;54;32;02
Jonny Dunning
Yeah, I find it so interesting. So I mean, and one of the things that I see in the market is the, the conflict that can arise around the just the very concept of direct versus indirect. And obviously it has important connotations to the way that the business is running itself from a finance point of view, from a procurement point of view and operations point of view.
00;54;32;06 - 00;55;01;27
Jonny Dunning
But it's just direct and indirect don't mean the same thing for all organizations, because if you get a manufacturing organization, the direct spend is going to be mainly goods and materials, and the indirect spend is going to be services around. Running the business is as a kind of a very broad generalization. But if you take a global building consultancy, their direct spend is all services because it's, you know, engineering consulting firms, architecture consulting firms, construction consulting, all of that stuff.
00;55;02;00 - 00;55;34;16
Jonny Dunning
That's all their direct spend. And their indirect spend is goods not for resale, for example. So I find it it's really interesting in terms of procurement has this structure that's either well it's usually both of a direct versus indirect and a category strategy. And for me coming at it sort of externally from a technology point of view rather than a procurement practitioner angle, I tend to look at the problem solving exercise of what's the what's the way in the things that organizations by are contracted, how are they different?
00;55;34;21 - 00;55;59;05
Jonny Dunning
How are the things that they're buying different. And for me, that always again very broad generalization goods of materials are things are procured in a certain way. People are procured in a certain way and services are procured in a certain way. But I feel like the way that the the procurement world has grown up has been very much driven by coming out of that kind of manufacturing boom.
00;55;59;12 - 00;56;35;00
Jonny Dunning
And I personally think that it's a technology issue as well, because if you look at the way the ERP was developed and then how that then grew into the procurement suites, the source to pay platforms, the procure to pay platforms that grew up, grew out of a primary need to manage goods and material resources for manufacturing. And I think while that has grown up and really proliferated out across all industries, and it's still very predicated from my angle towards goods and materials, primarily in terms of that Amazon experience.
00;56;35;00 - 00;56;53;23
Jonny Dunning
Catalog buying, guided buying. The thing is easy to define relative to to to its complexity. But you can define it. You can measure it. You can compare it when you throw services into the mix. As I said before, it's kind of the opposite. The supply chain is not as complex, but the thing is really complex and hard to define.
00;56;53;23 - 00;57;15;29
Jonny Dunning
So that kind of messes up the technology model to a certain extent. And it just leaves organizations in a situation where they kind of pushed it to one side or tried to make it round peg, square peg in a round hole type of thing. But alongside that, at the same time, the reliance has shifted much and the emphasis has shifted much more towards services, much more of a services based economy.
00;57;15;29 - 00;57;42;13
Jonny Dunning
If you look at that shift over the last ten, ten, 15 years, massive shift, and actually the spending on services is growing at five times the rate that the spending on goods and materials is growing. So I think that the technology we went through this kind of digital transformation in procurement, it didn't services got left behind because it was too difficult at the time and maybe not important enough at the time.
00;57;42;15 - 00;58;02;03
Jonny Dunning
And I feel like now organizations are trying to play catch up with that. So I do feel that I can certainly see a technology angle to it as well. And I think I think the way that organizations buy things, I can see some organizations moving more towards a view of this is how we buy people, this is how we buy things.
00;58;02;03 - 00;58;26;06
Jonny Dunning
And this is this is our services component, because it's just become too big to ignore for organizations now. And if you're in insurance or finance, it might be 90% of everything that you procure, for example, which then has that kind of disconnect with the with the manufacturing world. But I think that creates opportunities, right? It creates opportunities for organizations to move forward.
00;58;26;09 - 00;59;02;25
Betty Sweetman
Absolutely. When we talked about this as a topic, I thought about a couple of, you know, just simple statements for my own mind. So I think, you know, to me, direct spend is structured and it's measurable. It's tangible goods. There's clear specs and measurable costs. And that's something that goes over the life of the product. So that's that is how I would categorize direct spend indirect spend though or services or as we've talked about or complex or people driven, they're intangible and they're a lot harder to define.
00;59;02;27 - 00;59;24;21
Betty Sweetman
But I think that to your point, that's the exciting part, is that the less structured with services is a greater opportunity to create value. You got to got a lot of do a lot of digging to be able to get to it. But when you do, there's a pot of gold, so to speak, at the the end of that rainbow in terms of when you find it, you can action it.
00;59;24;21 - 00;59;32;03
Betty Sweetman
It's like, wow, this is unfair. Wealthier that we didn't, that we ignored for such a long time.
00;59;32;05 - 00;59;57;10
Jonny Dunning
Yeah, I 100% agree. And I think that kind of leads me on to we kind of key main last area I really wanted to cover with you in this conversation, which is just looking at how the services that organizations procure and that broader approach to services procurement can actually be used as a competitive advantage if it's leverage properly.
00;59;57;10 - 01;00;23;19
Jonny Dunning
And that kind of sits alongside another point that's come to my mind, just based on what you were saying earlier, when you talk about the HR side of it, which is, again, this crossover with workforce, and we can come on to that, but it's almost like a bit of a future question of like, well, who's going to end up owning the overall work capacity and capability of an organization?
01;00;23;19 - 01;00;58;18
Jonny Dunning
Is is HR going to expand? Is it going to be a new function? Is it going to be total workforce management, strategic workforce. It's really interesting to see that because this is this is where orchestration comes into it. And and real sophisticated coordination, strategic thought, forward planning, all those sorts of things come into it in the sense of organizations have got all these different ways to do work, and they need to work out what's the best horse for each course and actually really learn to kind of push, push work down through the right channels.
01;00;58;18 - 01;01;14;08
Jonny Dunning
So so I guess my question to you is really do you do you see services procurement as having the potential to be competitive advantage for organizations, and if so, why? Why do you see that? If that's the case.
01;01;14;10 - 01;01;42;03
Betty Sweetman
I do see it as competitive advantage. I'm not quite sure. Well, I think the reason I think it's a competitive advantage is for just what we talked about. It's messy when you can get your arms around data, benchmarking those types of things that clarify what services sourcing is about, that I think will be very helpful to be able to define where that function sets.
01;01;42;07 - 01;02;11;21
Betty Sweetman
And the reason I say that is that when I look at the travel industry, I've been involved with the travel industry for 20 years before getting into contingent labor. It always fell into indirect. It was always messy and well, I think that it's also becoming one of those categories that needs a different place to sit. It's going to depend on the maturity of the the sourcing and procurement function.
01;02;11;23 - 01;02;51;27
Betty Sweetman
So I, I'm in LinkedIn, I'm happy to see a lot of messages come through from CEOs about what their commitment to AI is. But what I don't see is their commitment to looking at services procurement differently. So that maturity of thinking of of the CPO CFO level is to where this should sit, I think is a conversation for down the road, and I think it's going to take one to get rid of the conversation about operations when it's all when the majority of that is in AI, then what's left?
01;02;51;27 - 01;03;28;08
Betty Sweetman
It's that what's left that could be restructured into a different functional group, either under a CFO because there's still a financial impact under a CPO who's has the the fourth forward. Thinking about looking at this kind of eliminating the silos that are kind of created in the structure now and bringing them up into standard standalone, and that's not the right word, but into their their own functional glory.
01;03;28;11 - 01;03;39;03
Betty Sweetman
Right. A travel program, one that one that has a sourcing component, but probably more to the point is recognition for the management after.
01;03;39;06 - 01;03;49;24
Betty Sweetman
moment at at BP, I had responsibility to manage the travel program. I worked closely with the sourcing function and they literally sat next to me.
01;03;50;02 - 01;04;16;22
Betty Sweetman
But it was still it still felt segregated. At GE, we had I had responsibility for sourcing and the program management. Once the sourcing was done, we spent the majority of our time on managing the program, the managing the suppliers, the QBRs you know, forward thinking strategic sessions that we would plan for our next year and what their future looks like.
01;04;16;22 - 01;04;42;07
Betty Sweetman
How do we how do we embrace their future is part of our future. So I think that that view of a program that includes sourcing is probably a good way to look at it, regardless of where it sits in the organization. If it's in procurement because of the function, great. If it sits in HR, contingent labor, for example, total talent management sits in HR.
01;04;42;08 - 01;04;48;18
Betty Sweetman
Great it, but it needs a home that's going to be appreciated for what what it can do for the company.
01;04;48;20 - 01;05;23;22
Jonny Dunning
Yeah, I love it. Having been involved in workforce stroke procurement related technology my whole career, I just find the way that organ how organizations do work, the way that's changed over the last 15, 20 years is absolutely fascinating. And the idea of who's responsible for that and how organizations get their arms around it and make those decisions effectively is something that I think is evolving a really rapid pace.
01;05;23;22 - 01;05;49;04
Jonny Dunning
Now, when we came into kind of pre-COVID and during Covid, there was this whole kind of explosion of like gig style working, and suddenly people were working remotely as a bit more of a norm and things like that. The gig component has kind of was a burst up and has kind of quieted down a bit. It's still a component, but the services element is like this juggernaut that has that has drawn from some of the others.
01;05;49;06 - 01;06;13;11
Jonny Dunning
And I think one of the interesting observations I've seen around AI is it drives outputs. It drives an output mentality. Because ultimately, if you if you hire me and you're paying me based on time, then what I could do pre AI in five days post AI I might be able to do in three days. So is time the best measure of your engagement with me?
01;06;13;12 - 01;06;36;01
Jonny Dunning
However I'm engaged or is it actually what I'm delivering? That's the most important thing. So I think there's growth of this output outcome. Deliverable mentality is something that's inevitable. And definitely we're seeing a big shift in that. And it's it's already a fundamental part of how organizations get work done, because it ties in with all the stuff that's outsourced to third party suppliers.
01;06;36;03 - 01;07;02;02
Jonny Dunning
And I just think that, for me, is where the wake up call is, not just for CPOs but for CEOs and the entire C-suite to say, if if your competitors are leveraging their service supply chain more effectively than you, more cost effectively with better relationships, better visibility on capabilities and skills, more ability to flex and manage where capacity has fluctuations.
01;07;02;02 - 01;07;24;06
Jonny Dunning
If they're doing that better than you, you're going to lose as an organization because you're not going to be able to deliver the actual work output that you need to compete with them in delivering your service or your product to your customers. And for me, that's the thing that that's where the penny really drops with organizations where they realize that this is absolutely strategic.
01;07;24;07 - 01;07;35;08
Jonny Dunning
It's not something that's just kind of like, oh, a bit annoying or that's how we've always done it. It's like if you don't shape up, you're going to get overtaken pretty quickly in my opinion.
01;07;35;10 - 01;07;38;24
Betty Sweetman
Well, I think that there's.
01;07;38;27 - 01;08;12;13
Betty Sweetman
To align with what you just said. The the CFO needs to look closely at his organization as well, because back to that conversation on where the budget sit. If if there is no change in where that budget sits, it'll still be in the details. Everything that we've talked about will be in the details. We'll have data. But that that engineering leader, for example, will have responsibility for their budget with no visibility on the outcome of it, except for how he performed to manage his budget.
01;08;12;14 - 01;08;43;26
Betty Sweetman
So I think finance needs to look at really closely as to how much flexibility is is needed when it comes to sourcing resources, services, and does it fall in an individual functions budget, or is it managed differently at the budget level under the CFO? So I think that there's a correlation, and most the CPOs that I have come across do have either direct reporting relationship with CFO.
01;08;43;28 - 01;08;57;17
Betty Sweetman
But I think there's there's got to be an evolution in the way CFOs look at their business as well to support what we're talking about, and a kind of an evolutionary progression for procurement organizations.
01;08;57;19 - 01;09;19;11
Jonny Dunning
Yeah, I love it. It's always brilliant to chat to you about this sort of stuff better, your wealth of experience, looking at different scenarios, different industries, that whole kind of procurement versus contingent workforce angle and understanding it from a strategic point of view. I always find it really fascinating because you've you've got a really good strategic view of this.
01;09;19;13 - 01;09;20;05
Jonny Dunning
And I.
01;09;20;07 - 01;09;20;10
Betty Sweetman
Think.
01;09;20;12 - 01;09;40;20
Jonny Dunning
You and I know sometimes it's frustrating when things, when some parts of the business don't move quick enough or people aren't on the, the kind of a wavelength. But there's some really interesting change happening in the market. And I think the sort of stuff that you've worked on is very much a part of that. And that's you've worked in the areas where the exciting change is happening.
01;09;40;22 - 01;10;00;03
Jonny Dunning
And what's the focus for you for the future? Obviously, you've got the experience on and this is where it kind of crosses over into one to a certain extent, because services can quite often sit under contingent workforce effectively. But for you going forward in terms of where your real interests and passions lie, what's the focus for you for the future?
01;10;00;05 - 01;10;25;05
Betty Sweetman
Well, so I'm in the job seeker mode, and so I'm looking for roles that particularly have a couple of things in common. One, I want to go back to working for a company and manage the indirect function to be able to put some more of these kinds of ideas that we've talked about and that I've been exposed to in other companies and play for them.
01;10;25;08 - 01;10;52;12
Betty Sweetman
The other part of it, though, is kind of the excitement that you get when you see different industries at work with clients. So consulting is something I'm considering, as well as continuing leadership and and maybe even focused leadership in either indirect contingent labor or back into travel. I find all of those very interesting and and travel, in my opinion, travel and labor rule the world.
01;10;52;14 - 01;10;55;07
You can't. Yeah. Well, you know, when the when the.
01;10;55;07 - 01;10;57;10
Jonny Dunning
Labor or travel get disrupted.
01;10;57;13 - 01;10;57;19
We.
01;10;57;20 - 01;10;59;12
Jonny Dunning
Certainly notice it don't we. We we.
01;10;59;13 - 01;11;00;04
Certainly do.
01;11;00;05 - 01;11;24;12
Jonny Dunning
And very, very pertinent at the moment kind of in both on both sides. But I think, you know, fantastic opportunities for, for you to get involved with some really transformative stuff in, in any of those areas, really, and some really great commonalities across them in terms of where you've driven that kind of transformation previously. So yeah, I'll be very I'll be watching that with interest to see see what you decide to push into next.
01;11;24;12 - 01;11;43;18
Jonny Dunning
But it's brilliant to catch up. I really appreciate you taking the time to discuss this, and thanks very much for sharing your experiences, because I think, you know, as we've spoken about before, that's the thing that's useful for other people who are maybe thinking about this, wrestling with these type of issues, hesitant about it, wondering if other people are having the same problems.
01;11;43;18 - 01;12;04;16
Jonny Dunning
I think it's very interesting for for folks in the industry, practitioners to kind of hear stories from people like yourself and hear the approaches and the issues and how you've resolved them and, and what you're kind of expectations are for the future and what you think is going to change. Because the more conversation that happens around this sort of stuff, the more transformation can happen.
01;12;04;18 - 01;12;08;23
Jonny Dunning
And it takes people like yourself to speak up about it. So I really appreciate it.
01;12;08;26 - 01;12;15;07
Betty Sweetman
Well, thanks for the time. It was fun. So this is my first podcast, as I had mentioned to you. So you made it painless. Thank you.
01;12;15;11 - 01;12;21;23
Jonny Dunning
Well, you're an absolute natural. It was an absolute pleasure. Thank you so much, Betty. And yeah, no doubt we will speak soon. Soon.
01;12;21;29 - 01;12;23;07
Betty Sweetman
Okay. Thank you.