Making digital procurement transformation work
Learning from experiences in procurement transformation across industries, companies and categories.
With Adam Brown, Procurement Strategy & Transformation, Maersk
00:00:00 - The journey from systems to startups to procurement
00:14:30 - Transformation differences and parallels between industries
00:20:00 - Technology needs of indirect vs direct
00:28:00 - Process and cultural change coupled with technology change
00:37:10 - Organisational approach to transformation
00:41:20 - Best-fit-solution procurement concepts
00:46:30 - The 80/20 split balance of best practice and specific
00:54:40 - Procurement creating competitive advantage
01:02:10 - Planning for the future
01:07:30 - Supplier experience mirroring internal efficiency
01:14:00 - Transformation's impact on people strategy
Episode Highlights
Transcript
Auto-generated. Please excuse any minor errors.
Jonny Dunning: 0:00 Cool. Alright. Excellent stuff. So I’m very pleased to welcome Adam Brown from Maersk to join me in the studio again for the second time. How are you doing?
Adam Brown: 0:08 This is great Johnny and thanks for the invitation. And this has been something, I think, we’ve been meaning to sit down and talk for a couple of years. So it’s fantastic to do it and do it in-person and not on Teams or Zoom or something else.
Jonny Dunning: 0:22 Exactly. I’m glad we finally managed to get round to it. And both of us are in good health despite the best efforts of our children to give us bugs and put us off track and give us a gravelly voice.
Adam Brown: 0:33 I know, and amazingly, it is possible to catch a cold and not COVID now by all accounts. So yeah, no doubt, I will be affected with that on Christmas Day for... Yeah, perfect timing from the kids.
Jonny Dunning: 0:44 Stand it. So discussion topic for today [is] all about an area that you’re very familiar with, you’ve got a huge amount of expertise in, digital transformation within procurement. There’s some specific areas of your experience and background, I really want to tap into that. Hopefully, it’ll be really useful to people. Just looking at how that applies across different industries, across different sectors, across different companies and also across different categories. I think there’s a huge amount to sort of delve into there. So I’ve got a few kind of specific points that I want to dive into and address with you. But before we do that, I think you’ve got quite an extreme background. Bearing in mind what you’re doing now, obviously, but also where it kind of came from? Where it started out? Because, obviously, procurement strategy, digital procurement transformation is your thing. But you started out in systems really.
Adam Brown: 1:41 You go back far enough and you suddenly discover I was computer science techie way back when. So we gotta go right back to the very beginning. When I went to university, I was doing computer systems engineering, kind of half computer science, half electronic engineering. And then despite my best efforts, after finishing that degree and really trying hard to actually get a proper job, I failed miserably in large part because the university said, “Do you want to do a masters?” And so I thought, “Well, that sounds rather fun if I can stay at university for another year.” So I ended up doing a masters as well in the course computer science related stuff. But that masters, as part of it, was half tools and a half a placement. And the placement that I ended up doing was with BT at BT’s research labs up at Martlesham. And of course, having a computer science degree and the masters being in wide area networking effectively, I ended up in a research team. I’m coming up in the team with some pretty good ideas that were at least deemed very interesting and non-core to what BT was doing at the time. And they said, “Would you guys like to spin it out and create a company?” And so there we found ourselves as a group of, must be, 23~24 at the time, saying, “Do you guys want to go and do a company, do a .com startup right at the absolute peak of .com stuff in ‘99 and 2000?” Shortly followed by the absolute .com bust, just to point out the slight downside of this.
Jonny Dunning: 3:24 Yeah.
Adam Brown: 3:24 So yeah, so that’s... If you kind of go back then, so yeah I was super, super techy, and went off and created this company. And we were funded by SoftBank. So yeah, it’s kind of crazy, crazy days being funded by Softbank, which is now an incredibly well-known company. And I did that for a few years. And I think with the .com bust that happened, thereafter I left that company a few years later. I think maybe its four years or so we did that for. I left thinking of, after the craziness of those few years, to take a summer off, but I found myself being employed as a consultant of all things and being a salesman in consulting and traveling around Europe for the next few years before then really settling and getting into transformation. So that whole path, that kind of thread of creating some pretty disruptive ideas and disruptive software, which is at its heart transformation, if you like. Then getting into some consultancy and advisory in selling. And then ending up in actual proper big organizational contract transformation in... This was back in BT again. It was from there. And I think by that point, probably up to around about 2010-11, because then the opportunity came up, which I hadn’t done, in procurement, which was then the kind of the initial phase of my career in procurement. And strangely, I actually started off in procurement as a full-on category manager for the mobility category at the time. So mobile airtime in the... And that was in the intervening years where BT didn’t own a network operator of its own. After ‘02 had left and before EE arrived - that kind of little bit in the middle for a small period - I think of maybe about 18 months or two years, I was a category manager. And BT was a real fantastic, folk.
Jonny Dunning: 5:29 I always find it really interesting looking at people’s backgrounds and looking at how skills kind of align and how people come together with particular roles. So if you think about yourself as having that technical side to your thinking and your approach, but clearly, having done the sales side of it, the consulting side of it, you also know how to communicate, you’re also confident enough to do that side of things. In some ways, it’s a fairly rare combination. But certainly with the transformation projects that you’ve worked on, that lends itself very well to what procurement is asking of you. And I think one of the things that I’ve learned partly through doing this podcast and having conversations with people in procurement and just in terms of getting things done and changing things, I think, to a certain extent, you need a bit of a rebellious nature. So I think maybe going through that entrepreneurial phase and doing that project, I mean, that must have really been... You basically started out your corporate career with an “anything is possible” attitude.
Adam Brown: 6:23 Yeah, completely! And what I found was really super useful. It was thinking, “You can do anything you want.” If you think there’s not really anything more than you can do, then creating a small company from a large one, doing a spin out or doing a carve out is really is transformational, as disruptive as you can possibly get. So having done that, but having this kind of pretty heavy techie background, but in a very, very commercial operation, was an interesting place to be. So I had that real natural affinity. It sounds terrible with Excel. You know, I genuinely just like numbers, I like the planning, I like the specificity. I just enjoyed that aspect. And so the category that I was involved in was super, super heavy on the analytical side. And so that worked nicely. But I always had that need to be involved in tech that need to be involved in the technology. And so that opportunity then came back in - this must have been about 10 years ago now - to own and run and manage the team and the systems involved in all of that digital tech support for the procurement function. So I took that team over. And this was when we didn’t really have anything at the time. There was no digital transformation. It’s the very, very traditional - procurement of Excel and PowerPoint, super, super manual. As ever a huge need for data and information and insights, but very, very manual - super, super basic. So that was really interesting to be able to start transforming that even with some minor stuff, even to say, well, the spend at the time was just reported on... Here’s a very completely flat spreadsheet. That’s the spend. And the same with the savings that were being recorded. Here is just a very static spreadsheet. And to be able to take that, even just one incremental level up to say, “Okay, well, this is what it was last week. This is what it is this week. And here is the specifics on all of the changes and all of the differences on the spend and the savings and the reason why.” Even though it’s something so basic and simple as that, it was massively useful and a huge improvement for the company.
Jonny Dunning: 8:47 And was it appreciated as such within your organization immediately?
Adam Brown: 8:49 God, yeah. So it’s suddenly, “We got something. Now, we know.” And that was my first kind of dabbling in seeing the difference between data and insights. And giving that information, saying, this is the insight. This is not just what has changed. Your number hasn’t changed from 10 to 20. And it hasn’t just changed because of one thing. It’s been 10 things going up, 20 things going down, 5 things moving. And here’s all of the difference and reasons inside that. And that was really the start of it. And fascinated. That’s always fascinated me. Just this digitization of a commercial function is at the heart really of all of the transformation that has happened ever since in my career and over the last 10 years.
Jonny Dunning: 9:32 So if I understand it correctly, you were actually involved in digital transformation before you were involved in procurement.
Adam Brown: 9:38 So the transformation I was involved in, if you... I suppose you could look at it as disrupting in the industry with the startup that we did. But then when I got into transformation, that was... I won’t call it digital transformation. That was much more commercially led and how can we transform these contracts that we had at the time in the business to make it a lot more efficient by just, I think, vendor management on absolute steroids. There’s a big transformation project to go through and make the whole thing a lot more efficient. And that was what preceded me getting into procurement. So I was doing transformation, if you like, on that mobility vertical in the company. And so that was from working out in the business doing that as more of a vendor management role. And so the transition going from that to being in procurement as a category manager was the kind of the bit that joined those two sides of it together before then getting into the real kind of running of the digital systems. And then ultimately, the digital transformation throughout BT.
Jonny Dunning: 10:47 And actually, the timing of your kind of entry into the more pure procurement side of it worked out very nicely in terms of where BT procurement were with the systems and where the market was with the availability of systems and a potential kind of framework that you could put in place. That must have worked out quite easily.
Adam Brown: 11:07 That was really, really interesting and really kind of exciting time to be, because when I took over the team running the systems and took ownership of the process and the tools and everything that we had... So we had oracle at the time, a load of homebrew stuff as well at the time. When I took that over, it was pretty shortly afterwards that the whole EE acquisition was occurring. So I then got heavily involved in clean rooms and looking through data and saying what are the synergies between the two? And so getting into, “How do you bring all of this information and data together from two completely different organizations and two completely disparate sources?” So how can we bring the data and the information together? Give the insights! But how does that all fundamentally plugged together? That was again a fascinating thing that happened fairly shortly after I made that move.
Adam Brown: 11:36 And then obviously, a good few years at BT. And now your most recent role, in some ways completely different challenge, at Maersk.
Adam Brown: 12:09 It is. Well, with the BT was really wonderful. It was the most incredible journey of transformation that we did there, because of course, we had the Cyril, CPO (Chief Procurement Officer), joined us back in... If I get my years right, it must have been 2019. Oh gosh, three years ago. So Cyril joined in, a massive advocate of technology and efficiencies and the effectiveness gains that you can do because of that. So I think the fairly well documented digital transformation that we did there was a wonderful thing. And then of course, then the separation out of the procurement function into BT sourced and moving to Dublin, and yeah, at that point, it time for a change. I’ve been at BT. I’ve pretty much done everything that is possible to do at BT. And the opportunity at Maersk came along. And Maersk was a company which I’ve admired for a long, long time. And I thought this is just too good to be true. So I live up in Suffolk, I’m not far away from Felixstowe, which is the biggest container port in the UK. And I’ve seen the Maersk trucks and the containers going to pass for years. So I kind of had this opportunity. The timing was incredibly good. And I thought, “I’ve got the chance here to revisit that digital transformation that we’ve just done but in a completely different industry.” And with the capability now... And this is the great thing. The capability now to not just buy stuff off the shelf, but to be able to also build stuff from scratch as well. So the frustration, which you sometimes get of saying, “There’s not quite a bit of tech here that does what I need it to do,” it’s no longer an issue. We have a... I have... Well, I’m in the process. We’ve talked about this earlier. We’re building a brilliant software engineering team to build and develop in-house products ourselves to solve whatever we want to, the bits that are missing in that whole process.
Jonny Dunning: 14:16 Yeah, and I think that’s fascinating to see the difference in the opportunity in the way that company is structured and the way that they’re approaching things. And one of the things I really thought would be useful to talk about with you, particularly if you look across the journey with BT and now obviously at the start of, which is likely to be at another epic journey of transformation with Maersk, what do you kind of...? If you look at digital procurement and look at it across industries and look at the comparisons, the differences and similarities between BT and Maersk, what really stands out?
Adam Brown: 14:50 So I think all procurement functions, fundamentally, are dealing with that source to pay process. And so, of course, there’s going to be a whole load of similarities across all of them straight away. Everybody needs to do contracting. You need to store your contracts. You need to author your contracts. You need to negotiate contracts. You need to understand your spend. You need to get wonderful insights from spend. Purchase orders are always going to be released. Invoices are always going to come in. You’re always going to need to do three-way matching. You need to pay supplies. You’re always going to be... There’s always going to be a need, a desire to do some supply chain financing. We’re always going to think about the supplier experience. So there is more commonality than there are differences. So that day-to-day work that the procurement person is doing, the systems they need to touch, the tooling that they need to be operationally more effective is incredibly similar across all of the organizations. Where you start to see the big differences is in the execution bit. And that’s when you start getting more into them: “What are the directs that we’re buying rather than the indirect?” Buying indirect is going to be, broadly speaking, the same across industry, but the direct is where it gets different. And the thing I noticed is, the fundamental difference is always the people and the knowledge and the skills and the expertise. That is going to vary. But the need for fantastic sourcing tools, the need for a wonderful contract repository... I’m knocking things down. Our tech is [unclear 16:36] of headphones.
Jonny Dunning: 16:39 We always trash the studio afterwards.
Adam Brown: 16:41 So let me put that there. So there’s so much which is similar. But then the difference between BT and Maersk the thing which really, really surprised me is just how far that similarity went. So, of course you have. And this suddenly sounds obvious when you start talking about talking about in a bit more detail. But if you think about it, you know, BT buys network capacity, they buy network connectivity, which is links going from point A to point B in different countries, because we BT owns a network in the UK, but it doesn’t own a network in every country around the world, but does have customers in pretty much every country around the world. And so needs to connect those customers from one point to another needs to build a global network which connects two points together. And that connection that you’re there’s being bought from a third party, where has a start point has an endpoint and it has a capacity and it has a cost. Now if we think about then, you know, Maersk moving off containers, on trucks in a country? Well, most doesn’t own trucking companies in every single country in the world to do that. So you have to go out to third parties. And you’re asking for a connection to move something from one point to another point that has a certain capacity to it. And so you suddenly start seeing the similarities between the two, particularly when it comes down to the technical perspective of what I’m doing and how to make that efficient. And you start thinking about how to rate repositories work. How do you ensure that the correct rates are in there? How do you if there’s a rate missing? How can you do the spot procurement for that automatically? How can you do all of these things to execute on the strategically sourced rates? How can you automatically execute those with an automatic trigger? And have that flow all the way through to orders going out and invoices coming in and receiving it all of that stuff? So there is similarities in the two, which sounds obvious when we talk about it. But if you’d asked me six, seven months ago, I wouldn’t have I would have thought the obvious stuff, the indirect but not so much the other side of it?
Jonny Dunning: 19:01 Yeah, I think it’s specific similarities in terms of that the structure of how they operate as businesses, but in other ways, as you said, extremely different. And I think when you do look across all sectors, for example, you mentioned about indirects. And the way that companies have to manage their kind of just company running expenses and things like that. Yeah, typically, I think the processes are quite similar. But when it gets into the more complex areas of indirect, then the obviously there’s vastly different things, the nuances of what people are buying is very different. But one of the things that I thought were interesting to talk about is just the kind of tech requirements when it comes to coming into the situation, evaluating the situation and looking at that transformation journey because it strikes me that the needs of an organization on the tech side on the tech side are potentially going to differ on where regards to indirect versus direct Depending on where they sit, what type of industry they’re in, how direct heavy they are, how service heavy, they are that sort of thing. So what do you what do you see as the kind of the benchmark for the solving of those technical needs, from an indirect point of view versus a direct point of view?
Adam Brown: 20:16 Everything? Well, everything has to start with the process. I mean, that’s the thing that fundamentally I find sits underneath all of this every everything that I’ve seen at BT everything that I’ve seen at Merck, everything that I talked to colleagues in different companies about it’s the problem is never the technology, the problem is never what you’re buying the problem is always comes down to the process and what’s been inherited, and what’s, what exists there. And yeah, nobody, you know, we’re in the procurement organizations, it’s always in any large company, there’s a continual reorganization, which is absolutely fine and to be expected. So there’s always tweaking go people join people leave new leaders come in and so there’s always an operational reorganization at some degree in some level
Jonny Dunning: 21:05 do you think that’s just inherent in the nature of larger organizations? Yeah, exactly.
Adam Brown: 21:09 I mean, times move quickly, they really do. And I’ve been in mask for seven months, and I’ve been reorganized once several months, in and out, that’s to stay more attuned to the needs of the business. And so business moves fast, you need to stay attuned to it. And so you reorganizing, reorganize the people move the people, but what you find is that the underlying process that is supporting the function evolves, it’s, there’s a lot of focus, but on, how can we digitally transform, What tool do we need to put in to solve this particular problem? Or how do we need to restructure our teams to more effectively reflect something else, but process is massive, you know, if we’re digitizing something, we’re digitizing a process. So you have to fix the process. That’s the bit that tends to evolve. And it’s almost like being the store has been passed around by around a campfire, from one generation to the next, these processes kind of evolved from one generation to the next, and sometimes end up strange and odd and in no way efficient. And then if you try to deploy a tech solution on a broken process, then it fails. And you’re in a world of pain straightaway. So it’s that process side of it needs to be looked at and considered. But even more than that, when I really get into and I really drill into what’s needed, you find that digital capabilities can be deployed and bought off the shelf or, you know, designed and built yourself, but you can develop a digital capability that solve a process problem. But those digital capabilities need to be kind of wrapped into some larger functional capability. And so you know, it’s where you start breaking things down and say, what does it what does the human interact? What does the human do? What are the Yeah, the employees of the company really, really bringing, they’re bringing the brain and the intelligence. And so whatever digital capability we deploy in whichever category, whether it’s direct, whether it’s indirect, they need to be fixing, you know, they need to be applied to a process, which is fixed and correct. But we always need to consider what’s the functional wrap that sits around that it’s, we can automate massively in the execution world, which we know so if you’re executing in rates that we just spoke of, you can do that in the p2p world where it’s super transactional, you can seamlessly start to automate there, but the procurement people, you know, are my direct customers, if you like, we’re trying to free up their brain power is fundamentally what we’re trying to do. And it used to be a case of let’s deploy Excel and PowerPoint to free up some time. Now we’re saying get rid of Excel, get rid of PowerPoint, free up time, how can we automate insights and intelligence and just free up more time? And it really is all about freeing up more time freeing up the brainpower is the critical element.
Jonny Dunning: 24:16 Yeah, and like you say, the process side of it. You know, I’m not gonna say it gets overlooked. But sometimes when people are talking about digital transformation, it’s very much focused on systems. But as you say, if you’re digitalizing, a chaotic process, you’re just automating chaos, as someone I heard someone say recently, which I thought was quite good.
Adam Brown: 24:34 But if you don’t understand what the process is, because you can quite easily say let’s drop in a digital solution to choose anything. You say, Okay, we’ve got a problem with FeiFei. Tonight, choose any part of the product contracting because it’s an easy one. He could say that the doing of contracts is painful. So let’s drop in a contracting solution. But we’re what which bid is actually the problem and are you going to drop When a solution and then have some kind of chaotic, crazy process here that you haven’t solved, and now all you’ve done is add to that process. So you’ve just incrementally made it worse, because you had a chaotic process, you’ve put a solution in, which doesn’t match, I should not put my hand in front of the camera, you got a solution, which doesn’t match. And so you then have effectively, you’ve put in a middleware process, to then try and make a chaotic process fix to this standard one, you’re putting in an extra layer, you’re making it, you’re making it work serially worse, which is a really bad thing to do.
Jonny Dunning: 25:31 Yeah. And I think what you were talking about in terms of enabling the strategic and you know, more, you know, kind of thought based abilities of procurement teams is absolutely what procurement transformation should be all about, in the sense of just automate the things that should be automated. I think it’s interesting still in the industry, I still feel like there was a little bit of a kind of threat perception around some digitalization. Whereas actually, it’s like, do people want to be doing transactional stuff? Or do people want to be getting rid of that and freeing up their time for more strategic activities?
Adam Brown: 26:06 Well, the answer is, yeah, you’re running it, you find people are maxed out, they’re running it 100% 110%. So the digital transformation is not going to make things. Yeah, it’s going to make things more efficient. So instead of running it 100% 110%, you can run it 90% is free up that bit of time, that space for thought, so that you can at least get onto the day job more efficiently or more effectively, just because you’ve got more space to think. So at its very least it has to do that. At the very most, then you’re getting into the transactional world of automating making it more efficient in the transactional side, maybe the accounts payable side, where you’ve got super high volumes of things occurring, that really can drive big efficiency gains. And we know I mean, that’s been proven out. And it’s been done in many, many places. You can see just talk to slowness, perfect PIO, or the efficiency gains that can be done with that by, you know, really understanding the roots and, you know, invoicing and automatic three way matching on Super transactional high volume stuff on the strategic sourcing side of it. How do you make that more efficient? Yeah, it’s, yeah, how can we create a tender quickly and more efficiently? How can we get those requirements from our customers the business more effectively and more efficiently and communicate that to our suppliers more effectively and more efficiently. That means what we’re doing is making it easier and better for our category managers to create this stuff, they have the brainpower they know it, they’ve thought about it is just transferring that to paper. So that means we can do more. So instead of doing your one tender a week or a month, whatever it is, do to get more spend coverage do more.
Jonny Dunning: 28:02 Yeah, it’s interesting, I think what you were talking about with regards to if some of these, you know, teams are running at 110%, you know, chopping that back to 90%. So they got some time to step back. In, you know, having been involved in startups scenarios myself. It’s a little bit that like, the situation when you’re in a startup is utter chaos. Everything’s a million miles an hour, you’re probably at 220%. Yeah. But actually, it’s so important to take that time to just stop and think strategically, because otherwise you just carried on, carried on with that kind of surge. And it’s impossible to really see things clearly.
Adam Brown: 28:33 Yeah, we’re takes the, yeah, see the wood for the trees, right, you’ve got so much momentum at so much pace with what you’re doing. Everybody, you know, everybody that I know, everybody that I’ve ever worked with, is wanting to do the best job they can, they’re wanting to do the best for the company that they can. And that translates into working as hard and as diligently as they can. And so you know, saying, okay, take a step back, effectively, say tapes, take a step back and say, stop working. Yeah, because take a step back, think about things but you built up so much momentum and so much momentum. So the business carrying through, it’s a really tough thing to do. But it’s a tough thing to sort of step back and say, that’s hard, that’s broken, I don’t want to be doing it. And, and I think a lot of people have been burned by transformations as well in the past a lot of people you deploy a technical solution. And it makes things harder or it makes things worse or there is such a steep learning curve to get a grip on what you’re meant to be doing. That is difficult to you don’t have that free. Timpson of time to do the learning to do the change and free up the time. That’s an being presented with systems that you have to go on a training course to understand to learn how to use and to do as opposed to just having something that’s consumer grade like a mobile phone Yeah. Don’t know anybody who’s ever read the manual on how to use an app on the mobile phone. And it should be the same for what we’re doing.
Jonny Dunning: 30:07 I kind of feel like it’s getting, it’s getting to be much more like that, certainly with the newer solutions. But something that I think I’ve been discussing recently, which I found really interesting is just looking at the tradeoff between saying, where we’re transforming digitally, we’re looking at processes first. And then we’re looking at technical solutions. There’s a balance point between saying, Okay, this, this technical solution needs to do exactly what our processes that might be quite hard to find, versus the this solution has a way of solving the problem. Maybe we need to adjust our processes to be more like that actually.
Adam Brown: 30:40 And that’s being informed and that’s where the whole but yeah, with what I don’t, what the, what everybody else I know, in the in similar roles to me is that scouting bid is going out, what is the current art of the possible? What’s the current thinking? What’s the current cutting edge? Ideas? If you don’t do that, what are we going to do? We’re just as you know, I got a wonderful colleague, Camilla sfondo, saying, you’re just gonna buy a faster horse? Yeah, that’s all you’re gonna do. We want we want a Tesla, we want a rocket ship, space shuttle. If we don’t open our eyes and talk widely and see what’s available in the industry, we’re just going to end up with a faster horse, which people are going to think that’s wonderful, got a faster horse, but they’re not aware that there’s a Tesla that they can be in. And that changes everything. So you’re absolutely right. You need to understand the process. And why this is important is because of where does the process come from? Why was it there in the first place? And it starts off with law, if you think about is what is the legislation say? What are the legal requirements for us how we operate, that’s the base layer. On top of that, you then have the company principles, which is the corporate law, which builds up on top of that. So actual legislation, which you can’t challenge, you have to do it corporate law, which may have evolved, which your internal company law may have evolved, it may be there for good reason. But fundamentally, those two things put together, start forming the governance that you have. And so the governance drives the process, you know, you’ve got governance, you’ve got controls. More does that mean, we need to implement a process to ensure that we are adhering to our governance that ensures we’re performing our controls? That’s our process? What do we do we automate that, and that’s a system. So you’ve got this kind of House of Cards built up? On the premise that the bottom level? It’s correct. Yeah, the very, needs to be checked and validated all the way through. So when I say you need to look at the process is because you need to understand why you’re doing that. Because if there’s actual legislation, you need to do it, there’s no getting around it, you have to do it. And so you made sure that you don’t miss that in whichever jurisdiction you’re in. But if there’s something there, there may be some corporate company law that’s been put in place that was relevant 1020 years ago, but isn’t anymore, nobody really knows why. So that might be causing a huge headache or a huge inefficiency. So let’s have a look at what’s the law, what’s the company law? What’s the governance? What are the controls? What’s the reason for the process that we’ve got? So the actual process? Important, but super important is the reason for it being like that in the first place. Then understand what’s there and available externally in the, in the outside market? Yeah, exactly. As you say, you know, we don’t want a faster horse. We want the rocket ship.
Jonny Dunning: 33:35 Exactly. And I think, you know, when you’re looking at the external tech market, and seeing how other people are doing it, and you’re also looking at the company’s internal, you know, approach to it and internal expertise, it’s a, it’s a tradeoff of a balance of where the expertise sits, where you got clever startups and tech firms addressing a problem very specifically. And then you’ve got companies doing things, like you say, there are going to be probably very good reasons why most of the processes in place, and it’s going to be the sort of reasons where, where people kind of, you know, stamp their foot about things is because Hang on, that’s there to protect X. But I think sometimes, I mean, I don’t know if this is something you’ve experienced, but sometimes I’ve seen like cultural elements come into it, where an organization can be doing something because that’s the way they do things or because we never mandate stuff, and therefore none of that ever got captured because that’s not the culture but cultures change and things move forward. Particularly in line with things like legislative changes as well.
Adam Brown: 34:31 Yeah, that’s that that evolution bit I mean, that’s the natural evolution of a company. You need to we need to look at process the reason why the governance that controls all of that is important understand all of that in the mix with so why are we doing something why can’t we do something different or do something else is super, super important. And as you say, the startups that you yeah, is absolutely wonderful. And yeah, going back when I was, you know first started really getting into this in depth maybe five or six years ago with the technology. I had Google that was it, Google CrunchBase. That was pretty much it. Maybe there was a little bit of the beginning. Beginning there spend matters where you get like the 50 to watch nowadays is so much easier, right? You’ve got Matthias with DP W. Brilliant. You’ve got Lancer procure tech 100. Brilliant, and you’ve got Eloise with her spider chart. Brilliant. It’s just a massive shortcut to get through to finding out what tech there is for what categories of stuff and applications. So no longer is it a case of sitting down for hours and hours with. With Google, you’ve got a real far shortcut to say, well, what is the available tech for this problem and start looking at it and learning about it and talking to the talking to the vendors, talking to other companies, it’s really, really, so much easier now than it was even a few years back.
Jonny Dunning: 36:13 Yeah, I think it definitely goes both ways. If you look at the work that people like Eloise and Lance matassa doing is massively valuable for the startups and scale ups as well in the sense that you can try and develop a solution to a problem in isolation, and you can apply your best methods to it. But if you’re not talking to customers, real customers that are dealing with these real problems in the market, you can miss stuff, you can go down blind alleys that people have been down 50 times already. So I definitely applies both ways in the sense that it’s that sharing of operational expertise versus theoretical problem solving, which is why those are elements in the market that are really coming to the fore now. Bring out the conversation, bring out the problems and allow people to really work together with the solutions and the organizations to try and solve those problems better. So it’s an incredible learning experience. And certainly, for what I speak for us as a company, we’re learning with our customers as well. And like I say, it’s very much an evolution. Yeah. So just kind of like leading on from that you’re in a fairly unique situation with the way that Maersk is set up and the way that Maersk go running and the way that they kind of, they’ve got similar structure in the way that they do business to some of the things that BT. The way the BT operates generally, in that kind of like, you know, working through independent networks and local networks and things like that. But, but it sounds like they’ve got a different approach and some ways.
Adam Brown: 37:35 Okay, so I mean, that kind of, like very small example, it’s this sort of strange parallel, which I discovered that that surprised me, that’s kind of a fairly, in with both companies. It’s a significant but you know, not certainly not the complete core of everything that’s, that’s done with BT, that’s the non UK stuff in particular. And with, with Merck, it’s kind of the non-shipping part in particular, if you like, so, but the parallel was fascinating. But the setup of Merck, as an organization to do a technical transformation, I am blown away. It is absolutely staggering. What’s, what is being done? Well, they’ve created the investment, the looking to the future is absolutely mind blowing, I just staggered every day when I look around at this tech organization, and the way that they’re building up these tech platforms, if you like. So here, instead of that single tech organization is one big behemoth that supports the entirety of the company, creating these platforms, these tech platforms that support a function of the business is excellent, you know, it gives so much focus, it puts everything in one place. So you know, obviously, I believe the procurement tech platform for all of the transformation that take that is needed to support the procurement function. And everything I need is in my patch, completely in my patch, which means there’s no needing to sort of like go off and, you know, borrow heads or try and get into somebody else’s pipeline of activity. That makes a massive difference. I mean, of course, there’s the control function. So you’ve got the Enterprise Architecture, keeping an eye on that we’re not you don’t have, you know, 50 people buying the exact same thing from, you know, the same supplier all developing the same thing. So that’s going on. But we also have a whole full on proper product ownership parts of the organization. So it’s not just a case of, you know, some people like me or my team going out and, you know, saying to the business, what are your requirements and here’s something and not being able to interact with them at a completely detailed and meaningful level. Fundamentally, we are there Uh, you’re doing a developing and deploying and integrating technical solutions. Yeah, that’s fundamentally what we do. We have the product management side of it as well, the product owners and so full on proper product owners to work with the business to talk with the business, to help really get the requirements set, get the user stories set, really laid down. And that’s that partnership that we have with them. It’s a wonderful thing. And I haven’t seen that, to that extent anywhere else.
Jonny Dunning: 40:35 Yeah, I have to say, you know, when we were first chatting about it, you know, a month or so ago? Yeah, it did strike me as that’s quite a unique situation in terms of, you know, there are a best fit solution is going to look different depending on what industry you’re in, what categories you’re dealing with. But I think probably most importantly, what type of company it is, how its structured ownership structure, for example. But when you look at that, so you’ve got obviously, would you say that BT was more kind of rapid agile, best of breed adoption kind of approach with BT sourced and all this stuff to do with digital garage, etc. Whereas this is you have the potential here to you have the potential to go one size fits all, but you also have the potential to build your own
Adam Brown: 41:23 the and so there’s a difference. So with BT, and BT sourced, it was incredibly rapid, if you look at the, the speed at which we deployed at the time, it was phenomenal, it was like a two year timeframe. And, you know, went best of breed, third party best of breed and deployed. And that was the route that was available that was needed the works and worked phenomenally well. And some really, really great stuff. But with buying off the shelf products, you cannot guarantee that you’re going to be able to address everything in that process taxonomy all the way from sourcing to payment, there’s always going to be gaps that you can’t do that there isn’t stuff that’s available to do. Yeah, so we have the ability at Mertz, to not just by best of breed stuff. But we can build it as well. So of course, we can build best of breed, I have a whole development team, which is wonderful place to be. And so there’s even more options. But it’s all needs to be driven by Yeah, what are the requirements? What’s the priority? Is it so all that usual stuff? But if somebody says, well, we got we got this problem. And we got no idea how to fix it, there’s nothing that exists anywhere, then we can build it is? Yeah, absolutely no problem. So there may be, you know, the cases where every company is specific, and it has its own needs its own nuances. But it may be a specific issue or a specific problem or a specific need for Merck and nobody else. So if it’s specific to Merck, and nobody else is not going to be any other companies are going to build it. So we have the ability to build it ourselves. And because the whole team is in this, my team, it’s my patch, we can absolutely do that without having to get in a queue for any other part of the organization. So of course, as long as we go through the correct process to make sure that really is needed, and then all the rest of it, but the capability is there to buy stuff, to build stuff, to buy an integrate, to buy an extend to do any blend, which is any blend going from 100% Buy to 100% Build, blend anywhere in between. And we also have, so Mercer also has Merced growth, which is the kind of the investment arm of it as well. And it’s fairly well publicized that we invested in PacSun, which Martins Martin the guys over at PacSun mask is invested in them. We’re also using them live now and deploying them. And it’s kind of really, it feels great that you’ve invested in a startup, and we’re deploying live and using that in a fairly significant part of the business as well. And that’s yeah, really, really cool.
Jonny Dunning: 44:28 Yeah, I find it fascinating in terms of the kind of build it yourself approach because that’s a lot of commitment. You know, it’s going to cost money, it’s going to take time, you’re not going to be able to spin out something that already exists in a really short period of time. You know, these are complex products. But the thing that I find really fascinating about it is just the long term future planning and how that can be applied to something that to an outside. I’m not an expert in the shipping industry. It just seems so complex. And it just seems like it could have rapid changes. But maybe I’m wrong but it’s but that is I find really interesting in terms of that complex forward planning?
Adam Brown: 45:02 Yeah, it’s having that that long term desire, being able to say, Okay, well, we need to do something. But you know, if you’re looking to the future, the business, the businesses, the business, we know that we have these things that we need to solve for, it’s not going to change, you know, we’re always going to need to solve for contracts, we need to solve for contracting, we need to solve for sourcing, we need to solve for insights and analytics. Fundamentally, we are the world’s largest integrated logistics company, fully end to end integrated. So we’re not going to suddenly stop doing that that is the nature of the business. And so there’s always going to be the need to manage rates to be able to automatically raise orders to be able to automatically trigger execution of rates into orders based on a vessel arriving at a port or a terminal. So all of those things are always going to hold true. Because that’s the nature of the business. So why not take a long term view, why not develop something in house, absolutely. Specific to the needs that’s absolutely best of breed.
Jonny Dunning: 46:18 Which brings me on to my next kind of discussion point, which I think is very relevant to what you just described, which is this kind of 8020 Pareto esque split between what’s likely to be common practice, across industries across companies, and what’s likely to be to tie in to an organization’s specific needs, based on them being in a particular industry, etc. So when you take that into account, what do you think are the things that procurement within an organization can do to help create that competitive advantage?
Adam Brown: 46:52 After getting connected to the customer? That’s the bit which is always difficult for procurement teams and procurement folks. So we understand our direct customer, who’s the business who’s asking us to do something, but with what we’re actually buying, and what we’re actually doing? How do we connect that all the way back to the customer? And really, the customer is at the heart of any company’s strategy, any big corporate strategy? The customer is at the heart of all of that, you know, how do you? How do you connect what we’re doing as a supplier facing function, which is kind of at the back end of that to tie it all the way through? And so that takes a fairly decent amount of thought, to say what everything that we’re developing, if I talk in terms of products that we’re developing and deploying, how does that make life better for the customer? Or to put it another way? How does that enable us to create a product, which is, has a better outcome for the customer? And so we can start, you know, if we even think in slightly bigger terms, you know, it’s very public with mercy, its commitments to being, you know, net zero. And so how do we, as procurement, how do we kind of feed that into the, into the customer, so if you think a customer goes to Merck, and perhaps and the, they’re gonna say, I want to meet, you know, I want to get something from point A to point B. So, I could do that in this timeframe, I could do it for this price. I can do it for this level of efficiency for with these green parameters are how do we start building in the ability to do that? Well, those kind of green parameters, if you’re dealing with parties, you can then certainly see how easily that chain runs all the way through, because it’s not something anybody else in the company can do. So if we want to say this is the, this is your, you know, offering a this is offering B and these are the environmental credentials of each one. And this is the differences. We can’t just be saying these are the environmental credentials, as far as we’re concerned, as a company, we have suppliers, we have to build that into it as well. So how do we flow all of that through? And that’s one sort of like very, very clear example, because most companies got ESG commitments. And this is, yeah, Mercy obviously doesn’t. So that’s one very clear thing in procurement, how it flows through all the way through our systems. And what I’m doing in my team is doing all the way through that directly impacts back onto our offerings to customers.
Jonny Dunning: 49:41 Yeah, I totally agree. I think that’s really interesting in terms of looking at that because you, you know, the commercial front end impact to procurement, I think is sometimes very disconnected in a lot of organizations. But actually, say for example, if you’re, if your organization is a consulting firm or you’re, you know, At a systems integrator or something like that, if you’re using third parties, as part of the work that you do, you’re naturally using a significant extended capability to cover niche areas and specific capacity and all that sort of thing. Well, that’s very important to what you’re selling to the customer. But I sort of feel like in some organizations that’s not encouraged in procurement to think like that, would you? Would you? Would you say that’s the case?
Adam Brown: 50:25 I think the, I think the onus is on anybody who’s a procurement professional to consider the customer. Yeah, the company, any company exists to sell stuff, you know, companies, you know, you have your company, if you didn’t sell anything, what’s the purpose? Exactly, yeah. So you have to sell something. So it’s all driven by being able to sell stuff, which everything’s driven by customer, it has to be, that’s why customers always are gonna be a focus of whatever the strategy is for any company. So as a procurement person, it’s difficult sometimes to connect it through. But I think as we, as we go forward with stronger and stronger ESG agendas, that is a particular hook into understanding how procurement can affect that ESG agenda, which is going to be, which is super important for customers, it’s important to me, when I buy stuff, you know, when I’m going into my shop is important to me, no matter what I’m buying. So it must be for everybody else, whatever they’re buying be that a personal level or a corporate level. And that’s an easy one to kind of hook into and kind of get your mind attuned to what’s that journey. And you find that, once you understand that foot, one aspect of it kind of opens your thought process and opens your mind up for everything else that procurement does, which can then directly affect the customer in your business as well.
Jonny Dunning: 51:50 Yeah, and I think it’s kind of opening up the true strategic value of procurement, whether it’s being involved with things like bids, so the ESG capabilities of your suppliers and how that pertains to what a customer is looking at as an opportunity that that mercy you’re providing them, that’s strongly affected by what procurement is delivering, what procurement are measuring, and how that’s translated and communicated through the business. But equally, other areas will kind of feed into that in the sense of things like supply management, and that wider scope to be able to deliver ultimately what the customer wants. So I think, elevating that providing information. Another area that I find fascinating around that is just having visibility of what’s happening within the company, and what’s happening outside the company. So if you look at the kind of carrier fascination is how organizations get stuff done. So whether that’s by using their internal employees by using contractors and temps, or by using external service providers, it’s all the overall capacity and capability of that organization. So I think procurement sit in this very interesting area where you can actually see what’s going on within the company. And you can see what’s going on outside the company from the extended capacity. But also, you can see the feedback from the internal side and what’s happening externally, and vice versa, from external parties on what’s going on inside your organization. I just think that’s a fascinating kind of CenterPoint to be involved in that flow of information to be able to read understand, well, that we’ve got some real problems here. But actually, the problem sits inside the company, because suppliers are trying to do a great job. And we’re understanding this and seeing what’s happening. And this is stopping it. So again, that really applies to that kind of really evolved position that that procurement construct do we have within an organization?
Adam Brown: 53:38 Yeah. And we talk about supplier experience increasingly now. And it’s not just the, it shouldn’t just be limited to what their suppliers experience is of interacting with us interacting with us as a company. But exactly as you say, what can we learn from them? What can they say, you know, it’s how to help us become more effective to help us become more efficient to say like, you guys are doing something crazy or stupid, or you could do this instead and be that much. It’s being open to all of these suggestions, not just saying your Euro supplier, we order stuff you send it we pay for it is much more than that there’s so much more knowledge and insight and advice that can be super helpful. And let’s not forget any big company, quite often your suppliers are also your customers. So you kind of get it from both directions. That is almost gone to that holy grail of how do you seamlessly connect that all the way through?
Jonny Dunning: 54:40 Yeah. So if you’re looking at how procurement can create a competitive advantage, what do you see as the key differences and how procurement can create a competitive advantage if you’re looking at more of a direct lead organization, versus more of a kind of indirect so Was his lead type organization? What would you see as potential differentiators that procurement can provide?
Adam Brown: 55:07 thought it’s the thought leadership, you know, on what is there available in the market if it comes back to this faster horse thing. So you know, if you have that guy that stands true for any requirements that are coming in from anywhere, yes, procurement, we get to see all of these businesses, all of these companies, but more importantly, the procurement folk are absolute category experts in what they do. And so if we can, this kind of goes round in a big circle, right? If we can free up the time for the procurement guys to just have more headspace have more space to think they’re all category experts anyway, we need more of that we need to be even have more expertise, have more time to understand things have more time to ideate that category, expertise that they have, fundamentally then feeds back into advice back to the business, the business is going to say I need this stuff. Here’s my requirement for what I need for what I want to do. procurement of the ones who understand the supply market, fundamentally understand the supply market, where it’s going, where it’s moving the insights, the intelligence, and that’s the feedback loop into the business to say, Well, you’ve said this, you’ve asked for this, these are your requirements. But if you tweak that, and if you change it, you can increase or improve or differentiate the outcome for the customers give that competitive advantage is the knowledge of the supply base knowledge of what’s available to feed into any products be that direct or indirect. That is going to make that difference to the sales force, if you like the sales folk, the products, the portfolios, whatever is being sold.
Jonny Dunning: 56:56 Yeah, I find that quite interesting. Because if, you know, I’m obviously very focused on the services side of things more the indirect, typically the indirect side of things. And if you’re looking at complex services, for example, then suppliers, experts, pliers in a particular area on cybersecurity is always an easy example. The input from suppliers may have a significant effect on shaping the requirements. How does that How about on the direct side of things? Would you still say where like you were saying earlier, you know, a supplier might look at and go you guys, you’re missing a trick here, you could be doing like this, you’re just not you’re missing out? Or you should be doing things differently? Do you feel that that applies in the same way on the direct side? And if so, would that be just around? The way the supply chain is operating? We could just chop this down for you? Or is it more about how you’re buying what it is you’re buying?
Adam Brown: 57:47 I think the easiest one is how you’re buying it because the directs are, is defined by the stuff that the company does is defined by what the company does what is direct. So how do we do that more effectively? How do we do that more efficiently? How can you, you know, take that market place and spin it into something that’s going to give you the most advantage. And that could be just from, you know, some pure, standard understanding of negotiation science, which is simple things like saying if you put an anchor price in, you’re going to have a better outcome rather than just starting from nowhere. If you can put in intelligent anchor and you get a better outcome. Do that at vast scale. And the outcome can be incrementally massive. So that’s one thing, how do you negotiate better? How do you optimize the negotiation? All the way through to how can I actually create a marketplace? So instead of going out and doing tenders and doing negotiations, is it possible to even go as far as creating a whole marketplace is there the volume of suppliers is the volume of capacity in any particular category that we can go out or we can create a digital marketplace that we can just look into and start using for the direction that starts becoming really fascinating. But for me that’s in certainly where we are at the moment. That’s the kind of the big things on the directs, how do we optimize what we’re buying? How do we get it efficient? How do we get what we need, where we need? How can we start guaranteeing capacity or capability or whatever that extra metric is other than the price of the thing? And again, coming back to the ESG bit that holds true for the you know, whatever you’re buying be that direct or indirect. And so, if you’re buying directs then what are the green parameters or what are the ESG considerations that you might want to feed through, all the way through to then say to the customers, this, these your option At least the parameters that we can go from one end to the other.
Jonny Dunning: 1:00:02 Yeah, I would imagine with the pricing calculations, and that must be incredibly complex within the way that Musk operates.
Adam Brown: 1:00:11 Yeah, I where it would be for any company and tying that all the way through to like, fully, fully and deeply understand the pricing and the capacity in whatever you’re buying. So does it capacity exist for what we want to buy? Is there enough volume for what we want to buy and connecting that through to what you want to sell? Is, has to be done in its very, very complex, because you’re dealing with two, two completely disparate systems. In most companies, you’ve got procurement systems, and you’ve got the sales side systems.
Jonny Dunning: 1:00:43 So procurement and finance are generally fairly well linked. But front end to procurement.
Adam Brown: 1:00:49 You know, where you tend not to get that linkage there, do you have a sales force, and you’ve got a procurement organization, a lot of the time, they’re not in big organizations, they’re not particularly closely connected.
Jonny Dunning: 1:01:03 I’m seeing it more, I’m seeing it starting to happen more particularly in areas where it’s specifically pertinent that that becomes a really, that is a really important thing. I think it’s important thing in any company. But for example, if you’re a service provider company, and a lot of those services are provided by third parties, but you’re the intermediary or you’re the you’re the name that a project is bringing into to provide those services, then procurement are gonna be hugely important in the bids that are going out to the end customer. Because that’s supplier bids with markup and bringing things together and sewing, knitting it all knitting it all together neatly. I’m starting to hear more people talking about that. But it’s an interesting, it’s an interesting thing to consider, particularly when you look at the capacity side of it in terms of what what’s the salesperson selling, versus what can the organization deliver, and how is the organization set up to deliver that via their supply chain. So I think that is an area to be honest, what we’ve just been discussing, I could go down the various rabbit holes, I could go down on that, just to move on to it to another area. I think there’s a conceptual difference. And there’s a cultural difference in how different organizations look forward and plan for the future. There’s different structures to be considered. But there’s also this different outlook to be considered. And it comes back to the long term Padme, long term, short term side of things before and I think you know, you and I’ve kind of spoken a bit about this before in terms of looking at the political landscape and the different cycles that operate within the way that different cultures and countries tend to tend to kind of view the world and how they view their future planning. But it also exists in different organizational structures, whether an organization is, you know, privately owned, or private equity versus a PLC? And in terms of that thought process and what kind of goes into it? What’s your what’s your view on those kinds of different strategies in the sense of that kind of, it’s partly about what’s appropriate for an organization in terms of you could have a very, very long term strategy, but it’s not necessarily going to stack up in a PLC that needs to be reporting information and providing stuff on a short term basis.
Adam Brown: 1:03:21 This is why this is something that we were talking about when we last met was like, month or so ago. And it was more of an interesting observation. And I don’t know the answer, I you know, I haven’t been at mass for long enough, but clearly, I was at BT for a for a decent time and PLC very, you know, very much, providing the best shareholder value it can and being attuned to the wants and the needs of the market and the shareholders. Wears mask when I’ve joined, it’s family owned. And it’s this kind of slightly intangible vibe to the company. I don’t know how to describe it, but it’s absolutely noticeable. It really, really is. And going from one to the other. And I you know, I haven’t been enough companies to say whether this holds true between all family owned companies and all PLCs like no idea, but there’s this definite different vibe that permeates the company that I absolutely noticed. So that was one observation what that means in the long term, you know, find out we sit down and a couple of years exactly reflect upon this. But as far as the planning goes, so every company will have a medium term planer have some plan, which is over the next three to five years on Yeah, what are we doing? They everybody does, but I guess the bit that we were touching on before was saying that if you’ve got If it’s a PLC, if it’s completely, you know, 100% traded on the market with a company. And this was more of a conversation, is that fundamentally going to lead to a different view on where to invest than if it’s completely, you know, privately owned for whatever is, if it’s privately owned? And you’re only answered answerable to the owners? And they can say, well, let’s take a long view, let’s take a 20 year view, let’s take a 30 year view, what do we want to do now to, you know, invest and look at the payback over 20 years, look at the payback over 30 years, or payback over 10 years? And it’s really is, I don’t know is the answer right now is, you know, do PLC, do they look at the, you know, looking at a shorter timeframe than a privately owned company. And I think it’s down to the difference in the privately owned companies on what you know, what timeframe that they’re going to look at, but, like, given the investment, and the clear investment in the technology, and the teams that we’re building in Merced is a very long time horizon that’s been looked out for that investment. It’s changing that investing in that deploying that that’s there forever, that’s there to stay, that isn’t looking to say, let’s deploy this, and we’re going to have a payback in 12 months, or two years or three years. It’s massively longer term than that.
Jonny Dunning: 1:06:35 Yeah, it’s a totally different approach. And it’s, it’s tied into the very, very high levels of expertise that sit within the organization and understanding that industry. Whereas you know, most, for example, technology providers aren’t just thinking about shipping, clearly, some of them are recent specialist providers.
Jonny Dunning: 1:06:54 But I think that’s a really interesting factor. And just before I come on to another thing that I think that lends itself towards, because I know, obviously, you’ve got some exciting plans, and I’m sure some of that will probably involve growth of the team, etc., as we’re going to kind of come on to last. But before we come on to that, just want to touch on something, just briefly, in terms of going through this transformation process, going through putting processes in place, digital systems in place, neatening everything up making it all, you know, rev like a Ferrari.
Jonny Dunning: 1:07:29 Spend isn’t everything. And I think, you know, this is something that we briefly discussed before as well, just in terms of a kind of view on stuff is how do you see the process that you’re going through? How do you how do you position it from a foot with a focus on those supplier relationships and that supplier management as a key kind of objective?
Adam Brown: 1:07:51 Yeah. Supplier, again, coming back to the supplier experience, you got to make it easy for the suppliers. And if you think whatever we’re asking the suppliers today, whatever hard time they’re having, we’re all of those systems are facing into the company as well. And so if we make it better for the suppliers, we’re instantly going to make it better for ourselves, it’s the flip side of the exact same coin. If a supplier has got 20 different touch points with 20 different systems for it operating in 20 different ways. What that means is on the inside of the company, we have got 20 different systems interface into 20 different parts of the business operating in 20 different ways. If we simplify it for the suppliers that’s going to make their life and much better for us. But it’s also going to do the same for us. Yeah. So you start thinking about that overarching, supplier experience that covers absolutely everything we do every touchpoint. And yeah, the suppliers are interacting, clearly transactional level invoicing payments, receiving purchase orders, but also the validations when we when we onboard a supplier and we validate them, and we continue to validate, continue to validate them throughout their lifetime with the company. There’s integrations there. We’re gonna continually put questionnaires out and this is even before we get on to sourcing and doing all of that.
Jonny Dunning: 1:09:25 Yeah, and I think when you look at that kind of mirror effect on what’s happening with regards to the technology, I think it’s a great point you make about if you’re making a more complicated for the suppliers, you’re probably making it more complicated internally as well. I think adoption is a massively important factor to consider with any kind of digital transformation. You know, you can you can you can come up with the best idea in the world but the best of luck if no one will use it.
Adam Brown: 1:09:50 It’s not a massive thing. It is the biggest thing. Yeah, yeah, it is. You can’t have you can’t have a digital ghost town. You know, I will not do that the change management is the number one most critical thing. And the easiest way to do change management coming back to what I said before, is create systems that are so intuitive that you don’t need to do it that people will be ripping your arm off to say, Yeah, give me that I know how to use it without any instruction manual. You know, it’s, and this is a Yeah, a big, big lesson from the BT days. And really something that, you know, Cyril, the CPO champion was consumer grade user interface on everything. And so with what we’re doing, yeah, we’ve I’ve hired a UX designer, to just work on the user experience for everything we do be that internally, it’d be the externally is the change management. If you don’t get that done, you don’t get it right. Then nobody’s going to want to use it. At worst, they’re going to hate it and treat it as an escape room. We can’t have that.
Jonny Dunning: 1:10:57 No. And I think sometimes when you’re dealing with the supply side of it, supplier adoption is assumed. You want to work with us, you jumped through the hoops, you want to work with us, you got to go through the systems, it might be really tiresome and annoying, but tough luck, you’ve got to do it. And I think that, you know, as you say, that’s not the right approach to take. Because if you’re making it easier for your suppliers, you’re going to have a better supply chain. And there is more is a very competitive market for the best suppliers now and suppliers choosing who they want to work for based on a variety of different credentials. These days, some more around the kind of ethical side of it, as well as you know, other commercial considerations.
Adam Brown: 1:11:34 But yeah, well, there’s a great one there, I had an absolutely fantastic startup that I that I know, I’ve never actually, you know, contracted with them. So I’ll just make that absolute absolutely clear. But the products wonderful, the guys are great, really, really good company. I was speaking to them a maybe two years ago now about this very subject. And considering that we might use them, it was at the very early stages of what do you do? Can we test things? Can we talk in more detail? And they said, no. Because we’re a startup, we know how much time is going to be an effort, it’s going to be sunk into working with you. So we like you. Yeah. But you know, no, at this stage, because we’ve very consciously decided that we will engage with one company of your size per year, because that’s what we can manage. And the rest of it is going to be near the smaller companies. And we kind of got our one big one we’re working with, with this year, we’ve got a full pipeline of sales and engagements. And we’re, we’re full with that. So thank you for your interest, we’re happy to talk, but we don’t as a startup, we don’t have the capacity to deal with it.
Jonny Dunning: 1:12:55 And I thought that was fascinating, very, very pragmatic, not an easy thing to do to turn out an opportunity. But obviously, they’ve had experience of what that can mean when basically a small startup or scale up gets swallowed.
Adam Brown: 1:13:10 Yeah, in their in their interaction by a giant organization it isand then the interaction, you just contracting. And there was, you know, the just onboarding and contracting takes months and months and months, and you would have experienced this, of just to get on boarded and being bombarded from a million different places give us this information, this of me thinking, Well, I’ve already given all of this to that person, you’re not talking to you what
Jonny Dunning: 1:13:31 yeah, how many different cybersecurity assessments can you do for the same organization?
Adam Brown: 1:13:36 Yeah,do get the stuff, you’re literally asking the suppliers, here’s, you know, here’s a set of questions. And there’s and then the next day, you receive another set of questions 80% of the same as the ones you’ve already done in just this amount of time that sucks up from you. But it must be mirrored on the other side as well. So there’s the efficiency gains on both sides. So making that seamless being the customer, you know, being the customer of choice, we talked about being a supplier of choice, but being a customer of choice is, is important.
Jonny Dunning: 1:14:07 It’s very important, I thought I also think being an employer of choice is very important. So that was the last thing I wanted to touch on just in terms of the unique opportunity you have with what you’re doing right now. And the type of people that that’s going to appeal to and the type of people that you need to appeal to and expanding your team. I think I personally think it’s an incredibly important part of digital transformation for any organized any procurement department within an organization because there’s going to be a base level that people coming into the market are going to say, Well, if there isn’t this level of sophistication, then that doesn’t appeal to me. So I think there is going to be a real demand for the companies that are really behind the curve to just catch up because people are going to come in from university and you know, early, early jobbers and come in and think What the hell’s going on here if there’s a really low level of automation and sophistication, whereas conversely, Some of the people who’ve been in the industry for a bit longer or a bit more traditional, can tend to be a little bit fearful of Hang on, is this going to automate me out of a job? It’s going to be a standard criteria of people coming into the market. So with, I’m assuming you’ve probably got, you know, significant growth, expectations in terms of building the team coming on, especially when you’ve got the technical side of it as well. You’ve got to appeal to them with some cool stuff. Really?
Adam Brown: 1:15:24 Yeah, exactly. What if you can just think about this very, very logically, if you if you had two companies, they were both companies were absolutely identical in the roles that they were offering you the financial packages that they were offering you. But you walked into one, and it had beautiful, lovely, fantastic new offices, I don’t know, looks something like this. And you went into another one. And it was something that hadn’t been cleaned or decorated in the last 20 years? And which one are you going to go for? Yeah. And the same holds true with tech, you’re gonna go for the company, which gives you a notebook, a pen and a Nokia 6310. Or are you going to be more attuned to go for the company, that’s going to give you an iPhone 14, and it’s going to give you a MacBook, and it’s going to give you everything cloud based. So that it holds true throughout the rest, to attract talent to attract good procurement professionals, we want to give them the best tooling possible as well. So besides making life better for the organization more effective and more efficient, we want to attract the best talent and so by, you know, deploying these, these tools in these systems, exactly that.
Jonny Dunning: 1:16:37 hugely exciting. We’ll wrap it up there, really appreciate your time. I definitely would like to see where the journey goes from here. And maybe a follow on conversation a bit further down the line. But I think it’s, I’m really glad that we’ve had this conversation. As you said earlier, it took us a while to finally coordinate ourselves and get around to it. But yeah, I think you’re gonna be extremely busy. And it sounds like it’s gonna be a really exciting journey.
Adam Brown: 1:16:59 It’s gonna be one hectic few years. I can see that right now. But yeah, we’ll talk again in a year or two’s time and see exactly where things have got to.
Jonny Dunning: 1:17:01 Brilliant. Well, listen, thank you so much. I really appreciate all your insights and the benefit of listening to some of the anecdotes of your experience and your views on this sort of stuff. I think it’s... I find it super, super interesting. You certainly triggered a few ideas in my head that I had not really kind of considered before. But yeah, I really appreciate your time. And yeah, I look forward to catching up soon.
Adam Brown: 1:17:30 Jonny, it’s been a pleasure.
Jonny Dunning: 1:17:31 Thank you very much.