With Amanda Prochaska, Founder, Wonder Services
00:00:00 - Procurement's role in change and tech deployments and user adoption
00:09:00 - The current patterns and trends in digital transformation
00:17:20 - How are procurement going to get closer to stakeholders
00:28:15 - Where does the data stored across systems converge?
00:35:00 - Measuring performance and contract lifecycle management
00:38:30 - The process vs technology balance
00:45:20 - The challenges business face when tackling transformation
00:56:45 - Measuring procurement's impact
Transcript - Auto-generated. Please excuse any minor errors.
00;00;00;00 - 00;00;08;13
Jonny Dunning
without further ado, I would like to welcome Amanda Prochaska from Wonder Services to join me for this podcast. Thanks very much for joining me.
00;00;08;13 - 00;00;12;05
Amanda Prochaska
Amanda Thanks for having me. This is exciting.
00;00;12;08 - 00;00;21;01
Jonny Dunning
I was saying to you just before we start recording that you're, you know, looking very alert and awake and with it bearing in mind it's pretty early. And you're in Las Vegas, aren't you?
00;00;21;03 - 00;00;30;18
Amanda Prochaska
I am in Las Vegas. I've been here actually since 2015. I told somebody that yesterday and they're like, Wow, you've been there for a while. And I was like, Wow, I guess I have been so.
00;00;30;20 - 00;00;52;06
Jonny Dunning
I haven't been to the States for quite a while, but I was actually in Dallas last week and I had a fantastic time. Really, really enjoyed it. And I'm sure that's the thing. It's the same in Vegas, but I could not believe the level of air conditioning that is possible even in extremely large buildings like the Dallas Cowboys Stadium.
00;00;52;08 - 00;01;07;03
Amanda Prochaska
Yes, it's funny because people make fun of me all the time. They're like, You live in Vegas, but you wear like sweaters all the time. And I'm like, Yeah, because it's it's actually chilly inside. When you go inside these buildings. It is well, just to call it refreshing.
00;01;07;05 - 00;01;09;26
Jonny Dunning
I was I was genuinely cold.
00;01;09;29 - 00;01;10;06
Amanda Prochaska
Yeah, I.
00;01;10;06 - 00;01;10;26
Jonny Dunning
Couldn't believe.
00;01;10;26 - 00;01;12;16
Amanda Prochaska
It.
00;01;12;19 - 00;01;31;08
Jonny Dunning
But I had an excellent trip. But thanks very much for joining me. So we're here to talk about procurement, digital transformation. We've got some great topics lined up in the area, keen to get your views on on how the market's progressing, certain things that we're seeing in the market and what we're what we're kind of looking ahead to.
00;01;31;11 - 00;01;41;16
Jonny Dunning
But before we get into that, would you be able to just give a bit of background context on your journey through the procurement world, what you're doing now with Wonder Services as Chief Wonder Officer, which I love.
00;01;41;16 - 00;01;42;28
Amanda Prochaska
Thank you. Thank you.
00;01;43;00 - 00;01;46;00
Jonny Dunning
Yeah. How you got there? Really just a bit of a journey.
00;01;46;02 - 00;01;53;07
Amanda Prochaska
Okay. I I'll will say that it actually legitimately started with the movie Beauty and the Beast.
00;01;53;12 - 00;01;56;25
Jonny Dunning
Oh, here we go. This is my kind of story.
00;01;56;28 - 00;02;14;07
Amanda Prochaska
So it's a very long story, but I'll, I'll try to abbreviate the front end. So I fell in love with that movie as a child and decided to study French. I ended up getting a French scholarship to pay for my school, and then I went. Just then I was like, Well, what am I? I just can't study French.
00;02;14;07 - 00;02;40;14
Amanda Prochaska
Like, what am I going to do with that beautiful language? But I needed something else and I wanted to go into international business. And the closest thing at the school I was going to was international political economics. So I decided to major in Bell. So that's like the starting point of this journey went through school. I realized that a lot of the people in school were going into government and I didn't want to necessarily go into government.
00;02;40;15 - 00;03;02;24
Amanda Prochaska
I wanted to stay in the business track. So I was a little confused about where to go with my career as I was sitting there as a junior and I was going to graduate early. So I had about six months to kind of figure out life and I was going through a booklet I Catch You not like they gave me about that, and they said, Here are the jobs that you might be able to get with this degree.
00;03;02;26 - 00;03;23;22
Amanda Prochaska
And it was alphabetical. So started with the A's all the way through Z and I started through the A's. Nothing like school. I went through the BS and I got to buyer and I was like, I like to buy things. He doesn't like to buy things. I had no idea what it was, what what a buyer does or anything.
00;03;23;22 - 00;03;45;06
Amanda Prochaska
And so that night I was like looking on the internet and I am one of the companies that was close to where I was living, was a French owned company. And so it was like, Why don't I check their website to see what they have available for us? And so I did that and they actually had a buyer, one position open.
00;03;45;08 - 00;03;56;19
Amanda Prochaska
So I applied a week later I was interviewed. The day after that they offered me a job and really the rest has been history since then. So that's that's how I got into procurement.
00;03;56;22 - 00;03;59;08
Jonny Dunning
That is a fantastic origin story.
00;03;59;08 - 00;04;00;24
Amanda Prochaska
And yes.
00;04;00;26 - 00;04;20;24
Jonny Dunning
I like the fact that you actually, in terms of what you studies, it gave you clear job opportunities. It reminds me a little bit of when I was at university, not such a great story, but I studied environmental biology, so ecology, kind of environmental science effectively on back in the day when I was studying, I was like, This is going to be huge.
00;04;20;29 - 00;04;40;15
Jonny Dunning
It's all about saving the planet. It's really important and but it was a bit early. It was a bit early in that, you know, back in those days, I remember one of my friends, one of my friends was studying economics and he basically produced an article that was outlining statistically the percentage increase against the average salary that your degree would give you.
00;04;40;17 - 00;04;54;28
Jonny Dunning
And his was like, you know, plus 50%. So we know that mine was like -7%. I thought I didn't really think this one through, did I? But it's it's great to see how that path took you there. So. So you went in as a buyer? Yeah. And then and then how did that progress?
00;04;54;28 - 00;05;24;08
Amanda Prochaska
Yes. Yes. So I started as a buyer in my my first project was a large change. We were actually changing from in-person travel agents to online booking tool. So from day one, I was usually working on some very large change agents and that was what I loved about procurement, because you could go into an organization, save some money, add some value, change the way that things were being done for the better, and move on to the next thing.
00;05;24;08 - 00;05;53;19
Amanda Prochaska
So I fell in love with that aspect of procurement, and then I got into three separate appointments, multiple procure tech deployments, insourcing and outsourcing, merger and acquisition, leading those mergers. Most of the time, I wanted to do as many divestiture orders that anything that was going on in procurement that didn't relate to the day to day operations. I became the lead for setting strategy, etc..
00;05;53;26 - 00;06;21;20
Amanda Prochaska
So progress through my career. I was say my last corporate gig was actually at MGM Resorts and that's what brought me out to Las Vegas. And I had my dream job. I was working for my mentor at the time. I built a brand new team from scratch. We were going through a large change. I was not just technology, but our processes, our talents and how what we want to accomplish in procurement, how we organized ourselves.
00;06;21;20 - 00;06;45;07
Amanda Prochaska
So it was like a complete transformation of the organization. It was so much fun. But then I got to the point where it was it was pretty good. Like we transformed a lot and we're moving more and more into operations. And I looked at my husband and I was like, Well, I could go find another transformation to work on, which would be fun, but we would move the family.
00;06;45;09 - 00;07;14;27
Amanda Prochaska
And I started like doing the self-reflection. I was like, I really think there is a need in the marketplace for the skills that I bring, which is mostly focused on change management and user adoption, how we want to organize strategically to get all of that done in procurement. Because I kept on hearing 30% success rates. Actually, KPMG just this week came out and said 50% are of digital transformations are successful.
00;07;14;29 - 00;07;34;17
Amanda Prochaska
So it's somewhere in that ballpark. It's still not good, right? We're investing all this money in digital transformation and we want to make an impact. And when you look at the numbers, user adoption is usually what is setting people back from being successful. It's not the technologies, it's the adoption of it. So I was like, You know what?
00;07;34;17 - 00;07;54;24
Amanda Prochaska
I'm going to go after it. We're going to start Wonder Services wasn't actually even following other services at the time, but we're going to start this adventure of helping as many procurement organizations be successful in their digital transformations. And that's what Wonder Services is all about. It's about unlocking digital success for procurement.
00;07;54;26 - 00;08;16;01
Jonny Dunning
And so one of the things I want to come on to later are some of the challenges in procurement in general. Obviously the challenges in digital procurement, but that's a that's a fascinating stop that KPMG is saying 50% of digital transformation is successful because there's a lot below the surface with that, isn't there? I mean, what what constitutes successful?
00;08;16;04 - 00;08;23;20
Jonny Dunning
And for all those that are unsuccessful, what was the thing that went wrong with them and how many of them never started in the first place?
00;08;23;23 - 00;08;50;20
Amanda Prochaska
Right. And like your original point, how do you even define success? Sometimes I walk into organizations and I'm like, What does success look like? And they already have approval for the project because it was an hour away. But I'm like, But that's not just what success looks like. Success is a much bigger picture than that. So we actually spend a lot of time upfront with leaders to understand how we're going to measure that success at the end of the day.
00;08;50;20 - 00;08;59;09
Amanda Prochaska
So when we do look back three years later or four years later or whatever it might be, we can say where we successful or not.
00;08;59;11 - 00;09;15;06
Jonny Dunning
Yeah, so, so if we take a step back a little bit and just look at the current procurement landscape in terms of digital transformation, what are you seeing in the market and why do you think you're seeing these particular patterns and trends?
00;09;15;09 - 00;09;39;13
Amanda Prochaska
Okay. So there's a couple of things I'm going to I'm going to talk to procurement in general first, and then I'm going to get into digital procurement. Okay. So it and actually a good friend of mine kind of brought this up. He said, you know, at first we were there to save money and then it became to save the company, which is risk looking at risks, understanding what risk might be.
00;09;39;20 - 00;10;04;07
Amanda Prochaska
And now we're being asked to save the world. Right? And I was like, That is so true. And you take a step back over my career, which is, you know, 20 plus years. Now, that is that is totally spot on. I mean, we we transform so much as an organization. And I think one of the challenges that leaders have right now is getting our heads around that right.
00;10;04;10 - 00;10;26;08
Amanda Prochaska
We know we've been talking about ESG and we've been talking about how to save the world. But have we really reimagined how we're getting the work done? And that will assess that we're using to get that done. Some people are starting to do that. Some people are not. But it feels like some leaders come to me and they're like, it just feels like work is being piled on to us.
00;10;26;10 - 00;10;57;08
Amanda Prochaska
And those are the moments where we can truly transform the organization and what we do and think about things differently. We're giving we're being given that great gift, that catalyst to create the change. And we need to have leaders who are going to walk through that door and really think about things differently. So that's the the I would say, the foundation of some of my comments on the digital transformation side, because I think we're right for a complete transformation of how we think about digital procurement.
00;10;57;10 - 00;11;20;15
Amanda Prochaska
When digital procurement started, it was taking physical processes, right? So how to get a rack to a purchase order to an invoice being paid. And we took that digital in this day and age, it's really about how do we reimagine the work with the tools that we have to create a difference in the world so that that's really what I want to get after.
00;11;20;15 - 00;11;48;19
Amanda Prochaska
So. AI It's going to be huge. You have a lot of the new intake thought and philosophy around how we manage work through the procurement organization and beyond. I think that that intake alone is going to transform a lot of what we do. If we apply it correctly, we're going to see a lot more tools that are specific to certain areas to optimize those areas.
00;11;48;19 - 00;12;08;13
Amanda Prochaska
I mean, I where you tell people right now, I mean, there's well, more than probably a thousand different procurement checks out there. And I think that's going to continue to expand. And we're going to see continue to see a lot of investment in the area. We just had a huge announcement from a particular attack last week or earlier this week.
00;12;08;13 - 00;12;27;02
Amanda Prochaska
I can't remember $44 million investment. And there, you know, so pre go to market. So that is a huge amount of money going into the procurement space. So I feel like I think there's going to be a lot of cool stuff happening in the next couple of years in this space.
00;12;27;04 - 00;13;06;16
Jonny Dunning
Yeah, I totally agree with you. We're going to we're exhibiting at the Digital Procurement World Conference in Amsterdam the week after week after next. Yeah, and you're right, the procure tech sector has has grown so rapidly and I think buyers are a bit confused in some ways. It's a bit of a kind of maze to navigate. And, you know, incumbent technologies sometimes don't help the process in terms of what they might have sold in they can do versus what's actually possible or realistic.
00;13;06;18 - 00;13;15;28
Jonny Dunning
But it's a fascinating area. And like you say, it's an area that's ripe for transformation because it's so immature compared to, for example, the marketing function and marketing technology.
00;13;16;01 - 00;13;43;14
Amanda Prochaska
Yeah, Yeah. No, I it's going to be interesting what I see that is going to happen is people have made investments in technologies, but even the present technologies don't do great in all spaces, right? So we're going to see kind of this hybrid model continue to develop where they're going to continue to leverage their base end to end, and then layer on the different points solutions where there's weakness per company, right?
00;13;43;15 - 00;14;15;09
Amanda Prochaska
Because everyone has a different need in different areas. They might be more services heavy or manufacturing heavy. So it's really depends on what the need is. But I think eventually there's going to be a migration off of the core technologies and into a space where you have an interconnected web of different point solutions that meet your needs. Yes, that's not going to happen overnight for sure, but I think there's going to be an evolution there.
00;14;15;11 - 00;14;49;25
Jonny Dunning
Yeah, I think you're right. And that's certainly the view that kind of front line industry commentators like Dr. Elouise Epstein from Kearney, certainly her view and the way she kind of maps out the market. And I think it is a confusing market at the moment. There are a lot of technology players out there, however, that will kind of it will organize itself to a certain degree in the sense that, you know, these heavily funded startups or maybe not so heavily funded startups will either sink or swim, you know, what is it, four out of five startups don't make it past year two or something like that.
00;14;49;27 - 00;15;20;13
Jonny Dunning
So I think the market will shake itself out in a similar way to how other markets have evolved and it will become more obvious which areas require that specialist expertise, which parts of the process need, you know, specific technology to to to make that to get to where it needs to be. And connecting it all together is a fascinating thing as well, but quite often less complicated in my experience than people might initially imagine.
00;15;20;15 - 00;15;33;10
Jonny Dunning
So it's a bit of a journey of discovery for organizations, and I guess that's where people like yourself can really, you know, open their eyes in terms of the conversations and a new knowledge of what's going on in the market.
00;15;33;13 - 00;15;55;21
Amanda Prochaska
Yeah, and it's it's interesting from my point of view, because I talked about user adoption earlier on. When you get in fragmented systems that one of my concerns is and part of why I was motivated to start winter services was because you you can get these wonderful START solutions, but you need to be really strategic about the user experience.
00;15;55;23 - 00;16;18;06
Amanda Prochaska
Like how how does a user move through that landscape to get what they need at the end of the day. And so I think there's going to be a lot of work around that and it's going to be part of it. But but I think it's also going to transform procurement into instead of that. The conversation for procurement has always been comfortable with government right?
00;16;18;08 - 00;16;44;20
Amanda Prochaska
We need to be engaged early, come to procurement, everything is around it. We need you to come to procurement. But I think what is going to happen with technology is that we're going to go to where the people are and be there next to them as they're doing their work versus requesting them to come to us. So that I think is going to be a really cool way to kind of reimagine what we're doing in procurement is let's not talk about procurement.
00;16;44;20 - 00;17;02;07
Amanda Prochaska
Let's go to where they are, where they're transacting today and and involve us in that process through a technology so that we can have that interaction where we need to be, where procurement needs to be entered into the process.
00;17;02;09 - 00;17;20;25
Jonny Dunning
That's really interesting. I've not kind of looked at it in that way before. I like your point there. I mean, was I was going to ask you a follow on question of in terms of, you know, firstly, we've looked at where you see the market now and the key things that are going on. But the follow on to that is really what do you see the next steps being?
00;17;20;25 - 00;17;27;01
Jonny Dunning
What are the future trends? And I think that's that's an interesting one. You know, if you see that as being a future pathway.
00;17;27;01 - 00;17;34;29
Amanda Prochaska
Yes, I do. I do. I think a lot of what procurement is going to be focused on is going to where the people are.
00;17;35;02 - 00;18;02;03
Jonny Dunning
It's really fascinating because it's ultimately about weaving the value that procurement can deliver into the just the the the lifecycle or the natural workflow that people are operating under or or where those workflows kind of are going to. How do you see that? How do you see that happening? How are procurement going to get closer to where the people are actually operating at the moment?
00;18;02;03 - 00;18;06;11
Jonny Dunning
But what do you see as the kind of different routes to that?
00;18;06;13 - 00;18;31;14
Amanda Prochaska
Well, I think there's going to be the way that I look at is actually through technology. So there's already technologies out there. Let's just say you have an organization that works in Slack, right? And they're working in Slack on projects or to see a marketing team working on a project and they decide they need to order something right in Slack.
00;18;31;17 - 00;18;50;13
Amanda Prochaska
There's going to be you need to order something, you know, here's where you go, and then it's going to take you through that ordering process and direct you to where you need to be without having any previous knowledge of that process. Right. And that's a huge struggle. So I'll give you an example.
00;18;50;13 - 00;19;17;10
Amanda Prochaska
So I was having a conversation with a consulting firm in a client and they, they were going through a process of identifying, buying channels, and they actually identified 15 buying channels as an organization. That's probably not uncommon. If you if you take a step back and you look at your own organization, there's probably 15 or more different buying channels that you're you're asking your organization to go through.
00;19;17;12 - 00;19;43;26
Amanda Prochaska
But if I take that a step deeper, a buying channel could look like this. For an end user. It is. I have a service and it's under $500. You need to go this direction. If I have a service and it's over $500, that's a low $10,000. Here's a different route that you're going to need to go. If it's a service and it's over $10,000 and doesn't have a contract, here is a different route you need to go.
00;19;44;01 - 00;20;06;01
Amanda Prochaska
And right now and those are just three examples. Right? Right now, we're asking the end users to know all of that. So at the end of the day, yeah, at the end of the day, when you just want to buy something, do you want to know what all those channels are? No. You just want to get something purchased.
00;20;06;01 - 00;20;35;18
Amanda Prochaska
Like I'm sitting in sales, I'm sitting in marketing. I just want something, I just want to purchase something. That's all. I don't want to know the 15 different buying channels. So I think this technology is going to help us get to the point where the end users don't need to know. It's just going to direct them where they where they need to go and get a purchase and it's going to be seamless and hopefully have less and less black holes and procurement versus what we have today.
00;20;35;21 - 00;20;45;07
Jonny Dunning
Yeah, And it comes back to what you were saying about how critical the intake side of it is in terms of making that process of getting on the right pathway, making it intuitive.
00;20;45;09 - 00;20;59;04
Amanda Prochaska
Right, right. And then even even like how we work through our contracts or how we work through services, financial services contracts are the most complicated when.
00;20;59;04 - 00;21;02;29
Jonny Dunning
Everyone loves the services contract.
00;21;03;02 - 00;21;03;21
Amanda Prochaska
The place is not.
00;21;03;21 - 00;21;08;01
Jonny Dunning
Worth the paper they're not stored on half the time.
00;21;08;04 - 00;21;47;03
Amanda Prochaska
So but for a for a marketing organization and someone in marketing to go through that process with procurement today, there is there's a lot of delays. There's a lot of like items that are black holes and there's not enough insights to make sure that that contract is a great contract. So when I start talking about a I with a I, we can leverage that to make sure that we not only can workflow that in within take, but we can now leverage AI to make sure that that is an easier process through and through.
00;21;47;06 - 00;22;17;23
Amanda Prochaska
How do we gather requirements, how do we get that into a statement of work or an MSA? How to how do we make sure, as we're negotiating that we have alternate clauses that we can leverage that are already pre-approved so we can streamline that and we can make sure that we not only because traditionally we've had to put those clauses in ourselves, but I think I can be leveraged now to say here are ten different alternatives to that language that you can negotiate that are within the parameters of what you set.
00;22;17;23 - 00;22;30;18
Amanda Prochaska
So I think there's there's going to be a lot on the air side, too, that can be adopted seamlessly into our process to improve our efficiencies and to the value that we're providing to our clients.
00;22;30;20 - 00;22;55;28
Jonny Dunning
Yeah, it's unbelievable what can be done with air in that context. I mean, you know, one of my one of my good friends just constantly gets chat to write rude poems about me for him, and then he sends me the poems and they are quite funny. They are quite funny. But, you know, if you asked to write a funny poem in, you know, from the point of view of X type of person with X sub subject is incredible.
00;22;55;28 - 00;23;21;20
Jonny Dunning
What it can do. If you ask it to write an article, it will make stuff up if you ask it to, you know, interrogate a podcast transcript, for example, it will make stuff up. But if you if you are specifically guiding it towards something like creating a scope of work, you know, I know firsthand from the stuff we've done around Scope IQ within our product, it's very well geared towards that.
00;23;21;22 - 00;23;45;22
Jonny Dunning
On the legal side, that's kind of like a bit of a next step. It's not. Our process is more about scoping the requirement than necessarily the legalese, but it has very, very effective application context within that scenario because it's much more information based, much more fact based. It's got so many comparisons to look at to to really understand.
00;23;45;25 - 00;24;11;26
Jonny Dunning
It's just ridiculous. The level of detail. You can ask a large language model to put together around a requirement. It's just the the information it can provide in terms of its accuracy. It's not necessarily going to go boom. Here's 100% perfect scope of work. But if you if you're tailoring it to work in the right way and in the same way that we look at it around creating a scope, we have very specific question and answer that we push back and forth via their API.
00;24;11;29 - 00;24;44;01
Jonny Dunning
So it's not, you know, just using the raw chat. You could say you're, you're tailoring the response and making it easier for the end user to just put in a simple two or three sentences. And on the legal side, surely the same must exist in the sense that if an organization or tech provider is tailoring what they're asking of the large language model to push it into that legal context, you're going to reduce the margin for error significantly and it's that kind of it's those wrappers around all or the ability to communicate with the eye effectively, which sounds weird, me saying that I'm just listening to myself.
00;24;44;01 - 00;24;55;12
Jonny Dunning
That sounds weird, but a lot of people will try and interact. I won't say talk to a lot of people who try and interact with chat. GTI In the same way that they would just ask something of Google because.
00;24;55;15 - 00;24;55;24
Amanda Prochaska
That's how.
00;24;55;24 - 00;24;57;04
Jonny Dunning
They used to operating.
00;24;57;06 - 00;24;58;10
Amanda Prochaska
Yeah.
00;24;58;12 - 00;25;14;10
Jonny Dunning
But, but with the education around that and with some specialism, I totally agree with you. I think there's massive things that can be done that aren't actually that aren't there to take people's jobs or, you know, or it's just to a tool.
00;25;14;12 - 00;25;42;01
Amanda Prochaska
Yeah. And in a tool that right now at least I think it's going to get better. I get to 80% there. Yeah right. It's like it's a it's a sprint at the beginning to get to 80% there and you have to fill in the next 20%. So I'll give you a story of what I was doing last week and I reported 75 videos, short form videos that were like maybe two, 2 to 5 minutes long, and then leveraged chat.
00;25;42;08 - 00;26;08;16
Amanda Prochaska
I took the transcripts of those videos, leveraged chat, and now we're creating all kinds of different content around it, right? That's it in written form just from the videos that we're recording. So it is it is an amazing tool that I think can be applied so many different ways within procurement and to increase our relationships, to drive innovation, to decrease our cycle times of in procurement of the work that we're trying to achieve.
00;26;08;18 - 00;26;33;19
Jonny Dunning
Yeah, and it's interesting when you're talking about user experience, because user experience always used to be something that particularly as a tech provider, you know, how good is the user experience within your tool? But the interesting thing we're looking at now is ultimately user experience is across is a cross-platform scenario. So you need to be looking at that cross-platform user experience, adds a whole new layer to it.
00;26;33;22 - 00;26;59;14
Jonny Dunning
But there are some really smart ways that the organizations are making that, making that work. I've seen some great examples of it and actually earlier, sometimes it's not as complicated as people first think. And certainly, you know, incumbent tools like teams, Slack, etc., and also some of these new code intake intake platforms are certainly helping that process.
00;26;59;17 - 00;27;28;11
Amanda Prochaska
Yeah, I 100% agree on that. And it's it's a cool time to be in procurement because of all of that. I think that, you know, as our scope has changed so dramatically, the tool sets have also come around to support that scope. And now we have to marry the two together to make sure that not only are we achieving a value that is expected of us, but that we are creating a user experience that is expected within organizations so we can move quickly.
00;27;28;11 - 00;27;48;06
Amanda Prochaska
We can be agile. If anything, the last several years have taught us that agility is truly important within procurement. So there's that breakdown of we have this very rigid process and more flowing with the businesses is going to be a key to our success.
00;27;48;08 - 00;28;23;00
Jonny Dunning
Yeah, and I think you mentioned earlier about what the kind of core platforms that people have in place at the moment. So it's the paper queue to pay kind of workflows. They have the scope for additional granularity to be added underneath them. So so whether they are the master supplier record, but the some additional supply criteria being looked at around ESG, for example, on a more granular level by a specific platform or whether, you know, in in services, for example, you're handling your MSA in your contract lifecycle and risk management within a source to pay platform.
00;28;23;00 - 00;28;41;21
Jonny Dunning
Or if you call off a statement of work, you're going a level below or if in in the buying of goods and materials you're punching out in an Amazon type scenario, I think there's a lot of scope to just add in that additional layer because ultimately it comes back around to the data side of it, which is another area that is massively changing.
00;28;41;23 - 00;29;08;13
Amanda Prochaska
Yes. No, I, I still don't know. This is a big question mark in my mind when it comes to data. Data is going to be the connector of all of these systems. Right. It's what's going to feed the engine of this platform working. Well, there's, I think, a debate and a healthy one that needs to be had. It had within procurement is around what what is that like the main record that we're going to build this off?
00;29;08;13 - 00;29;31;12
Amanda Prochaska
Is it going to be the supplier and build around the supplier in that relationship with the supplier and contracts with that supplier and spend and power? Who's using that supplier in the organization and what's their ESG scores? All of that. But then I've also heard the whole debate around, you know, it's going to be around the contract. In a contract, it's going to have all of that information surrounding it.
00;29;31;14 - 00;29;53;18
Amanda Prochaska
I still don't know which way that's going to play out, but I think there's a when it comes to that, I think there's is going to be this foundational connector point for the data so that we can see a holistic picture of whatever activity is going on within procurement. I personally like I originally thought it was going to be a supplier, but then when I heard some people talking about contracts and I was like, Wow, that would make sense too.
00;29;53;18 - 00;29;56;13
Amanda Prochaska
So I'm not sure which way it's going to go.
00;29;56;16 - 00;30;18;10
Jonny Dunning
It's a really, really interesting point. It's got my mind whirring in the stuff that we've done around supply performance. I'd say it's kind of both. And if you think of the data, so you've got the data that is associated with that supplier, but our suppliers data is always going to be associated with the contracts they've been engaged in to deliver materials, goods or services, whatever it might be.
00;30;18;10 - 00;30;44;01
Jonny Dunning
So I almost see the data as like this kind of cloud of information that is is relevant to the supplier, but the performance is related to their delivery against the contracts. So it feels like it's potentially like a cross over area. And I think the way that data is, the way that data is handled more now is is in this type of scenario where it is a cloud of data or an insight to pull the manipulated in different ways.
00;30;44;08 - 00;31;06;18
Jonny Dunning
But ultimately what it comes down to is capturing the data, which in in some cases can be extremely difficult, where process is kind of deep offline or for example, contracts are not stored digitally. I mean, some some organizations would regard the digital storage of a contract being a scanned PDF sitting in a file. Okay, it might be in a PDF.
00;31;06;18 - 00;31;21;22
Jonny Dunning
That doesn't mean it's digital. So so that is, I feel like with some companies and I'd be interested to know what you see in this area. It feels like there's a long way to go, even if they've got top level systems in, that data can still be quite scarce.
00;31;21;25 - 00;31;57;08
Amanda Prochaska
Yeah, and it has been for me, it's been a challenge since I started in procurement. I remember going to a conference, My gosh, it was probably around 2014 and they were talking about how because we don't have good data, we can't digitally transform because we don't have that layer of foundations to build office. And I got so fresh then got so frustrated about that conversation and the seat at the table conversation during that conference that that's what actually launched me into LinkedIn and writing blogs and doing all of this work because I was like, Oh, we got to we got to get off this.
00;31;57;08 - 00;32;19;10
Amanda Prochaska
Like, we've got to figure it out. Either we're asking the wrong question or we just like the answer to the questions that we've been asking for the last 20 years. And so when it comes when it comes to data, I think it's I like the I think we have enough data where we can we can do what we need to do today.
00;32;19;13 - 00;32;58;07
Amanda Prochaska
Right. However, there's going to be a very large shift in our thought process around how we connect all of the dots. And I think that that kind of cloud concept is interesting. But like if I were to walk into an organization today and just randomly pick a supplier out of a hat, right, here's a here's a vendor number that you have in your organization, tell me tell me everything that you know about that supplier with just looking at that today, like, are we connecting to that supplier record the contracts, the their scores, their risk scores?
00;32;58;12 - 00;33;21;06
Amanda Prochaska
Can we quickly pull up their spend? Can we look at who is using that supplier and how often? Like I think that's going to be. We have all of those elements for the most part. There are some organizations that don't like. You mentioned other contracts, which I'll get to in a second, but I think we need to start thinking about connecting them the dots.
00;33;21;08 - 00;33;30;21
Amanda Prochaska
And then once we understand what that landscape you want to create, looks like, we can start filling in the holes of where we do have holes in that we and see. Does that make sense?
00;33;30;23 - 00;33;53;01
Jonny Dunning
It does. In my in my head it kind of feels like what you need to be able to do is grab a supplier. When you pull that supplier close to have a look at them. It drags all data points that are connected to that organization exactly as you say, the top level data points around that organization and then the data points around what they've been doing for you and with you.
00;33;53;04 - 00;34;03;28
Jonny Dunning
And I think the connecting the dots thing is interesting, particularly as at the moment there are more being added. Yeah. So it's quite a fluid process, isn't it?
00;34;04;00 - 00;34;22;01
Amanda Prochaska
Yeah, it is. And it's something that I think organizations need to be strategic about and start thinking about, okay, if I have this landscape, how does it look today and how is it how do we want it to look in the future? And then that might be part of your driving factor around what technologies you want to eventually invest in, Right?
00;34;22;03 - 00;34;44;21
Amanda Prochaska
What data are you missing in that picture and how can we acquire it, or do we do we have it today as speeds contract and we have a great starting point, but it's not really giving us the data that we need. How do we get to the data in the future and think about that differently? And that might drive an investment within procurement to get that done?
00;34;44;23 - 00;35;15;18
Jonny Dunning
Yeah, definitely. The the other thing about kind of scan contract, almost a name, isn't it, but is just the fact that contracts change contracts, engagements are, fluid, particularly in some areas. You know, there are particular areas where that's more likely to be the case than others, which are particularly cut and dried. But I think it affects a lot of procurement and that's where it comes into this whole thing of measurement of performance.
00;35;15;18 - 00;35;34;15
Jonny Dunning
And, you know, dare I say, I know you're going to go as far as saying ROI, but just in terms of that measurement of performance, it's it's a constant update of what was promised versus what was delivered and what was promised might actually change along the way. And it might be factors within the organization that are hindering that supply from delivering or asking them to deliver more.
00;35;34;15 - 00;35;54;18
Jonny Dunning
And these things need to kind of drag along, tagalong, don't they, to use the the legal contracting parlance. They just need to be pulled along with it and taken into account because it's it's more complex in a lot of cases than just here's the original contract that was signed and in a PDF and actually we don't there's nothing known further than that.
00;35;54;21 - 00;36;32;19
Amanda Prochaska
I, I have a theory around contract lifecycle management products, the historical project products. They never really worked because as soon as you let you say I have a PDF uploaded into this tool and then I had to manually put in the master data around that contract. You rightly said that relationship is always evolving, right? It's changing, it's morphing, it's adding on its maybe we're deleting some, some or changing terms, whatever it might be.
00;36;32;21 - 00;36;56;11
Amanda Prochaska
That master data was attached at that point when something changed, most likely not right? And so like I would go into fields, like I would start at a new corporation and I would go into their sales arms and I'm like, Who's Jonny so-and-so? Who's the contract owner of this, this contract? And they're like, Oh, Jonny hasn't been in here for five years.
00;36;56;11 - 00;37;23;20
Amanda Prochaska
And I was like, Oh, well, this is really useful data. Like it doesn't. So the cool thing about where this is going though, is that I think with the technologies and actually leveraging those documents and creating real life master data around it, pulling out the attributes, understanding if you actually have a assign ability, that's another one that used to drive me nuts.
00;37;23;20 - 00;37;43;25
Amanda Prochaska
Like we go in and we merge with another company or we acquire another company and I have to hire a consulting firm to go through my contracts to see if they're assignable, like, really, I have a I have a contract management tool. But of course that wasn't part of the master data that was asked. So now I have to hire someone.
00;37;43;25 - 00;38;08;29
Amanda Prochaska
Well, now there's technologies that do that for you. They'll pull out. Here's sustainability of the contract. Here's that report that you have. And again, it might not be on present for you myself to spot checks and stuff today, but it gives you a lot further in the conversation than previously. The previous technologies were being able to provide. So I'm excited about that space in particular.
00;38;08;29 - 00;38;22;24
Amanda Prochaska
I think there's there's a lot of innovation happening in the contract management space and how it's tying into suppliers performance and how we can get better insights from the information that is being gathered in that process.
00;38;22;27 - 00;38;52;09
Jonny Dunning
Yeah, definitely. Yeah. So I want to come on to talking about or getting your viewpoint on some of the challenges in procurement when they're looking at moving forward with the transformation in digital transformation, making those steps. But before we get into that, I just think that in your view, what you were talking about earlier with regards to the implementation of technology and the kind of strategic approach to it in terms of having linked best of breed systems and all that sort of stuff is quite interesting.
00;38;52;09 - 00;39;14;25
Jonny Dunning
I always find it fascinating understanding people's viewpoint on the kind of process versus technology kind of conversation in the sense that some companies will try and take technology and just basically bend it to fit bad process. And some companies will do a digital transformation, whether it's just all about the technology. What's your view on the kind of balance there?
00;39;14;28 - 00;39;35;12
Amanda Prochaska
Okay. So I actually just posted about this a couple a couple of weeks ago. Like should we be looking for technologies that can meet our process needs or should we be looking at a technology where, like the old moniker is you're going to adopt best in practice fast and fast processes to meet the needs, this particular technology, right?
00;39;35;12 - 00;40;00;20
Amanda Prochaska
So what is that? I actually got like a 5050 split on the comments around that, by the way. So some people are like some people are thinking, hey, technology is the way that it is today can bend to our process and our process is going to rain. KING Where other people are like, no, no, no, Like the technology is going to dictate our process.
00;40;00;22 - 00;40;24;27
Amanda Prochaska
I, I personally think I, I used to be one of those people that are like, the technology is going to dictate our process. But I think we're at the point today where we can be a little bit more flexible that and allow a process to kind of more dictate what the technology looks like. Now, here's the caveat to it all of what I said.
00;40;25;00 - 00;40;44;22
Amanda Prochaska
You don't want to get crap faster, and that's what I tell people all the time. If you have a bad process, the technology is not going to fix it, right? So if you're going to go the route of having this process dictate what the technology looks like, you need to make sure that your pilot, your processes are fantastic.
00;40;44;24 - 00;41;06;15
Amanda Prochaska
And I think that what's going to happen with these technology firms as you're going out and you're going and consulting with your clients around how things should be implemented, I think there's going to be a little bit more focus on what that process should look like in the future and bringing those best in class options to the table so we can really look at that process.
00;41;06;18 - 00;41;38;26
Amanda Prochaska
But it's not like force fit it into the technology. The technology can be, I don't want to say manipulated because that's not the right word to get into. Yeah, yeah, I can configured into the right way of working for that business. So even this morning, like I was at a conversation with one of my clients and they have a very particular process that is very particular to their business and the technology doesn't have a way to support it.
00;41;38;28 - 00;41;50;12
Amanda Prochaska
Yeah, which is unfortunate. Like we're trying to create a process that's for their purchasing process into the system and it's like we're really struggling to figure out a way to get it done.
00;41;50;14 - 00;42;15;22
Jonny Dunning
Yeah, I had a really interesting conversation with with Adam Brown from from Merced, and he's the head of all of the digital procurement stuff that they're looking at and if you look at that shipping sector in terms of the problems that I need to solve, price variability time zones or the distribution sort of is hugely complicated. And actually he's building a great team that are doing some of those things for themselves.
00;42;15;22 - 00;42;40;02
Jonny Dunning
So I think I think there's going to be a balance. And I certainly from our point of view, we are, you know, we are constantly being educated by our customers and prospects as well and I think is essential to have that flexibility. But by the same token, the needs to be the tech companies need to make sure they're not just automating a bad process for the sake of it, to try and keep that customer happy.
00;42;40;04 - 00;42;52;20
Jonny Dunning
And the client needs to make sure that they're not just approaching it by just saying, Oh, let's just get some tech that's going to solve everything where they might be having to addressed the bigger issues behind the scenes that that are kind of covering up those problems.
00;42;52;23 - 00;43;19;10
Amanda Prochaska
Yeah. And we actually when we go into organizations, we actually the old kind of saying was people process technology and we've actually started peeling back that onion a little bit because there's actually more than that. Right. So people process technology. Sure. But policy plays a big role in in that because not only procurement policy but finance policy, other policies that we need to consider across the organization.
00;43;19;12 - 00;43;47;02
Amanda Prochaska
You have data which we've already talked about, like what's your data layer, What does that look like? Are we trying to transform it? Where where do we want to go with it? Metrics is the big driver a lot like I just had. I had a conversation with a client the other day and I was like, Why? Why don't your buyers have targets that if they had a deal like a day, days table outstanding target that they can go after, it would solve actually lot of your process issues.
00;43;47;02 - 00;44;07;17
Amanda Prochaska
So what type of metrics are holding our cells accountable to? How are those wanting to transform? You have culture, you have organization, right? So how are we organizing the work? How do we get the work done and how does the culture dictate what we can and cannot do in this transformation? And I don't know how many did I go through?
00;44;07;17 - 00;44;10;01
Amanda Prochaska
I think that was eight. But I'm not sure.
00;44;10;03 - 00;44;28;14
Jonny Dunning
So I will be keeping an eye out for the acronym that can capture that because that's brilliant. It's really good. So you got you started it kind of like that's that's a challenge I'd like laid out for you. But people process policy, data, culture and organization. Yeah.
00;44;28;17 - 00;44;29;21
Amanda Prochaska
Well.
00;44;29;24 - 00;44;58;01
Jonny Dunning
Yeah that's yeah it's it has, it has to be more sophisticated as the procurement function evolves, as procurement becomes more digital, as we push into greater granularity and more of a focus on using data for strategic action rather than just being transactional. So I think that makes a lot of sense that maxims like that that always kind of make sense maybe ten or 15 years ago need to need to move with the times as well.
00;44;58;03 - 00;45;17;17
Amanda Prochaska
Yeah, absolutely. And when you think about the user experience and change adoption, you have to look at all those different factors to really, really be successful. It's not just a technology implementation anymore. Like you understand how that's going to fit into the bigger picture. And all of those different elements help you think through what that better picture might include.
00;45;17;20 - 00;45;44;13
Jonny Dunning
Definitely So, yeah. So obviously there are some challenges around things like data, existing processes, maybe cultural, you know, kind of lack of desire to change. What are the challenges do you see for within the procurement, within procurement teams, within businesses that are stopping them from moving forward with, you know, kind of transforming their procurement function?
00;45;44;15 - 00;45;57;11
Amanda Prochaska
They might not make a couple of people happy with my comments. This one. So everyone's been forewarned on this. I think the largest challenge is leadership within procurement.
00;45;57;14 - 00;45;59;10
Jonny Dunning
Right.
00;45;59;12 - 00;46;24;15
Amanda Prochaska
And kind of I don't want to call it old school, but maybe stuck in your ways, stuck in like there's been so much change within procurement, so it's hard to get your head around. So I feel for these leaders. I don't they they're probably they're not bad people or anything like that. It's just not so much change is just trying to get your head around it so that you can think strategically about how you want to move forward.
00;46;24;15 - 00;46;42;01
Amanda Prochaska
So I think there's there's a huge blocker here and I'm going to use an example and I like to use this example a lot. If you were to guess how many invoices are sent to businesses electronically, what do you think that percentages.
00;46;42;03 - 00;46;55;29
Jonny Dunning
Invoices that are sent to businesses electronically? I'd like to think it's in the kind of like, you know, 50 to 75%, but it's probably going to you're probably going to tell me that it's far lower than that. I'm going to guess it's probably somewhere.
00;46;55;29 - 00;47;28;07
Amanda Prochaska
But yeah, globally, 30%. Now, here's the thing. We've been working on e-invoicing since I started in my career and probably before that right now is one of the like the lowest hanging fruit. When you talk about digitalization, procurement, it was trying to get your invoices electronically. I don't think that's a technology issue. I think that's a willingness to adapt a technology issue from a leadership standpoint.
00;47;28;09 - 00;47;52;25
Jonny Dunning
I think you're right. And, you know, I mean, it reminds me of a panel discussion. I saw a procurement conference last year. I think it was early last year, maybe, and there were people from pretty large organizations. And there was one person in particular who was talking about the importance of this transformation. And it amazed me that some of these other senior leaders were kind of saying, well, it's not all it's cracked up to be.
00;47;52;25 - 00;48;13;03
Jonny Dunning
You know, the good old stuff that we always should have done and need to stick to. And one of the things that really jumped out to me was how on earth, if you're one of those procurement organizations that stuck in the past, how on earth are you going to recruit good people because they're going to come in and go, okay, so so I'm I'm a young person who's used to using tech in everything that I do in my life.
00;48;13;05 - 00;48;19;20
Jonny Dunning
And you're coming in here and you're asking me to work with these archaic processes. Good luck retaining those people now.
00;48;19;20 - 00;48;46;25
Amanda Prochaska
Yeah, well, so I'll give you an actual story about that. I was one of the driving factors of the transformation that we did at MGM because we were actually using an as 400 green screen to purchase items. Wow. Okay. Yeah. So you could get a new college grad that we spent so much time and effort. I mean, we had wonderful programs developing relationships with universities and getting like the top talent to come in to the organization.
00;48;46;28 - 00;49;11;14
Amanda Prochaska
And then we would turn around and sit them down and say, You need to learn all these codes to do what you need to do. Like all these transaction codes and all that stuff. And they're like, I've never seen a green screen before, and they would be completely confused and frustrated. And so that was a challenge. Like we we would bring all these wonderful people in and then give them a technology that just didn't meet the needs.
00;49;11;14 - 00;49;34;06
Amanda Prochaska
And so that was such a huge driving force behind change that we did at MGM. So anyway, it was it was pretty funny. I remember just sitting there looking at these kids like they're going to have no idea what to do. I didn't even know what to do. Yeah, Yeah. So, so anyway, I think that's a large challenge is things are changing.
00;49;34;06 - 00;50;00;00
Amanda Prochaska
So quickly for the leaders to get their heads around. Like what? How how do we want to reimagine procurement and do this effectively and surely buy in to that? That's the technology is an enabler of their success and to be open to those new ideas, there's so many new ideas out there, and mature tech is just vastly complicated now because there's all kinds of different options out there.
00;50;00;00 - 00;50;26;25
Amanda Prochaska
But to be open to the possibilities and explore there will be a solution out there that can solve for a problem that a procurement leader is having today. So that's yeah, that's that's number one. And the other problem that I see is that procurement is still and I don't know if it's because of a lack of technology investment previously or the increase of work level.
00;50;26;25 - 00;50;48;01
Amanda Prochaska
But everyone that I talk to you with in procurement is overwhelmed today. Like I, I haven't met a procurement person that's not overwhelmed in a very long time. And when you're getting into that overwhelmed state, do you have time to think? Do you have time to strategize or are you just reacting to the day to day that's coming in like fire every single day?
00;50;48;04 - 00;51;20;01
Amanda Prochaska
And so I think there is a large alert. It's not a distraction, but it's hard to be focused on what the future looks like because the day to day is just so overwhelming for procurement professionals and I don't I don't see that slowing down. I mean, the rest of the low end supply chain worries, inflation worries, geopolitical issues going on across the globe, a new climate and all of that being in I mean, I don't see this slowing down.
00;51;20;03 - 00;51;45;03
Amanda Prochaska
So it's going to be foundational for those leaders who are in charge of those organizations to really be strategic about where they're spending their time and how they're carving out enough time to focus on the future and what what their organization is really going to be able to accomplish through their what they have today. And additional investments that they might need to make in the future.
00;51;45;05 - 00;51;51;02
Jonny Dunning
Do you think that's do you think that's in any way a lack of investment from organizations in their procurement teams?
00;51;51;05 - 00;52;15;08
Amanda Prochaska
Yeah, I mean, I hear all the time, you know, we're being asked to do more with less or more with what we have today. And like leaders have used the words like being piled on to like, we just are getting piled on with work, but we're not getting the investment. So sometimes I think that's a lack of ability to influence in the organization.
00;52;15;08 - 00;52;56;18
Amanda Prochaska
So procurement has created a lot of value in the past several years in just managing the supply chain process alone. But how are we promoting that? How are we showing that back up to leaders? How are we building our story around that? And even like I think procurement professionals would benefit from being trained on how to pitch ideas, because I know just speaking from experience, from being a procurement professional and then going into sales, my eyes were completely open around how much skill I was lacking in procurement versus the skills that I could have since my personal journey.
00;52;56;18 - 00;53;17;27
Amanda Prochaska
But I think a lot of procurement leaders are probably in that same boat, like we're in procurement because we're not marketers. You know, we're in procurement because we're not salespeople. But I think you I think procurement would benefit a lot from learning those skills so that we can promote our organizations and get the investments that we need.
00;53;17;29 - 00;53;43;10
Jonny Dunning
Yeah. Otherwise it's a bit of a chicken and egg scenario, isn't it? I mean, if a procurement function is, you know, highly digital has a huge amount of data at their command and that suddenly gives them a lot of power. Yeah, the CFO, the C-suite in general are going to be very interested in what that data is telling the organization, how they can use it to mitigate risks, reduce costs, you know, increase value and all this sort of stuff.
00;53;43;10 - 00;54;00;23
Jonny Dunning
So so getting to the point of being able to bring those insights to bear, it's it's a it's a point that people have got to get to. The change makers within procurement teams like you say, they need to be able to put that pitch together to get somebody to take the risk on them.
00;54;00;25 - 00;54;20;15
Amanda Prochaska
Yeah. So what you just said is exactly right. So I tell I tell leaders all the time, it's not about you, it's about them. So when you go into an CFO's office, they're going to want to hear what you just said. What they're not going to want to hear is I need a spend analytics tool. Yeah, right. It's a completely different story.
00;54;20;17 - 00;54;43;23
Amanda Prochaska
And what really at the end of the day would have sent I wanted to of you, I would argue that that's a very limited view of what you need a view on. But what you just talked about was the value to the company, the insights that you could drive. You could even commercialize that at a certain extent if there is a way in the marketplace to leverage that data to offer a new line of business in your organization.
00;54;43;23 - 00;54;58;09
Amanda Prochaska
I mean that the possibilities are are really awesome. If you think about it and where you'd go with that. But that selling to a CFO about the business impact versus trying to talk about what we need in procurement.
00;54;58;11 - 00;55;20;11
Jonny Dunning
Yeah. And it it kind of I mean in terms of problem solving approaches, are there any other particular areas that you see as like major parts of that? Because so sorry, Joe, I was just gonna say, yeah, it kind of leads on to one of the last question I had for you, which was around recognizing value in procurement and how to measure that.
00;55;20;18 - 00;55;34;09
Jonny Dunning
It's quite, it's quite a significant topic. But just, just before we move on to that, in terms of on the problem solving approaches, are there any other particular kind of key areas that you see as important?
00;55;34;11 - 00;55;58;24
Amanda Prochaska
And I think I'm trying to think if there's any other ones we already talked about going closer to the customer. I think there is there's going to be a real need and a shift within procurement organizations and it's a problem today is that we're not as customer centric as we could be as a team with your stakeholders. So really impacting organizations into the work that's being done day to day.
00;55;58;24 - 00;56;18;22
Amanda Prochaska
We talked about that from a technology standpoint, but I think there's also a need and a barrier to success. Really. I've been very inwardly focused versus being focused on the business and how we can help our customers and our stakeholders be successful at the end of the day. And so I think that's a shift in mindset that it has.
00;56;18;22 - 00;56;40;21
Amanda Prochaska
What it has told us back in in procurement in a past, technology might help us break through that. We'll see how that goes. But but I think that has been another one that I would bring up, that outside of those I'm not thinking of anything else that I've heard from clients or in my recent engagements with Centurion organizations.
00;56;40;24 - 00;57;06;05
Jonny Dunning
Well, conveniently enough, those points all have some bearing on how procurement are measured in terms of their ability to serve the customer, the ability to be more outward. Looking at how you serving the business, what does this mean strategically when you look at how procurement teams are measured at the moment? It's pretty basic. I would I would put forward.
00;57;06;05 - 00;57;08;07
Jonny Dunning
Would you agree with that?
00;57;08;09 - 00;57;35;09
Amanda Prochaska
Yeah, it's funny too because what we talked about at the very beginning and it throughout this how procurement has transformed. Right. All the new responsibilities that it has. But at the end of the day, we're looking at cost savings like and I know some people have like supplier diversity spend targets and stuff like that, but if you ask people in procurement what you are measured on, the first thing they say is savings for the most part.
00;57;35;11 - 00;57;44;25
Jonny Dunning
Well, particularly when particularly when the economic conditions are difficult as well, it's suddenly, yeah, there's other things that might be priorities and they suddenly get deeper them.
00;57;44;27 - 00;58;08;29
Amanda Prochaska
Yeah, Yeah. So I, I think we and people will say we're never going to get away from cost savings because it's, it's what we're here to ultimately the baseline of what we do. But I think there's even a way to think about cost savings differently. And my experience at MGM kind of opened my eyes to this. And we actually started in certain categories measuring gross margin improvement, right?
00;58;09;01 - 00;58;36;22
Amanda Prochaska
So if you just look at that. GROSS What goes into gross margin, you can increase your revenue, you can decrease your cost and your margin looks much better. Right? And that's one of the categories was why? Okay. So why nobody wants to chip out of line, right? So cost savings around wine is not what the customer wants. It's not it's not what we're going to make money off of.
00;58;36;22 - 00;58;51;08
Amanda Prochaska
So we actually looked at how how do we buy a better bottle of wine and price it more effectively so we get a better gross margin. So it totally shifts the conversation.
00;58;51;11 - 00;59;25;23
Jonny Dunning
Yeah, it makes sense. It totally shifts the conversation into more of a more of a grown up conversation rather than just a face value. Computer says no type of thing. And I think I find it quite interesting looking at cost savings because even if you just break that down, you know, you've got the kind of hard cost savings that are this was the budget, this was the contracted price or this is how much you got cost last time, this is how much it cost this time or this is how much I was quoted and this is how much we contracted for, which of course have their value if they're measured correctly.
00;59;25;25 - 00;59;48;05
Jonny Dunning
Yeah, but procurement. So say for example, there's a there's a sourcing event, procurement added value. If the organization is sophisticated enough for procurement to be able to add value around that sourcing event to create saving against, for example, budget versus contracted. So great that procurement person has created X amount savings that goes towards that target.
00;59;48;07 - 00;59;49;05
Amanda Prochaska
But you get a gold star.
00;59;49;13 - 01;00;13;16
Jonny Dunning
You get a gold star, but then postcode tracked what happens post contract, which often times if you look at areas like services for example, often that's not measured very effectively. So if if post contract that agreement is going completely off track, there's a massive overrun or the big extensions on it, you know, it just continues on and on and on or it just spirals out of control.
01;00;13;18 - 01;00;41;24
Jonny Dunning
How much are procurement worried about that and how much are procurement measured on that? And there's kind of a question of like, how much should it be that problem? But it's it still comes about lifecycle because you've contracted with a supplier to deliver something for a certain cost and maybe they haven't or maybe they've just they, they, they there was a bit of a poetic license with how much the costs were quoted in contract and it just gave them scope to have massive cost overruns that the business had to bare.
01;00;41;26 - 01;00;50;27
Jonny Dunning
But actually it's still looking like, you know, a cost saving at the front end. So there's those. So those parts of it are far more nuanced.
01;00;50;29 - 01;01;21;29
Amanda Prochaska
Yes. Okay. So, gosh, I have all kinds of thoughts around that. So a couple couple of thoughts is I, I think the way that procurement is going and more likely a lot of our metrics will be around third party management, right? Because we're being asked not only to look at the cost savings upfront, but the risks that are associated with that relationship and the how the suppliers performing and the ESG scores and that.
01;01;22;02 - 01;02;07;03
Amanda Prochaska
Right. So I think it's going to be kind of this more the shift to more management of that back end relationship. However, today there is a healthy struggle between units that just that upfront and then you go and it's now owned by the business, right? There's that. And I think it comes down to what we're incentivizing our teams to do, is if we're incentivizing our teams just to do that upfront contract negotiation and the theoretical budget versus force and we say that's towards their goal and there is nothing else, they're not going to concentrate on the back end right now.
01;02;07;03 - 01;02;50;16
Amanda Prochaska
I've tried in previous slides to track actual cost savings in an indirect space. It is not very straightforward. Right? And so there's I think there is a there's there needs to be a change there to understand what the bigger picture is of that relationship and understand what those other metrics might be around performance of those contracts and adherence to original budget, original project timelines, etc., and gathering that information to create that more well-rounded perspective of how we are measuring the success of a procurement manager, director, etc..
01;02;50;18 - 01;02;56;28
Amanda Prochaska
So but until that changes or people are incentivized by what they're measuring.
01;02;57;00 - 01;03;36;06
Jonny Dunning
And do you think when you talk about procurement kind of dipping out of the process a certain point, handing over the business, do you think that sometimes within businesses, a collective sigh of relief where the buyer is thinking, Great, that's procurement out of my head, or I can just get on with it now? Yeah, because it feels to me like, you know, if you look at the concept of how do you how do procurement engage with that greater lifecycle to ensure maximum value from that supplier engagement, that interaction, they they need to be involved in that full process, but they need to be involved in a in a position where they're helping, not hindering.
01;03;36;08 - 01;03;54;20
Jonny Dunning
They're not the police, they're not in the way that they're helping the buyer, the stakeholder work towards the overall business of the organization. I feel like it ties back and it ties back really, really nicely to what you were saying about getting closer to where the person is doing business.
01;03;54;23 - 01;04;20;05
Amanda Prochaska
And internally understanding what the business is trying to achieve. I guess I give this example when you walk into a marketing organization, you start talking about cost savings. They're not going to want to hear like most marketing organizations don't want to hear that to begin with. So it's before we start talking about what we can do, let's learn from the customers and try to understand what they're trying to achieve and then help them achieve it.
01;04;20;08 - 01;04;48;09
Amanda Prochaska
Right? And that's not just savings and can be value from those third party relationships. It could be that we're driving innovation across the board depending on what those targets are. There's kinds of now that we've been exposed to so many more value drivers within procurement. You can walk into an organization, understand their strategy and find multiple ways to add value in those relationships.
01;04;48;12 - 01;05;21;19
Jonny Dunning
Definitely, it's it's always about that deeper look, isn't it? About a bit more of a considered approach. And but obviously, if you can take best practice, then you're continuously building on the approach that you take. For example, when you're going into new customers, there's a there's a wealth of information that you bring with you. And I think the more the people can have these types of conversations, I think it's great to just get the information out there and get the conversation going because, you know, a lot of people are have these questions in their heads and maybe they're kind of in their current mode within their current organization.
01;05;21;19 - 01;05;29;22
Jonny Dunning
They can feel a little bit stuck in terms of, well, what are other people doing and and what are the opportunities to change?
01;05;29;25 - 01;05;58;06
Amanda Prochaska
Yeah, absolutely. I'm going to circle back really quickly to the comment you made about the service providers. And this is just something that for procurement professionals who are listening today to keep in mind when recessions start to be talked about or if they're occurring, a major strategy that consulting firms do is that they will undercut their price knowing that as they move forward with the implementation.
01;05;58;06 - 01;06;28;13
Amanda Prochaska
Let's you say they want it that change orders are going to. And so it is then as as I went into the consulting world, I learned so much about what what companies are doing and it's like it's just a known fact in consulting that that's the strategy that the large consulting firms deploy, that they'll cut down their cost in hopes of change orders later on to make up that difference.
01;06;28;15 - 01;06;54;21
Amanda Prochaska
So procurement organizations are like, Yay, we got a great cost reduction on this consulting firm versus budget. But the play isn't that upfront contracts, it's the change orders on the back end that is a relationship with the business that procurements are involved in that it's out the door, right? You can say you saved money all day long, but the strategy is totally opposite of that.
01;06;54;24 - 01;07;32;11
Jonny Dunning
100% agree. And it's like that comparison of yeah, right. Card of consultancy versus consultancy B, you know, how long is it going to take Wait. But in some projects it's very difficult to work towards very deliverables, but you can iterate in exactly in the way you would with a, a sprint in an agile process. For example, the most important thing is that those agreements are being updated, constantly updated as these iterations occur, because what's promised works best is what's delivered can change over the time, over time, and that can be totally legitimate in the sense that the company might not really know what they're asking for to start with, and they work it out as
01;07;32;11 - 01;07;50;15
Jonny Dunning
they go along and they need their supplier to be able to facilitate that process. Or there might be reasons that the project has been delayed within the organization, but it's the organization's fault, not the suppliers folks. So absolutely, it's all about, yeah, that's the only way you can get to understanding value and it's the only way you can get to understanding true supplier performance.
01;07;50;15 - 01;08;13;20
Jonny Dunning
So I think it's a really exciting opportunity for organizations to look at along with all the other cool stuff that they can do to make that procurement function more effective and therefore a greater value to the business and therefore be held in greater esteem and seen as more valuable and more powerful within that organization and therefore hopefully get more investment.
01;08;13;22 - 01;08;24;22
Jonny Dunning
And that will allow the greater maturity of the function in the same way that we've seen in other functions that have been around longer and certainly been through that digital transformation maybe maybe a few years ago.
01;08;24;24 - 01;08;30;25
Amanda Prochaska
Yeah, you had it. I mean, I don't know how I can say it any better if you hit it on that.
01;08;30;28 - 01;08;43;24
Jonny Dunning
Excellent. Listen, thank you so much. I really appreciate you taking the time to have a chat. I've really enjoyed conversation. I'll be keeping an eye on your content When when your when, when and how is your video content going to come out?
01;08;43;26 - 01;09;06;22
Amanda Prochaska
Oh, so it's going to come out over our social media. So follow me on LinkedIn. And so that's going to happen. I'm also now on X, which is a venture for me. So there's going to be content out there, but if anyone wants to follow me on LinkedIn, that's where most of my content is dispersed use and that's really a value to the organizations.
01;09;06;22 - 01;09;07;13
Amanda Prochaska
Yeah.
01;09;07;16 - 01;09;15;17
Jonny Dunning
Brilliant. Excellent. And thank you so much, Amanda. I really appreciate it. Have a good rest of the day and yeah, hopefully we'll catch up again soon.
01;09;15;19 - 01;09;18;29
Amanda Prochaska
Yeah, likewise. Thank you for inviting me. This was a pleasure.
01;09;19;02 - 01;09;20;26
Jonny Dunning
My pleasure. Thank you. Yeah.
