ABX Impresses in London

The Amazon Business Exchange (ABX) Event, a new conference on the procurement rota, took place on 9th October with the Victoria House Basement in Holborn full to capacity with 500 delegates.

The main sponsors were SAP Ariba, Coupa (who are both partnering with Amazon Business), Barclaycard, Accenture and YPO which gave it a slightly different feel to the likes of eWorld and Procurement Leaders, a sense emphasised by what was quite a different audience to many of the events we attend.

Whilst there were a few familiar faces, there was definitely an international feel to the audience which was predominantly mid and senior-level procurement professionals.  Representatives from the other solution vendors and consultancies were conspicuous by their absence.

This was the first ABX event in Europe with people tuning in via live streaming. Todd Heimes, Director of Amazon Business for Europe, opened proceedings with a few interesting thoughts about their view of the procurement world and how Amazon intends to have a major impact on it.

The pictures of his various slides that we have published here give some great insight into the data he was able to share with the audience.  Amongst the headlines were:

  • 89% of procurement leaders say that 50% of their processes can be automated
  • 94% of procurement leaders have implemented a 3rd party marketplace
  • By 2025 70% of all savings will be driven by data analytics.  He made the very pertinent point that there is a talent shortage centred around data (maybe he read one of our Insider reports!)
  • Only 34% of digital transformation projects are judged to be a clear success with more than 50% classified as a clear failure.

  • More than half the FTSE 100 are already Amazon for Business customers

He talked about the gap that exists between procurement leaders’ plans and the businesses expectations. Amazon intends to fill that gap and who would back against them given the success of the business overall?

Following Todd on stage were a couple of notable Amazon for Business clients Dietmar Harteveld Head of SCM for EMEA at Siemens and Bouygues Construction Global CPO Eric Bouret.

Both talked impressively about their journey with Amazon for business, their savings, process improvements and positive feedback from the business.

Two areas of capability really got my attention and are worth considering for CPOs.  Firstly Amazon’s system of progressive discounts over time which don’t require bulk purchases or supplier negotiation if you are a Business Prime customer.  The second was built in Spend Analytics, something that procurement professionals need to start using more of.

Next up was David Price, MD of lead sponsor Barclaycard Commercial Payments talking about how they might work with Amazon.  Todd asked David about how Barclaycard is making a difference to supply chains in an era of Brexit uncertainty and increased regulation.

He talked about the importance of “injecting liquidity into the supply chain” in areas of vulnerability and pointed to two key elements of the Barclaycard solution that could make a real difference in future. Firstly built in analytics (data again!!) to support their customers’ payment strategies and a similar capability for suppliers which could have a multitude of benefits for companies needing to manage their cash flow more efficiently.  For example, faster payments to the supplier community has given them a significant value add in the Barclaycard service and moved the dynamics of the relationship towards the supplier community away from the previously dominant buyer.

There were some good breakout sessions for the procurement delegates to enjoy after lunch which made for a successful event overall.  We expect to see much more of Amazon in the business community now, particularly given their alliances with such high profile organisations, and given the global success of the Amazon consumer business, we think it’s reasonable to suggest that this is bad news for other marketplace businesses.

A memo from World Procurement Congress – act now, don’t wait

My colleague Andrew Daley and I attended the World Procurement Congress hosted by Procurement Leaders last Week.

It was an excellent event managing to mix some key themes that procurement needs to address now, such as sustainability and talent and significant long term trends including the impact of technology and how regionalism and nationalism affect the supply chain.

The message to me was ‘act now, don’t wait’, as in such uncertain and unpredictable times sitting and waiting may be the worst option and seriously risks your business getting left behind.

Robert Guest of the Economist gave a very broad ranging ‘state of the nation’ type speech on global trade and made some excellent points on the increasing regionalism of supply chain versus globalism and the impact of nationalism. He asked “what does this mean for Procurement people?” Well it risks the introduction of increasingly populist regulations or challenges on hiring, which means doing business could well become harder. So watch this space as this may be counterbalanced as digitisation and AI may make trading easier.

Sustainability is becoming a critical business driver and one that procurement has a leading role in. This point was made excellently by David Ingram, CPO of Unilever. It’s not good enough to just talk about it as sustainability is visible and measurable and must be checked and certified in the supply chain.

This was followed by an excellent discussion session with Imran Rasul, CPO at BAE Systems. Procurement people in his business have embraced the approach as they feel good about it. So no need for a mandate.

Two excellent but very distinct approaches in different markets.

Talent was another key theme from the conference. Future-proofing procurement’s capabilities featured in many of the keynotes and breakout sessions. Simon Geale of Proxima summed this up concisely as being two key issues of capability and capacity – simple if you think about it but very complex to solve?

Yes, there is a shortfall of people with specialist procurement knowledge, but more critical is finding those with good business and soft skills. Part of this discussion across the two days was also on diversity. We just had to look around the venue at the predominantly white, male audience to see this is a challenge procurement needs to address. Again real action needs to be taken now and words and presentations are not enough.

A number of discussions also touched on another key challenge for procurement, that of digitisation and the use of AI. Daniel Keyworth, CPO at Legal & General shared his vision for a 100% digital workflow by 2021 and I feel other organisations need to challenge themselves in this way too. He proposed five key pillars for procurement linked to digitisation:

  1. Enabling self service.
  2. Team organisational evolution.
  3. Better business partnering.
  4. Driving disruptive innovation.
  5. Easier to work with for our suppliers

Ultimately, the theme ‘procurement needs to be an enabler’ resonated, but with so much to do and with headcount tight it was felt organisations will need a flexible resource model with highly capable, well trained, multi skilled individuals who will adapt to the organisation’s needs.  

This was a red flag for me as whilst I agree, I did not hear how this was to be solved in terms of recruitment or development. If the bar is raised higher and the approach remains the same, we will get the identical end result: a lack of capable people internally and a lack of good people to recruit.

The end of the conference was a call to arms and Anita Sngupata, who is ex-Nasa really showed how we need to challenge our thinking through the example of how transport will change. If she is right our current supply chains will need to be completely re-modelled as there are some genuinely disruptive technologies coming – and soon.

Procurement Leaders event hosts Jet Antonio and Joe Agresta gave us three key takeaways to make happen:

  1. Build talent capability
  2. Drive innovation
  3. Sustainability

The challenge I think for procurement is to lead and educate their businesses about cost savings versus value and long term strategic goals. We see too many functions and organisations who are driven by short term cost or time-based metrics and a ‘penny pinching’ approach to any of these three could be a very short term result indeed.

But overall, do it now. Don’t wait.

Peter Brophy

Associate Director, Edbury Daley

peter@edburydaley.com