At the Americas Congress 17, procurement executives spoke about disruption, cross-functional collaboration, innovation and the psychology of negotiations. Here are the four lessons we learned:
Robert Guest, Foreign editor of The Economist, Robert Guest, told delegates at the Americas Congress that, while uncertainty surrounds geopolitics and trade, new opportunities are emerging for businesses.
He pointed to India as an example with the country set to introduce a new nationwide sales tax that will open up the movement of and sourcing of goods as well as standardise regulations.
Rather than fearing any disruption, procurement executives would be wise to make plans to take advantage of these opportunities.
Speakers said that collaboration with other functions is more important today than it ever has been. With economic volatility and increased global risk procurement should be working closer together with the likes of finance to mitigate any risk and identify synergies across the business.
The challenge when it comes to procurement’s relationship with finance is, according to Ermal Shehu, Cott Beverages’ senior director of finance and global procurement, that there is a lack of trust and poor communication between them. To overcome that he suggested that some members of the finance team should report directly into the CPO, which would help bridge the gap in a visible way across the business.
Alex Tapscott, CEO of Northwest Passage Ventures and co-author of Blockchain Revolution, explained that the implementation of blockchain technology can simplify and automate several procurement processes into one simple step, making transactions between the function and suppliers simpler.
Delegates agreed that procurement needed to be both revolutionary and evolutionary to keep up with these technological changes.
"What teams know today will be out of date tomorrow”, said Marsh & Mclennan’s Laks Natarajan.
Bad negotiation skills cost US businesses around $127bn a year, said Philip Blanc, CEO at iNegotiate. Yet, despite this waste, he suggested that just one quarter of procurement professionals receive training for negotiation in their first year in the job.
Training programmes should be implemented to achieve balance a between hard negotiation tactics and soft skills, such as joint problem solving.
"Negotiations should not end when a deal is reached," he said.
"They should continue throughout the entire relationship."
This article is a piece of independent writing by a member of Procurement Leaders’ content team.