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The AP automation specialist Tipalti recently held a one-hour webinar to share some best practices for implementing a technology-empowered procurement process, and the real-life examples and insights were grounded in straightforward terms even though technology can be seen as scary or too complicated.
Spend Matters’ Global Head of Client Services Jenny Draper talked with Tipalti’s GM of Procurement, Bar Winkler, and with webinar panelist Tomer Gamlielle-Druyan, VP of Global Supply Management for Cybereason, an end-to-end cybersecurity solution.
As a senior leader who oversees Cybereason’s procurement, facility, travel and vendor compliance functions, Tomer and his team carry a broader mission and loftier goals to support the whole business — including adopting technology to modernize procurement. As such, Tomer said his company changed the name of its procurement function to “Global Supply Management” to align with the elevated mission.
He said the company’s hyper-growth — going from 590 employees to about 1,500 in less than two years — resulted from its focus on technology and being more efficient. A plan to go public also meant the company needed to ensure it had the proper compliance capabilities, internal controls and automated processes in place.
“Nothing can be left for human error,” Tomer said. “We have to have automation all the time. Automation works.”
Later in the webinar, an attendee asked a question that cut to the heart of the matter: How does technology prevent common mistakes attributed to procurement?
Tipalti’s GM of Procurement, Bar, had the answers because he has spent the last few years building procurement technology and has spoken with hundreds of procurement executives and professionals on this subject.
To procurement pros, his list of problems will sound familiar — problems like hunting down old information for a PO, late involvement in business decisions so procurement teams feel like a rubber stamp, no visibility into spend, and slow onboarding or complex processes that upset other departments across the company.
“The systems in place can alert you,” he said of the technology that can prevent problems, analyze spend or smooth out repetitive daily tasks.
And that struck a chord with the host.
“That is the role of technology — to get rid of those problems,” Jenny said.
Procurement trends driving technology
Jenny used her experience with Freemarkets (pre-Ariba acquisition), lessons from running other businesses, and her insights from the vendor and solution research at Spend Matters to curate and share 18 trends in digital procurement.
The first nine trends (above) reflect the developments related to strategy, but No. 12 on her second slide in the webinar lists a tactical, long-term problem that technology is finally addressing — and that’s getting control of tail-spend management. (With greater visibility into tail spend and better payment options, you could control more of the nearly 30% of spend that isn’t managed. As Spend Matters analysts have pointed out, if you could cut 30% of your spend by 30%, that’s a 9% cost reduction that could go straight to the bottom line.)
Tail-spend management “is NOT the sexy thing, is it?” Jenny said. “Remember that ‘sourcing’ was all hype and sexy and doing reverse auctions and so on. People didn’t want to talk about tail spend because it was low value and it’s administration. … But it’s become uncontrollable for some organizations so (technology) is really getting ahold of that.”
Spend Matters also partners with Deloitte on its procurement-focused research that comes out every two years, and in 2021, the “Global CPO Survey” of more than 400 procurement professionals showed that the top concern wasn’t cost-cutting, which procurement is known for.
The biggest focus for CPOs was driving operational efficiency, which the webinar panel discussed in detail.
Technology and the need for change
The panelists also addressed a range of other issues, like the steps to take to switch to a technology footing and how to ensure that new processes and technology serve the people using them. But the discussion also focused on why technology is needed and how businesses decide to do digital transformations.
“Our management had a learning curve,” said Tomer, of Cybereason. “When they thought about procurement, they thought about procurement in the old days.”
He said they hired him to make a change, so he asked for three things.
“I need the support, I need the funds and I need the systems,” Tomer said, noting that he got good technology and hired proper procurement experts to use it. “I’m happy to report that the entire company sees the advantage and the added value.”
With a big-picture perspective of how companies are seeking growth with the aid of technology, Jenny said “I think a lot of (companies) are at this tipping point in making that investment and how they can sell that to the board.”
Bar said the need for digital transformation commonly results when companies seek a funding round, are going public or are making leadership changes to spur growth, like adding offices or going international. Each of these comes with the expectation to show investors, regulators or the open market that your company has the proper controls and systems to meet the challenge.
Often, Bar said, “the pressure to make a technology-based change comes from a new senior person who is hired.” He noted that when the new leader sees that the company’s current setup will not scale and that they have to automate to grow, the leader will have to say to management — “Whoa … if you want me to take responsibility over this huge budget and very fast-growing budget then I need tools and systems in place. Otherwise, it’s going to break.”
Bar said that “before this person comes in, it’s very hard for people to make this kind of statement, it’s hard for them to get the support to change core workflows in an organization.”
Go beyond the highlights mentioned here and listen to the full Tipalti webinar to get all of the slides, insights and expertise to help build a technology-driven procurement process.
