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Apr 25, 2024
Navigating complex business environments through category strategies – reflections on the Cirtuo Procurement Forum 2024
4
min
Twelve months. That is the time between the first and the second Cirtuo Procurement Forum. Twelve months, since we witnessed the resurrection of category management in Procurement with a renewed focus on customer centricity and aligning category strategies with business objectives. It is fair to say that the timing couldn’t have been better. Twelve months in which GenAI shook the business world, and Category Management claimed its place as the guiding light to navigate complex business environments.
‘Navigating complex business environments through category strategies’ was the theme for the Cirtuo Procurement Forum on April 18th and 19th in Dubrovnik, Croatia. Drasko Jelavic, Founder & CEO of Cirtuo, opened the event by outlining what complexity means and that the next two days were meant as an open forum for category management professionals, industry experts, and professional services providers from across the world and industries to discuss the status quo of digital Procurement and category management.
The unique mix of keynote presentations, expert panels, breakout sessions, and networking opportunities demonstrated how category strategies connect the dots across diverse topics and business challenges like cost optimization, operational efficiency, risk management, sustainability, digitalization, and skills & knowledge.
The Cirtuo Procurement Forum 2024 was opened again with a blast by Dr. Elouise Epstein of Kearney. Her keynote ‘The Age of AI: Do androids dream of Digital Procurement?’, referencing Philip K. Dick’s ‘Do Androids Dream of Electric Sheep?’, the 1968 science fiction novel examining the moral crisis introduced by almost-human androids, set the scene for the rest of the conference. AI is real and it will change every aspect of Procurement. It is already happening. And nobody will ask if we like it or not. Boom.
Mark Webb, Founder of Future Purchasing, pulled the conversation back to today and shared key insights on the current state of category management. He outlined that the complexity Procurement is facing keeps growing and that teams are struggling to deal with it. Some findings around the technology, skill, and quality gap, resulting in 68% of potential procurement value being untapped, are a worrisome message for 2024. Mark pointed out that the main issue is the lack of operating model alignment around category management, which was echoed in multiple sessions.
The first night was concluded by a provocative discussion between Lance Younger, Founder of ProcureTech, Sam Achampong, Regional Head CIPS Middle East, Drasko Jelavic, and Dr. Elouise on ‘How to leverage category strategies for navigating complex business requirements & needs’. “The role of Procurement is unique. We are the only ones that take a holistic look across all departments’ requirements”, reflected Sam. Lance highlighted that “tech is the single most important enabler for driving change, but we lack digitally minded leaders to transform Procurement”. And where transformation happens, “it often dies with middle management,” added Dr. Elouise Epstein. Adding more technology without changing the organization around it will therefore not transform Procurement and AI might as well eat Procurement’s lunch. Enjoy your dinner!
Day 2 was kicked off by Drasko Jelavic outlining ‘the business problem technology needs to solve’. Drasko examined the future role of humans in a world full of data, AI, and Market Intelligence. He concluded that the automation of the mundane results in an even stronger focus on the uniquely human elements: relationship building, reasoning, and connecting the dots. For humans to make holistic decisions, the role of technology is to enable them with the required information and insights.
Lance Younger opened the tech track of the Procurement Forum by sharing his insights into ‘Digital and data-driven procurement transformation’, and outlining the agility of the growing procuretech landscape. His market overview and the rise of new categories outlined the need for a functioning ecosystem of spend analytics, market intelligence, category management, and sourcing solutions to help Procurement identify and solve business problems end-to-end. Ultimately, “category management is the start of intake processes”, Lance concluded.
The ecosystem came to life through a series of technology-focused presentations. Drasko Jelavic and Lana Zuber, Head of Product Development at Cirtuo, explored how Cirtuo’s Guided Strategy Creation Pro was addressing the complexity in Procurement with a combination of intuitive UI/UX, a guided process to developing category strategies, and the support of AI through Ciri, the Cirtuo AI assistant. Drasko explained the wealth of use cases already covered by the few tech partners in the room and highlighted that the vision of a seamlessly connected ecosystem around category strategies is closer than people might think.
Sammeli Sammalkorpi, Co-Founder and CEO of Sievo, underlined this perspective with his highly energetic presentation on ‘Spend analytics: establishing the data foundation for impactful category strategies’. Too much coffee and an alternative career as a reindeer farmer helped Sammeli identify the new oil: data. Procurement is uniquely positioned to explore and exploit data due to its role in the organization. And “access to more data analytics creates more informed and automated decisions”, said Sammeli.
Vel Dhinagaravel, Founder of Beroe, followed with a slide-free exploration of how ‘Market Intelligence & Insights power actionable, always-on category strategies’. Vel retold a discussion with a CFO that explained the duopoly of quotas and market share when measuring the success of Sales. Hitting quotas without increasing market share is still not winning. If quotas are the equivalent of savings, what is our market share? Vel implored Procurement to find its equivalent of market share. Category strategies powered by market intelligence and data can help to create a competitive advantage for the company and connect value to procurement initiatives. Three cheers to that!
The presence of many technology partners lent itself to a panel on ‘Observations on the progress of digital transformation: tips for Procurement to achieve tangible business impact faster’. Moderated by Dr. Elouise, Sammeli, Vel, Frank Thewhisen, CRO of Cirtuo, and Lukas Wawrla, Co-Founder of Archlet, discussed their experience and insights on the current state of digitalization in Procurement. The panel spoke in unison that the digital maturity and willingness to drive change have plenty of room for improvement. Digital transformation requires strong leadership and a focus on execution and change management. It doesn’t stop with buying a tool if you want to get solutions.
The group outlined that we move faster when we create a powerful, connected ecosystem, increase our risk appetite, provide a clear value proposition to users/customers, and when we leave the path most traveled (think suites, ERP first). And while progress has been made, there is still a long way to go. The panel concluded the tech track and left the audience with plenty of food for thought.
The panel was followed by an energetic presentation by Rachael Legg, Interim CPO of Rolls-Royce, who made a compelling case for ‘The beating heart of Procurement: how digital category strategies are at the core of Procurement transformation’. Rachel outlined her experiences in Procurement where no two days are the same and reflected on her recent experience working with Cirtuo. She made it a point to say that “digitizing category management is the only way to find a holistic response to the requirements of our business and the market drivers forcing our hands.”
Diarmuid O’Donghue, Head of Digital Garage at BT Sourced, echoed this sentiment during a fireside chat ‘Seeing it through ’till the end: experiences on making category strategies actionable’. He outlined how working with Cirtuo and bringing together stories around data, savings, risk, and ESG has enabled BT Sourced to overcome the lack of transparency, trust, and credibility around Procurement’s value add and enabled meaningful conversations with their CFO. A strong case of linking strategy to value delivered.
Elvire Regnier-Lussier drove home the point that category strategies are helping us navigate complexity. In her presentation on ‘building ESG into category strategies’, Elvire outlined her experience from leading the ‘Partner to Win’ program at Unilever to being the CPO at L’Occitane. The common thread is that driving change is not one big activity but many small ones on a category level. Each category can contribute if we understand the business objectives and work with our suppliers on innovative ideas. A point in case that cost savings/margin improvements and sustainability are not mutually exclusive.
To get participants actively engaged and bring out the wisdom of the crowd, the Cirtuo Procurement Forum hosted four breakout sessions. They focused on the ingredients for successful technology implementations, a deep dive discussion around embedding sustainability across the procurement process, establishing new ways to measure procurement’s impact, and practical tips for improving stakeholder communications. We will share the learnings at a later point in time.
The Cirtuo Procurement Forum 2024 concluded with a discussion between Karl Ace, Head of Digital Transformation at GSK, Diarmuid O’Donoghue, and Ganga Siebertz, VP Customer Success at Cirtuo, around ‘best practices for achieving broad technology adoption’. The panel reached the consensus that technology implementations should rather be referred to as business solution implementations, as value to the organization and the customer or user should be at the center of the initiative. Besides that, the discussion centered around the importance of change management, highlighting the importance of clear communication, understanding resistance points, and identifying champions and sponsors early on.
After two days of discussions and networking, Drasko thanked the audience for their active participation and the ongoing discussions. Reflecting on the Cirtuo Procurement Forum 2024, we took away 5 major points:
The Cirtuo Procurement Forum 2024 brought out some uncomfortable truths. But the energy, passion, and excitement in the room gave a clear sign that Procurement means business and accepts the challenge to transform itself. Reach out if you would like to learn how Cirtuo can bring out the change you want to see in your team!
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