This past week, I spent four days outside of the procurement ‘bubble’ at SAP Sapphire in Orlando, FL. It is amazing what access to new schools of thought (and unlimited access to Diet Coke) can do for your perspective.
Today’s procurement professionals are a part of a much larger world than they’ve interacted with in the past. Being aware of that context makes it clear when we are pulling in a different direction from the rest of the business. Each of us should find opportunities to escape that bubble.
For instance, I’m used to attending procurement-focused events, reading procurement content, sharing ideas with my procurement community, and, yes, even listening to procurement podcasts.
And yet, procurement wasn’t mentioned until 60 minutes into SAP CEO Christian Klein’s keynote speech, “Realize the Power of Becoming an Intelligent, Sustainable Enterprise,” and only then as part of sustainability. Even Ariba, the familiar name of the SAP-acquired procurement solution, made only a single appearance in the Sapphire sessions I watched. When I think about my primary take-aways from the event, two stand out as more important than the rest:
We Must Reimagine Procurement’s Role in This Brave New World
SAP is one of the largest enterprise software companies in the world, and it shows. Their product offerings cover everything from customer experience to supply chain management, human experience management to ERP, and business networks to spend management.
This range of offerings and expertise makes it abundantly clear that procurement is a cog in a much larger wheel. At our best, we can accelerate forward momentum. At our worst, when our actions are not aligned with the needs of our constituents, we can bring all momentum to a halt.
In the past, we may have served as a roadblock without even realizing it. But now we know better. Continuing to halt progress is no longer a matter of governance or spend management philosophy. It is proof that we have made a choice to put our own priorities and desires above the needs of the business. This needs to stop.
Sustainability is More Motivating Than Savings
The ‘red thread’ of SAP Sapphire – the issue that transcends each individual business function – was sustainability. The saying, “bringing planet and profit together” was repeated often. SAP is following their own advice, in part through a partnership with Ecovadis that will integrate ESG data into its risk management platform.
As Accenture CEO Julie Sweet said, “Sustainability is one of the forces that will shape the next decade, and the leading companies will be the ones that are able to harness that force.”
SAP shared customer stories, including one from GE, where the presenter stated that the economic driver of their sustainability-focused initiatives is cost savings. Also discussed was SAPs purchase of Taulia and the enablement of supply chain financing. In my opinion, this is a seriously untapped opportunity for procurement to support both the business and build strong relationships with suppliers at the same time – a win-win.
I took the opportunity of being onsite to record a new podcast with Baber Farooq, SVP of Product Strategy, Procurement Solutions at SAP. He spoke convincingly about the fact that the data procurement has been waiting for is now coming in – and giving us a chance to demonstrate tangible ROI. This should be music to procurement’s ears. He also reiterated that cost and risk management are always going to be procurement priorities, but that the game is changing – as will be evidenced by soon-to-be-published research papers commissioned by SAP.
All of this is not to say that procurement’s unique contributions are going away, just melding better with the other business efforts. My number one sustainability takeaway is an idea that I discussed in a short segment with Scott Luton and Megan McSherry (to be published soon). The successful business of the future embedding sustainable practices and decision making into their day to day processes rather than ring fencing them as “ESG initiatives” and “CSR programs.” Not only is this approach more scalable, it gives everyone an opportunity to contribute to the best of their abilities.
For all of these new ideas and connections, I would estimate that over 95% of the people at SAP Sapphire are not procurement professionals. “Spend Management and Business Network” and “Procurement Solutions from SAP” were the names of the game. What that means for SAPs longer-term procurement branding strategy, time will tell. But it provided a timely reminder that procurement is part of a much larger corporate ecosystem and our future role depends on our ability to enable all of our constituents.