Author

Paul Ducie

Published

11 October 2024

Estimated Read time

4Mins

Paul Ducie, partner at Oliver Wight EAME, explores how to avoid staff burnout created by the overzealous adoption of AI.

Over the last two years, many businesses have been sold on the benefits of AI. The technology is supposed to deliver higher productivity at lower cost. What’s not to like? However, a growing number of organisations are reporting that poor planning and implementation are creating additional tension in the workplace. Staff burnout rates are increasing and customer relationships are being damaged.  

Major decisions on implementing AI are made at the top by the senior team based on optimistic, unsubstantiated business cases. AI promises greater productivity at a significantly lower cost.  

But, in many cases, the gains are oversold. Already, several household names who have invested in AI are scaling back or stopping investment programmes based on unsuccessful trials.

Problems may include:

Middle management burn-out from devising and deploying AI.  

With AI implementation programmes, we have teams being given little or no training and expected to deliver a major change programme. These underpinned by potentially unrealistic project and operational expectations from senior management.  

It is a case of history repeating itself. There are strong parallels to previous implementations of ERP systems circa 20 years ago. Those too were characterised by oversold benefits, lack of relevant education and problems from automating poor processes. But this time the pressure is even greater, thanks to a significant cost of AI solutions, combined with the push to deliver higher productivity gains within unrealistic timeframes.

Employee burn-out from dealing with the problems when the productivity gains fail to appear.   

As with previous technology implementations, people are not being given the skills and training to properly implement the changes. Additionally, they are also having to deal with the consequences of the change programme’s poor implementation and subsequent performance. Therefore, we’re seeing an understandable backlash from employees against the drive for productivity. Not only are people in affected areas feeling less-and-less valued, but they also recognise that often they are now competing against the AI engine and being given unachievable targets to hit.

Customer service deterioration.   

What is your business trying to achieve with AI in customer service, such as with chatbots and AI assistants? Is it improved customer service or is it reduced overhead? Most businesses claim the former when really they are driven by the latter.  

Businesses using AI to reduce the cost of customer service are allowing AI to dictate how they operate.   

We are seeing companies forge ahead with implementing AI without sufficient consideration for how they seek to differentiate themselves in the marketplace. When they fail to provide the necessary training and change management support to their staff, customer service levels and ultimately profitability drop while your best staff leave. A perfect doom loop.

What should businesses do to make their AI work: Humans first

Whether you have already introduced AI or are just investigating, you need a “humans first” approach. It is the quality of your employees and customer relationships that matter. AI has all the potential to help enhance these… and to also destroy them irretrievably!

If you’re at the investigation phase make sure any proposed implementation is treated with a healthy dose of scepticism. Interrogate the ability of the technology to meet the improvement goals. Also, look at the unexpected costs, proposed ROI and, most importantly, what are you risking in terms of human capital and customer service if poorly designed and implemented. Ultimately, your profits will be delivered by your customers. So, take the time to deeply consider how your AI will impact how your customers think about your brand. After all, we know from bitter personal ChatBot experience that we’d much rather speak to a human to get anything more than a minor problem solved.

If AI is already in place, to get its benefits you may have to re-engineer with the involvement of those who are expected to deliver the productivity gains. To successfully implement an AI capability that will drive true competitive advantage, the investment in change management must be your priority, supporting your people so that they understand the reasoning for the change and will ultimately be prepared to own the productivity improvement targets sought by the business.  

Your people need to see how the integration of AI into their working life will make them more effective and successful, not subservient to the machine, with them being able to employ it as a trusted co-pilot to enhance business performance while making the working day better for all employees.

  • AI in Procurement
  • People & Culture

Author

Nell Walker

Published

28 August 2024

Estimated Read time

4Mins

We caught up with Shachi Rai Gupta from ORO Labs to discuss the importance of orchestration in procurement.

Simplifying procurement in smart ways is the ultimate goal for ORO Labs. Utilising the best of AI, ORO Labs aims to implement procurement orchestration across sectors, creating an experience that is simultaneously automated, augmented, and humanised.

Shachi Rai Gupta is VP Strategy at ORO Labs, with a wealth of transformation and technology experience behind her. Rai Gupta’s sharp eye on procurement has allowed her to witness the rise and fall of various trends, and understand what the sector needs as it – along with technology – evolves. 

We caught up with Rai Gupta at the DPW NYC Summit back in June, a special North American version of the event. Procurement trends, especially AI and orchestration, were very much the theme of the day, prompting lively conversations amongst some of the world’s most influential procurement leaders.

Procurement as a net positive experience generator

For Rai Gupta, the trends right now are guided by the fact that procurement has more of a  strategic and evolved role than ever, giving the function the opportunity to have a great impact on the enterprise bottom-line and the environment and community at large 

“Procurement is morphing into a function where one of its biggest responsibilities is to be a net positive experience generator,” she explains.

“Procurement really is a service function for the whole business stakeholders. We, as procurement professionals, need to see things through the lens of the business. This includes what issues the business is trying to solve, and meeting the business where it’s at for good collaboration.

“It’s also important to make this experience as easy as possible, rather than cumbersome and time intensive. That needs to be catered and customised to the individual business segments.”

Prioritising the planet

Another area Rai Gupta is seeing talked about a lot is sustainability. This topic has, for some, been sidelined a little in favour of advanced technology. But it’s just as important as it’s always been, and it’s vital to keep the discussion alive – especially in procurement.

“More and more, companies are realising the impact they’re having on the environment,” Rai Gupta explains. “It’s an increasing priority on all our agendas. The technology is still nascent in that space, in the sense that there aren’t good ways to do benchmarking or tracking. That’s going to be an interesting space to watch out for.”

The next generation

Another hot topic of the DPW NYC Summit was the talent shortage. We at CPOstrategy discuss this topic a lot with procurement professionals, and there’s no one answer for fixing the issue.

“There’s a dearth of good digital talent,” Rai Gupta states. “The skillset you need today in procurement is very different from what we’ve had before. To be able to leverage that, to really make use of the procurement teams you have and the operational model you want, it’s a different challenge. The structure of your team is more important than ever. 

“While that shortage is there, when you do have the right people in place in procurement, that’s where the department shines,” Rai Gupta adds. “That’s where procurement becomes a group of trusted advisors for the business, providing proactive opportunities. We wear a lot of hats in procurement, and we’re stepping up to a new level of evolution.”

Advanced tech for good

And, of course, AI and orchestration are terms on everyone’s lips right now – procurement included. AI is, in Rai Gupta’s words, “a solver”. Many of the blockages and challenges procurement is experiencing as it evolves can be solved, or at least aided, by AI and orchestration. “There’s so much tech out there,” Rai Gupta states. “AI is one such possibility. Every segment of procurement comes with its own risks and requires its own expertise and tool sets. 

“To manage that whole ecosystem is where that orchestration comes in. There’s a real beauty in this because it’s collaborative. It makes the whole bigger than its parts.”

  • AI in Procurement
  • Digital Procurement

Author

Andrew Woods

Published

23 July 2024

Estimated Read time

3Mins

Shelley Salomon, VP of Global Business at Amazon Business, discusses her company’s commitment to fostering gender diversity in procurement… Procurement’s…

Shelley Salomon, VP of Global Business at Amazon Business, discusses her company’s commitment to fostering gender diversity in procurement…

Procurement’s gender imbalance isn’t new.

Traditionally, the function was regarded as a male-dominated profession. But change is afoot, in more ways than one. While a digital transformation amidst technological innovation is well-publicised, another evolution is underway within the workforce.

Gender diversity has become an important component of many company strategies globally. While progress to encourage more women into procurement has already started. There still remains an imbalance, particularly among those holding leadership positions. With current statistics suggesting around one in four leadership positions are held by women, there is still room for improvement.

So, is progress happening quickly enough? Shelley Salomon, VP of Global Business at Amazon Business, discusses her organisation’s commitment to fostering gender diversity and how women can reach parity in procurement. 

In your opinion, where is procurement today in terms of women’s representation in 2024?

Shelley Salomon: “Women’s representation in procurement has seen progress these past few years, but there remains room for further improvement. Gartner’s data shows that women comprise 41% of the supply chain workforce. It’s encouraging to see greater gender diversity within the industry.

“While these statistics are encouraging, they also highlight ongoing challenges. Particularly at the leadership level. Only 25% of leadership roles are held by women. This disparity underscores the need for sustained efforts to promote gender diversity and support women’s ascension to senior positions within procurement.

“My perspective on this trend is one of cautious optimism. The progress we see is promising, reflecting a growing recognition of women’s unique contributions to procurement roles. Diverse perspectives and gender equity are vital for effective decision-making and problem-solving. Additionally, multiple credible studies show that companies with the greatest gender balance in the C-suite are likelier to achieve above average financial results. However, much work must be done to ensure these advancements translate into lasting change.”

While progress to encourage more women into the workforce seems to be underway, there is still a major disparity in the number of women leaders in procurement. What is the best way to go about rectifying this? 

Shelley Salomon: “I believe there’s a significant opportunity to welcome more women into procurement leadership roles. By establishing robust mentorship and sponsorship programmes, organisations can provide invaluable guidance, support, and networking opportunities. Thus empowering women to thrive in their careers and gain visibility within the organisation. Investing in inclusive leadership development programmes is essential. These initiatives focus on building inclusive skills and readiness for leadership roles, continuing to foster a more inclusive and dynamic workforce.

“In my opinion, implementing inclusive hiring practices that actively promote gender diversity, such as using diverse hiring panels and conducting blind recruitment processes, is essential to minimising biases. 

“Lastly, setting clear, measurable goals for increasing the number of women procurement leaders and regularly reporting on progress to hold leadership teams accountable can drive meaningful change. By taking these proactive steps, organisations can create a more equitable environment that supports the advancement of women into leadership roles within procurement.”

Read the full story here!


  • AI in Procurement
  • Data in Procurement
  • Digital Procurement
  • Procurement Strategy
  • Sustainability Technology

Author

Andrew Woods

Published

16 July 2024

Estimated Read time

3Mins

Soqui Calderon, Regional Director of Sustainability for Grupo Modelo and the Middle Americas Zone, reveals how the beverage giant is tackling sustainability from a procurement and supply chain perspective

Our exclusive cover story this month is with Soqui Calderon, Regional Director of Sustainability for Grupo Modelo and the Middle Americas Zone. She reveals how the beverage giant is tackling sustainability from a procurement and supply chain perspective. 

Grupo Modelo is a giant and a leader in the production, distribution and sale of beer in Mexico. Grupo Modelo is part of the Middle America Region (of the AB InBev Group) and boasts 17 national brands. Corona Extra is the most valuable brand in Latin America. Its other brands include: Modelo Especial, Victoria, Pacífico and Negra Modelo. The company also exports eight brands and has a presence in more than 180 countries while operating 11 brewing plants in Mexico. 

Through more than nine decades, Grupo Modelo has invested and grown within – and with – Mexico. It has also generated more than 30,000 direct jobs in its breweries and vertical operations throughout the country. 

Grupo Modelo, like many forward-thinking companies, is currently focused on a drive towards establishing a truly sustainable business. This endeavour is best exemplified in the Middle Americas Zone (MAZ), where sustainability efforts have been led by for the past five years by Soqui Calderon Aranibar, Regional Sustainability and ESG Director. Ambitious targets have been established for the region, but some remarkable achievements have already been made. As Calderon says: “For our team, sustainability is not just part of our business, it IS our business.” 

Sustainability in the MAZ 

The Middle Americas Zone is made up of several countries: Mexico, Colombia, Perú, Ecuador, Honduras, El Salvador, Dominican Republic, Panama, Guatemala + other Caribbean islands. Each territory is home to its own brands that are household names in their respective countries. However, Grupo Modelo’s Corona beer, manufactured in Mexico, is one of the top five best-selling beers globally.

Calderon’s regional role means she travels extensively throughout the territories, engaging with all their businesses and collaborating closely with their partners and suppliers. Her job? To effectively outline their sustainability goals…

Read the full story here!

Elsewhere we have some incredible names imparting expert insights from companies such as Amazon Business, Source Day, DHL and Marriott International and lots, lots more! 

Read the full issue here!

Enjoy! 

  • AI in Procurement
  • Data in Procurement
  • Sustainability Technology
  • Sustainable Procurement

Author

Andrew Woods

Published

18 June 2024

Estimated Read time

5Mins

Our cover story this month…  Marriott International Inc: A more sustainable supply chain  With science-based targets approved, Marriott is accelerating…

Our cover story this month… 

Marriott International Inc: A more sustainable supply chain 

With science-based targets approved, Marriott is accelerating work to help make its supply chain more sustainable. We speak to Stéphane Masson, Senior Vice President, Procurement, Marriott International, Inc. – for our exclusive cover story this month – to find out how… 

“Like many global companies, Marriott recognises that serving our world helps the communities where we operate and is also good business,” Masson tells us. “This Earth Day, we announced the approval of our near-and-long-term science-based emissions reduction targets by the Science-Based Targets initiative (SBTi), with a goal to reach net-zero greenhouse gas (GHG) emissions by no later than 2050. Approval of these targets is bringing heightened focus on our work to embed sustainability in our operations.  

Specifically, the company has committed to reduce absolute scope 1 and 2 GHG emissions 46.2% by 2030 from a 2019 base year. Marriott also commits to reduce absolute scope 3 GHG emissions from fuel and energy-related activities, waste generated in operations, employee commuting, and franchises 27.5% within the same timeframe.  

Importantly for our team and the suppliers we work with across the globe, Marriott’s targets include 22% of our suppliers by emissions—covering purchased goods and services, capital goods, and upstream transportation and distribution—which will have science-based targets by 2028. 

In the longer term, Marriott also aims to reduce absolute scope 1 and 2 GHG emissions 90% by 2050 from a 2019 base year and reduce absolute scope 3 GHG emissions 90% within the same timeframe.  

Our Global Procurement organisation plays an important role in setting up Marriott as we work to achieve the targets within this timeline. And it will require an evolution in how we engage Marriott associates, our suppliers, and other members of the industry.” 

Read the full story here! 

Grupo Modelo: Procurement and sustainability in action! 

We speak to Soqui Calderon, Regional Director of Sustainability for Grupo Modelo and the Middle Americas Zone, to see how the beverage giant is tackling sustainability from a procurement perspective… 

Grupo Modelo is a giant. A leader in the production, distribution and sale of beer in Mexico, Grupo Modelo is part of the Middle America Region (of the AB InBev Group) and boasts 17 national brands, among which are Corona Extra, the most valuable brand in Latin America, as well as Modelo Especial, Victoria, Pacífico and Negra Modelo. The company also exports eight brands and has a presence in more than 180 countries while operating 11 brewing plants in Mexico. 

Through more than nine decades, Grupo Modelo has invested and grown within – and with – Mexico, generating more than 30,000 direct jobs in its breweries and vertical operations, located throughout the country. 

Grupo Modelo, like many forward-thinking companies, is currently focused on a drive towards establishing a truly sustainable business. This endeavour is best exemplified in the Middle Americas Zone (MAZ), where sustainability efforts have been led by for the past five years by Soqui Calderon Aranibar, Regional Sustainability and ESG Director. Ambitious targets have been established for the region, but some remarkable achievements have already been made. As Calderon says: “For our team, sustainability is not just part of our business, it IS our business.” 

Read the full story here! 

SDI International: Delivering tail spend excellence 

SDI International’s Brendan Curran and Joaquín Morales discuss empowering procurement innovation, the importance of effective tail spend management, and how its Master Vendor programme transforms the function 

In a world of greater complexity and risk, technology adoption and digitalisation, and an ever-evolving compliance and regulatory environment, procurement teams still grapple with a perennial challenge: cost reduction. Which is why tail spend management – often overlooked and unmanaged while procurement focuses its attention on strategic, high-spend categories – is so important. Indeed, for many organisations, taking effective control of costly, one-off buys and high-volume, low-value purchases involving numerous suppliers can deliver as much as 5% to 10% of cost savings, according to Boston Consulting Group. 

But tail spend, by its nature, is complicated. It requires significant focus to effectively manage high volumes of data, often has a perceived lack of strategic importance within both procurement and the wider organisation, lacks visibility, involves vast numbers of transactions, many product categories, and a largely anonymous supplier base, and can bring potential compliance risks because of poor onboarding processes or inconsistent terms and conditions.  

Tackling the problem can be daunting for procurement teams. But, according to SDI International, it doesn’t have to be. The organisation, one of the world’s largest diversity and woman-owned procurement outsourcing and technology providers, delivers industry-leading holistic tail management solutions based on a successful formula: simplify, digitalise, innovate. Its Master Vendor programme provides procurement teams looking to tackle their tail with a one-stop solution for tail spend that leverages the latest and most efficient technologies to handle supplier onboarding and on-time payment, and manage the entire tail supply chain, stakeholder servicing, and escalations. The result is a procurement department better able to drive cost saving, efficiencies, and more strategic outcomes.  

Read the full story here! 

  • AI in Procurement
  • Data in Procurement
  • Digital Procurement
  • Procurement Strategy
  • Sustainable Procurement