Recently spoke at an event called “From Facebook to Purchase Order” organised by Oracle‘s Purchasing partners Enrich @EnrichTweet
The following blog covers an introduction; my slides from the day and notes to those slides.
Procurement was once a very tactical and reactionary function, predominantly focused on driving cost reduction. Today, procurement has a seat at the table creating corporate strategy and helping tap into innovation in the supply chain, and is becoming a platform for strategic value.
Procurement has always talked about wanting to be more strategic, spending time focused on working with suppliers, developing supply, capturing innovation, and driving long-year roadmaps. But it wasn’t easy because they couldn’t get beyond the basic blocking and tackling of negotiating agreements, managing suppliers, and executing orders. But automation technology has freed them up to eliminate those hassles … to automate their core sourcing-procurement-payables processes, to eliminate the paper costs, the burdens that really bog down the supply chain and largely consume most of the team’s time.
That is where the use of Social Media comes in, more on that in a moment.
Introduction to Social Media in Procurement
The day started with a presentation from Peter Smith, Managing Editor of Spend Matters Europe a website dedicated to Purchasing professionals. Peter created context as to his view of Social Media in an easy to understand and humorous manner.
Peter also has written an article “Social Media and Why Procurement People Should Be Adopting It (part 1)”
http://shar.es/1X7Kd8 he can be contacted @spendmattersuk or for European Public Sector Procurement content at http://public.spendmatters.eu/ – follow @publicspendeu
Next to speak was Padraic Phelan of Enrich he discussed how he once put a Business case together for a company to buy an email system. Would anybody build a business case to buy Email today? Of course not.
He presented an interesting concept that the Business Case for email is exactly the same for Social Media. See diagram. If people therefore want a Business Case to invest in Social Media, there is one in that slide ready to go. Follow Padraic
So how does Social Media fit into this?
In 2001, Thierry Breton, CEO of Atos announced that he was banning email by the end of 2013. How we laughed, that will never happen we sniggered.
So what were the results? In June 2014, Anthony Bradley and Samantha Serale analysts at Gartner under took some research and found out that Atos had cut email volumes by 60% and the 76,000 employees now worked together more effectively. Not sure about you but having my email reduced by that amount and working with my co-workers better, I think is a good thing. One quote from the report is the most interesting “Move collaboration activities out of email and into a more suitable environment ….”
Now if we could do that and do this in relation to Purchasing, this be a good thing?
What do the Industry Thought Leaders Think about this?
If you check out this report by McKinsey, the average worker spends 28% of working week responding to and replying to email. Not saying that time is unproductive, but it’s a large part of the week and it probable feels unproductive. In addition to this, the average worker spends 20% of the week tracking down information on the endless number of Portals that people have created.
But by using Social tools time dealt with email reduces by 25 – 30% and the time spent search reduces by 35%.
If you look at the table on the slide to the left the conclusion of the report was that using Social technologies you could raise productivity of knowledge workers by 20 – 25%. The next paragraph discusses another case study.
Enterprise Social Networks
My employer, Oracle, implemented something similar. Oracle Social Network (OSN) is an Enterprise Social Network (ESN) (the IT term for “Move collaboration activities out of email and into a more suitable environment ….”)
The problem, which many organisation is; the sheer weight of email. Information is hidden in emails, that you cannot search on. Data is lost when employees leave and the email chaos of “copy alls” and “reply alls”.
We implemented OSN across the Commercial Industries (CI) sales team and after a time to allow it to “bed in” we measured a change and found a number of benefits.
1. Shortened Meeting times, XLoB (Cross line of business engagement), collaboration around new starters, new product introductions (NPIs) and new starter productivity. Based on our measurements our conclusion was similar to that of McKinsey, which is that implementing an ESN could increase work productivity by 25%.
In addition, OSN, unlike Facebook etc, our OSN implementation is within the Enterprise Firewall. Corporations are therefore are to control roll out, usage and privacy.
Typical Purchasing Process
In this slide (and it is not the best Purchasing process I admit, blame Google Images) we have tried to show the sort of areas where we would expect Social to be involved in the purchasing process. If you can think of me, let me know.
Now a Demo!
The following slides are screenshots of my 5S and Oracle Social Network (OSN) being accessed. The screen shots are as follows:-
1. My home screen
2. My followers and the people I follow.
3. Conversations I am part of.
4. Documents I can access
5. Opportunities I can access. The Oracle CRM (Cx) is the only CRM system that has a Enterprise Services Network built in and accessible across sales teams.
6. A suggested purchasing conversation, which demonstrates how purchasing departments could use Social Media to “chat” with internal stakeholders and external suppliers through the procurement process. All of these conversations are fully auditable, which current emails discussions are not.
Tim Hughes @timothy_hughes is a blogger and speaker on Social Media he works at Oracle, he can be contacted at @timothy_hughes