Leveling the Procurement Playing Field

Transcript

Bruce Morton: Welcome to Subject to Talent, brought to you by Allegiance Global Solutions. Similar to you, we're always trying to learn more. On this podcast, we speak to workforce and talent experts from around the world, covering market trends, technology, and our ever-evolving dynamic industry.

Hi. I'm Bruce Morton, the host of Allegiance Global Solution's Subject to Talent podcast. Today, I'm super excited to be joined by Keith Hausmann. Keith's a leading voice in the sourcing and procurement domain, and chief revenue officer at Globality, the world's first AI-powered platform and marketplace, revolutionizing how companies buy and sell services. Welcome, Keith.

Keith Hausmann: Thank you so much, Bruce. Looking forward to chatting and having a good conversation.

Bruce: Thank you for joining. So, we always ask our guests the same first question. How did you get into the workforce industry and what was your journey to get you where you are today?

Keith: Yeah, I'll try to keep this succinct. Of course, nobody graduates from high school, or goes to the university thinking about that, per se, as the journey or the career path. But after leaving university, I found myself in several procurement consulting, procurement startup businesses, as well as working in industry and pharmaceutical and a number of other companies. And ultimately, I've worked in the procurement space for now close to 30 years. And as you think about workforce or labor, as I've worked with literally hundreds of companies over the last 30 years, as it turns out, spending money on labor based services is one of the largest things that companies encounter.

Keith: So, in particular, over my time with Accenture, and now with Globality, and previous to that, a company I started called Procurian, we just spent a lot of time in categories that are fundamentally workforce and labor driven, and found lots of ways over the years to create value, improve processes, and delight and users and customers around the experience in that space. But ultimately, I found my way in here through a career in procurement where services and workforce just became a dominating theme.

Bruce: Wow. Yeah. Great. Okay. Well, thanks for that. So, right now, across, I guess, nearly all industries, there is a lot of conversation going on about redesigning the way what works, redesigning processes and technologies, just to make the whole thing better for everyone involved. And I know you and I have had this conversation. And I love to hear talk about the consumerization of the enterprise. But for our listeners today, can you just explain what that means and how organizations like Globality are actually driving that trend of consumerizing the enterprise?

Keith: Sure. I mean, I think at the heart of it is unfortunately companies have probably designed many of their processes to control, drive compliance, and things of that nature, rather than from the eyes of, or through the lens of the business stakeholder. So, the first principle of this consumerization is design process that is in the eye as of the user of the process, rather than in the eyes of the controlling function, as maybe the case. Because what otherwise happens is that people will find a way to go around the controls if the experience and the process and the technology being used isn't wonderful, comfortable, easy to use, et cetera. So, that's the first concept is... And when we think about consumerization, we think about what we do in our consumer lives, which generally is slicker, easier, simpler, faster than what we experience in our enterprise lives.

So, that's one concept. The second to me is making things more self service. Procurement and different functions in companies, they always talk about wanting to be at the table with their stakeholders. But the reality is there are thousands of tables out in companies and procurement cannot keep up with all those, nor can HR or other sort of functions as maybe the case. So, how do you use self service concepts to bring the procurement domain or the HR domain to the stakeholders on their terms, and allow them to work in a self-service way? I think the third concept really is using artificial intelligence, natural language processing, etc., to guide to people. Much as we experience in our consumer lives, platforms in our consumer lives are very easy to understand. They are guided.

You never get lost as to where you are. So, it's really using AI to guide people through an experience where they don't need to be trained. They don't need to look up a user guide. They don't need to find the manual. They really just are guided through an experience, using artificial intelligence, that's easy to understand, follow, be compliant with, if you will. And I think the last part about it really is... I think we've all experienced this. But again, in consumer lives, it's platforms or technologies that have a built in learning component. In other words, they get to know you as an individual, or they get to know you as a company with individuals in it, and start to customize the experience to you: what your persona is, what you normally do in work, things you should be thinking about, what other people in similar roles are doing in your company or outside your company.

So, it's really about sort of machine learning, and taking every instance of what somebody does in the technology, and using that to make it smarter and more personal for the next experience that you have, or that others in your company have around that technology.

Bruce: Yeah. That's really interesting. And I like that personalization you're talking about there, because I'm old enough to remember when computers didn't know who I was. Right? But now, wherever you go... It used to be annoying. But now, it’s annoying if they don't know who you are. What do you mean? Why you ask... You know me. You know me better than I do.

But we've all got comfortable with that all to an extent of, I want things to be personalized. So, I think that elements of... through that machine learning, understanding the personas. So, based on those three elements you just mentioned, what are some of the big benefits you're seeing clients getting from the fact that you've got this AI and ML built into them?

Keith: I think a couple... I think a few things. And I'll try to bring them into real life as we talk through this morning. I think number one is speed to market. There isn't a company on earth anymore that doesn't need or feel that they need to move faster. And traditional analog based procurement processes, no matter how you look at it, or no matter how hard you work, or how many hours a day you're in it, are not super fast. So, I think speed to market, and giving the business partners that we're working with the ability to work as fast as they need to, to accomplish what they need to do. So, that's one. I think the second one is a bit of an emotional one. It's empowerment, right? I mean, I think most companies' cultures is one of collaboration and empowerment. And the more you're able to give a business partner or a community within your organization the ability to be compliant, but also feel emotionally empowered, the more likely it is that they adopt, and they engage, and they want to do it more, and so forth and so on.

So, I think empowerment is another one. Much more efficient is another. I mean, there are so many things that in my past life, and growing up in a traditional sourcing world, that just are very inefficient. They take a lot of time. The spreadsheet analysis, and the sending of RFPs, and the coordinating of NDAs and all that. So, much more efficient. And I think everyone in every enterprise today needs more bandwidth, either to be more strategic or to do more work, or both. So, I think efficiency is huge. ESG (environmental, social and governance) I think is another one. If you don't have a simple, easy to use consumer like platform to find, engage and include different flavors, types, sizes of suppliers, it makes it very hard to make that social impact and to have that transparent governance around the process.

And I think last, but not least, is certainly more bang for the buck in the spend, or savings, or however you want to think about that, meaning the quality of what work gets done is driven by, I think, the process and the technology. But also, I can spend less if I define my needs and my scopes correctly and accurately, and if I expose those competitively to enough suppliers to really have choice and best value.

Bruce: Right. I want to come onto the supplies in a second because I know you've... Globality are doing some amazing work in leveling the playing field there. But just so we get to that, when I think about that, the smart sourcing piece of this; gets to know the user, gets to understand the persona, advising them, guiding them, almost Sherpa-like helping them along the journey... What are some of the benefits you've seen from that element of it specifically? Is this a procurement tool? Or does this foster collaboration more? Are people able to work together on this platform? Just talk to that for a minute.

Keith: Well, on that specific question or point, yes. I think analog processes, by definition, analog meaning things involving... I'm using outlook. I'm using spreadsheets. I'm using SharePoints, so these are analog processes, are very difficult to collaborate, right? Because they're asynchronous and people don't see what other people are saying or doing or whatever may be the case. So, in our platform, our customers would say... And I don't mean to be... They would say there is a hundred percent collaboration and visibility and transparency. So, for example, when they're building a scope of work, or a scope, or a demand, or requirement, if you will, they're inviting three or four of their compatriots in their company to engage, answer questions, think about the scope, get it right, make sure they agree on budgets and timelines and what suppliers should be included or not included, all happening transparently on the platform, and likewise with suppliers.

I mean, again, most of what... Sourcing, in its traditional sense, is analog and asynchronous. All of that in a platform can be made conversational, saved, stored. I'm broadcasting to all suppliers. I'm conversing with a single supplier. But all done in a single place. And I've had customers say something as simple and brilliant as, "Wow, this is perfect. It's a one-stop shop for everything that goes on from the time I have a need to the time I have an agreement with that supplier, and where I can see all of the history. And all of my internal partners, as well as my supply partners, can see what's happening."

Bruce: Yeah. That makes a ton of sense. So, coming back to the supply base or the supply chain or the supply ecosystem, I know that Globality's mission is to promote what you call economic inclusion, which obviously is a very admirable mission, and very relevant for today's world. I think every C-suite conversation now is about not just how can we remain financially stable and be successful and be competitive, but at the same time, figure out how they can positively impact the world and make it more fair and equitable. Can you talk more... a bit more for the audience about Globality's mission behind that?

Keith: Yeah, sure. And what we do is actually, at the heart, complicated but simple. And that may seem like a contradiction. But at the end of the day, the biggest bottleneck, in my opinion, to including small diverse specialized suppliers is we don't know about them. We don't know who they are. And we don't have ways to find them in a simple instantaneous manner. And as much as Google is an amazing thing that changes our lives, you really can't go into Google and say, "Find me a diverse supplier that does legal services in Southeastern United States." I mean, it just doesn't work that way. So, what our platform does, and what we've sort of built around it is, a network of some 30,000 suppliers that we vet and qualify every quarter of the year ongoing, and that have deep and rich profiles about their capabilities, about their teams, their biographies, their case studies.

That when somebody is in the midst of sourcing something or trying to buy something, we instantaneously use algorithms to match those suppliers, qualified, vetted, diverse, small business, specialized suppliers to the need the customer has at the moment when they're trying to go to market to buy that service. So, it's basically... For us, it's building, and constantly building and curating, the supply market, but also creating this AI-based way to match those suppliers to the needs that a customer has at the exact moment when they have the need. So they don't have to go offline and look in a database, or talk to their friends, or call one of the industry organizations. It's right there for them. And in our work, about 80 to 90% of all requirements that people create on our platform are matched with at least one diverse or small businesses, if not multiple. And customers constantly say that is, to them, amazing. Now, of course, those suppliers still have to earn the customer's business. But their qualifications, their capabilities, their case studies, their bios are brought right to the forefront at the moment when the customer has a need.

Bruce: So, within that ecosystem, is there a democratization of the performance here so that the cream rises to the top? Is that a good way of describing it or am I off there?

Keith: Well, I think inherent in what Globality does is using quality performance ratings to inform the algorithms, meaning that perhaps the most important thing of all is how is a supplier performing at a company or across companies, and crowdsourcing that information. Because as we know in our consumer lives, we're constantly looking for the five star hotel, the five star piece of electronics, the five star restaurant, the... And consumers in companies really are deprived of knowing that, right?

I mean, they know as much as the supplier tells them or gives them a reference to talk to, which is potentially pretty darn biased. So, we are crowdsourcing information about how suppliers are performing in the proposal and delivery processes, so that people have another piece of information to rely on their decision-making, other than sort of the self-fulfilling prophecy of, "I gave you a reference", which is... To me, it's not a super accurate way of really measuring "Am I talking to a supplier that is viewed as high quality for the type of work I would like to get done?"

Bruce: Yeah. Great. That explains it really well. Thank you. So, let's just dig into some real world examples here. So, if you think about some of those clients who've been... the smarter ones who got on board earlier, let's put it that way, what are some of the advantages and benefits that they've seen now, over a period of time, that you're seeing are repeatable and almost become institutionalized on the platform?

Keith: Yeah. I'll talk about a couple of customers, obviously completely anonymously, as just the right thing to do. And I've kind of hit on some of the benefits before, so I'll try to hone in on them more specifically. But one of our customers is a Fortune 50 company and a very advanced company. I mean, they're leading the way in probably everything they do, including procurement and things of this nature. And so, they're always looking for what's next. Call it early adopter, if you will, or what's next, pushing the envelope type company. And I think a few things that they're experiencing that they view as important. Number one, I talked about that a hundred percent collaboration concept before. They're experiencing that. They love that. There are hundreds, if not thousands of people, collaborating day in and day out on sourcing processes, all in one space, on a single platform, with transparency and visibility.

So, they love that. That's one thing. Two, as evidence of that... It's a company, again, that sort of prides themselves on, "Do our business stakeholders love procurement. Do they love the way we do things, or do they not?" They care about that. And they're experiencing a nine out of 10 NPS score for what they're doing with their business stakeholders in our platform. And this is kind of unheard of. If you Google search the NPS scores of most enterprise technology, you'd be shocked at how low some of the NPS scores are. So, they get a very high degree of customer or stakeholder love, if you will, out of what they're doing on our platform. In fact, to the point where we start to see quotes of like, "Why don't we do everything on this platform" kind of comments, which of course we love. They're seeing savings on the spend of 15.2% on average. Okay. That's important.

That's a function of competition. That's a function of accurate and clear scopes, demand management, things of that nature. And they are seeing the time to market. In other words, from the time a business person says, "I need to do something with a service provider to the time they're in the market, engaged of less than two business days, compressed from less than several weeks. So, a huge business agility benefit and a pretty significant efficiency improvement, or in other words, how much work can a procurement person do when a lot of the heavy lifting is being done through technology rather than loading our effects platforms and many billion spreadsheets and so forth and so on. So. That's one example.

Another customer, in some ways, may be quite different, right? I mean, it just... I wouldn't say the opposite end of the spectrum, but just a less mature procurement organization. And probably the biggest benefit I think they have is that, when they engaged us some two years ago, the idea was "We want to create a different operating model. We want our human procurement talent to be top, top end, but not engaged in doing transactional work." So, they wanted an operating model that was, I use the word truly human, where the humans were doing high-end relationship strategy, thinking, engaging with their business partners and suppliers, innovating with suppliers. They wanted them engaged with that work. And they wanted technology to do, I'll say, the guts of, how do we source something? How do we get an SOW in place? How do we engage suppliers? And they've achieved that operating model effect, simply by combining Globality or Glo with their very high-end talent, which is lean and mean, but at the end of the day, very effective when it's been combined with our technology.

This company also is very, very ESG focused. We not only work with procurement, but diversity and inclusion office. And the things we've done together to really bring diverse suppliers to the forefront in the markets they work on, in the projects they have, has been really well received and effective for them. And I think they're also accessing spend they never could touch before, partly because of the multiplier effect of the operating model, but partly because the stakeholders are more willing to engage in something that they like, and that's easy for them to use, and that fits their lifestyle. We all know, during the pandemic, which unfortunately is still sort of going on, people don't work eight hours a day in the office. They work three hours here, and four hours there, and five hours there. And it's never in the office. So, I think they really... The stakeholders really find it easy to engage because they don't have to wait for a procurement person to be at work and ready to go to do the heavy lifting of the process.

Bruce: Right. And just on that point then, just to hammer that home for the listeners... So, you're saying lean and mean procurement department. So, that means that this allows an organization to increase adoption because it's an enjoyable tool to use. And speed and efficiency, I think you mentioned that there's some pretty compelling time differences using the system. Is that like an overarching impact you see that, instead of people avoiding procurement, they're actually getting them involved earlier because they get access to Glo?

Keith: Yeah. I think Glo is... Our customers almost start to become... think they're in a relationship with Glo, which I guess they sort of are. So yes, I sometimes use the term Glo interchangeably with Globality. But yeah, I think that's right. I mean, we're all humans. And I think, for the most part, humans like to be empowered. They like to have some autonomy. They like to be able to do things at their own speed, pace, time, and to not necessarily feel like they're kind of being brought through something that they're not particularly enjoying, or willing to do, or seeing value in. So yes, I think that empowerment and that self-service, and being easy for a business stakeholder to engage, is a super important part of the whole thesis here. Yeah. That's right.

Bruce: Cool. Okay. So, we're coming to the end of the episode now. So, another question we like to ask everybody that we have on as a guest is the crystal ball moment, so get ready. So, if you had a crystal ball looking a few years out, and pick your own time timeline, but where do you see the industry of procurement moving towards? And how would it look different to what it does today?

Keith: Yeah. I mean, I made the earlier point that I've been around the procurement space, services spend, labor based spend for a long time. And unfortunately, for virtually all of that 30 years, procurement's been run on spreadsheets, and some technologies, and lots of outlook, lots of SharePoint and et cetera. So, I do think the crystal ball says that's ending. There is modern technology being invested in by Globality, but also other companies that are very well venture funded, that are bringing a different day and time and place to the technology world. And I think, in my lifetime, we will... or my career, I'll say, we will see sort of the end of procurement being a very analog type process, which unfortunately, today, it's still very much... it is, although certainly Globality is at the front of trying to change that.

And I think that'll happen. So, that's one. I think, two... I haven't mentioned this before, but you could think of Globality as a marketplace. We have many customers that say, "You're a marketplace." Yes, we are a marketplace. And I think that it's not surprising that a huge amount of what we do in our B to C world is done in marketplaces. Airbnb is a marketplace. VRBO is a marketplace. Amazon's a marketplace. Alibaba is a marketplace. There's a huge amount. And we just see statistics every day about the hundreds of billions and trillions of dollars going through marketplaces. And I think that there will be a day, in the not distant future, where a huge amount of enterprise spend will also be satisfied through marketplaces. You're starting to see it now. And I think that will ever increase.

And as you know, many of your customers probably refer to what they do in the contingent labor place as a labor marketplace. And in fact, that's what it is. And we are creating sort of this company and broader services marketplace. And I think that, you go forward a few years, 70/80% of these kinds of spends are going to be marketplace driven. And I think the last, which I've already kind of touched on a few times, but is the walls will be broken down where it's hard for a big company to find and do business with a diverse or small company. It is hard. It has been hard over the years. And I think those walls will come down. And it will become easier for big companies, without jeopardizing their risk and their standards, to find and engage and do great work with smaller and diverse suppliers who, in many cases, are just as good as anybody else at doing what that thing is, that specialized thing is.

And I think those walls are coming down more and more. And I think that companies, enterprises and companies like Globality, are really after how do we accelerate that trend?

Bruce: Yeah, that's fantastic. And I'm excited about that. I couldn't be more on board with you with those thoughts. And yeah. Having been in the industry for 40 plus years, I'm hoping, in my career, we get to that Nirvana. But Keith, it's been great chatting with you today. And I do really appreciate your time. Thank you for joining us. So, where should our listeners go if they want to learn more about Globality?

Keith: Well, of course, our website is a good place to go, www.globality.com. And otherwise, happy to have them reach out to me on LinkedIn, easy to find Keith Hausmann, chief revenue officer of Globality.

Bruce: Fantastic. Thanks Keith.

Keith: Thank you very much, Bruce. Great talking with you.

Bruce: To learn more about AGS, please check us out at AllegisGlobalSolutions.com. You can also send questions for me or our guests. Just tweet us @Allegis Global with the #SubjectToTalent or email us at SubjectToTalent@AllegisGlobalSolutions.com. Until next time, cheers!