Martin Smith, host of Talent Talks interviews two of the UK’s leading procurement experts whose experience spans across the IT and Technology sectors, leading procurement divisions for brands such as Babcock International, British Airways, IBM, Accenture, Nokia, Virgin Atlantic and KPMG.
In this episode, Phil Clark and Matt Man discuss the variety of skills now required in an ever-changing industry to work in IT or Technology procurement, the rise of commercial danger zones, the need to raise awareness of the procurement profession to schools and universities and the impact of emerging technologies including 5G, IoT and AI.
Keeping up with the skills both on the technology side of things and the commercial models makes IT and Tech Procurement roles very, very difficult. The push towards buying things as a service has created some interesting dynamics in the way technology is bought, and as a result, you need a slightly different skill set and different mindset to make these things successful
Phil Clark
There’s a lot of education that needs to happen with our colleagues in finance and Chief Finance Officers to understand that actually, it’s very difficult and that they understand the degree of locking that you’re entering into when you enter into these contracts.
Matt Mann
This episode of Talent Talks covers:
- The changing environment of the technology industry
- The skill set required within technology procurement
- Commercial danger zones
- The implications of changes to SAAS and cloud based services
- Working with suppliers and colleagues to understand data and privacy regulations
- Developing a career within IT & tech procurement
- The impact of 5G, IoT & AI, Big Data & Blockchain.
Links & References
- Talent Drive: https://talentdrive.co.uk/
- Martin Smith: https://www.linkedin.com/in/martinsmith2009/
- Phil Clark: https://www.linkedin.com/in/philclarkmsp/
- Embedded IT: https://www.embedded-it.co.uk/
- Matt Mann: https://www.linkedin.com/in/matt-mann-2736023/
- Babcock International: https://www.babcockinternational.com/
- Moore’s Law: https://en.wikipedia.org/wiki/Moore%27s_law
- Computing magazine: https://www.computing.co.uk/
- CIPS: https://www.cips.org/en-gb/
- CIPS South of England Branch Group: https://www.linkedin.com/groups/4027828/
- CIPS South of England Branch Page: https://www.linkedin.com/in/cips-south-of-england-05082a164/
- Get in touch: info@talentdrive.co.uk
Read the full episode transcript
Martin Smith 0:04
Welcome to the fifth episode of Talent Talks with me, Martin Smith, Founder and Director of Talent Drive specialist recruiter across the UK in procurement and supply chain. Now today I wanted to talk about a topic which has been a theme with a lot of clients that I’ve worked with for, to be honest with you the whole of my career in recruitment; the demand for IT procurement professionals. It really seems there is a real skills gap in the market. In fact, I did a bit of analysis before today’s podcast and just over 60% of all current vacancies that Talent Drive are working on are either specialist in the IT and technology space, or have a real bias towards that. So I really wanted to tackle this head on and look more broadly at the tech changes in procurement and what impact this could have on the area. So who better to have on such a podcast than two highly experienced IT and tech procurement leaders to discuss the issues of IT and tech and its impact on procurement. Firstly, I’d like to welcome Phil Clark. Phil after graduating with a BSc in computer science has worked on both supply and demand side of the technology industry with companies such as the Accenture and IBM and then more recently operating through his own IT procurement consultancy “Embedded IT” where he offers technology procurement advisory services to clients such as EDF and Equiniti, as well as other mid market companies. Phil a big welcome to you firstly thanks for being here today.
Phil Clark 1:30
Nice to see you.
Martin Smith 1:30
Our other guest is Matt Mann who started in procurement at BA before progressing his IT procurement career rapidly with the likes of Nokia, Virgin Atlantic, KPMG and Barclays before moving to Babcock to head up IT procurement and more recently into “Head of Group Procurement Process and Systems” at Babcock, and a big welcome to you as well Matt, thanks for being here.
Matt Mann 1:52
Nice to be here.
Martin Smith 1:54
So firstly, I wanted to tackle technology as a growing area which clearly it is across all markets. Phil, I wanted to kick things off with you and go straight on to that point. It’s been well publicised by recruiters and hiring managers such as yourselves. It’s difficult to find people with that right skill set. Why do you think that is?
Phil Clark 2:12
I think it’s an interesting time to be in technology full stop, and a large problem with access to skills is really the volume of change. We are seeing a massive explosion in the different types of technology and the different services that people need to acquire. And as a result, staying on top of the market and staying on top of the technology change curve is really quite difficult. And people in procurement, obviously, are looking to buy things at a point in time or manage contracts that are relevant to certain technologies and in that context, you really need to understand what you’re buying to make sure that you’ve got an equal footing with your supply base etc. So on that basis finding people who are able to invest the time and stay on top of that volume of change is pretty key. I think the other thing is there’s sort of two different skill sets required around technology procurement, which need a bit of thought, and it’s quite difficult to find the right people to balance these two things off. One is obviously quite a technology related focus, so making sure that people understand the technologies that are available, and different options that people have when buying technology services. The other is obviously understanding the commercial models, and from a technology perspective, things have changed massively in the last sort of 20-30 years or so, from acquisition of assets to acquisition of services, and that’s created some quite interesting commercial models, which are quite difficult to navigate. And so keeping up with the skills both on the technology side of things and the commercial models makes it very, very difficult. The push towards buying things as a service has created some interesting dynamics in the way technology is bought, and as a result, you need a slightly different skill set and different mindset to make these things successful.
Martin Smith 3:56
Matt, just picking up the point Phil made there, about commercial models in technology for businesses, what are your views on that?
Matt Mann 4:06
If you think about Moore’s Law, it really locks in this kind of rate of change, the innovation within the whole of IT from the very beginning. And I think what that means is that the pace of change in lots of areas of IT means that if you’re in that area, you have to keep pace with it, and also understand what that means. So for example, there’s a lot of change in recent times where a lot of the big technology OEM’s are moving from their traditional business models, fairly kind of CapEx intensive licencing models to much more kind of annuity, SAAS, cloud services, those types of things. And that has a very big impact on people understanding that but also you really need people with skill sets that can understand “how do I react to that?” and “how do I understand how I get the best deal?” with those variables changing, when to push back, when to move forward. I think there’s a lot of opportunity though, with those changes and there is an ability to more easily show end users, how they can impact the cost of IT. So certainly with with SAAS and cloud based services it’s much easier to see how consumption affects the price or the cost than it is, for example, if you’ve invested, you know, £10 million in a software licence, and it gets depreciated over 10 years, the end user doesn’t see that. But if you tell them that the cost of the licence is £10 pounds a year, they really determine whether or not they’re getting value from it, and are they using it. So I think that’s actually quite an important change, and actually, it’s quite useful for procurement people because you’re much now closer to the demand levers, whereas in the past, actually, you were much further away so you could make an impact in the interest of a CapEx discussion, but when it came to sort of thereafter, it was much more difficult to but now you’ve got lots of levers that you can pull throughout the life of those contracts. But it does require the IT organisation to be far more agile in terms of monitoring, being able to automatically switch stuff off, people’s desire to have things on their desktop, people’s desire to want to have applications or bits of software is almost limitless. But whether or not they actually get value from it, so they’ve got to be much more agile otherwise, effectively, your cost will ramp over time. And certainly at Babcock one of the really interesting things we did was around showing our end users the cost of applications, so we bill out to them every month, this is what you use, this is what you consume, and then we found that when people see that and they get a link that allows them to click on and see what technology they use it actually changed behaviour quite rapidly. People would send desktops back that they weren’t using, they would actually ask for us to remove software that they weren’t using and they would ask, “well, why am I being charged for this?” in a way that they didn’t do before. So I think there’s huge opportunity in that area that people can exploit.
Phil Clark 7:15
I was just gonna pick up on the point you just made about behavioural change it’s quite an interesting one, because some of the difficulties we have around sourcing skills is, you know, potentially that’s not normally a typical procurement function in the context of IT. The management of end user behaviour or consumption trends is really normally within the IT department. And the fact that we now have procurement teams looking at methods of influencing behaviours to drive savings and appropriate commercial models, adds another skill dynamic to the thing that people are looking for when they’re hiring. Just understanding that concept is quite difficult and applying that to the way the commercial models are modelled and also the technology specific bits, can make it quite difficult to hire people. So I think all of these things are just becoming incredibly difficult to manage, and as a result, you do need a different skill set.
Martin Smith 8:09
So you guys have both mentioned about being aware and agile in terms of what the markets doing, so are there any publications or online literature that people could look at and use as a reference point to keep them up to date with the latest technology and the latest trends in the market? Anything you guys use specifically?
Phil Clark 8:32
I think part of the problem we’ve got is there’s almost too much information. And also, it’s finding a reliable source of information as there’s so much on the internet these days, and you don’t really know who’s telling the truth. Clearly we’re all victims of marketing these days. So it’s about trying to find specific sources. I mean, in terms of sourcing technology information, specifically, I tend to focus on some of the bigger trade magazines such as “Computing” to try and make sure I’m spotting trends, but realistically, all of the analysts, all of the technology sources have a bias. And so we just need to be concious of that as we go through this process.
Martin Smith 9:10
Okay. The next thing I wanted to talk to you guys about, and we had a discussion and a few emails bouncing around before today, and one of the bits of terminology, which I really liked, and I wanted you guys to pick up on was talking about commercial danger zones and areas in the marketplace. So Matt, are there any specific areas that you would call out as commercial danger zones for businesses that are looking at tech change?
Matt Mann 9:35
Yeah, I think it broadly goes on from the point that we’ve just been talking about and it’s the kind of opposite side to it, and I would talk about cost escalation and I think that’s actually much more difficult with SAAS models than perhaps it is in traditional models. I mean, if you’re an optimist, you would say that it’s the very generous IT OEMs who are flattening the curve smoothing costs, opening up all of these wonderful new elements of technology that otherwise you wouldn’t be able to have in the more traditional ways. If you’re a cynic, the view would be well, actually, the OEM is driving you to a sort of annuity revenue. It’s locking all of its new products, patches, upgrades into their sort of cloud based offerings. And what that means is effectively, you have to take it in order to keep on the curve. You’re very much then locked into that product, and then when they decide, which many of them do, to kind of do over and above inflation uplifts, every three to four years, it’s actually very difficult to have any strategy that offsets that. So, you know, the typical one would be “well thanks very much or sweat my assets for longer” but actually, that’s taken off the table now because it’s very difficult to sweat an asset that actually you don’t own, and if you don’t pay for it, you can’t carry on using it. So I think that’s a big danger how people react to that and there’s a lot of education that needs to happen with our colleagues in finance and Chief Finance Officers to understand that actually, it’s very difficult and that they understand the degree of locking that you’re entering into when you enter into these contracts. But also for companies, what they need to do now is have a much more thoughtful “well what is my best alternative here? And how do I back out of these arrangements? How long would it take?” If you wanted to back out of a 365, it could take you 12 or 18 months to lay the groundwork with an alternative provider in order to do that. So actually, you’ve really got to start thinking about those sorts of things.
Martin Smith 11:39
And is that a step change from maybe what it was in the early parts of your career and experience in that area?
Matt Mann 11:46
Yeah, I think that it’s just the planning horizon is slightly different. I think the amount of time it will take to move from one technology to another, involves more planning. So if you’re talking about your annual category plans, which a lot of people do in procurement, actually, you’re gonna be laying the groundwork maybe now for something that might not happen for 18 months. And that’s quite a difficult thing to sell to some CPOs, who are actually very focused on the here and now and how am I making my savings this year and what’s going to happen?
Phil Clark 12:19
It’s an interesting point, I think it’s exactly right, in terms of the consumption model it’s great that we’re moving to a variable cost base, because we can control with behaviour, the amount of cost we’re invoking, but part of the issue is, Office 365 being an absolute classic example and clearly not implying that Microsoft have got anything but the good of the world at stake here, but if they were to decide, almost arbitrarily that they were going to raise the cost of the office 365 licences next month by X percent. There’s not a lot many people could do about it. Whereas before, to Matt’s point, you buy a bit of software and you can sweat it for another six months while you work through the process of swapping it out. You know, we will be potentially at the mercy of someone making a price change and I’m not implying that Microsoft would do anything bad here but in general, the consumption model has good and bad aspects to it. Office 365 is one that’s quite obvious because it’s so ubiquitous, but, you know, other software solutions that underpin core business processes, that’s a 12 to 18 month change programme, you would have to weather 12 to 18 months of price uplift while you go off that model and move to a different one. And it becomes quite a complex thing to navigate in that context. So yeah, I think there are the commercial danger zones around some of these new technologies are quite, quite interesting.
Martin Smith 13:37
And I know it’s not your area, but I guess if there’s people that are listening to this that are maybe coming from a different category area within procurement. Is that something that you can relate to other areas and other categories? Is that the same thing that’s happening the same kind of issue and the same kind of danger zones?
Phil Clark 13:51
I think so. You know, part of the issue we’ve got at the moment is technology is influencing every category within procurement so no matter what happens, you know, one of my previous clients was looking at their marketing spend, and I was responsible for the technology category in that client. But we were involved in pretty much every conversation because you’re buying data, you’re buying it for marketing purposes, you’re buying digital platforms that support marketing. And as a result, they’re all moving to a subscription model because that’s the way the technology is going. And therefore you are navigating that problem for every category. And I think that’s relevant to not just technology, but pretty much the whole procurement function and the whole procurement function, including but not just including technology, fundamentally need to get their heads around this because it is a potential risk.
Matt Mann 14:38
Anything that has that kind of flavour probably has a similar problem to the one that IT is facing now and perhaps they faced it before in the past.
Martin Smith 14:53
But that’s a really interesting point that I guess one of the premises of being here and being such a hot topic because iT and technology as you rightfully say, is across every category, it can apply to everything.
Phil Clark 15:06
There’s some other interesting commercial models that technology buyers need to be aware of that we’re all aware of, but sometimes lose a bit of focus. If you look at things like data privacy, which was massively relevant in GDPR world a couple of years ago, and now sort of faded off a little bit. I think people need to make sure that they’re covered and technology, like I say, across the whole of the category spectrum. Because most things are being bought as data, in terms of commercial danger zones, people will need to be really respectful of data privacy and things like Office 365 or other platforms where you’re storing information that you may or may not see as sensitive, if it goes off shore or if it goes into a place where it shouldn’t be then you know, we need to get our head around that. So at a commercial level, that’s something that procurement people need to understand and enforce. So you’ve got the right protections in place for the business you’re work for. I think the other thing talking around different commercial models, actually, the operational models are something that need a bit of thought as well. Moving stuff to the cloud being an example, one example, has potential ramifications as to how things work within a business. And that operating model concept, and the potential HR implications and the changes of responsibility and ownership within a business is something that I think procurement can take a lead in helping the business understand the implications of buying a certain sort of service, and moving away from in house resources, if appropriate, etc. So, you know, at a commercial level, there’s quite a lot of things that we need to factor in from a procurement standpoint, and help advise our internal colleagues, that they need to avoid these sorts of pitfalls. Because, you know, absolute worst case if you went too far down the route on buying a cloud solution, it might have TUPE implications, you know, if you went really far, and not many do have those sorts of implications, but it’s those sorts of things that I think for the contractual and legal commercial viewpoint, add some value to the overall business and make sure, you know, procurement are the policeman of that environment.
Matt Mann 17:14
I think that’s a really good point. I think that if you think about the cyber risks, the data protection and the GDPR. One of the big things that you have is the flow down of risk is sometimes very difficult in those areas, and with a lot of the sort of GDPR legislation, companies can end up with quite significant fines for data loss. If you actually look a lot of the agreements that I’ve seen in the cloud space, the levels of protection, the limits of liability, are a fraction of the actual risk and exposure of losing that data. I think companies at the moment, probably aren’t really thinking about that. I think that it’s very difficult for this kind of mindset of “I’m just going to flow risk right the way down”, because actually some of these larger and even some of the smaller OEMs that provide these services just are not going to accept the limits of liability and the risk that is associated with holding data in their data centres and on their equipment.
Phil Clark 18:16
It does give you an interesting dynamic on negotiation. I mean, because we’re moving to a lot more shared services, rather than buying your own piece of software, putting it on your own piece of hardware and sitting at your own data centre. Cloud means by definition that these companies are managing tens of thousands, if not millions of clients, and therefore their appetite to negotiate is limited because it’ll have potential ramifications on the whole client base. And that does make the procurement role a little bit more difficult because we’re in a place where, you know, we’ve got in some cases monopolies and in other cases, certainly strong vendors who have to protect their own interests a lot more readily than previously they would. So you know, all of this commercial stuff is the absolute focal point for technology procurement going forward it’s a massively complicated area.
Martin Smith 19:03
And you’re balancing that whole time the commerciality of being a procurement professional and negotiating the right contract, making sure they’re getting the right liability and the GDPR and the risk side of it behind it as well. It’s an added dynamic that, I guess, has come into more of the forefront of people’s minds the last few years.
Matt Mann 19:21
Yeah, absolutely, especially as you see, companies that have struggled with data loss or issues of being hacked, actually, you know, senior people in companies are now much more concerned about “well, what happens if I lose my data?” so you know, conversations about how people protect their information. Things like cyber essentials plus throughout the supply chain. This is something that as IT sourcing professionals, we should be encouraging all of our suppliers now to make sure that they’ve got these sorts of standards.
Martin Smith 19:55
And has that changed the expectation in terms of what the CIO or even CFO have on procurement in IT and technology? Is there a change in that expectation now?
Phil Clark 20:08
Yeah, certainly in the projects I’ve been involved in, there’s a higher focus on not just price. Its quality, its risk, its commercial roundness that people are considering just beyond what’s the cheapest. And, certainly, in previous lives, where you’re sourcing commodity components and hardware components, etc. price is obviously a focus, but now we’re moving to a more service and solution based commercial model, everyone needs to think in the round. And even if something is X percent more expensive, but protects your data better or the downstream risk impacts of brand reputation, all those sorts of things, are coming into consideration rather than just buying the cheapest widgets you could get your hands on. And again, that just leads itself to procurement have a more rounded role, I think, which actually from a career perspective makes more interesting. I do quite a lot of work with the CIPs function and we’re actively talking to school leavers and all those sort of things about career choices. And whereas I think the industry has been guilty, certainly probably 10-15-20 years ago to be very cost focused now it’s a good rounded career choice for people because it does genuinely factor in business analysis, legal and contractual reviews, obviously modelling out business cases and stuff like that, but you get a holistic view of the business and the risks that are specific action takes the business rather than just focusing on fundamentally the finance function. I don’t know if you feel the same way, Matt?
Matt Mann 21:39
Absolutely agree with that.
Martin Smith 21:41
My ears always prick up there when I’m talking about, you know, one of the premises of doing this podcast is raising the awareness and the population of the procurement industry as a whole. So as an entry point, do you think businesses are doing more now? I know you do a lot of work with with CIPs to allow the participation levels to get up and raise your awareness. Do you see that’s sort of growing and developing, has it become better? It sounds like you’re saying it has been?
Phil Clark 22:05
Yeah, I think hats off to CIPs they they do a lot of work to try and raise awareness almost at the GCSE and A level level. I don’t think there’s enough in my view around this or the structured learning environment to get formal qualification before we get into a safe professional environment,
Martin Smith 22:22
Like accountancy do and other professions in that space that are quite good in terms of those accreditations?
Phil Clark 22:27
Exactly, and also if you are following a technology education path at the moment, you tend to do computer science, so you get involved in coding and hardware engineering, those sorts of things, which is clearly very, very relevant if you’re going into a very pure play IT job. Which is why it’s difficult to find procurement technology people because not many people have the skills that go across two different categories; technology and commercial. So I think it’s trying to understand how to build that roadmap to get from GCSE type level education staff – kids basically, who don’t even know what procurement means and how to get the next tranche of people into the industry. I think we need to understand what that roadmap looks like to get good rounded individuals across, from my perspective, technology and procurement.
Martin Smith 22:28
So how did you guys get into procurement? Matt from your point of view, you’ve worked for a lot of really impressive brands over the years. How did you get into IT procurement and the technology space?
Matt Mann 23:24
I’d love to say it was planned, but it wasn’t. I was lucky enough to get offered a job with with British Airways. And when I joined, they effectively put me within the Technology IT procurement team. And I just kind of understood it and kind of got it in a way that I think, going back to the right at the beginning of the show, we were talking about how do you attract people in. I think that some of IT can be quite an abstract thing for people to understand and so through the years, I’ve seen a lot of really talented colleagues who just aren’t very comfortable working in that abstract space, they much prefer to see, you know, they can feel it, touch it, see it, and then it’s easier than to sort of understand it. But if you’re talking about a network or a cloud, or a ISDN line, any of these things are actually really quite abstract concepts. So, I think there are people that just enjoy that and enjoy the challenge of that, and they fit more comfortably in. I think we could do more to encourage people to get into technology, I think, it is becoming more pervasive across lots of different places. And I think that also has to come from some senior people within the procurement function as well, so a lot of the CPOs out there. I mean, I had a conversation once with someone that said, not many people become CPOs who are technologists, and I always thought that was a shame that someone said that to me, that somehow by being in the technology space that precluded me from actually having an understanding of building maintenance for example.
Martin Smith 25:07
Which is ironic because out of all the strategic spends that businesses have, you know, technology’s on the agenda on everybody’s and it’s normally, not all, but normally it’s the highest portfolio spend that a business is managing, so, there isn’t there is a bit of a paradox there. I think the other thing as well is that, certainly in my impression from a recruitment standpoint, people within the procurement community like you guys are, they absolutely see the value of it, and there’s a really nice trajectory, and the cynics out there you can command big day rates and really high paid jobs. Typically compared to other indirect categories, I think there’s often a perception of that but outside of the procurement industry, as you say, IT is almost put in a little box still, I think to a degree of as you say, “I can touch it, I can feel it” but they don’t really understand “oh I can actually be a bit more commercial and go into a more procurement role and utilise my my skill base.” So I definitely think there’s still a lot to be done there.
Phil Clark 26:01
And I think that the commercial application of technology is, in my view, at a personal level, I started off as a technology guy with a degree in computer science, I could build a CPU out of bellwire if someone forced me, well I probably couldn’t now actually 30 years on. But going forward, you know, I worked through the technology industry and then moved as part of my career path into more commercial application of technology and then decided to move on client side rather than supply side. From my perspective, that’s a really interesting way of doing it because other than coding something or building something, and clearly we need people who do that well, actually understanding how that combined set of technologies make a massive difference to an industry or a business is a really, really interesting world. And, yeah to Matt’s point, we need to really find a way of encouraging people to get into that or even realising that there is an option to move from one career path to another. Not many people leave college or university with a direct focus on going into procurement. Actually, if you’re in technology, or even if you’re in business operations, and have got an understanding of the processes that are largely underpinned by technology, moving into procurement on that basis is a really good thing to do, because it gives you a really holistic view of the commercial benefits of that.
Martin Smith 27:19
Hopefully there’s people that listen to this podcast that are maybe, an IT manager or something away from this who are actually interested in moving into that field. I hope so anyway.
Matt Mann 27:28
And the final point I’ll make is if you think about IT, most of it is delivered by third parties, and has been for a long time. So actually, most CIOs, most CTOs actually have to have really good commercial skills nowadays in order to operate. How do they manage the relationships with their key vendors? How do they know what technology they want to invest in? How do they make sure they’re getting the right price for that right technology? So I think for people coming into technology it’s also is going to offer them career paths, not just in procurement but actually within more general roles within IT because those skills are really useful in the delivery of any service in IT I think.
Phil Clark 28:06
I think building out on that point as well, the commercial models within the IT industry have got more complicated. There’s always been a two or three tier supply chain for technology from manufacturer through to actually delivery. But the middle layer, the channel layer, certainly in the UK its so fragmented its ever changing, there’s a lot of m&a going on. It abstracts you away from the vendors to a certain extent, but the vendors are now trying to approach clients direct, certainly the top end. So understanding the dynamics there and making the right decisions in that context is a bit of a skill. And from a potential skills pool perspective, there are plenty of people in the technology channel industry who have navigated that commercial complexity for a while, who probably at the moment are offering sales type skills, but actually moving into the procurement world with the knowledge they’ve got around commercial models would be a really good…
Martin Smith 28:59
I’ve seen that really successfully done with someone actually recently, so yeah I completely agree. Moving on to the trends of technology. Phil, I wanted to ask you about what you see as emerging in the next five years and what you think that impact will be on procurement.
Phil Clark 29:19
Okay. So there’s obviously a lot of change, as we’ve already discussed. I think the main ones that we’re tracking within Embedded IT and obviously my clients set, that 5G is going to be enormous. I think it’s quite an interesting dynamic, a lot of people are still a little bit miffed about the quality of their own 4G signal, and that’s the way they see 5G, but 5G is a fundamentally different technology that will potentially revolutionise the way we use devices, because of the potential improvements in both speed and coverage for mobile technologies. And that goes hand in hand with the Internet of Things, which you know, those two things together, if you’re in an industry that’s got a high use of distributed devices, or remote workforce, that these sort of things could make a fairly fundamental difference to the way you operate as a business. I was a talk a few months ago, specifically around the Internet of Things and the opportunities that that brings, just looking at connected technologies and connected devices and monitoring trends in that context is really interesting. Similarly, the risks it brings around security and increasing your attack surface or the number of devices that potential bad agents can get involved in to come into your business, again, brings some really interesting dynamics from a procurement standpoint, because at procurement level you need to understand what your risk profile looks like, where your liabilities sit, and make sure that that your contracts protect you from what potentially could be quite high risk environments if you’re not careful. But all the negative stuff to one side, 5G and Internet of Things in my view, are probably the two big ones for the next 6 to 18 months depending on where you are in which industries. Alot of talk also about artificial intelligence, and I think everyone’s got a slightly different view…
Martin Smith 31:03
It’s massive at the moment isn’t it?
Phil Clark 31:05
Yeah but there’s so many different interpretations of what that is. I think it’s already there to a large extent, it’s got a long way to go yet, but there are a lot of different technologies that already use natural language understanding and those sorts of things. So AI is a thing that has some interesting commercial dynamics, and again, on the procurement perspective, there are a lot of ethical impacts and CSR type impacts almost. Should you be looking at adopting AI, if it’s used as a rule engine that contravenes your own social values and your business? Those sorts of questions are quite profound and need to be driven from somewhere. The technology guys are probably more interested in the way AI works from a technology perspective. Someone needs to be asking the question, hang on a sec, you know, that those automated engines that you’ve got in the back of an AI function, who designed them, what are their values and make sure that those are applied appropriately, which is a whole philosophical debate that we probably don’t have time to talk about now, but that’s coming through. And from a procurement standpoint, I think we as the bastions of potentially reducing risk on those sorts of environments should be well aware of as we go forward.
Martin Smith 32:15
Matt, what’s your thoughts on that?
Matt Mann 32:18
The key trends that I’m seeing are reporting, analysing machine generated big data. There’s a huge amount of appetite at the moment for tools that allow you to kind of take packets, bits of data and then bring them all together and then effectively create everything from workflows to KPI charting. Some of that’s kind of quite interesting because it will give you insights that perhaps you wouldn’t ordinarily pick up on. I think there’s some really interesting stuff there. Linked to AI, automation and machine learning, I think we’re on the cusp of seeing some really practical applications of those sorts of things. I was lucky enough to see a demo the other week around cognitive contract management, and this was the ability to download thousands of contracts, rule sets that can then interpret that and then effectively stratify them and codify them so that you can effectively see “Well, this is this is a liability clause…” so it will completely change the way that people will be able to load contracts into contract databases and remove a lot of manual processes. So I think that’s going to become ever more present. And then a final one that that would be remiss of me not to talk about in a procurement sense is blockchain or distributed ledger technology, which once amusingly said is a solution looking for a problem to solve. But I do think if you look underneath that within secure supply chains, where you need significant goods traceability or security of supply, there is an application there, but I still think we’re years away from it being kind of pervasive and used extensively.
Phil Clark 34:14
I’m a massive non fan of blockchain. Just to put out there…
Martin Smith 34:18
We don’t always have to agree with each other on this, that’s good!
Phil Clark 34:20
I’m not disagreeing with Matt, I think the problem is exactly as you say, it’s a solution looking for a problem. That said, I had a really interesting talk with someone probably about six months ago, I think it was in Dubai or certainly in the UAE, somewhere in the middle east somewhere, there was an application of property purchasing, not necessarily a direct procurement context but clearly relevant. And they were trying to use blockchain to impose auditability of every stage of the purchase of a property to allow for effectively online property acquisition such that you click a button say I want that gazillion pound flat up the Burj and at the end of the next day all of the right steps have been been taken to go through solicitors and banks and all those sorts of things in an auditable way so you pick the keys up the next day. And you know, whereas personally, it’s not necessarily something I’ll ever go through. But it fundamentally you can sort of see how those sorts of blockchain, security and ledger type applications are relevant. Exactly as Matt says tough, in my world I can’t see anything particularly directly relevant. Someone will find something and it will become the next best thing, but for now, in my view, it’s one to just keep an eye on.
Martin Smith 35:34
Okay. Like we do every week, on the Talent Talks podcast we ask our audience some questions. So I had a couple of questions if I may to ask you guys. Someone reached out to me last week that’s not actually in IT procurement at the moment. So Matt, I wanted to ask you what advice you’d give to someone wanting to get into IT procurement as a profession?
Matt Mann 36:02
I think you’ve got lots of tools now out there, LinkedIn, there’s lots of people out there who you can see that they’re involved in, technology procurement, or IT procurement. There’s lots of great people out there that will mentor, will offer advice. There’s recruitment networks, there’s people who can point people in different direction, so I suppose use the power of the network that’s open to you to find people who can offer you advice. Try and get some experience.
Martin Smith 36:34
I was going to say on projects, because I’ve seen that’s quite effective for people that have maybe been in other categories and are interested in going into it. So I’ve heard people sort of mentor or maybe work on a project with somebody in the IT space, would that be something that you would actively encourage?
Matt Mann 36:47
Yeah, I think that would help. I mean, any exposure that you can get where you’ve got something that’s, that’s kind of relevant to the area. If you’re talking about when you’re specifically recruiting people, there are obviously different factors and considerations and sometimes you want people with very deep, rich experience. There are other times actually where you might look to bring people in, who have no experience. And what I mean by that is there are some times right, I’ve done it where actually if I can find people, who can get their head round, the concepts and the abstract nature of It, and are really bright and intelligent, then actually, it’s relatively easy to teach them the specifics of and we can help you find out about, you know, how you contract with Microsoft, I can teach someone that. They’ve got to have a kind of level of capability and competence in order to do that, so, the other thing is just to focus on the core skills that you need as a procurement person and I think if you can demonstrate that eventually someone will give you a chance.
Phil Clark 37:48
I think competence and confidence as well. The ability to not be daunted by something that’s a bit new, at an attitude level is something you’ve got to look out for because quite a lot of people I’ve worked with in procurement are a bit “Oh, that’s technology. I’m a bit scared by that I don’t really understand it.” You need people who are willing to have a go at something. Having a good procurement background is good but if you’re keen to learn and not scared to learn, that’s absolutely the thing I’d be looking for.
Martin Smith 38:17
Okay, perfect. And the question for you, Phil, was someone asked about AI and robotics. So unsurprisingly, that was always going to come up, I guess as a question. Do you see AI and robotics as, using their language, a threat to the IT procurement professionals or a help?
Phil Clark 38:33
Why did Matt get the easier question is what I want to know?
Martin Smith 38:36
There’s another question here in a minute, I’ll run to both of you!
Phil Clark 38:40
I mean, Matt’s already covered it off to a large extent. AI and robotics, in my view is a fantastic opportunity. It’s obviously of concern, potentially, that there are some aspects of the procurement role that can be automated actually, fairly easily. And like Matt, I’ve been looking at some of the contract automation functions that are out there and there’s some good ones, one of my current clients have already deployed one for a very small subset of the procurement and legal function, but in this instance, this piece of software takes a simple requirement from a business user and creates an NDA. I mean, it’s nothing more complicated than that. But the process that it has automated has saved an absolute fortune in terms of time and effort from quite expensive lawyer resource. And that contract management overhead piece is something where I think AI can probably take some of the mundane stuff out of a procurement role, to allow procurement people to focus on the more interesting things. The reality of AI and robotics in my view, it’s about 50 years out before they start being able to develop relationships. And therefore, you know, if we see procurement as a role, which is very much a relationship role, there will always be a role for a procurement person involved and maybe the AI robotic piece just gives us an opportunity to get rid of some of the mundane dross that we sometimes we have to deal with around contract management and contract administration.
Martin Smith 40:02
Okay,
Matt Mann 40:03
Just to pick up on that, I think that’s absolutely right, I think in the here and now, the ability to kind of help put framework contracts together and stuff like that is really important. I can’t see two machines being able to make the kind of subtle nuances of “where do I compromise in that negotiation?”, it would be almost impossible at the moment to write all these rules down, I mean, your years of experience to know whether or not that’s appropriate to compromise at that point. And in the circumstances…
Phil Clark 40:31
I’ve got this mental image of two smashed robots.
Matt Mann 40:33
I have that as well. That’s exactly what I have, just everything coming to a grinding halt because you have two machines that have been given a set of rules, and they’ve both got the same kind of best alternative to a negotiated agreement and effectively they both walk away whereas I think the great thing about procurement as a function is one of the key things that we do when we negotiate is actually is we come away with a deal most of the time. Because it’s built in us that we need those products, we need that service in order for the business to function, so yeah, I’m absolutely with you with that image, I have that in my mind.
Phil Clark 41:06
Yeah, maybe it’s our age Matt!
Martin Smith 41:09
We could talk about this for hours, but I’m conscious of of time here. I just wanted to finish off if I may, just a little bit of advice to people that are listening that are either in IT procurement at the moment, or indeed have an interest in going into it. Just briefly for both of you, one piece of advice for people, whether in it or not, in your experiences? Do you want to start Phil?
Phil Clark 41:31
I’ve got to say it because I’m very heavily involved but get involved in your local CIPs network. There are branches out there that are incredibly good from a networking perspective and give some really good advice. So I think CIPs has a role to play in making the profession more accessible and certainly, you know, some of the branch activities that are out there need to be followed up on in my view, and just a little plug, CIPs South of England branch on LinkedIn, by all means, approach us were very keen for you to get involved.
Martin Smith 41:58
There we go, got it in! Matt?
Matt Mann 42:00
I think the best advice anybody ever gave me was you’re responsible for your own professional and personal development. So don’t wait for someone to send you on a training course, look out there, find what’s out there, for yourself and then good things will happen as a result of you making that happen.
Martin Smith 42:18
Guys thank you so much for coming on today really, really insightful look at the changes in IT and technology procurement in the modern world. It’s certainly changing and I really hope that people got a lot out of that today. As always, the podcast is free to download on Spotify and iTunes and our website talentdrive.co.uk, alongside all our other episodes so far. Episode six will be out in April, where we’ll be discussing corporate responsibility and sustainability in procurement. So please join us again for that. If you are listening and would like to take part in our Talent Talks podcast series, please get in touch. I hope you enjoyed today and thanks for listening.
Phil Clark 42:54
Thanks Martin
Matt Mann 42:54
Thank you
