Future of Sourcing Awards 2018: Innovations in Digitization, with IBM and Microsoft

Posted: 10/30/2018 - 01:41

At SIG's Fall Global Executive Summit in 2018, SIG held its first annual Future of Sourcing Awards. Join Sourcing Industry Group CEO and President, Dawn Tiura, as she interviews the teams nominated for the Innovations in Digitization category who have demonstrated excellence in their field and represented the best examples of innovation, transformation and/or leadership in digitization.

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Dawn Tiura: Folks, I'd like to introduce to one of our team finalists, and this is in the digitization finalists IQ project, and I'm going to be speaking today to Gavin Hough with IBM and this is called pricing IQ. Can you tell us a little bit about the project Gavin?
 
Gavin Hough: Yeah, hey Dawn! Pricing IQ—a great, great project. It started out in the early iterations to where we were trying to ease up some time that the buyers were utilizing for the extraction, transforming and loading of data to develop some kind of insight for negotiations. In that process we've been able to take our spend and market intelligence data and push it in and manipulate it in a way where we can utilize that to leverage the data for negotiations and really optimize our spend. Started out [a] very small team, 10-12 people supporting the project from product owner down to the development team. And we have expanded, right? So it's a pretty great project.
 
Dawn Tiura: So you started off trying to actually, taking something that used to be done in excel and would take weeks of data crunching to using IBM Watson to gain insights. So, you started off in, if I recall correctly, in the staffing category or contingent labor, is that true?
 
Gavin Hough: Yeah, so our contingent workforce with our tech services as well as business services that cluster. A lot of support through CWF, the contingent workforce group. You would have a buyer that would get some data that, you know, historical spend, and market intelligence that we had brought in from an outside company that they would load it into a spread sheet and try to essentially work through excel, and develop some graphs and outlets and try to obtain values on the specifics of the contractor working towards it. It might take them 80 hours to develop a full insight to leverage with confidence and so you fast forward, you move us to where we are now, and that same buyer is able to go into a dashboard that this data is already feeding through the backend and they can go in and see market position's and historical spend, down to market sentiment, right?
 
Dawn Tiura: Uh-huh.
 
Gavin Hough: You know if they are moving on a contract in market sentiment is up, you know we've got upper pressure's in the market maybe we need to take a twelve month contract instead of six month contract. Maybe it's down… So we want to take a three month rather than a six month because we might be able to get a better price, you know as we reach that point in time with the sentiment moving the way it is. Yeah, it's been pretty great, you know in the beginning we were using Watson analytics to load in these excel files, to develop the dash boards and show us what we were working with. Eventually we realized that we're loading on flat file's, and we've got these data sets that could be used cross category, so we ended up merging all the data into a data lake, into a centralized data platform, so now if there is a category that can gain value from other areas of intelligence they can tap into that. It's not just a specific data set for a specific category now it's all of IBM data and all of our market intelligence posted in a large group.
 
Dawn Tiura: Wow! That's impressive. So you've gone beyond contingent labor, but that alone was about 3 billion dollars in spend, wasn't it?
 
Gavin Hough: It was, the service cluster is about $3 billion in spend, had great coverage due to the structure of how services works with their job or skill set, and ended up expanding, right? We've got 11 sub set's; 11 categories that spend within IBM. So we started branching out because as other leader's would speak to the services cluster, or the buyers would be talking to the services buyers and they would hear about this great project going on and the savings they were achieving and the time they were saving, you know, they wanted it for themselves. So, we linked up, we added on project managers, we assigned over teams, [and] they pushed down into the categories and we're working forward to provide value across every group of spend with IBM. It's really taken off.
 
Dawn Tiura: Wow! That's amazing. So obviously it's not only sustainable, it's gonna continue to grow across your company?
 
Gavin Hough: Yeah, it's definitely running full steam, as I mentioned the ETL process, the extraction, transforming and loading of data—previously we were running it in a manual process. We’d get the spend, we’d get the market intelligence, merge them into one spread sheet and run. But now moving forward with this level of cognition in this data transformation we're able to take raw data, structured or unstructured, which ever and push it into a format that we need more to leverage it. So, it's really expanding, ultimately a tool such as this is gonna really be dependent on the data that's driving it.
 
Dawn Tiura: Uh-huh
 
Gavin Hough: So, the more data, the better the data is laid out, obviously, the more confidence you can have in the output and the insight's you'll be able to achieve.
 
Dawn Tiura: This is amazing. So, other companies are not IBM, and they don't have a ton of programmer's sitting there at their beck and call. Can other companies do this, or do you need to be an IBMer, or do you have to hire IBM to do this?
 
Gavin Hough: Obviously, you know, my business group is really focused internal, right. But as this has really taken off across the orb there's mention, and you got the different services group and there taking this external right. So the capability to bring IBM is there, right. Its new, It's fresh. I might have spilled the beans before its actually official. But no, if you don't have programmers or a great or even if you don't have in depth group of data scientists, I guarantee you've got somebody within your organization that is maybe an undercover data geek, right. They like to go in play with spread sheets and get things structured and do tables and you know. When this first started I would spend hours in a day restructuring data tables, getting it put into a method that we could load it in and derive values, and I'm not a programmer by any stretch of the word. But I had a vision to what I wanted the data to do, and if you're able to see that and you're able to build out the buckets, right.
 
Dawn Tiura: Uh-huh.
 
Gavin Hough: What's the part number, what's the description, what's the price, what's the market price? You know, you look at your data and you start building out the columns that you want and eventually you can put it out and develop your insights. And if you're able to do that with the category, you're saving everyone within that category the time that their gonna do it. So maybe you spend, you know, six to ten hours figuring out how you're gonna structure your data, and then maybe so often every couple weeks or every month you take another four hours to load in the fresh data into the same spreadsheet and get it structured in the method that you need it. But everybody else that's utilizing it is saving that time.
 
Dawn Tiura: That's true.
 
Gavin Hough: So, you're getting that savings off of that point just in the work reduction. But where the values out is when those buyers go in and utilize those dashboards of those visualizations and go into negotiations, right.
 
Dawn Tiura: Yep, yep.
 
Gavin Hough: You can go in, you know, the negotiations and you know get the price back you look at the best one. Maybe you go back, you push for a couple extra points. You maybe want ten percent, whatever. But if you're able to go in to a negotiation and tell them: “This is what we've spent historically, this is what the market's sending, heres the markets sentiment, heres the facts. Heres x, y, z—this is the price we are willing to pay.” Right? And regardless what the price is down if you lay out facts that's no refutable.
 
Dawn Tiura: Right, exactly that's not emotional. It’s not I want, I wish—It’s, “I deserved it this much.”
 
Gavin Hough: Exactly.
 
Dawn Tiura: Yeah, this is amazing. So your team this is going to be a tough one for people to beat and I'm wishing you the best of luck in the awards, and I mean, I loved reading about it. I loved hearing the comments from the judges. It quickly became one of finalists. So Gavin, you've done a fantastic job on behalf of IBM, so thank you so much.
 
Gavin Hough: No, thank you Dawn. It’s an honor to be recognized. I have a couple of interactions before my career with SIG when I was in my graduate program and the organizations made a great impact on me. But it’s doing… You guys are accomplishing great things for the industry, and to have a nomination really come out of nowhere. For an internal tool that's getting traction and visualization across the industry, this is something.
 
Dawn Tiura: It’s something you should be very proud of; very very proud. This didn't come easy and I know it was a lot of hard work. But you kept it going and now you have success to talk about. So hopefully I'll see you on stage excepting the honors.
 
Gavin Hough: That's what we're hoping for. But I'm also looking forward to getting up on the stage for the TED talk, it’s gonna be great.
 
Dawn Tiura: Yeah, that's gonna be great as well. So, folks, this is Gavin Hough with IBM, and it's a pricing IQ digitalization project that made him into a team finalist. And yeah, keep listening to the pod cast for more stories, thanks for joining us.
 
Dawn Tiura: So that was IBM with their pricing IQ and there digitalization finalist, up next is Microsoft with a their supplier onboarding.
 
Dawn Tiura: So, folks, I'm excited! With me today is Connie Chu and Erica Shepard, both from Microsoft, talking about supplier onboarding project, and they are chosen as one of the digitization finalists. So welcome ladies, I'm so glad you could join us for the podcast.
 
Connie Chu: Thanks so much, we're excited to be with you.
 
Erica Shepard: Thanks for having us.
 
Dawn Tiura: Yeah, it's exciting! So, you guys made it to the top really quickly. What was the problem you were originally trying to solve that set you out on this team trouble?
 
Erica Shepard: Yeah, no that's a great question. So, the problem we were trying to solve is really not unique to Microsoft in any way. I think, if you go to any procurement conference, you'll hear the people lamenting the challenges of collecting and managing supplier data, and our preliminary organization focuses on making sure we have capable, compliant, and competitive suppliers. And so that was the solution that we were putting in place to solve.
 
Dawn Tiura: Okay, so after you had this project going and in place. Do you think your results are going to be sustainable?
 
Erica Shepard: Oh, absolutely. We've already demonstrated that. The solution has been in place for a while now, and in addition to executing against the original problems we were trying to solve, we have scaled on top of that and added more categories, more countries, and significantly more data into the system.
 
Dawn Tiura: Oh, that's great. So how far and wide is the implementation?
 
Connie Chu: It’s global for us, and so now it's really become core to how we do sourcing. We’re using this capability and technology to significantly reduce our turnaround time, reduce our operating costs, and improve the experience for both our supply base and our internal users who really need us to help them find the right suppliers to work with.
 
Dawn Tiura: Okay, so Erica… So let’s say other people are listening to this and they wanted to know if you've learned something from this project. Is there something you would have done differently, or something you wish you'd known before you embarked on it?
 
Erica Shepard: This project went really, really, really well. Of course there are always things we could do better. But that's what I have trouble with.
 
Connie Chu: So this is Connie. I would say if we're going to make recommendations to others to embark on this journey really be clear on rules and responsibilities for the folks that you're engaging with up front and really focus on the foundational work of the business process. Technology is just an enabler—it can be applied to the situation. But really focus on stream lining your business process, driving of publicity there. Because that will provide you with great frame work to build upon.
 
Dawn Tiura: Oh, that's great. So, you guys made it to the finalists very, very easily. It looked like you just soared through the nominations. So I hope you'll all be joining us in October for the summit, and thank you for joining me today and talking about supplier onboarding project, digitization finalist team category and the future sourcing awards.
 
Connie Chu: Thanks so much.
 
Erica Shepard: Thank you.
 
Dawn Tiura: So that was Microsoft supplier onboarding for digitization finalist category. And up next is Microsoft again, but this time with product catalog.
 
Jessica Lancaster: Hi. Yeah, thank you. So we had implemented a product catalog solution several years ago using a outsourced platform, and it worked, and it did what we needed it to do, but we found that it was not easy or intuitive for our users to find what they wanted, find what they needed, I should say. And they were not really finding relevant search results when there looking for projects; the terminology was hard for them to determine and understand. And quite frankly, it just was a very poor user experience and we got a lot of very negative feedback. That's not the experience we want for our end users, we want things to be simple and easy to use. So, we went back to the drawing board and said okay, “so what do we wanna keep and what do we want to scrap and do over?” And what we did was we kept the back end functionality for managing the content, but designed a completely new user experience for searching, finding, and purchasing the products that they need to do their job.
 
Dawn Tiura: Oh, that's neat. So, you took someone else's product and rebuilt the front end of it, or the user end of it.
 
Jessica Lancaster: I would say we replaced the front end of it. With the outcome solutions we have limited influence over the design because of corporate supports multiple clients, not just Microsoft. But what we did was we built our own internal solution using Microsoft Azure, and then we just replaced that front end all together and discontinued use of the outsource solution’s UI.
 
Dawn Tiura: Well, that is awesome. That is a beauty about Microsoft is that you have the know-how on how to do that within your own company, that's fantastic. So with this, since you have built your own front end off of it, is this going to be something you think is sustainable? Is it going to be able to grow? Is it going to have a life that will continue on after the project is complete?
 
Connie Chu: Absolutely, there’s a lot of capabilities set up and established at a foundational level that can be leveraged to help solve other business problems. For example, people at Microsoft get a wide variety of choice for the device that they utilize, and there are sites and processes to help promote standards within Microsoft and point people to devices that they should consider. We want to hitch that experience up to this solution… So that it can continue to streamline that overall buy experience for users regardless which team is responsible for what components. So, we see this as a capability that could be utilized more broadly, and we're looking into those opportunities now.
 
Dawn Tiura: Wow, so growing the scope of the project as well. that's fantastic, so what do you think made this stand out as an incredible nomination to our judges?
 
Jessica Lancaster: Well, I think, when we just look at the impact it had to our users and the amount of time it takes, I think that those are two huge wins. We had—so we do sanctification surveys for our system and tool users, and our base line was 2.5 stars on a scale of 1-5 and, quite frankly, we were surprised that it was that high at the time based on the feedback we were getting. Today, on the same scale, on the same survey, our customer satisfaction scores are 4.6 out of 5 stars.
 
Dawn Tiura: Oh my goodness!
 
Jessica Lancaster: Yeah, it’s a significant increase.
 
Dawn Tiura: That's fantastic, congratulations! I don't hear that often.
 
Jessica Lancaster: Yeah, we were pretty happy with that. Just wondering what it takes to get those extra four points right.
 
Dawn Tiura: You can't be perfect, no, no, no. You've got to be human still.
 
Jessica Lancaster: Additionally, the simplified process and the easier UI actually shaved a significant amount of time off of the purchasing process. So we had a system and a process that took approximately almost twenty-three minutes to just buy a laptop, for example.
 
Dawn Tiura: Oh my goodness.
 
Jessica Lancaster: Now, our new system, it takes about six minutes. So, when you consider that we've got approximately 80,000 purchases per year, that's a significant time savings to our end user and a significant resource savings to Microsoft as an organization. It saves us almost ten years in resources every one year.
 
Dawn Tiura: Oh my lord, that is an amazing… I was just going to crunch the minutes and see what that turned out to be. But that is amazing the amount of time that you've taking out of the equation. So you have to be very proud of this. I think it’s something, I mean the metrics are amazing. So congratulations.
 
Jessica Lancaster: Yeah, absolutely, thank you. You know Microsoft has a lot of important work to do. We don't need to spend that time buying what we need to get that work done, right?
 
Dawn Tiura: I agree, I agree. I think some people are going to be asking you for more information about this. Cause its sounds like a great, a way that you revolutionist really the entire experience for the folks. So, you certainly earned your new satisfaction scores. So is there anything you would have done differently, is there advice you could give to someone if they were gonna undertake something like this?
 
Jessica Lancaster: I think one thing that we could have definitely done a better job on. [It] was with this new experience we were focused a lot on the UI and how our users were interacting with it, but we could have dug in deeper on preparing our suppliers who actually provide that catalog content to make the changes and updates that are necessary for everything to display appropriately. The way we changed the UI really made some adjustments to how our suppliers are providing that data. And we trained them, we met with them, but we didn't track and monitor and follow up with our suppliers the way we should have. And, as a result, we were doing a lot of last-minute crunching trying to get those data updates in before our go live. So, I think the broad scope of not just technical requirements in readiness, but really looking at the wholistic business ready activities is one thing we could have done better.
 
Dawn Tiura: But you were focused more internally, so that makes sense. But it is great lesson learned to think of the whole 360 degrees of a project like this. So congratulations on having that insight, because you'll probably do it right the next time you do a project—you'll think of the 360 turn for it. So congratulations once again. So I am talking with Microsoft on the product catalog project which is a digitization finalist in the future of sourcing awards. So thank you for joining me today.
 
Jessica Lancaster: Thank you.
 
Connie Chu: Thank you.
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About The Author

Dawn Tiura's picture

Dawn Tiura is the President and CEO of Sourcing Industry Group (SIG), the world’s largest association representing Global 1000 companies, with a combined spend of $17 trillion USD in sourcing and outsourcing. SIG’s goal is to elevate the strategic impact of these organizations on their company’s top and bottom lines. Dawn is also the President of SIG University, an online and in-person training and education organization that offers certifications in Sourcing, Governance and Risk, competency assessments and Vested Sourcing techniques. 

Dawn has over 25 years leadership experience, with the past 15 years focused on the sourcing and outsourcing industry. Prior to joining SIG, Dawn held leadership positions as founder and CEO of Denali Group and before that as a partner in a CPA firm, focused on early Silicon Valley enterprises and high wealth individuals. Dawn is the proud mother of four and actively involved on a number of boards promoting civic, health and children’s issues in the Jacksonville, Florida area. Dawn is a licensed CPA and has a BBA from the University of Michigan and an MS in International Taxation from Golden Gate University.