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Hélène: So welcome to

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the procurement game changers, the podcast for leaders that make a difference. Today,

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we'll be talking about digital transformation and to discuss that topic, I am very happy to receive

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Tomas Wiemer. Tomas is the Global Indirect Procurement and Digital Transformation

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Director at Juniper Networks. Juniper Networks is leading the revolution in networking,

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making it one of the most exciting technology companies in the Silicon Valley today. Tomas

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has more than 25 years of experience and expertise that spans the execution of business

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transformation initiatives, negotiation, and operations management. Welcome to the show, Tomas.

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Tomas: Welcome. Thank you.

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Hélène: Tomas, could you tell us what led you to procurement? Tomas:

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So I started in procurement after starting a career in business development and strategic

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planning. So when I started in procurement, it was early 2000. And the idea, back in those years,

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is we had a lot of mergers and acquisitions happening in the chemical industry. So

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in those years, I was in the chemical industry. And really what the organizations were looking for

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is to create a new dynamic when those companies were created through the procurement organizations

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and supplier management. And what they were really looking for were business savvy talents, I guess,

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who had leadership skills and moved procurement out of the standard quality management execution

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approach into a more business savvy supplier management approach. So that was really how

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it started. Hélène: All right. So we talk a lot about digital transformation and its impact on procurement.

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And actually, when I talk to procurement leaders, they often have a budget for

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digital tools rather than support to transform their processes and practices. So the thing is,

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digital transformation is about changing the ways of working first and digital tools second. So,

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Thomas, can you give us your vision on what is digital transformation for procurement?

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Tomas: Yeah, so it's <laugh>, this is a very interesting

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question, right? Because you're right, most often it starts with a tool to be selected one

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after the other, and then eventually build a user experience that goes with it and then hopefully

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get an ROI out of it. When you do this several times, you discover that it's probably the wrong

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approach, right? So the problem that we have in the industry, when I say industry, it is

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the procurement industry in general, is that there's not too much experience yet happening.

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That means that nobody's really taking the time to really evaluate what is really that you're looking

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for. What is the why? Why do you need that? What is you're trying to accomplish? And then

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let the budget constraints run free and not put yourself immediately in the budget constraints.

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Tomas: Of course, if you have a very, very, very tiny budget, then I guess you don't have a digital transformation anyhow,

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but and we will come back, I guess, [on] that later. There is a minimum of budget for that. But

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you should really start with the thinking about what is it that you try to accomplish? What is it

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that the organization today is not really tackling properly from the supplier end ? And what is the

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talent that you want to have and where you're going. And then from there on you build your

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plan and your budgets. But very often we start completely reverse, which is the biggest mistake.

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Hélène: Yeah. So let's start with the wrong end. And I say

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there's so many startups, you know, within the digital space, the digital procurement space.

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How can you explain all those options to a CEO? So where do you start?

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Tomas: So the comfort very often comes with a logo, right? [it] means that you have a consulting company who brings a logo and the

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comfort comes also in, from technology companies who have proven their level of satisfaction.

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Most often they're big software houses and it's really a multimillion-dollar ticket

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at that point. The startups, [it] is a completely different scenario. You can

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try and test with relatively low budget. But they're young companies, they're not mature

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and you need to work with them. So there's a requirement of having a project structure

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that follows very closely that startup and accept[ing] the fact that you're building

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the business case, right? You, the account that you're bringing, they will sell it and it's fine.

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You will benefit from it and the startups can give organizations a new way to do business.

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But it requires a lot of flexibility and a different mindset, for sure.

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Hélène: Yeah. Yeah. And obviously,

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as you were saying, a lot of startups are building, as they go, the tool.

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So it's the pros and cons of having something that is maybe more customized with what you need,

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but it means that you need to involve your teams more at the beginning. So you get something that

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is workable at the end. Tomas:

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Yes, that's correct. So when you build that budget you have the software cost, you have

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the integration cost, and then you have the change management cost, right. And very often those three

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do not, not necessarily get analyzed from the beginning and the startup management will always

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on the sales set at the beginning, try to get your business. And they will really try

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to do all the extra steps. The problem is that once you start and launch, they run

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out of steam and then you need to move the next account. And that's when the frustration starts.

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So the reality is that you need to stay engaged and you cannot count on the supplier that they do

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all the work for you. Right. They will simply not. Or then you go into a consulting SOW,

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which is in a different business model. And probably it's a good thing to plan for an SOW

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on the consulting side at the same time. Hélène:

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Yeah, that's interesting. So what about the return on investment and what can company really expect

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from the digital transformation? Tomas:

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Yeah. So those are two school of thoughts, right? You have, the first school of thought is the hard

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dollar payback, right. Which is probably true for organizations who are not that mature yet.

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And have a lot of unmanaged spend, unmanaged suppliers and a level of complexity that

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has never really been addressed either because of the history of the company,

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or because they went through multiple mergers, like acquisitions and things have not

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been aligned. So this is almost what I call the low-hanging fruits. And then you have the other

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type of companies who are much more mature over the last 10, 15 years. They have already a P2P.

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They went through multiple restructuring and that ROI gets more based on the user experience.

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Now, how do you measure user experience and user satisfaction, simplicity, and speed of

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execution gets much harder. At that point of the year, the transformation agent, so to speak,

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needs to spend time and educate the finance organization in the upper management,

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in order to rebalance both of them. You need the money for sure. Otherwise, why invest? At the same

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time, the benefits of the digital transformation brings you on new avenues, which is kind of the

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big thing nowadays, right? The diversity, the sustainability, the Eco Green Initiative, the

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values on how you want to do business, et cetera. It brings you on that path. And there is a,

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what I call, a dimension of belief that needs to be part of it. You have to believe in what you do.

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Hélène: Yes. So one thing that I've noticed in particular

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in our very niche category, which is consulting, is that what digital may bring to the table is

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finally the ability to have an overview of what's happening in the category because it's scattered

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in the company. So it's not real hard dollar value, as you say, but for procurement, this is

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so valuable to finally know who is spending, what [CUT on, on] on what type of project. And it goes

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to your point that there might be some unexpected value in the digital transformation that cannot be

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measured in dollars per se. Tomas:

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So you're touching on a very interesting point, right? The interesting point is that

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traditionally procurement systems have developed it through the purchase order accounts payable.

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So whatever the invoice says, that's what you get as an information. The digitalization now

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touches on pretty much on everything else than what you see in an invoice. Like what is the

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value of SOW, right? And the consulting. What is the return of investment of the time spent?

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So those are not always materialistic outputs that you can see through the normal traditional

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P2P. So I think the procurement organization is now extremely challenged. And I think actually

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the innovation will come through the startups in the sense of, you see, we speak so much about AI

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and artificial intelligence, but the AI becomes only intelligence when you start

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to bring in multiple sources of information. And then somehow you can cross them. But if you

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have only the traditional supplier onboarding P2P and contract management, frankly speaking,

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you don't really create a digitalization. It's the premise of a digitalization, but

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it's a necessary step, but you haven't reached the digitalization yet. So the challenge for

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our industry, in short, is that, and we are not completely there in reality, there's a lot of deep

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writing on it, but we are not really there. The data crossing each other in term of information

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is a hard step to overcome, especially as we are today in a cyber security information,

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security, privacy, and many laws happening in many countries is also a barrier for those

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information transfer from one to the other. Yeah. So that's the 20, 25 journey if you want. And, and

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not to go too far, but that's when I'm a strong believer that that's when the platforms will come.

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So you will probably see if I, if I would take a my crystal ball, I would say by [20]25, [20]28,

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we will not speak anymore about individual softwares for procurement. You join the

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platform and it's just there. You don't need a purchase order. You don't. It's like the Venmo

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in the US for credit cards where you don't need an invoice, you don't need this and that you just

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get paid, right? Yes. And you don't need to supply onboarding. The suppliers are already

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on the platform. You don't need every time, negotiate your terms and conditions. They're

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standard for everybody. If you join the platform, that's what you accept. And maybe certain things

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you can address. That's where it's coming. We are not there at all yet. So everything pretty much

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what we do sounds bit depressing, but [it] is more to prepare for the next wave to come. But if you

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don't do it, you're really, really behind Hélène:

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So let's talk about resistance. You know, what are the main resistances? How do you have become them

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in that preparation of the next wave? Tomas:

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The change management in general is a budget that gets early cut because nobody really

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understands it. Where's the money coming back? People should adapt. They should understand.

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The reality is that everybody likes what they do. People are comfortable. It's really a little bit

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of psychology coaching in a certain way. But the management has a big role to play, right.

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And then you can have a different type of situations. Either you do all that for

12:03

headcount reductions. If that's the case, then just say it, you're better off to just say it

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and say what you're trying to achieve. Everybody makes their own decisions. Those who stay,

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those who leave, that's it. Or you're saying, no, we are not doing this for headcount reduction. We

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are doing this for an enhancement of capabilities. If you're on enhancement of capabilities,

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there will be a dead time in a certain way where you build out those capabilities.

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The team members don't see the output yet, and that can take 6 to 9 months to 12 months. So

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it's a lot of hand holding and explanations and spending time that it will be fine at the end.

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But yes, your world will be rocked that's for sure. Right. And it's not for everybody

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at the end game. Right. there's a lot to learn. I think that's the biggest thing.

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When you belong to an organization that is going through this, you need to be willing to learn

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on your own, right. Make yourself available to learn. And that's probably at least 10,

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15 hours a month. Right. And what do you do for yourself? Right. And most people, yeah,

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they just don't do it. Right. Hélène:

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True. And I think that goes back to what you were saying. You need to be a believer

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at some point that it's bringing value and maybe the toughest challenge for the project leaders in

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a digital transformation is to get other leaders to believe because it's kind of spreading through

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that. You can only get on board and really embrace digital transformation if you believe in the

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benefits for yourself and for your organization. Tomas:

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Which brings to an interesting point is that it's becoming a profession almost, right. In the sense

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that if you do it once, you don't do so well. It's like anything in life. If you do it three or five

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times, now [you start to develop a second sense of what can work and what cannot work. It's not

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a recognized profession yet in reality, actually, it's the opposite. It's the fuse of the system.

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Very often the statistics unfortunately show that its little bit improving, but over the last year

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still is that the transformation agent is the one that loses very often first his or her job,

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simply because it's an easy fuse, right? He or she is not able to explain. They didn't

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understand our culture, went too fast, went too slow and all that things have improved lately, but

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it becomes a profession. It's important to keep the

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fundamental of the profession. If you're in sales, it's in sales, it's customer service,

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customer service, procurement, procurement where you apply what you know in a new direction.

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And for those who want to go into that career ladder, I really recommend to take some classes,

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school certifications because the academia behind it puts things back in perspective

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versus just go by feelings, right? Certain things are normal and other things you just don't know.

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I think it's a new career ladder that will develop quite quickly and companies will pay for that.

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That's for sure. Right. Hélène: You know, let's talk about a bit about, you know, how to hire and keep young professionals. So

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I've heard that that was very difficult these days to get the right people, but to keep them as well

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in procurement careers. So do you think that going digital could help attract and retain talents?

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Tomas: The simple answer is yes. And I think

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that's one of the main reasons [I] personally spent a lot of time on that of course, is to

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bring the value to the company, but the value to the company comes also through the talent. Right.

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I believe that for those who have, well, let's say 10, 15, even 20 years of experience, and when they

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look for new opportunities, you need to give in a work environment that is not too complicated,

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not, too hard. And so the old days when somebody sends you a flat file that you need to go on,

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spend hours and building the tableaus and or the excels and the pivots, when you're done with it,

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you're exhausted. You don't even have the energy anymore into looking at what you have even built.

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Right. And I think the talent is looking for organizations that are dynamic.

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Yeah. Many people apply to companies where they can continue to grow, but grow from the knowledge

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perspective. I mean, you have, it is not so much in the procurement world, but it's coming also in

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the IT world, people join certain companies because they work on this type of software

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so they can get certified, they can build a brand for themselves, and then they move on.

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The digitalization has a benefit for both ends. The first and it's for the company, because for

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those who want to rotate, companies stay stable. But it's a great way to attract the right people

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also ensuring that you are dynamic, you are modern and [in] the job career that people are joining,

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the organization at least is trying to create a comfort level that goes with all type of setups

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nowadays, right? Post COVID, is it a hybrid mode? Is it a remote based, is it office based? And

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we don't really know yet how organizations companies will set themselves up. Right. So

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there's a lot of choices and yeah, it's important to be cost competitive, but also create this work

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environment, in this case, the digital work environment where it's not so hard to start and

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perform right. That's the key thing, I think. Hélène:

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Yeah. So now let's talk about risks. You know, how do you manage risks during a digital

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transformation? Tomas: The risk is to collapse, right? The biggest risk is to collapse that when you start to

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dismantle and the organization is not ready yet, and then you start to rebuild and in the middle,

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everybody gives up. I have seen probably 10 years ago situations where the top management suddenly

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got scared and just wrote it off, stop everything. So just was too much, too much, too fast at that

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time. Today it's less, right. But I think that's the biggest risk. The other big risk is that

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it's a big distraction to the organization, right? So you spend a lot of meetings, lot of things,

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and at the same time, you have to execute and deliver. So how to execute and deliver while

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a big portion of that organization is focusing on the transformation.

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You need to find the right balance. Now, the next risk is that people get a little bit jealous,

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right? For example, he or she gets moved into the transformation. And I am stuck

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in the execution because I'm good in execution. I'm good in negotiation,

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but I'm not really part of the new wave. So you have to manage this type of sentiments where

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both groups are needed. And if you can, depending on the size of the organization, the best is to do

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some kind of rotation among people. So everybody stays engaged, but yeah, depends on how big the

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organization is. Nowadays it's rare that you do that in one country. So you do it in different

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countries, different time zones, how large the organization is. So all those aspects need to be

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taken into account when that movement starts to happen. And it's a journey that will last

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from the risk perspective, I think, it takes, easy, 15 to 18 months. And then it goes down,

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but you need to survive those 18 months Hélène:

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And you have to be consistent during... Tomas: You have consistent and deliver, because at the end of the day, the CFO wants a money, right?

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Hélène: So, direct or indirect, do you think that

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digital transformation for procurement applies more to direct, indirect, same.

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What's your opinion on that? Tomas:

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I think it's different. The common factor is learn how to integrate data from the outside into the

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inside. Many companies have started to work in data links where you can bring information in

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and you bring them out. The direct side is moving more and more into geopolitical risks, commodity

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risk management, planning, lead time. So the gap between direct sourcing, especially if you're in

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manufacturing, I guess. I guess the direct means mostly manufacturing to make really simple.

20:10

The gap between planning, inventory, lead time, it's getting closer and closer. So if I would

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redesign something tomorrow, I will do an end to end from that end, right. And probably walk away

20:22

from the traditional procurement KPIs. On the indirect side, you're really joined by the hip

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with compliance and legal. It's finance, legal, compliance that gives the drive.

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And the most difficult that most companies still suffer is not just to have access to the

20:40

information and get ready to go decision proposal, so to speak by the computer, to the strategic

20:47

source data. But [it] is a user experience, right. How can it make easy to point that

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almost the normal requester of the company doesn't even know that the procurement exists, right? That

20:56

would be the ideal dream situation. You just need it. And somehow you get it right. In the morning,

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you switch on the electricity, you have light, you go to a seat, there is a chair waiting for you.

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You need a screen, you click, you have it, right. And it's not so easy because those who are not

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part of the procurement world, don't always realize all the standards that procurement is

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executing on behalf of legal and compliance and audit and finance while procurement is not really

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making any rule. Right. I mean, they can influence the rules, but they don't own the rules. So

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that's the downside, and again, back to platforms. That's my big hope in the years to come, that the

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platform will just wash all that out. Right. Hélène:

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So now it's time our takeaway. What is the one thing that our listeners should remember from

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this conversation? Tomas: Yeah. I think everybody can do a piece in the transformation management. Everybody should

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reflect either you are a small company, medium or large. I think that the world is changing

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and the best way to capture all the sustainability, the Eco Green initiative,

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the diversity, the building and remote employees and motivation hiring is to engage on that path.

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So don't be afraid. And the takeaway that I would like to say is probably one point is that:

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failing is part of the journey. Allow yourself to fail, allow yourself to miss an investment,

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but in a controlled environment and lessons-learned environment, and the growth

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will come naturally. That's the biggest takeaway. Hélène:

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No, no, it's, it's a little bit like, you know, I think there's a quote from Nelson Mandela

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saying that I never fail. I just learned that's the idea if you're in control environment,

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and even when you fail, you take it early enough. So you can just, you know, adjust

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the course of the journey and you don't take too much of a loss in the process.

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Well, thank you, Tomas. Thank you. That was very interesting.

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Tomas: Yeah. Sure. Thank you for having me. Hélène: So now it's your

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turn to tell us about your experience and your challenges in the comment section on the digital

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transformation front. Don't forget to subscribe if you want to be notified when a new episode is out.

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Thank you for listening. Thank you again, Tomas for your time. And I hope you enjoyed

23:13

this episode is that's the case. Don't forget to give us a thumb up happy sourcing to you all, bye.