Ep.2 James Meads - State of Procure Tech & Best-of-Breed vs All-in-One

Why did he leave working in procurement as a practitioner, where is Procure Tech moving towards and should your Procurement Team adopt a best-of-breed or all-in-one approach? 

In this episode we’ll be talking about:

-  Some productivity tips & what got him in the Procure Tech space

- Why he left working as a practitioner in procurement?

- What they do at Proctopus and Procurementsoftware.site

- Where does he see the industry of procurement and tech be moving towards?

- Best-of-Breed vs All-in-One

- What's his biggest tip to ProcureTech Vendors?

 

And here's the episode:

Today we have the pleasure of hosting procurement consultant, podcaster, co-founder of Proctopus, founder of procurementsoftware.site, and an all around digital nomad, James Meads. James, welcome to the show!

That's a great intro, Sam. Thank you. I feel very inspired by that

I wanna start with a bit of a softball question. Maybe something that other people have been wondering. How in the heck does an Englishman wind up living in Bulgaria?

Well you know, we grow up on this cold, rainy island where it's January for three months and April pretty much for the other nine. And one of the things that drove me to set up my own business was that I really wanted to have location independence. And to optimize, I looked at the two biggest things that you spend money on. You know, how much money you give to the government in taxes and how much you pay on your rent or your mortgage every month. So I thought if I could pretty much halve both of those, then I'm on the goods, the path to financial independence.

And the sweet spot is Bulgaria and accelerated remote work, so you're in the best position.

Yeah, I wanted to stay in Europe. I still feel very much European, even though I'd love to spend winters in Argentina or South Africa or something like that. But I like the European lifestyle, so it suits me fine here.

I wanna start off as we typically ask most of our guests, what exactly does sourcing a procurement mean to you?

I mean for me it's really the ability to help companies to have an influence on their bottom line results without having to take a short term approach to just indiscriminate cost cutting.

And that for me really is the center of it, or the pivot is having that sweet spot where you have the collaboration between both suppliers and internal business partners with procurement. Really as the fulcrum. And I see it as a relationship of equals. And one thing that I hate is that some procurement professionals have this sort of master servant mentality that a lot of people perceive procurement to be. Especially when it comes to our relationships with operations, if you're in a manufacturing business. Where we're often perceived to be in a role as a servant. And whenever I hear that, I always cringe because I think Apple is arguably the most successful company in the world and they don't manufacture anything.

So to me, manufacturing is just another function in the cog that could potentially be outsourced. So, you know, when I've dealt with 'em in the past, these primadonna plant managers and plant directors that think the world revolves around them, I really would love to see procurement think of themselves more as an equal to their business partners rather than, rather than a servant.

I think maybe that comes somewhere from the traditional understanding of the value chain where procurement sits very much as a support function. I think that we've seen that shift in the more recent years, not only being able to impact the bottom line, but also top line growth by leveraging the supplier base.

And I think that one of those aspects, of course, that's helping procurement to accelerate that is in fact technology is in fact strategy. And of course, new talent.

What I'm curious of is: how is it that you got interested in the Procure Tech space within the broader procurement industry?

I saw a lot of my role in corporate as being taken up with a lot of wasteful processes and administrative work and I'm not unique in that respect. Category managers or procurement managers that are not CPOs or directors, we're pretty well paid, experienced professionals, but we spend on average between a third and a half and a half of our time on tasks that are not really strategic and value added. And I just thought sales don't do that. You know they have admin assistance and they have technology. Procurement doesn't.

I'm a bit of a productivity nerd anyway, and I was reading into some of these productivity gurus and what they say about productivity; Look at anything that is not a core task. Look to either eliminate, automate, or delegate it and delegation is difficult in procurement because we often don't have admin assistance or support functions within our org structure. Quite wrongly, I think. But you know, that's the reality. And in a lot of large corporates.

Eliminate, yes, there is a lot of process waste that is just work for works sake. But we are also limited in terms of our influence over that if that's been driven by functions like legal or internal audit, for example, that we can't control

But an area that we can control is; How much of our workload we can potentially automate or at least partially automate to get rid of a lot of the spade work that we have to do on a day to day. And that's really what got me interested in how technology can drive that.

And like most people when I first started looking into this I'd heard of SAP Ariba and Coupa and a couple of the more niche procurement tech companies that are very active in their marketing and with their content. But I didn't really know much beyond that. And it really opened my eyes when I saw just the breadth of technology that's out there to facilitate procurement professionals these days. And it's growing and expanding as you know. Since Covid, even more so. But even when, back in 2019, I started looking into this with a view of wanting to do a podcast around this topic. I was just amazed at how much tech was out there that I just never heard of.

Those are valuable insights that you're giving about either eliminating, automating or delegating. And the automation is definitely the element we can control.

You come from a background as a practitioner working at multinational companies like Jaguar, Essity, Kimberly-Clark, and you've been stationed around the globe. Was this something that was a focus as a practitioner?

Not really, no. I've never really been working in companies that have been cutting edge in terms of the tech that they deploy. Like most practitioners I used eSourcing tools and I'd run online auctions and I used a little bit of tech here and there. But I've certainly not worked in a world class procurement function. When you look at the ones that are always put in, put in shining lights as being the leaders. I've never worked in that environment. So I wasn't really exposed to the real cutting edge tools as a practitioner, no.

Can I ask why? Why did you leave the the practitioner life?

Well, other than getting frustrated at all of the day to day stuff that procurement practitioners get dragged into, ultimately I wanted to have location independence and I wanted to build something that didn't necessarily involve selling my time for money.

And I do think, in hindsight, a good career move when I was younger would've been maybe taking a step into a different function to get some team leadership experience. Because if you don't get that pretty early on in your career, you are pretty limited in terms of career development. Because once you hit your mid thirties, if you don't have that, then no one's willing to sort of give you a try and allow you to sort of learn on the job. You know, a lot of these roles that involve managing people, it's a deal breaker if you don't have prior experience. So I think the fact that I realized that in terms of career development, unless I retrained or did something completely different, that was always gonna be a bit of a roadblock. But also just the determination to want to have more of a lifestyle type business rather than a corporate job really.

Great answer. And not only about the way we source here, we're talking about career, life advice. I dig it, James.

If we shift gears a little bit and talking about, where you are today versus where you were before. You have been a part of founding Proctopus and procurementsoftware.site. Would you maybe just wanna plug a little bit and talk about those two ventures and what it is that you are doing at both of those?

You're very kind, Sam. I'd love to. Yeah.

Proctopus really is a networking group. We are five procurement practitioners who really got to know each other over LinkedIn during the first lockdown when Covid hit and we were all quite concerned about what was gonna happen and finding work during that time. And we set up Proctopus initially just as a way to network and grow our personal brands a little bit and meet other procurement professionals online, because obviously all of the conferences were canceled. We got a little bit of sponsorship now that helps us to keep it running, but we don't really want to run it as a business. It's really just to help, to grow, to network and connect with people this space that are not necessarily meeting each other face to face, especially internationally.

We do Proc Meet every month, which is a monthly zoom session where we have small breakout rooms. We have had a couple of in-person drinks meetups in London that are more ad hoc. But it's mainly a virtual networking group.

We have Proc Live which is a monthly LinkedIn live chat with guests that we bring on. And we also have a podcast that we do every month called Proctor Cast.

Very cool. I mean, any organization, network or whatever that can sign off having beers as an ad-hoc activity. I'm on board for.

What about procurement.software.site? Could you tell us a little bit about that, which is also then injunction to the podcast that you've started.

So I started a podcast in March, 2020 called the Procure Tech Podcast, which was ultimately a recognition of the fact that I saw digital as being a really interesting area that I wanted to dive more into.

And I had seen the success of DPW that had their first conference back 2019. But I didn't really see much audio and visual content around the digital ecosystem specifically. I mean, there were procurement podcasts out there, Art of Procurement being the oldest and the best known, but there wasn't really anything that focused on digital.

So that was the grounds for starting the podcast really to get connected with a lot of these companies and learn more about what they're doing and try and showcase some of the lesser known tech and startups that are out there that don't have the budgets to sponsor all of these conferences.

And the website was a natural progression from that. So I recognized that a lot of the existing research and a lot of the existing content and websites that are out there that showcase procurement technology are very much focused on solutions for large enterprise customers. And there's nothing wrong with that, it's a big market. But I do have the sense or the impression that everyone's chasing after what I call the hottest girl at school. You know, they're all chasing after this enterprise audience. When I really see the growth and the potential in solutions for mid-market businesses that are made. Because that's where the greenfield growth is, right? I mean, most enterprise level organizations have done some degree of digital transformation now, right?

They've probably done it badly and implemented one of these big legacy clunky suites that don't really get good user adoption. But they've done something whereas a lot of heads of procurement going into roles in mid-market companies with a brief to transform the procurement function and make it more strategic rather than a transactional operation or operational. They really do have a greenfield role, a blank sheet of paper when it comes to tech. And I'm really excited about that and I wanted to give that demographic the opportunities to easily find and filter procurement technology that doesn't require a five figure corporate subscription or downloading a complex white paper that's full of jargon.

I think it's also in line with kind of the way the world work. You know, moving towards ”why pay-to-play anymore, when you can have so much more open source” And I think that it's really unique and interesting what you've done.

I wanna shift gears a little bit because being that you've been a practitioner yourself, you’re a consultant, you’ve talked to so many procure tech vendors and other practitioners. You've seen so many different sides of it.

What path do you think that procure tech is currently on?

It's a really broad question, so I'll try and I'll try and limit it to five trends that I'm seeing and I'll be as brief as possible on them.

So number one is, I think that there will be more acquisitions in this space because if we are heading into some economic tailwinds now, which I think there's pretty much a consensus on across the board, understandably there's not gonna be as much easy VC money going forward.

So I think there is gonna be a necessity to show profitable results and steady but stable growth. If companies are not doing that then I think they're going to be prime targets for acquisition. I sincerely hope some of the big boys, or dare I say, the dinosaurs don't come in and acquire all of the innovative tech and then trample on it. That's one concern that could happen. But I also think there will be a lot more partners and alliances as well. As companies try and work together to get sales or to deepen their ecosystem.

I think the investment in procurement technology from companies that are buying procurement software, will now be driven by the necessity to fight inflation as well as improving operational efficiency. They’re gonna be the driving factors behind this. So it's not so much now about driving cost savings, it's about limiting cost increases or driving cost avoidance. Initially I thought it was gonna be ESG that was gonna drive this.

I would almost say if you've got better data and if you can work closer with your suppliers and if you've got all the things that digital procurement provides. Along with the operational efficiency to handle the bandwidth of all of the supply chain challenges and some of the compliance and additional bureaucracy and legislation that's gonna come about because of ESG requirements that are gonna be a necessity going forward.

And number three is that best-of-breed solutions are now diversifying and they're adding more features. So as they can compete with some of the bigger legacy suites without having to have three or four different solutions to do all of that.

I think the next frontier is going to be the mid-market. We are already seeing companies now that are emerging and getting funding that are specifically targeting that market. You know, be it SRM, be it Vendor Management, be it Spend Analytics, be it Source-to-Pay.

There are solutions in pretty much every main sector of procurement tech that are specifically focusing towards that size of business. And I think ease of implementation, user adoption and return on investment are going to be the key factors now that convince the budget holders to invest in a specific solution.

I think gone are the days in non-enterprise businesses where investment in procurement technology is something where people will tolerate a year to implement the solution and then even longer to see a return on investment. People want nimble, agile tools now that are gonna give a quick ROI because companies are suffering with inflation and with supply chain instability and they want to see a return on investment and user adoption quickly.

Well, I think that also goes back to the fact tha why would we have so many great applications in our phone or personal lives, but not in our professional applications when working in procurement?

And I guess this kind of leads nicely into the next question: What team are you rooting for, James? All-in-one or best-of-breed?

Definitely best-of-breed. Because even if you do buy an all-in-one suite, you're still gonna need best-of-breed for certain applications.

You know, supplier relationship management, which is what you guys at Kodiak Hub do. None of the suites do that well. So if you're gonna do it properly, then you are gonna need a best-of-breed solution for that contract lifecycle management. If you want anything that's beyond just a signature routing and repository piece of software, you're gonna need to go best-of-breed for that as well.

And likewise for spend analytics. All of these suites have a spend analytics module, but none of them are very good. And if you talk to their sales people they will quietly, off the record, actually admit that. So I can see why companies do go for all-in-one suite, especially large enterprises, because they can see that.

And if I go back to Dr. Eloise Epstein's spider diagram, where she designates that there will be a platform at the center of all of this tech, I can see why companies go for that approach. But I think it's a very expensive solution to buy one of these suites and then just essentially use it for source-to-pay.

You know, you can get best-of-breed source-to-pay on the market for a fraction of the cost. So I understand and I agree with with what she says about having a platform or about having a single source of truth for all of your data. But I don't necessarily think you need to buy one of these big, expensive suites to do that.

I think that you had a few tips in there. But if you would have one or two practitioners that are currently looking for a solution in the S2P landscape, do you have one big tip to leave them with?

Yeah, it would be; Look at the user experience and the user interface because especially with source-to-pay, you need your suppliers to adopt it and you need your stakeholders to adopt it.

If you're buying a spend analytics tool that only procurement and maybe finance will use, it's not such of a big deal if the user interface is not so intuitive because generally the people that are gonna be using it will be pretty tech savvy. But if it's something that the guy with oil on his hands in maintenance is gonna have to use to request to purchase? You can't have a clunky tool if you want stakeholders, especially blue collar stakeholders to adopt and use. So that would be my number one. And a lot of these best of lists and a lot of these reviews and analysis don't really take this into consideration to the level that I believe it should be.

The other thing I would say is look at who their existing customers are. Both in terms of company size and industry sector. A lot of these tools now are starting to drill down and focus more on specific industry sectors. Because in a crowded market you have to niche down. There's a phrase that ”the riches are in the niches”, which only rhymes in American English . But I do believe that because, you're seeing it now that procurement tech companies are starting to focus and say; you know we are the go-to tool for pharmaceutical, or we are the go-to tool for automotive, and there's a reason for that because there are certain nuances to every industry sector.

I'm doing a little bit of work just as an advisor for a vendor management platform, and they're very much focused on the hospitality and construction industry. Certification and insurance is very important in the vendor onboarding process for that industry. Whereas, if you're in something like the service industry, you are more interested in just having the right contact data and bank data to be able to pay suppliers. There is a valid reason for that.

Pertinent tips: Make sure that you focus on UI and UX of the solutions that are out. There, take that into consideration as user adoption's gonna be important.

And it sounded then like another valuable tip that's a bit unique: look into the customer base, make sure that it's industry specific, which is a totally reasonable.

If we shift to the other side of the table, looking at Procure Tech vendors themselves. What would be your biggest tip to them, both in an early startup stage or in a growth stage?

For earlier stage procure tech vendors. The biggest thing that amazed me when I started talking to procurement technology companies was how few founders, that are actually procurement professionals turned entrepreneurs. And the fact that the ones that are so, are well known as being that because they're quite unique it just speaks volumes to that.

And that's not necessarily a bad thing in that, often disruption comes from people from outside the industry. Often a reason why buyers change roles so often is because they can look at spend and a category with a fresh pair of eyes. I don't necessarily think that all procure tech founders need to be procurement practitioners. But not having procurement people within your business or giving you working as an advisor, as a consultant, as part of your growth strategy, I think is a huge mistake because you can only get so far. If you're a business that's founded and run by software developers and sales and marketing professionals.

I would also say that with the greatest respect, chief procurement officers may not always be the best advisors because they don't really understand the challenges and the problems of the person that's working in procurement day-to-day. That's in the weeds. And ultimately, a CPO in most businesses isn't the person that signs off the budget for this type of investment. It's usually the CIO or the CFO. What a lot of people in procurement tech don't realize is that procurement typically, in most organizations, doesn't have a budget beyond training and travel for their own people. Procurement is a department that spends other people's money, but typically it doesn't have a budget.

There's almost a case to say you should be selling to CFOs or CIOs or COOs potentially if it's supply chain or SRM, like what you guys do. Because procurement, while they may be the one that will be the key user base of the software, they're often not the one that has the budget to go out and buy it.

I think that that's some interesting insights. I would love if you could answer quickly with a concise response: what Procure Tech category do you think will be the fastest growing in the coming years?

Third party risk management. Vendor lifecycle management and Contract lifecycle management I see as being the top three.

All right. Now we've come into the last session. Thank you so much for answering these fantastic questions. I think that there's been so many great insights and now we get into having a little bit of fun here.

On the way we source. We typically like to finish off all of our episodes with a session that we call the Kodiak moment. Haha… A rare and cherished rare moment that you and I can share together. These questions are gonna be quick fire questions that I'd love you to answer pretty quickly.

Getting into the first one, procurement tech as a space, what do you think make or buy? Buy.

What is your favorite song or musical artist?

Oh God, that's a difficult one. So I'm really into classic rock. When I go running, I often have stuff like Iron Maiden or Guns and Roses or, you know, eighties, nineties rock music in my playlist.

I dig it.

All right. We say in Swedish ”Paradrätt” it kind of means your dish that you feel comfortable with making when you would invite somebody over for dinner. If you were making dinner tonight for me, James, to impress me. What are you making?

Well, I was born and raised in the Birmingham area, so Indian food is my specialty. I love a good curry.

All right. And with that, I thank you so much for being a part of the episode today on The Way We Source, James. It's been a real pleasure. And is there any last words or anything you'd like to plug before we sign off?

No, I appreciate being on the show, Sam. It's a great format and wish you success. If anyone would like to connect, then LinkedIn is the best spot. My last name is spelled m e a d s. Just hook up with me there and would love to chat. All things procurement tech.

You heard the man. Thank you for listening to today's episode of The Way We Source Our Guest was James Meads.

If you're looking to get in contact with him, you heard him follow him on LinkedIn, get in touch, reach out. Thank you for listening.

Connect with James Meads on Linkedin

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