Copyright © 2014 Azul Partners Inc. / Spend Matters Europe Ltd. All rights reserved. Not for distribution. | www.spendmatters.com 1
From Facebook to Supplier Collaboration
How the Social Media explosion will fundamentally change procurement
Peter Smith Managing Editor, Spend Matters Europe Ltd.
October 9th, 2014
#Modernprocurement
Copyright © 2014 Azul Partners Inc. / Spend Matters Europe Ltd. All rights reserved. Not for distribution. | www.spendmatters.com 2 2
Peter Smith MA FCIPS
• Born in Sunderland, Maths & Management Sciences degree from Cambridge
• Early career at Mars Confectionery, Procurement Director for the D&B Corp Europe, the DSS and NatWest Group
• Fellow and ex-President of CIPS
• Consulting for 10 years, appointed ‘special adviser’ to the National Audit Office, worked in public and private sector
• First book published “Buying Professional Services” (Czerniaswka and Smith, Economist Books, 2010)
• Non-executive experience in public and private sectors
• Now main job is Editor / MD of Spend Matters - 3rd biggest procurement website in the UK. (Maybe 2nd now?)
• Just launched Public Spend Matters Europe site
2 #Modernprocurement
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• @spendmattersuk - 2,500 followers
• Spendmatters.com - Alexa rating of 62,997
• Supply Management 158,427
• CIPS 187,361
• Procurement Leaders 322,879
• Peter Smith on LinkedIn – over 1,000 links
• Spend Matters LinkedIn – FAIL!
• Facebook – not for business?
5
Our Social Media profile
#Modernprocurement
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• Started in 2003/4 at Harvard then other Ivy League Universities
• My daughter started using it in 2007, moving on from MSN
• Now around 1.5 billion users
• Valued at over $200 Billion
• Facebook paid $19 billion for WhatsApp – 55 staff
• A key B2C marketing tool – less clear where B2B fits in most cases
#Modernprocurement
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• Twitter was founded in 2006
• The site had 4,000 tweets a day posted in January 2007
• Over 500 million per day now
• 143,199 TPS (tweets per second) in August 2013 during “Castle in the Sky” on Japanese TV
• Valuation – a mere $32 Billion
• A serious tool for change e.g. Revolutionary groups
• Fastest breaking news e.g. Bin Laden execution
• A key marketing tool already - B2C and B2B
#Modernprocurement
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And it is not just the mega-sites ...
• Trip Adviser; rating hotels, restaurants etc
• Glassdoor; rating organisations as employers
• Check-a-Trade; find and rate local trades people
• Flickr; photo sharing
• Tumblr; share your interests, blogs etc.
• SoundCloud; share and discuss music
• Mumsnet; a community of ... Mums?
• Tinder; a community of ...???
• Haul Girls (YouTube); what do you think...?
#Modernprocurement
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But it can all go wrong
Where are they now?
• MySpace (lost News International $500 million)
• Friends Re-united (lost ITV c. $200 million)
• Friendster
• Google +
• Ping
• Bebo (Lost AOL $800 million)
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The pace of change is extraordinary
• Social media has created whole new social phenomena (see next slide)
• It has changed the way we do fundamental things such as searching for a lover / partner (or plumber)
• It has changed our concepts of what is “free” or “chargeable”
• It has fundamentally changed whole industries and business activities, from artistic creation to pension management
• Marketing to the consumer is in a state of permanent flux as advertisers struggle to understand (what is a view on YouTube “worth”?)
• Exponential growth – faster than any previous business trend
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How To: My Quick and Easy Hairstyles | Zoella
How many views
do you think
Zoella got for her
tutorial?
How many
subscribers does
she have to her
main YouTube
channel?
#Modernprocurement
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ZOELLA 6,055, 278 subscribers
to her main channel
(another 2.3 million to
“more Zoella”)
7 million views for her
“Quick and Easy Hairstyles” video
2.3 million Twitter
followers #Modernprocurement
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Why has Social Media succeeded?
Social Media offers the following benefits to users:
• Communication (choice of 1 to 1 and 1 to many – real time)
• Belonging – to a “club”, building relationships with the like-minded
• Collaboration – working together, a voice, collective action
• Knowledge - (or links to knowledge), learning, teaching
• Reciprocity - essentially active not passive, non hierarchical
• Democratic - everyone has a voice, not curated e.g. haul girls, Youtube channels, SoundCloud
• Choice - self regulated, adaptive, flexible, varied
• Mobile - driven by / helped to drive
#Modernprocurement
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But this is not new
From the beginning of humanity we:
• Always wanted to communicate - but now instant, global, inclusive or exclusive as we wish
• Always liked belonging - but now common interests with people anywhere
• Always wanted to know stuff - now it is just there instantly
• Always liked to work together - but now easier, faster, more people
• Always wanted our own say - but now truly democratised
• Always liked choice - now virtually infinite
#Modernprocurement
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Why should procurement people care?
• It affects us directly, and we can use it in a personal manner to benefit and contribute towards achieving our own objectives, goals, happiness and success
• It affects how we work within our organisations and with our boss, staff, and other colleagues
• It affects how our organisations engages with its customers
• It affects how we engage with suppliers and other business partners – perhaps the most critical area for procurement
• Our suppliers will use it to engage with us – and with our stakeholders, often by-passing procurement
#Modernprocurement
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Social Media in procurement
Recruitment
• LinkedIn has revolutionised the recruitment market
• Twitter and Facebook also important
• Need to be aware personally – and also as recruiters
• But note of warning – ‘fake’ profiles, exaggeration, lying rife!
• And might we see a backlash – “the really good people aren’t looking for jobs and may not even be advertising themselves”
#Modernprocurement
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Social Media in procurement
Internal communication
• As our colleagues get relatively younger (!) we will deal with more people who expect to communicate in Facebook, Twitter type style at work as well as at home
• Email use on the decline
• Ability to get messages across in a targeted manner (e.g. to project groups), elicit feedback, build ‘our’ communities
• But people get sick of trite self-aggrandisement (“look what a great thing procurement did today”)
• Look for help and advice, be honest and open, and celebrate success
#Modernprocurement
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Social Media in procurement
External communication
• Many similarities to the comments re “internal” but with some additional dimensions
• Speed of communication can be enhanced e.g. For better planning and scheduling
• Ability to grow communities and get input, ideas more quickly and easily via the networks
• Identifying the best suppliers in the world
• Also able to open out to those who are not in the community already e.g. Public organisations advertising tenders on Twitter
#Modernprocurement
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Social Media in procurement
Collaboration
• Growing “communication” into “collaboration” is relatively easy
• But need to choose with whom you collaborate
• Ability to elicit get data, information or ideas from a wide spread of participants
• Then narrow it down and use collaborative tools from a smaller group e.g. Suppliers working on a new product perhaps
• We are already seeing new tools to engage suppliers in performance discussions (instant feedback) and to work together in more innovative ways
#Modernprocurement
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Social Media in procurement
Risk Management
• Understanding what is happening in the world in real-time
• Understanding what is happening with our suppliers in real time
• Access to expertise, individual or the wisdom of crowds
• Whistle blowing
• Meta- data / Big data – picking up trends (e.g. predicting epidemics based on Google searches, Facebook mentions)
• Quick ways of carrying out surveys, checking accreditiations
#Modernprocurement
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The future
•People management – a more fluid contingent workforce, use of alumni networks, expertise is democratised
•Less email, more use of project based tools with a social media angle
•Most technology tools we use will look and feel like social media
•Collaboration – open and closed supplier rating and performance monitoring
•Risk Management – real time monitoring, use of drones, cameras, everything linked
•But possibilities that more governments will get #Modernprocurement
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Thanks!
Peter Smith
Tel. 07775 438602 / 01276 691770
Spendmatters.com ... Etc.
#Modernprocurement