Hey procurement, speak to startups!

| 0 Comments

MatthiasGutzmann_100.jpgAfter I left Procurement Leaders last year to join Old Street Labs, a startup that helps large organisations to work more collaboratively with their strategic suppliers and, ultimately, drive more value beyond savings, I was sceptical as to how we can catch the eye of these giant companies. Apart from having a timely and relevant product called Vizibl, both my Chief Executive Officer, Mark Perera (who also founded Procurement Leaders), and I came with a strong network of procurement professionals, which helped. Other unknown startups out there do not have that network and are thus having a very hard time even getting a foot in the door.

Matthias Gutzmann, Founder of Digital Procurement World, tells SmartProcurement more.

'Big only deals with big' is the mindset of many companies and based on concerns that only large organisations have the capacity to meet the needs of other large companies. On top of that, most organisations have risk mitigating procurement policies in place around team size and insurance that limit their ability to engage with smaller businesses. Don't get me wrong, some organisations have opened up and are already working with startups and, according to consulting firm Oliver Wyman, investments in auto-focused startups ballooned to $16.3-billion in the first half of 2016 compared to $16.1-billion in all of 2015. In a sign of the rising stakes for startups, General Motors last year snapped up Cruise Automation, a 40-person autonomous driving software firm, for $1-billion. Here at Old Street Labs, we are part of Vodafone's accelerator programme and are helping the telecommunications giant drive more innovation from their suppliers. However, according to Gartner's annual Chief Information Officer survey, only "the top performing organisations are much more likely to engage with startups and source from them. The trailing performers distinguish themselves by mostly ignoring them".

So, diversify your supply base with more startups and small suppliers. More companies need to look beyond their traditional suppliers and engage more with startups simply because that is where unconventional ideas are coming from. In addition, startups are often faster, more flexible and more cost-effective than larger suppliers. Even if 90% of their ideas or products are irrelevant to your business, the other 10% could be crucial to your company's competitive advantage. Make them part of your sourcing strategy and innovation agenda. Sell the benefits of working with startups to your stakeholders and explain why they offer something unique which you cannot get elsewhere. I believe that procurement, or any company for that matter, cannot afford to limit their supply base to large suppliers only if they want to drive innovation. Sure, there are risks to working with startups and their easy-going culture, and you will have to convince some of your risk-averse stakeholders of the benefits of working with startups and their disruptive ideas - but this can be managed. Startups and innovation go together like peanut butter and jelly. Or Mark Zuckerberg and his hoodie. Embrace them!

Join us at Smart Procurement World for a panel discussion on reducing the SMME mortality rate through effective exit strategies for SMMEs after particiapting in corporate ESD programmes.

Leave a comment


 

 

Career opportunites

Tutor and Coordinator

  • Gauteng Operations, Planning & Inventory Permanent Procurement Management Supplier / Business Development
Purpose of the job: To plan, coach, advise

Commodity Manager

  • <500 000 Commodities Gauteng Procurement Management
Are you a Commodity Manager looking for the

Supply Chain Professional

  • <500 000 Gauteng Procurement Management Supply Chain
I specialize in placing professionals in the Supply

Supply Planning

  • <500 000 Gauteng Operations, Planning & Inventory Supply Chain
Seeking dynamic candidates to take to the market

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer Procurement Consultant
Are you an Industrial Engineer looking to make

Logistics Manager

  • >500 000 Gauteng Logistics & Warehousing Supply Chain
Seeking vibrant industry specific individuals seeking new opportunities

Operations Manager

  • <500 000 Gauteng Operations, Planning & Inventory Procurement Management
Looking for an Operations Manager to take into

Supply Chain Systems Administrator

  • >500 000 Gauteng Procurement Management Strategic Sourcing Supply Chain
One of South Africa's leading, mining companies is

Logistics Manager

  • <500 000 Gauteng Logistics & Warehousing Procurement Management
Are you an experienced Logistics Manager looking for

Continuous Improvement Manager

  • >500 000 Gauteng Procurement Management Supply Chain
I specialize in placing professionals in the Supply

Warehouse Assistant

  • <500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory
I am currently looking for ambitious Demand Planner,

Internal Procurement Officer

  • <500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
Position Available: Internal Procurement Officer Status : New ...More

Supply Chain Officer

  • <500 000 Gauteng Procurement Officer / Specialist Supply Chain
Seeking dynamic candidates to take to the market

Supply Chain Planner

  • <500 000 Free State Operations, Planning & Inventory Supply Chain
Seeking dynamic candidates to take to the market

Senior Buyer

  • >500 000 Buyer Gauteng Procurement Management
Tech-Pro specialises in placing professionals in the Supply

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer
Tech-Pro specialises in placing professionals in the Supply

Warehouse Manager

  • >500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory Supply Chain
Seeking hands on individuals that come from an

Manufacturing Purchasing Specialist

  • >500 000 Procurement Officer / Specialist Supply Chain Western Cape
A leading auto manufacture company based in Cape

Procurement Sourcing Specialist

  • <500 000 Gauteng Procurement Consultant Strategic Sourcing
A Leader in the Supply Chain industry is

Planning Manager

  • >500 000 Gauteng Operations, Planning & Inventory Procurement Management
Looking for Planning Managers to take into the