Building a ROI-driven Plan for Mid-Market Procurement
by Shelly Kramer | November 22, 2022

In this episode of the Futurum Tech Webcast, I’m joined by Chris Haydon, former president of SAP Procurement Solutions, and more recently, a consultant and current board member of ConvergentIS, for a conversation about taking procurement processes to the next level and the benefits that organizations can realize along the way.

For starters, let’s be real: procurement processes are by no means a sexy part of business, but they are an incredibly necessary one. And, based on what we’re seeing the market, outdated methods for sourcing, purchasing, and managing processes are a reality — and one which can often lead to a number of challenges across the organization. So, that’s why a conversation about taking procurement processes to the next level and exploring what organizations can do to optimize their procurement processes is a timely one.

Here are some of the things we covered in this conversation:

  • Procurement can cover a wide area – we explored the differences between the midmarket and large enterprise market space.
  • The challenges, especially those experienced by the midmarket, to procurement operations, and the areas of procurement that the midmarket sector needs to optimize.
  • The kind of solution that’s best suited for the midmarket: Ferrari or Ford?
  • How can a solid procurement strategy help set up organizations for success in 2023 and beyond?
  • An overview of ConvergentIS and insight into how the company helps midmarket organizations solve their procurement challenges.

If you’re in procurement, this is an episode that I think you’ll learn a lot from.

If you are thinking about your procurement strategies for the year ahead and want to explore how you can integrate technology into your procurement operations you can find more information on ConvergentIS, visit the SAP Store here. You can also find Chris Haydon on LinkedIn and he’ll be glad to answer any questions you have.

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Shelly Kramer: Hello and welcome to the Futurum Tech Webcast. I’m Shelly Kramer, principal analyst and founding partner here at Futurum Research. And today I am joined by Chris Haydon, former president of SAP Procurement Solutions, and more recently a consultant and a current board member of ConvergentIS. We’re going to have a conversation today talking about a super important topic and that is procurement, and how organizations can think about taking their procurement processes to the next level. So step back just for a minute, procurement is not in any way the sexy part of business, but it’s an incredibly necessary one. And we find on a regular basis that outdated methods for sourcing, and purchasing, and managing processes can really lead to a number of challenges throughout organizations. So what can companies do to optimize these processes, that’s what’s on the minds of procurement professionals today. And that’s why I’m so excited to have Chris as my guest. I mean, seriously, I don’t think there’s anybody more adept at procurement than you. So Chris, I’m so excited. Welcome to the show.

Chris Haydon: Hey, thanks. Great to be here and talking with you.

Shelly Kramer: Absolutely, absolutely. So before we get started talking about all things procurement, I would love to have a little bit of your backstory, talk with us if you would, about your career path and how you ended up where you are today.

Chris Haydon: Yeah, sure. Great, thanks. And it’s really, really great to talk to the audience, even though digitally. Look, my story is interesting, I’m obviously from Australia, A lot of times people would call that the deep south. I spent a lot of time in Texas. But I spent 20 plus years in really cloud solution delivery for our customers over that time. And worked with a lot of great organizations and a lot of great employees and team members as well had a number of roles from product management, solutions management, marketing, customer success, strategy. And so I’ve seen it all in many ways. And certainly the evolution of the industry and the changing over those last 20 years, dating myself a little bit, but yeah. And then more recently just being an advisor in the industry and a consultant, it just gives me a little bit of a change from leading and being a part of the team in a pretty preeminent solution provider in the market and being SAP.

Shelly Kramer: Absolutely. Well, thank you for that. So let’s talk a little bit about procurement. Obviously this is a very broad subject, and what are the differences between, for instance, mid-market and the large enterprise market space? What are the differences in terms of needs and challenges?

Chris Haydon: Yeah, no, it’s a great question. And I would say there’s two ways. There’s the mid-market definition, kind of how large companies who really even sell into large companies target. So sometimes you could argue that’s more than a billion in US revenue. And then less than that tends to start getting in definitions of mid-market companies, maybe between 250 and 750 million. So there’s the scale which changes between if you like, the enterprise and the mid-market. And then when you talk about scale, really the differentiators come to a couple of things. Obviously employees that you have to touch and manage, the size of the spend you manage, so the leverage you can have in the market. And then last but not least really is your technology budget to be able to throw at business priorities, be that in procurement, or HR, or customer acquisition, whatever they are, that’s that. So I think they’re the main differentiators. You see almost a step change in terms of the number of people, technology, budgets, and obviously the scale and leverage you can bring to the market.

Shelly Kramer: Absolutely. It makes perfect sense. So let’s focus in, if we can for a minute on that mid-market segment. What challenges in particularly do you see mid-market organizations having as it relates to procurement?

Chris Haydon: Yeah, I think what I would say in general is my experience is, it’s probably as much about process maturity and being able to then go and imply that. Now whether that’s the talent that you’ve got access to, if you’re a very large company, you might have hyperfocus, a nice good team of category managers to go and help source and do supply development, you step into the mid-market. You just don’t have that depth and breadth of people and/or talent to get there. And then again, it’s process maturity. How can you make the most of your investment with the talent you’ve got? And I think that’s it. And it’s like the little bit of the song, you’re stuck in the middle, I mean mid-market, not in a negative way, but you’re stuck. How do you graduate up to leading practice compliance, leading practice savings, leading practice user satisfaction with a third, a tenth, a quarter of the budget, and the people, and the leverage.

Shelly Kramer: Yeah, it’s like trying to do more with less, which organizations across the globe are focusing on especially right now in challenging macroeconomic times. Right?

Chris Haydon: And the other thing is, sorry just to finish up though, but the law is the law, so compliance doesn’t stop at the enterprise. Compliance is for the mid-market as well. So supply chain issues, delivery issues, labor issues, forced labor issues, all of these really important topics don’t go away when you’re a mid-market company. In fact, in some ways they’re more daunting.

Shelly Kramer: They’re more daunting. And like you said, they’re sometimes more difficult to address because at the enterprise level you generally have more people, bigger budget, generally speaking, better processes, that sort of thing. So those are all challenges I think that mid-market companies have. And by the way, thank you for getting that song stuck in my head. And I think that that’s how we know that we are people of the same generation when you can say stuck in the middle with you and I know exactly what song you’re referring to. And hopefully if you are a part of our watching or listening audience, there are at least a few of you who also know what we’re talking about. And so you’re welcome for that earworm. So you mentioned procurement, I mean you mentioned compliance, but what other areas of procurement do you see the mid-market looking to try to get their arms around and optimizing?

Chris Haydon: I mean, look, really, it’s just efficiency. The journey to digitization, to rip costs out is still paramount really for any organization. And again, how do you just get that efficiency so you can put your less access to talent because your scarcity of resource for best bank for buck in probably the simplest way of doing it. So again, that’s interlink perhaps between process maturity and then efficiency AKA digitization. How do you get rid of the touches on paper-based or email-based processes? It’s crawl, walk, run. But it’s surprisingly still getting out of the crawl phase of paper-based or the walk run of email-based is still a big challenge. And it’s just a drag on your business. It’s a drag on the internal users. And frankly it’s a drag on the accounts payable and the procurement stuff trying to run the engine.

Shelly Kramer: Absolutely. So I think sometimes my experience in talking with mid-market organizations about procurement is that sometimes there’s a feeling like, oh, all this stuff sounds really great and I buy what you’re saying, but this is beyond our financial capabilities. This is too sophisticated for us. This is something only enterprises can do. We need to keep waiting through our processes because we’re not quite there yet. And I don’t agree with that. I think that there are solutions for mid-market and those solutions don’t necessarily have to be a Ferrari, in many instances a Ford will do just fine. What do you think about that?

Chris Haydon: Oh, look, I wholeheartedly agree. Look, the reality is, and Ford is a metaphor, great company. It does 95% of what you need. And frankly, look, I’m not a good enough driver to make the most out of Ferrari.

Shelly Kramer: I’m not either.

Chris Haydon: But I’m okay enough driver for Ford, right? Look, it’s safe, it’s pretty high performance, and pretty comfortable, and got some great tech. And so look, the focus has got to be on the business and getting out of the way. And again, that approach of Ford and making the most of what you have. And complementing what you are able to execute. Because I think you touched on a little bit too, what you can execute on and what I touched about in my driving capability. I can’t hit a corner at a hundred mile an hour. And this goes a little bit about change management. The budget, there’s the tech side, but can you affect the change and into your business? So probably not. That’s the hardest thing. It’s why most implementations fail, mid-market and/or enterprise. So how do you find a solution to minimize change management because it raises the ability to get to the business case through time and through user impact and just ROI.

Shelly Kramer: Right. Right. And I think that’s a really smart way to… I mean, I’ve spent a career as a strategist and I think that when you look at this, you can’t get sidetracked by all the little different pieces. I think all of this is part of a digital transformation strategy, a digital transformation journey, and looking at what is it we’re trying to accomplish? What are our end goals here? What does success look like? And then ask yourself what technology solutions can help us to get from where we are to where we want to be? And I would guess that you approach this much the same way.

Chris Haydon: Yeah, it’s outcomes first, it’s kind of like the outcome economy. The technology is great, but how do I get to my business outcome. Whether that’s a services blended with technology, whether that’s just straight technology or anything else, that’s really where the conversation’s got to be. How do you drive me a differential business outcome? And in a way that’s pragmatic, again, change management, do you have to change everything in your business to go and get after the first 20%? Because that first 20%, it’s like, again, another overused metaphor, but you have this iceberg effect in how do you get to these other pieces of lowering the water line so you can see more of the iceberg to chip away at it.

And I think that’s why you’ve got to deconstruct the problem, focus on the outcomes you can get in a really quick time, but not really having to change the planet with a massive implementation or a massive change management approach to get to where you need to be. And then ready yourself to scale, just touching back on the mid-market. There’s not too many mid-market companies who wouldn’t aspire to be an enterprise company. Right? They want to grow revenue, they want to be the whatever the next Google, Tesla, et cetera, et cetera, et cetera. And so there’s that degree of, you mentioned journey. So how do you ready yourself to future-proof scale your business and be successful?

Shelly Kramer: Well, and I think that an important part of digital transformation is understanding that there is almost never a situation where technology alone is the answer. It’s people, processes, and technology, and all of those things work together. And for instance, there’s many instances of an organization invests in a technology solution but struggles with changing processes or struggles with adoption throughout the organization. And all of a sudden you’re looking at this huge tech investment that people aren’t using. Maybe it’s not the right solution, maybe it wasn’t vetted carefully enough, maybe it requires some expertise that you don’t have internally, all those sorts of things. So there are challenges there, but it always involves those three things, people, processes, and the right technology solutions.

Chris Haydon: Yeah, I agree with you. And look, you hit it on the head, adoption. How do you get that adoption engine going in those solutions that can surround and/or augment kind of what you’re already doing, but move you forward in a meaningful way, in a meaningful time where not exactly a hundred percent TikTok economy. But if you’re not getting an ROI within six months, this question’s being asked. And maybe more so when dollars, and euros, and whatever are tight in an economic market and just frankly in a mid-market company.

Shelly Kramer: So, I want to circle our conversation back to procurement, and I want to talk a little bit about ConvergentIS. And tell us a little bit, if you would, about the company as a whole and really how ConvergentIS is able to help this mid-market segment with their procurement challenges.

Chris Haydon: Yeah, let me articulate the point a little bit. You have your ERP. And SAP S/4 is the preeminent ERP, whether you’re the enterprise or mid-market company. And it can do a multitude of your multifunctional business processes. But as you look to extend those processes outside your own firewall and to drive some efficiencies, you can leverage other technologies to really help close that loop while minimizing, if you like, the business process or the change management impact that you’re already using in that system. And so Convergent does a great job of really augmenting and extending the business process capabilities for procurement in a really high ROI way. We’re talking months to get you on a great digitization journey, whether it’s transactional capabilities or vendor onboarding. And there’s a holy bit detail you’ll be able to see on the company page.

But what I really liked about it is, one, your future-proofing a little bit one of your largest IT investments, which is your ERP. And so if you’re a mid-market company, you want to scale, you want to largely leverage all the greatness that you can get from something like SAP core ERP. But how do you ready yourself for scale? And this is a great way to get after value and procurement, run that transactional efficiency as great as you can. And then be ready to scale that either with more bolt-ons or add-ons or some of the core functionality that exists. I think that’s number one. Number two is just being close to the customer and being able to work, understanding your problems and starting at what their dimension needs to be. Lowering their change management, working on accounts payable, working on procurement, working on onboarding, working on compliance, working on services, whatever little area you need to go and get benefit from, that’s what this company can go and do. And being a really prominent SAP partner, you also take away one of those challenges, which is IT and integration.

Now getting integration turnkey business processes running is, let me tell you a really challenge that I’ve faced. Just to punctuate the point I leave everyone with a little bit of a model. I used to call it, when you talk about integration, I used to call it the double T model. A lot of the focus is on how do I integrate this and I move this file from A to B or this XML from A to B. And that’s really important because that moves the data from the firewall yours out. But there’s also this process integration. And that’s where the friction can come on the onboarding process and the realization of the business processes. And Convergent does addresses both those double Ts, beautiful, seamless integration because it’s part of the SAP platform and ecosystem. But because of that, it’s also part of the process integration. So you’re not talking a new language to leverage on top. And particularly when you’re not an SAP partner ecosystem. That’s a little bit of a challenge that I think particularly mid-market companies probably don’t understand enough and they can do.

Shelly Kramer: Well, I think that makes perfect sense to me. Absolutely. So let’s see, if you are a mid-market company and you are thinking about how best to solve your procurement challenges, I hope this conversation has been helpful. And I will include in the show notes a link to find more information at the SAP store. So you’ll find all kinds of information about Convergent and what the solution is, and what it offers, and why, it’s kind of a no brainer in my opinion. But this has been a fascinating conversation, Chris. I so appreciate the time that you’ve spent with us today here and the insights that you’ve shared. You’ve been amazing.

Chris Haydon: Thank you so much. Great to talk to you.

Shelly Kramer: Absolutely. Is there anything you want to leave our audience with? One final bit of advice as they think about procurement and what to do moving forward? What’s the one piece of advice you want to leave them with?

Chris Haydon: Laser beam focused on time to first value. Pick a solution that you can get started on your value realization journey as fast as possible. Because as soon as you get that, you see what you’re getting, you can report it back to your business. And trust me, your CFO, your CEO, and frankly your end users will thank you.

Shelly Kramer: Well, and you have your proof of concept there. When you ask for funding for a technology investment, you’re absolutely correct. The very best outcome is to be able to turn around and go, look what we’ve been able to accomplish, and look at the short period of time. And so I think that if you want to be a rockstar procurement professional, this is a solution that you absolutely need to explore. So with that, thanks to our listening audience. Thanks again to you, Chris. It’s been wonderful and I’m sure we’ll be talking again soon.

Chris Haydon: Great, thank you.


About the Author

Shelly Kramer is a Principal Analyst and Founding Partner at Futurum Research. A serial entrepreneur with a technology centric focus, she has worked alongside some of the world’s largest brands to embrace disruption and spur innovation, understand and address the realities of the connected customer, and help navigate the process of digital transformation. She brings 20 years' experience as a brand strategist to her work at Futurum, and has deep experience helping global companies with marketing challenges, GTM strategies, messaging development, and driving strategy and digital transformation for B2B brands across multiple verticals. Shelly's coverage areas include Collaboration/CX/SaaS, platforms, ESG, and Cybersecurity, as well as topics and trends related to the Future of Work, the transformation of the workplace and how people and technology are driving that transformation. A transplanted New Yorker, she has learned to love life in the Midwest, and has firsthand experience that some of the most innovative minds and most successful companies in the world also happen to live in “flyover country.”