On this episode of Thriving at the Crossroads, we have Phil Ideson. He is the host and creator of The Art of Procurement Podcast. He talks to us today about something that he is about to launch called Palambridge. He shares what Palambridge is and what it does differently to help businesses out in getting great procurement connections.
Listen to the episode here:
Building Procurement Connections With Palambridge
Today, I’m thrilled to take a little different tact with my interview guest today. I’m welcoming Phil Ideson, who many of you probably already know from The Art of Procurement Podcast. Phil is here to talk about something new called Palambridge today. Welcome to the show, Phil.
Thank you very much for having me, Amber. I’m delighted to join you.
Phil, this is a little drumroll. You’re giving us a sneak peak of something that’s coming out and will be out right as we’re coming live, probably right before this episode comes out. Tell us a little bit about Palambridge. What have you been up to?
That’s the plan. I’ve been working for the last three or four months in pulling this together, the notion of Palambridge, I’m in the procurement space. I’ve got a lot of background in procurement outsourcing, and strategic procurement and also as a practitioner. I’ve had a number of different roles across procurement. What Palambridge is, is making procurement subject matter expertise available to companies on an on demand basis. If you think about the fact that your suppliers are really important to you as an organization in terms of really creating competitive advantage, certainly more so now than it had ever been before.
One of the ways to unlock some of that competitive advantage through your suppliers and access to innovation and to build really strong relationships, you need subject matter expertise. That subject matter expertise that help you do that doesn’t always come cheap. The options are that you can hire an expert full time, that’s great if you’re a Fortune 50 company and you have the dollars to do that. You can hire a consultant; a consultant still come on a month, two month, six months contracts so the numbers can add up pretty quickly. Or you can outsource them; I spent part of my career delivering outsourcing services where you have a three or five year deal, where the service provider has category experts across a vast range of spend. But it’s still a really big commitment, there’s a big dollar commitment in doing it.
It seems like one of the challenges for a lot of organizations is about the dollars spend. I’ve certainly ran into situations in talking with a customers and clients around implementations where they say, “Certain people aren’t interested in us because we can’t spend seven figures with them.” We’re getting bigger from the consulting perspective. They need the really large projects. It seems like the guy on the bottom that doesn’t have the multi-million dollar budget, that can be a stretch to get true expert advice.
Frankly, that’s always been an inhibitor of strategic procurement of smaller organizations. They are still not small organizations, maybe anywhere from $500 million to $5 billion in revenue. The only options are really to hire generalists, strong procurement people who can run a really strong process but they’re not in the market every single day for the things that you buy. That’s where the expertise comes in; what we set out to build is a way that enables organizations to access experts when they need it. If they need somebody for two or three hours to help validate or build a strategy, I’ll need to pull them back in in the middle of a negotiation so they can give insights on some market intelligence, sanity check or go check a deal. We wanted to be able to provide a platform that enable companies to do that.
Who’s your target market? You talked a little bit about the smaller companies, but who are you really targeting? Procurement? Finance organizations getting into procurement? Who’s the ultimate customer that you really want to go after.
That’s an interesting question. It’s always really hard to define your exact target market. There’s often and a lot of variables that go into that. I look at this as two different target markets. One is a procurement leader, a CPO, but who’s a little bit more innovative, who’s looking out for different solutions and understands that agility is a lot more important than it used to be and recognizes the value of bringing subject matter expertise in. There’ll be CPOs out there who wants to take their procurement organizations to the next level and they just can’t access the people that they need to be able to do that on a full time basis right now.
The other side is non-procurement leaders. We’re going to be really be careful about not trying to position this particularly as a procurement solution because all organizations manage suppliers. They all have supply chains. There’s a big opportunity for companies who have never had procurement before. Now we start to access talent and also technology. We’re bringing some on demand technology through our partners as well into this that they just haven’t had access to before. One is innovative CPOs, the second is folks who have oversight of supplier spend but may not have a formal procurement organization in place to manage and to handle it.
That second category is such a huge slab of people. I do a lot of treasury implementations and the practical reality is the people on the staffs, they’re negotiating with banks, they’re negotiating pricing, they’re controlling what the spend really looks like around their fee structures, who do they do business with and the infrastructure. They’re actually controlling a fair amount of spend. There’s only certain variables and knobs they can dial. It seems like to give them the education to be more strategic about that procurement and what buttons they can push and how do I think about that negotiation to give them more ideas on how to walk into it. It seems like it could be really valuable.
For the best part in the world, for a lot of things that we buy as organizations, we only buy it once every two or three years. There’s just something to be said for someone who’s in that market all the time, who understands the nuances of supplier X right now is pursuing a strategy to grow in a certain product area. That enables them to be more competitive in a solution that they provide. There’s knowledge in the market that maybe supplier Y is having difficulties from a quality perspective around a particular product. It’s those kinds of things that we can bring.
The other thing that I wanted to make a note of as well, for people who are outside of procurement, I think procurement has a bad rep, we deserve that for a lot of time. That’s part of our mission. We’re really strong on talking about transcending the notion of traditional procurement. For me, the notion of traditional procurement is that procurement organizations have, at best, trying to optimize what the business wants. Whereas what we can bring with the network of experts that we have is how to think differently about disruptions that are happening in supply markets. It’s actually influencing and changing perhaps what you thought you needed to buy rather than just going in and saying, “I’m going to try to get 3% or 4% percentage points out of your supplier.” Frankly, that’s not what most businesses need.
The other thing I’ve noticed a lot from companies I talk with and even just people at I talk with at conferences and events, is it can be really difficult as a company to have the network, to be able to reach out, to get these additional details and really know what’s going on. I feel like a lot of companies will ask me, and people pull me to the side of the conference, “Hey, we’re doing this. Is this normal? Am I the weirdo? Or is anybody else like this too?” We’re a little bit afraid to talk about what might be ugly or we’re not even sure if it’s ugly. Sometimes I say, “Yeah, that process is just ugly. It’s ugly for everyone.” Everyone breathes a sigh of relief. “It’s just difficult, it’s not me,” or, “There’s something about the way I’m doing it and maybe I’m making it more difficult than that. Maybe that requires a deeper look.” It seems like the subject matter experts are pretty helpful when it comes to those types of conversations.
What’s interesting is the way that we’re delivering it. Part of the value proposition that we’re building is that, we’re looking at this as a platform, we’re building a platform which bring together the best of the best from all across the world and making them available in a commercial model. My perspective and experience has always been that no one company can know everything, no one individual, no one consulting firm can know everything. The model is really built to figure out, “What’s your challenge? Who are the best people in the world that can help you solve that?” Not necessarily just the same people that you’ve dealt with in the past. You’re really expanding the scope of expertise that’s available to you. That’s something I think is really powerful. The way we deliver that is in a way that’s really seamless. We manage everything behind the scenes so it looks to the client as if it’s all under one umbrella or under one roof.
How is Palambridge really going to work? What does the customer buy? Tell us a little bit more about the actual set up. You’ve talked about the experts that are involved, talk about that network and how it’s going to be set up.
I don’t want to say it’s difficult to do that because one of the things that is clear is that the depth and breadth of the expertise that we have, the technology partners that we have, we have some framework partners, is that there’s really almost unlimited solution configurations that we can build for an organization. It can go anywhere from you’d like to access an expert who may be a CPO or former CPO and you have to be able to do that once a month for a couple of hours. We can set that up for you. Or it could be that you’re a $1-2 billion revenue company who understands the value of procurement but you need help on a very specific project by project basis. There can be a managed service that you tap into as and when you need it to just bring the expertise in, on the fly, as it were, for a particular project.
We have a vast array of different solutions that go from, “I need somebody every now and then,” to, “I have to be able to access almost this procurement organization on demand as a managed service.” The ways that we’re going to make that available is through a credits model. We will also do project pricing, that won’t go away. Think about how your procurement is changing and how organizations, partnerships where there’s suppliers are changing, there’s much more of a demand to buy outcomes, buy deliverables and have transparency in what you’re buying.
It’s not around how this person is going to cost me a lot of money because I’m going to get them tied up in time and they’re going to charge me on time and material. It’s going to be, “Here’s a menu of different milestones on deliverables and you buy against that.” If you want market intelligence for a particular category that’s based on bringing in an expert, it’ll be a certain set number of credits that it cost you. You basically buy a pool of credits that you can use to spend against those outcomes. It just makes it a much more cleaner model but also takes away some of the risk of having to find money every time you need to talk to somebody or not really knowing how long you’re going to be engaging with somebody and afraid of it getting out of hand. One of my experiences is, consulting companies obviously want to keep you on the clock as long as possible and we don’t want to do that. We want to make sure that you’re actually buying the outcome, the deliverable that you want rather than just clocking up the hours on a time and material basis.
It sounds more like value based pricing. More like a retainer model almost. “Hey we put this bank of credits and then we utilize them as we need them.” It reminds me of a little bit of a retainer.
It is, it’s moving towards as a service. We’ve obviously seen software as a service and this has become a pretty standard model now. We’re moving towards a managed service, as a service if you will, procurement as a service. You’re making a minimum commitment, which is based on credit, so you can apply those credits to a variety of different solutions. Those can scale based on what your exact need is, from nothing to a lot. How many credits you buy every month will determine essentially the effective cost per credit, so there’s an incentive to buy more than there is less. You never have to go out there and sign a three-year contract and spend hundreds and hundreds of thousands of dollars without really knowing what you’re going to get in return. It’s a different commercial model that we see as the future of a lot of managed services. It goes away from long term contracts, it goes away from time and material. It’s just around pricing on volume, pricing on deliverables and outcomes.
Why now, Phil? What was the driver or the a-ha moment for you to say, “It’s time to create this procurement as a service platform with all these experts.” What drove that?
It’s funny. I have a lot of things in my background that all intertwine with each other that come to this point. I’ve lived in India and managed a captive offshore BPO center for procurement for example. I’ve been a client of procurement outsourcing services. I’ve delivered procurement outsourcing services from within the business. I was looking back at some old files, I mapped out this model back in 2010, seven years ago now, it just wasn’t the right time. I think that now as buyers, maybe this is in the consumer space, we have come to accept and understand platform based models, like Uber and Airbnb. It’s not so out of left field from a, is the industry ready for it.
There’s also the fact that there’s more and more individuals that are available to plug into a network like this as more and more people are going to become freelancers, taking advantage of the gig economy. Those are a couple of the things. For me, personally, the journey that I’ve had since I left my last corporate role to go out on my own and also start the podcast, I’ve just built such a fantastic network, a network that I just wouldn’t have even thought would be possible in the last twelve or eighteen months. Honestly, that’s the missing piece. It’s knowing that I have been able to bring theses network of people together to deliver the solution rather than just being conceptual. It’s really what made me think maybe now is the time.
I was at a conference three or four months ago. There was a presentation and they were talking about, as procurement, how do we do in RFP a bit better. We’re still talking about how to be a bit better in RFP. We’ve got to do something differently. I was lamenting to my wife at breakfast the next day, “I really need to bring together this dream team. I really need to bring together all these people I know and harness it in a way that there’s a business model there.” Immediately they reminded me of the business models seven years ago that I’ve drawn up. At the same time, my cofounder, within minutes he’d said, “You know what? Somebody needs to bring together this network of people that we’ve built.” I was like, “That’s a sign. Now is the time.” That was the impetus.
For those the listeners that don’t know, Phil and Kelly Barner have sponsored The Procurement Revolution last summer. I participated in that as well and spoke there. It was a very unique virtual conference. There was a whole week’s worth of activity. Every day had a different theme. They put together this whole virtual conference. When he talks about the dream team, if you’re interested in some good content, there’s some really good content from the Procurement Revolution for last summer. For those that are junkies or trying to catch up on a variety of procurement topics, you should check that out as well. Even as a person speaking in it, it was an interesting experience for me. Just talking among the whole procurement group, and how do we things better. That’s a conversation I appreciate.
The whole procurement revolution, which Kelly Barner and I put together, was all driven by this thought that we have to think differently, we have to act differently. A lot of it is mindset, so we need to change the procurement mind set. But also there’s so much thinking from outside our typical bubble of procurement. That’s one of the reasons why we were so happy that you were involved. We deliberately tried to find people outside of the procurement profession to come in and actually share war stories or their perspective on things that we can be doing. Because we have to open our eyes and figure out new ways that we can bring value to organizations. We call them revolutionaries, 40 people who really just shared their perspective on what we can be doing better as a function and what the vision is for moving the function forward. That’s ingrained in a lot of things that we’re doing in Palambridge. Palambridge is really just the next iteration of what we started with The Procurement Revolution.
It’s interesting to see the evolution you’ve had over this last year plus. You launched The Art of Procurement Podcast, and then The Procurement Revolution came together, and now Palambridge building on top of it. It’s really about the network effect. Speak a little about the network effect and how these experiences have built on each other to help you create this organization.
When I started the Art Of Procurement podcast, I started that almost eighteen months ago now. I was thinking that the worst thing that could possibly happen is that I’ll start my own podcast and nobody will listen but I will have an excuse to talk to people that I look up to and respect. I will learn from them. I can tell them I have a podcast and maybe it will give them a reason to talk to me. That’s basically how we started. I started the first few weeks with me and my mum and maybe all the animals in the house going on to my iPhone and pressing play a few times so it looks like I had some listeners. It got a mind of its own over time and it started to grow. We got a lot more people coming on listening and that enabled me to build a much stronger network.
The people that I was able to build a network with through doing that is just fantastic, people I could’ve never have dreamed of, I now think of as peers. I wanted to mobilize that in some way, shape or form. Just building the network is one thing, it’s a great thing but there’s an opportunity to bring those people together that perhaps they wouldn’t be able to do on their own. The Art Of Procurement was kind of the glue, the thing that everybody had in common with each other. I just saw it as a great opportunity to bring together such a diverse group of people into a platform and figure out how we can help organizations collectively rather than what we are doing individually.
How did you do some market validation? How did you get information that made you think this is really going to go?
The way that you don’t go about it is by your own gut instinct, talking to the people around you who are probably more likely to say yes than no. That’s what gave me the initial impetus, but then obviously thinking I need to sanity check this. I have a really great group of advisors through The Art of Procurement. People I have gotten to know through doing the show who are CPOs, ex-CPOs and they’ve certainly been around the procurement space for a very long time. Sanity checking it against them to start with and got a lot of positive feedback.
As I have my conversations with CPOs for the show, I’ll just talk a little bit about the challenges before we hit the record button and see if it just resonates. The feedback has been so overwhelmingly positive that we’re ready for this. The industry is ready for this. There’s such an opportunity here. Frankly, talking to some of the service providers who you may look on the outside of this as being competitive, but who actually believe that we’re all in this collectively as a profession, who have said, “You know what? Somebody’s been needed to do this for a long time.” I‘ve had such great positive feedback. Nothing ever survives its first airing to the public. I’m sure that there will be some tweaks we’ll make along the way. Some of the feedback I’ve had has been positive enough to make me really excited about the opportunity that we have here.
I must confess I was pretty excited about it because as people will see when it launches, I’ve actually joined the Palambridge group as well, I’m available as an expert there too for people who are looking in that procurement world and looking at working capital and payments and things. Because you’re right, we have to expand that conversation and we can’t solve some of our pressing business problems unless we expand that. It’s encouraging to hear you going after not just procurement but all the other people that need to care about all these topics.
To me, there are a couple of different dimensions. One is category expertise, people who are experts at buying a particular thing. That’s obviously very helpful for my businesses’ normal perspective when you’ve got projects that come up that need executing against. But the other part of me is people, like yourself, you have very specific expertise from a procurement perspective but we have others that have expertise around sustainability, procurement transformation or human rights and the supply chain, slavery and the supply chain. There’s such a diverse group of thinkers that we need to think about how we use our supply chains and how we use our suppliers in different ways. We have somebody who’s an innovation specialist. How do you help to build innovation pipelines with your suppliers? It’s such great diversity and not limited to buyers of particular things or subject matter experts in particular areas of spend.
Did I miss anything I should’ve asked about Palambridge?
This is version 1.0. We’re wanting to get something out to the market. The first part of that is around access to people, access to some technology partners. If you need any sourcing tool, previously you’ve had to go buy a new license and it costs you a lot of money. Now we can offer that through the partners we have on a project by project basis. That’s all tying together in the version 1. When we look out to the future, we want to be a lot more around disruption and innovation. We’re going to be investing a lot in a research around what’s the disruptions that are happening in certain areas of spend? How can procurement help bring those to the table to really start companies thinking about how they buy things differently, what they buy differently? Because I think it’s a world that we’ve never really played before. It’s really transcending the typical notion of what procurement is. I think that’s version 2. Version 1 is, let’s connect people. Let’s get people access to folks that they wouldn’t typically have had the ability to access because, financially, it was just out of reach.
How are people going to find you? Once Palambridge launches, where do they find you?
There are a couple of easy ways, one would be our website. The website would be at Palambridge.com. The other way would be through the podcast and the media site that we have, which is Art of Procurement. If you go to Art of Procurement then you’ll see links to Palambridge. Art of Procurement is really where we share the leadership around procurement. We’ll continue to do so but we’ll also use that as a way to showcase some of the expertise that’s within our partnership network.
Tell me Phil, you’ve done quite a bit of traveling yourself around the world. What was your favorite travel destination you’ve ever visited and why?
This is probably the hardest question out of all the questions, because there are so many different ones I could go for. I’ll cheat and I’ll go with two. The two are Hong Kong, I absolutely love the juxtaposition between the east and west of Hong Kong. You’re one side of the harbor, and it’s a London by the equator. You go across the Victoria Harbor and it’s mainland China. I just love the energy there. If you tell me today I have a plane ticket to go anywhere in the world, where is it, I would go to Hong Kong.
The destination that’s probably had the biggest lasting impact on me, I’m not really sure why, is Kyoto in Japan. It’s such a beautiful city. It’s not like I’m a big history person particularly but there’s just something you feel different from walking around that city. There’s just so much to see. It’s been a while since I’ve been there. I’m really hoping to get back there pretty soon. It’s just one of the cities in the world that I went to and just fell in love with when I was there.
Thank you so much for joining us on our show today, Phil. Jump in the conversation, ask Phil some questions, especially since this is new. You get a voice in shaping this. We would love your feedback. We encourage you to engage in the conversation as well. Thank you so much for joining us today, Phil.
Thank you very much for inviting me. I just really appreciate it.
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