Persistent Partner Series | Catalysts of Change: How Strategic Procurement Transforms Business

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Barath Narayanan

Global Head of BFSI Unit and Head Europe Region

Persistent Systems

Pratik Patel

Director Sourcing & Supplier Management

Mastercard

Catalysts of change: How strategic procurement creates value in a data-driven business world

Can strategic procurement be a catalyst of change in business? Two enterprise practitioners believe it can, and they have seen how enabling and embracing data-driven procurement with a strategic mindset has generated results.This approach represents a change for procurement from a siloed, short-term, fragmented process to one that is longer-term and meaningfully integrated in key operations of the business itself.“The real change here is how the procurement function is a value creation function and not really a cost reduction function,” said Barath Narayanan (pictured, left), global head of the BFSI Unit and head of the Europe region at Persistent Systems Ltd

play_circle_outline Introduction to strategic procurement with Pratik Patel and Barath Narayanan

play_circle_outline Maximizing Procurement Success: Roles, Relationships, Process Optimization, and Risk Management Strategies

play_circle_outline Procurement understanding of broader business goals for effective influence and alignment.

play_circle_outline Innovative Procurement: Creating Value, Managing Risks, and Driving Competitive Advantage

play_circle_outline Early involvement in process to proactively manage risks.

play_circle_outline Establishing a brand for procurement, focusing on value enabler and risk management.

play_circle_outline Maximizing Strategic Outcomes through Agile Procurement Processes and Data-Driven Decision Making

play_circle_outline Waste elimination and process improvement in procurement operations.

play_circle_outline Maximizing Contract Success Through Win-Win Negotiations and Transparent Collaboration with Procurement Partners

play_circle_outline Key advice for procurement professionals: focus on relationships, data, and waste elimination

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Catalysts of Change: How Strategic Procurement Transforms Business

Barath Narayanan

Global Head of BFSI Unit and Head Europe Region Persistent Systems

Pratik Patel

Director Sourcing & Supplier Management Mastercard

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>> Hello and welcome to this CUBE conversation. I'm your host, Shelley Kramer, managing director and principal analyst here at theCUBE Research. And our topic today is Catalyst of Change: How Strategic Procurement Transforms Business. I'm joined today by two fantastic guests, Pratik Patel, who's the director, sourcing and supplier management with MasterCard, and Barath Narayanan, global head of the BFSI unit and the head of the European region for Persistent Systems. Welcome gentlemen. I'm so glad to see you today.

>> Thank you for having us.

>> Absolutely.

>> Thanks, Shelley.

>> Absolutely. Well, I've been so looking forward to this conversation. So as I mentioned, we're going to do a deep dive today into the topic of strategic procurement and if procurement can actually be a catalyst for change as well as a strategic enabler for organizations. In my experience, enabling and embracing procurement with a strategic mindset is really business mission-critical. I'll even go so far as to say that when you can align successfully align procurement with your other strategic business objectives, you'll be amazed at how you can transform an organization. So I love to start the show with some personal intros and a little bit of a career backstory. Pratik, will you indulge me please and kick us off, and tell us a little bit about sort of your career journey, how you got from there to here and just maybe surprise us with something we might not expect?

>> Yeah, absolutely, Shelley. So I think we're all the sum of our life experiences and our life experiences mold us into who we are today. And I am so extremely fortunate to have such... The values of my family have really molded me into who I am. And I'd like to share with you, if I can, the story of my grandfather because I truly believe if my grandfather didn't take the initiatives that he did, had the passion that he had, I don't think I would be born because my mom was the ninth of nine kids, so she was the youngest of nine kids. So my grandfather, when he was growing up in India, in fourth grade, there was a town hall meeting with the local king, we call him the Maraj, and he had this aspiration that he wanted to do more for the farmers in India. At a young age he wanted to be... I didn't know what he was going to do, but he wanted to do something. And so he raised his hand in this town hall when he was in fourth grade and told the king, "I want to have more schooling beyond fifth grade. I can't do that. In this village, school only goes till fifth grade. What can I do?" And the king was so impressed and the king said, "We will take care of this for you, but it's going to take time for us to build a school. So until a school is built, we'll arrange for transportation to another town nearby that you can go beyond fifth grade. And then after that, any schooling you want, the state will provide." And he took advantage of this to the point where he got his PhD at the University of Illinois during the Great Depression. He got a couple of bachelors, he got a master's in Germany, and then he went to the United States and got his PhD. After he was done, he was so thankful to the king, he went back and supported the king being a tax collector until India's independence. And then he was starting to be able to do what he wanted to do his entire career, which is make a difference for the farmers. But he didn't finish with his role, he was a deputy director for the state, but after he retired, he helped to build a wheat. So he genetically engineered wheat that could produce 20% more production, had less infestation, could take less water to produce. That really helped to enable the farmers to be able to grow economic wealth within the same land that they had. And he did this in such a humble way. He didn't want any patent. He wanted to make sure a subsidy was provided for them. And I share this because that instills the values in me and my entire family growing up. Now if I fast-forward from what my grandfather did and the impact that he had, and then think about my life, I went to 11 different schools before I went to college. My dad had an engineering degree from India, and it was tough in the '80s to establish yourself with a foreign degree.

>> Yeah.

>> And so that really helped build a level of initiative, because I was always tested. Unfortunately, I was bullied. I was discriminated against because I was one of the few Indians. People didn't know how to interact with people that are not from this country back then. And so I had to persevere from that. And so I had to think about how do I get what I need to get done, but knowing that I'm not necessarily going to get a support system? I didn't have a lot of friends, I didn't study with other people. I needed to learn and adapt. And I think adaptability in your career is very important. How you overcome struggles and be able to really drive a difference, how you're able to show passion, that passion can then hopefully drive a level of influence with people as well. And it's contagious. And so these elements are values that I think I've learned over the years that kind of make me who I am. And then in college, I went to six different co-ops that I had as well. So I had lots of different experiences. I was very much process oriented as well. Project management was something I learned early on. I was 20 when I got formal training in project management. I have Six Sigma background as well. And then I started off in consulting with Anderson Consulting after college. And then I went, after 9/11, there was a lot of different impacts with consulting. And so I went back and went in to become a plant engineer and went back to my degree in engineering where my degree is with. And I did that for about a year. But then I was, again, bold because I think I've learned over the years to be bold, to take that initiative, and take on the risk. I told my general manager that, "Hey, I expect, in 10 years to be where you're at. I don't expect you to give it to me. I expect to earn it. I expect that I need to accelerate my learning curve to get there as well." And so he was so impressed. He told the COO of Energizer at the time and said, "Hey, guys, I know we're struggling with filling this position in procurement. I got this guy that's an engineer in the plant, he could be a good fit for us." And fast-forward 20 plus years later, I'm still in procurement and I love procurement.

>> That's awesome. That's awesome. Pratik, this is one conversation I'm going to have to make sure I force my children who are headed off to college in the fall to listen to because much of what you're saying here is sort of the gospel that I have preached to them their whole lives. Raise your hand. It starts with raising your hand, asking for whatever it is, the opportunities, the chances that you're looking for. Be tenacious, be bold, embrace change, embrace continuous learning. I feel like no matter where you come at, whatever it is you're trying to accomplish, whether it's your education and then you lead the university and you go out into the work world and things like that. And it's, generally speaking, the person who says, "I'll do it," that goes far. So what amazing. What an amazing story. Thank you so much for sharing that with us. And Barath, I'm really sorry that you have to follow that. But you know what? I am confident you are going to share with us your interesting career backstory as well.

>> Shelley, believe me, I'm not going to match that. I'm not even going to try match that, right? That was amazing story. What I love in that story is not the perseverance and everything ,but really Pratik, the town hall with the Maharaj, the town hall concept. I didn't realize it existed in that period that your grandfather really used that. So amazing story, amazing resilience. I always respected you, Pratik, so glad that we are here. Let me give my story, which is very simple. As I said, a lot of similarities, Shelley and Pratik, but let me give you a perspective of what has been my journey of last 24 years. I may be one of the few who have this experience of of course growing up in India, my childhood, my college, my education, everything has been in India largely. But then I had an experience of living in Asia in Singapore for a couple of years. I had an experience of being in London, Stanford, New Jersey for almost six years. And then I moved to Europe to be based out of Zurich for 10 years. That really helped me. As much as I'm Indian in me, I'm also a global human being who understand the cultural nuances of India, Asia, US across the board, different parts of the US that I've experienced and European region as a whole. Of course I've lived in Zurich for the last 10 years, but it has really made me understand the nuances of people in different cultures and how we experience that. And that follows through a point where I believe in continuous learning and learning from everyone around me. It's not about learning only from your peers or managers. Really somebody whom I have been, throughout my career, to learn from people who I observe, also learn what not to do as much as what to do. I've learned enough from various people what not to do. I'm not going to give examples to that, but a lot on individuals that I learned what to do, what to change, what to evolve yourself as a human being and respect. And one of the person I most admire and learn is my little daughter. She's not little anymore. She's 19 years old. When I tell her she's 20, she corrects me that she's only 19. But she has been a good mirror in my life to always highlight what I'm really as an individual. And she keeps highlighting... We have these unique sessions that we have every three, six months. What are the three things I observe about her? What are the three things she observes about me? Believe me, Shelley and Pratik, she has surprised me every time, right? One thing that she said, which is when she was actually around nine years old is, "Dad, you know what? When your friends, your closest friends, give you some thoughts or ideas or suggestions, you don't have any problem in accepting that. And the same idea mom would've suggested you just three months before, a month before, and you don't accept that. You resist. Do you realize that?" And I said, "No way, . That's not true." And she gives me three examples, three solid examples she gives me and then I have to accept that. And that made me really understand as a human being, how I respond to, of course, my partner in my life and how it has changed me over a period of time. But the point of, as an individual being willing to learn, observe and learn and evolve yourself is something I've always looked at. And something really surprising and unique, which has become a topic of conversation for me last three months, is after living in Zurich for 10 years, I decided to move to New Jersey since April 2024 for my new job, which many surprise, but not to me, I follow my dream. I follow my professional dream, professional career. I have always been a agent of change and it didn't surprise me, but that has become a part of conversation that, "Wow, Barath, you decided to move from Zurich to New Jersey after 10 years." That's me as an individual over the last 24 years. Don't compare it with Pratik's, but that's what I am.

>> You know what? I think you've had an amazing journey as well. And I think that what's very clear is that we are here as three consummate tech geeks. I'm sure we've been described by our family and friends as nerds along the way, but we all seem to love continuous change and continuous learning. And I think that that sets the stage for not only career success but really happiness in what we're doing. So fantastic. Thank you guys so much. It's been great learning a little bit more about you. And now we're going to keep learning, and we're going to learn from the two of you on the topic of strategic procurement. So it's safe to say we're in the midst of a transformation, from a mindset perspective, as to the role that procurement plays as a strategic enabler within organizations. And we've talked before, the three of us, about some roles that we feel play a little bit of a part here. Pratik, I know that you've got some thoughts on this. Will you share with us a little bit about your thinking about what those three roles are that contribute to success on the procurement front and why they're significant?

>> Yeah, absolutely. So I think when you think about the role of procurement, procurement truly is a strategic enabler. But in order to be a strategic enabler, I really think you need to be thinking about these three dimensions that I want to talk about. One is being an influencer. So we'll talk about what does it mean to be an influencer from a procurement lens, talking about it from being a process expert. Really understanding, what are the activities that impact procurement from upstream and how does procurements activities then impact downstream? And then also thinking about it from a risk management perspective. Because to me, procurement is the first and last line of defense. So when you think about influencer, so first off, influencer to me is someone that you have trust in. In order to have trust in them, you need to first establish yourself as a credible source that they can really rely on and be that subject matter expert. And so it's important that we build those relationships to be able to drive influence, not just go and reach out and have cadence with businesses, have cadence with suppliers, but really be able to understand their needs and be able to articulate with what their needs are. And transfer to the other party, that other party being the supplier, because we're the conduit between the business and the supplier. And so the supplier needs to understand what is it that the business is looking for, and for us to also give them the ammunition inside their organization so they can go and influence their leadership to drive the value that we want. And vice versa. We need to be able to understand our suppliers and really understand what differentiates them from others that are out there. Because especially in the IT services space, there are so many suppliers that are very similar in their capabilities. So how do you really differentiate that value and be able to tell the story back then to the business, so that the business can see that value and be able to capitalize on it and get the optimal value they can for the vision that that supplier has? Because everybody has a vision as well, and we need to be able to understand where we are on that journey of that vision and how can the supplier help us to get closer and closer to achieving their vision for why they exist, because then it'll get the most value. So that's as an influencer. From a process perspective, it's about elimination of waste. Waste exists in everything we do. These are non-value added activities. But in order to identify the waste, we need to really understand the process. What happens to the activities that ultimately then procurement is then helping to support? And so how can we ensure that we get better information? Because that is also helping to eliminate a lot of back and forth as well. How can we ensure we have standardized processes, so it's consistent? And then the work that we're doing, ensuring that we are doing that better, faster, and cheaper so that there's a positive experience with the people when they're interacting with procurement and our procurement process. And then on the downstream impact as well, we want to ensure that the work we do has long-lasting effects as well and not just something that we have to redo again because something was missed. Sometimes if you don't get the requisition correct, that could have an impact on delaying payment to the supplier too because we're not quite getting the right parameters around being able to pay that supplier. So process is so important to me. And then the last element is risk management. From a risk perspective, we are the first and last line of defense. The first line when it comes to the governing documents. So the contract, the terms and conditions that's governing our relationship. It's important that we understand the intent of everything we have in those MSAs or data processing agreements, or whatever the different contracts there could be. And we need to be that influencer in a sense with the supplier to ensure that they understand what risk they need to manage because we don't have the control.

>> Right.

>> And so I think procurement needs to take a more proactive role in being able to really help manage that risk. Or when it comes to financial risk, how we think about negotiations. To me, negotiations is very psychological. It's about achieving satisfaction, and it's understanding the aspirations of both parties and how can we connect. It's not about tactics, it's really about what are the pressures to buy and the pressures to sell, and then truly understanding each other so that we can achieve satisfaction. So those are the three key roles, from my perspective, for procurement.

>> Well, I think that makes a lot of sense. Barath, what are your thoughts on these three roles that PR suggests are key? And is there anything else you would slide in there?

>> Those three are the fundamental pillars, I would say, Shelley, as Pratik called out. Being an influencer, absolutely clear on how the process works today and what does it take to improve the process continuously with the difference. Now, what I would add on to that is really more about the procurement function having a deep understanding of the broader business goals. Only when the procurement function is on the table at the executive level, clearly understands the macro business, priorities at each line of business, they are very well positioned to influence the need of the business organization with the suppliers, of that bridge that Pratik called out. So absolutely influencer is one of the most important element, but with a very good understanding of the business priorities. So that becomes an important element. Now, the real change here is how the procurement function is a value creation function and not really a cost reduction function, right? And I've seen this in the industry with many leaders truly adopting value creation led by continuous innovation that really results in much better managed risks and improving the competitive advantage of the business with the way they engage with the external firms. So the whole element of value creation is so critical and the cost advantage becomes an outcome. If you're a value creator, you, by default, make sure that you have an outcome of the whole element of how you are able to save the whole cost spend that you have. And with that, Pratik beautifully articulated about the risk management, which is so critical. There, it is more about how you can, as a first line of defense, how you can really be proactive in managing your risk rather than reactive. And that is where you will use a lot of process enhancements, process innovation to be the proactive leader, to improve the risk that, at any point in time, may come up in future that you need to be aware of it today. That's what I would call out fully aligned to the three pillars, three roles that Pratik called out.

>> Yeah. Yeah, I agree. And to me, I think that in my experience, procurement isn't your grandfather's procurement operation, right? Things have changed so much as it relates to procurement. And what I'm hearing both of you say is that procurement leaders need a seat at the boardroom level. This is a business strategic conversation. Procurement plays an outsized role in so many of the organization's strategic objectives as a whole. And so again, this is not something that's just tucked over here in a section of IT or wherever we want to do it. It truly is a business catalyst, a change driver, and it's an important part of leadership conversations. And I doubt that either one of you would disagree with me.

>> No, absolutely not. I think if I can add on, Shelley, I would say that the key part for procurement to be successful is getting involved early, very early in the process when a need is established. When a need is established, involve your procurement stakeholders because what you do is you open up the door to a lot of different levers. There's this philosophy of a chess board. AT Kearney helped to build this a long time ago, and I have been brainwashed by AT Kearney around this chessboard, which is that there are 64 levers that exist when you think about where the buyer influence os, where the seller influence is, and what levers are available to you. And one of those levers is what we call an RFP or an RFI, a request for proposal, a request for information. But yet that is a lever that we go to a lot. But there are many, many other levers that are out there. And involving us early when the need is identified is critical. So it's not just having a seat at the table, but it's when you have that seat at the table.

>> Yeah, no, absolutely. And understand the value I think that your procurement team can deliver in terms of just business strategy overall. You started answering, Pratik, my next question. And what I'm going to ask you to share with us now is, so if I'm starting, I'm probably not going to start a procurement operation from scratch today. I'm probably going to step into an organization. I'm going to think about how can I structure or overhaul my procurement operations to modernize them. So if I was going to do that, what would you suggest is the key areas I might need to focus on in order to drive this transformational value that we're talking about for the business?

>> Yeah, for me, it really does start with an understanding of the value that procurement brings and that is with establishing the brand. Because when you establish a brand, you think about a brand as having a certain level from a consistency standpoint. When you think about Nike, we think about quality. We think about maybe athletics. So when you think about procurement, we want people to think about a value enabler. We want people to think about gatekeeper of risk. Or thinking about it in terms of, "Hey, they can help me with driving a better, faster, and cheaper execution overall." So it's important to ensure that there is a brand established for what procurement stands for, and it all centers are on better, faster, cheaper. So that, to me, is number one, establishing a brand that really people understand what that brand can do to help drive value for that. Number two is waste elimination, and we talked about that from a process perspective. So it's important that if you're establishing a procurement organization or helping to further evolve it is to think about what's happening today. What's in the current state, what are the pain points that we have in the current state, and how can then we drive a future state that eliminates that waste? Because that will help to ensure, again, related to the brand, the credibility and the trust that can be built into the brand. Because when you do things faster for people, when you have a better quality output for people, and if you happen to reduce costs for them too, it's hard for people not to rally around that.

>> Exactly. It's hard to say no to any of those things.

>> Yeah. And then I think the third element is how you leverage data.

>> Yeah.

>> Because data is everything. And today, we are so fortunate when we think about data and all the natural language processing, the tools and algorithms that exist out there and how we can leverage data. So it's important to have good data. So you want to ensure you have good data and that you have less variability in your data so that you can enable machine learning to take place and to help with machine learning where the data relationships exist, and how those data relationships can then drive a predictable outcome. Because, again, that will help to eliminate waste and drive efficiency in the procurement operation.

>> Right, right makes perfect sense. Barath, talk with me a little bit about how procurement teams can leverage technology like AI and machine learning, which Pratik just mentioned, to enhance their operations and to drive that strategic value that we're all in search of.

>> Absolutely. I would just add a few points to the earlier topic, deriving into the technology adoption in a minute. As Pratik called out, if we have to start a procurement function today, the few things I would add on, supporting Pratik's point, is clearly establishing a purpose and a vision, aligning to the business. I would do that today from a procurement standpoint, very well aligned vision and purpose to support the business organization from day one. So that's something I wanted to highlight. The second element is, as much as the procurement function has consideration of the internal stakeholders as their own clients, equally there is an importance of building a relationship with the external suppliers. And they're not vendors but truly partners, right?

>> Yeah.

>> Without compromising any ethical aspects or any preferences, you could still truly consider the suppliers as two partners and have an excellent outcome achieved being a partner versus vendor. And I've seen this with players adopting a partnership versus a vendor approach where there is a tactical outcome that takes you to the result versus a strategic approach of partnership that takes you one level above. So I would really call that out. And the last point we also should consider is a very agile and flexible process being established, because things are changing in such a disruptive manner at a short span. We need to be nimble to be very agile from a procurement standpoint. I would just add that now if you look at the three elements, technology plays a very, very crucial role, an important role. And there, I would say, technology from the basic element of procurement process, e-procurement process, well established organizations are evolving. I would say how do you digitize it? You can digitize the whole procurement, e-procurement process, especially on your collections, on invoicing where I've seen large institutions actually having leakage, actually having challenges and the invoices and collections not well managed, and it is a challenge for them. They lose, to an extent, the percentage of their own financial impact that they have. So there, the e-procurement process becomes very critical. With the evolution of new AI and the whole machine learning, and now the most fancy word gen AI, which is really getting adopted, is how you improve your analytics. Procurement actually has enormous amount of data. How you convert the data for your decision making on spend analytics, how you build insights on the data that is already existing with you today to improve and bring new ways of working with your partners, with your internal stakeholders. So that decision analytics that you can adopt on top of your data that is available through advanced analytics becomes very crucial. But there, what Pratik called out, the fundamental data quality becomes very crucial. And if you establish that and add on the insights, that's really an important element. And the third aspect, of course, how you use procurement function to be as flexible as to the internal stakeholders with an interface of what we have, the ChatGPT interface. Have people engage with your data that you have. The business users can actually chat and engage with that to get insights on the fly, on the fact that you don't need multiple people interventions. You provide transparency to your business users on your data. And of course there are a lot of things on technology that we could do, but these are the few things I would highlight the importance of technology adoption.

>> Yeah. Well, you're going to get no disagreement from either of us on that front, that's for sure. And really today, the reality of it is whether we're talking procurement or any other thing we're trying to do within an organization, data is the lifeblood of every organization of every size. And quite honestly in the research that we're doing, that's the biggest challenge that our customers have, that your customers have, in terms of getting their arms around their data, being able to manage it, being able to access it, provide access to the users who need it, being transparent about data, all of that. But that's the foundation upon which we build our procurement operations and upon which we build our other operations within the organization. So good call on the importance of data for sure.

>> Thank you.

>> So Pratik, this is one of my favorite questions. Can you share with us maybe a specific instance where procurement played a pivotal role in helping achieve some significant business outcomes?

>> Yeah, I'd love to share a couple of examples if I can. So one is more from a process perspective, because I think we all kind of face this challenge sometimes, which is that we have our system that we're using from a procure to pay standpoint to manage purchase requisitions and how we support the business. But then in that workflow, there are other stakeholders that need to be involved. And when those other stakeholders need to be involved and there's a change, maybe that we're asking them to be a part of our workflow that we have in our system versus their own system that they're used to where they do that work, then I think that's where there's inertia that kind of takes place as well. And so the example I want to share with you is legal. So legal has their workflow, they had their own system where they did their approvals, for example, and then they expected procurement to go into their system, put the intake into their system for where they need to engage. And I challenged our legal team, we went through a kaizen, if you're familiar with that term, continuous improvement was what it stands for from a lean standpoint. So we did a whole value stream mapping, mapped out the current process that we currently have, where the pain points are with that, where procurement has to go into this other system, how legal doesn't completely have visibility to all the contracts and the history with the contract. When we're in this other system, they rely on us to feed that. So there's a lot of waste. And so then we established the future state where we could utilize our procure to pay system, where legal can get the value that they need as well, and we addressed their pain points. One of their pain points was just really around mapping how the triage would take place within legal in our system. And so we took the painful exercise of building out this triage template for them, updating that, showing based on our future state so that they wouldn't have that lift initially. Then they saw the value of it, because today, we're more than five years in, and we're utilizing this, and it's working beautifully. They saw the value of it, and now they keep things up to date too, they invest into that. But initially, there's always going to be hurdles. And so how do you get over those hurdles? And sometimes you just got to roll up your sleeves and do the work so that people will see the value from it. So that's one example of where I think procurement can help to drive that value of rallying other stakeholders to drive efficiency. And another example is, recently, so we're talking about AI, I won't tell the company's name, but we have a solution from one of the AI players that a number of our businesses have needs for. And so we rallied all these different businesses. We kind of talked about, "Okay, we all have different needs here, but what we don't know is how much that demand will increase over time because it's so new in terms of how we're utilizing this. So we need to be thinking about how do we structure a contract that gives us that flexibility, the adaptability. Gives us the training that we need as well for our people to be able to leverage this platform. And also get a level of commitment from all the different parties, because one group is going to be the technical owner of this platform." And so then there's an allocation of cost that needs to take place from these others. "But if collectively, as a company, we meet the demand, then you're not going to be on the hook for that because others are offsetting it." So it's how do you build out a structure that enables an entire organization to leverage this platform, which is going to drive value for everybody. And so we don't have rogue activities then where different people have different contracts for the same platform, but build that flexibility in. And I think that's working out beautifully for us. And I love the support that we got across the company, because we probably had 20 people on a call initially to rally the different people. We had finance talking with the business as well, so that they can all align in terms of how we're going to support this to drive the value, because then we get a deeper discount as well when we pool all that demand. So those are two examples that I would share.

>> Well, I think that's an incredibly timely example because I don't think in many instances, when we're thinking about AI and gen AI, and integrating it in, and adopting it into business operations, a lot of times we're not thinking about that from a procurement lens. And so it is a procurement function and I love the approaching something like AI technology with a view toward flexibility and adaptability because we know that our needs today are here, but our needs moving forward are of course going to change. So great example. That's really timely. You must have actually thought about that in advance. I'm impressed.

>> That's perfect.

>> All right. Barath, would you share... I know you come at it from a different lens sometimes. And so I would love to hear your thoughts and maybe some specific instances where you worked closely with a procurement team to help understand their strategic objectives and maybe even going beyond your comfort zone, and really kind of how you might've reimagined your customer partnerships so that you can help deliver better outcomes.

>> Yeah. Well, absolutely an important element here.

>> Yeah.

>> Absolutely an important element here that I would call out, right? The fact really is how we move towards a win-win approach for both the parties, and that's the most important element. Pratik brought this point at the beginning of the call about negotiation. I will take that as a key pillar and give an example. One of the most important element is, it is never about one of the two entities winning. I've seen that happening multiple times, and I'm not going to give that example, but when truly the procurement function and the partner, I'm not calling it vendor or supplier, the procurement function and the partner, when they both operate with the intent of both the parties winning... And it is possible, and that's the beauty of negotiation. When you truly look at what is the intent that the procurement function representing the client organization is trying to achieve, and this is where the transparency comes into play, and the procurement partner who is negotiating with the supplier partner, they truly understand that if the partner compromises on some of the elements, you may get a beautiful contract to date, but within 3, 6, 9 months, my quality is going to suffer. And I've seen that here. I'll take a very unique example. Yeah, I can't call the country where I did this in Europe also because then it's very easy to know which contract is that. But this is a contract, substantially large contract. And the two players, we operated entirely with the transparency of what is in it for the client, what is in it for the partner. And we were willing to bring the transparency to an extent, to share the details, to achieve a common objective. And that truly resulted in a win-win situation for this contract. And it is sustainable contract that we have seen for the last five years. And that is what truly differentiates a winning proposition, when both the parties see a benefit. Not one sees, "Oh, you know what? I have compromised." And the other sees, "Oh, I have actually won my battle in this specific process." Then we are blocked. And actually it's a loss for the client. And that is what I would give as an example, Shelley, where it is truly an element of both parties thinking about each other with a common objective of, "Of course, success of the business," without compromising the risks. Like procurement is a first line of defense. You cannot compromise the risks, you cannot be preferential at all. You need to be absolutely balanced. But you could still make sure that you're not compromising on the partner. And that's what I would call out.

>> Yeah, but I have to applaud you for the comments that you're sharing because I cannot agree with you more. It is so, so important because the partner component is actually broader than just even our relationship, a buy-sell from a customer and you as a supplier, but it is also that ecosystem from that perspective. So in order to really achieve that satisfaction and drive that value, it is about how we're able to rally in and bring in all of the components, because it could be that platform provider, it could be the hyperscaler. That is a part of that too. So really bringing in all of those parts and understanding the true, to your earlier point about what's the vision, what's the business goals that we have? How does that align with yours? How does it align with the partners? And then when we're all synergistic in terms of that alignment, it is beautiful what we can achieve.

>> Correct.

>> And actually, Pratik, I can add mind reader to your list of capabilities because I was just going to ask you to help me wrap this show with sharing your advice as to what you might say to other procurement professionals who are looking to transform their roles within the organizations and to transform procurement operations within organizations, and how to be more strategic and more aligned with business goals. And to a certain degree, you've already answered that. But just, if you would, talk us through. I know there's the alignment factor, I know there's the partnership factor, but walk us through those key things, those key pieces of advice that you might give somebody looking to do this, because they're inspired by our conversation and they realize they want to change.

>> Yeah, I think number one is relationships. Harness the relationships, nurture the relationships and ensure that those relationships are sustainable to help drive the value and that are aligned with the business goals that the company has. And that, one, procurement understands what those business goals are, procurement understands what is it that you're buying, what is driving that need, that differentiated value that we can gain from buying a goods or service versus doing it ourselves as well. So relationship is a key component, both with our business and with the supply base. And the supply base goes beyond just the suppliers. It's the partners. It's that entire ecosystem. So harness those relationships, nurture them, sustain them. Number two, data. I forgot who said it, but I love this quote. "In God, we trust. Everything else is about the data." So let's make sure we have good data because when we don't have good data, that creates waste, that creates additional rework, that creates maybe looking at data that we think is good but is not really driving the decisions that we need to be able to make. We need to let data help make decisions, and we need to ensure we have good data quality, good data governance as well to ensure that that data can remain dynamic instead of static. So data is an important component. And then the last piece, and this is just kind of encompassing everything, is understanding where waste exists and how we can look to eliminate the waste. It doesn't matter what role you have, whether it's a procurement role or any role in a company. Understanding where waste is and how you can eliminate it. And I know I share this in other sessions like this too. So I wear, and you can't really tell because I think there's a blurriness here, but on my badge I wear the eight areas of waste that exist in any process. Because I want to be constantly reminded of what they are and to ensure that it's top of mind.

>> That's awesome. That's better than a yellow Post-it note, right?

>> Absolutely.

>> I like it. I like it. Well, that's awesome. Pratik and Barath, thank you so much for joining me today for this CUBE conversation. And with your vast industry knowledge and the expertise that you both bring to your roles, I'm not at all surprised by the amazing insights that you've shared. And I know our viewing and listening audience will agree. I said this before, procurement is definitely not your grandfather's procurement operations. It has changed tremendously. There is a huge opportunity for procurement to be a driver of strategic business operations and to deliver some amazing impact on the bottom line. It can contribute substantially to that bottom line. And then, as I said, when done correctly, it can be a tremendous catalyst for change and can impact business operations in a big way. So gentlemen, thank you so much for lending your time and your expertise in this conversation today. It's been wonderful spending time with you. To our viewing and listening audience, thank you so much for joining us. theCUBE is your choice, your stop for enterprise and emerging technology news, and we always are happy to have you join us. And we'll see you here next time.

Catalysts of Change: How Strategic Procurement Transforms Business

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>> Hello and welcome to this CUBE conversation. I'm your host, Shelley Kramer, managing director and principal analyst here at theCUBE Research. And our topic today is Catalyst of Change: How Strategic Procurement Transforms Business. I'm joined today by two fantastic guests, Pratik Patel, who's the director, sourcing and supplier management with MasterCard, and Barath Narayanan, global head of the BFSI unit and the head of the European region for Persistent Systems. Welcome gentlemen. I'm so glad to see you today.

>> Thank you for having us.

>> Absolutely.

>> Thanks, Shelley.

>> Absolutely. Well, I've been so looking forward to this conversation. So as I mentioned, we're going to do a deep dive today into the topic of strategic procurement and if procurement can actually be a catalyst for change as well as a strategic enabler for organizations. In my experience, enabling and embracing procurement with a strategic mindset is really business mission-critical. I'll even go so far as to say that when you can align successfully align procurement with your other strategic business objectives, you'll be amazed at how you can transform an organization. So I love to start the show with some personal intros and a little bit of a career backstory. Pratik, will you indulge me please and kick us off, and tell us a little bit about sort of your career journey, how you got from there to here and just maybe surprise us with something we might not expect?

>> Yeah, absolutely, Shelley. So I think we're all the sum of our life experiences and our life experiences mold us into who we are today. And I am so extremely fortunate to have such... The values of my family have really molded me into who I am. And I'd like to share with you, if I can, the story of my grandfather because I truly believe if my grandfather didn't take the initiatives that he did, had the passion that he had, I don't think I would be born because my mom was the ninth of nine kids, so she was the youngest of nine kids. So my grandfather, when he was growing up in India, in fourth grade, there was a town hall meeting with the local king, we call him the Maraj, and he had this aspiration that he wanted to do more for the farmers in India. At a young age he wanted to be... I didn't know what he was going to do, but he wanted to do something. And so he raised his hand in this town hall when he was in fourth grade and told the king, "I want to have more schooling beyond fifth grade. I can't do that. In this village, school only goes till fifth grade. What can I do?" And the king was so impressed and the king said, "We will take care of this for you, but it's going to take time for us to build a school. So until a school is built, we'll arrange for transportation to another town nearby that you can go beyond fifth grade. And then after that, any schooling you want, the state will provide." And he took advantage of this to the point where he got his PhD at the University of Illinois during the Great Depression. He got a couple of bachelors, he got a master's in Germany, and then he went to the United States and got his PhD. After he was done, he was so thankful to the king, he went back and supported the king being a tax collector until India's independence. And then he was starting to be able to do what he wanted to do his entire career, which is make a difference for the farmers. But he didn't finish with his role, he was a deputy director for the state, but after he retired, he helped to build a wheat. So he genetically engineered wheat that could produce 20% more production, had less infestation, could take less water to produce. That really helped to enable the farmers to be able to grow economic wealth within the same land that they had. And he did this in such a humble way. He didn't want any patent. He wanted to make sure a subsidy was provided for them. And I share this because that instills the values in me and my entire family growing up. Now if I fast-forward from what my grandfather did and the impact that he had, and then think about my life, I went to 11 different schools before I went to college. My dad had an engineering degree from India, and it was tough in the '80s to establish yourself with a foreign degree.

>> Yeah.

>> And so that really helped build a level of initiative, because I was always tested. Unfortunately, I was bullied. I was discriminated against because I was one of the few Indians. People didn't know how to interact with people that are not from this country back then. And so I had to persevere from that. And so I had to think about how do I get what I need to get done, but knowing that I'm not necessarily going to get a support system? I didn't have a lot of friends, I didn't study with other people. I needed to learn and adapt. And I think adaptability in your career is very important. How you overcome struggles and be able to really drive a difference, how you're able to show passion, that passion can then hopefully drive a level of influence with people as well. And it's contagious. And so these elements are values that I think I've learned over the years that kind of make me who I am. And then in college, I went to six different co-ops that I had as well. So I had lots of different experiences. I was very much process oriented as well. Project management was something I learned early on. I was 20 when I got formal training in project management. I have Six Sigma background as well. And then I started off in consulting with Anderson Consulting after college. And then I went, after 9/11, there was a lot of different impacts with consulting. And so I went back and went in to become a plant engineer and went back to my degree in engineering where my degree is with. And I did that for about a year. But then I was, again, bold because I think I've learned over the years to be bold, to take that initiative, and take on the risk. I told my general manager that, "Hey, I expect, in 10 years to be where you're at. I don't expect you to give it to me. I expect to earn it. I expect that I need to accelerate my learning curve to get there as well." And so he was so impressed. He told the COO of Energizer at the time and said, "Hey, guys, I know we're struggling with filling this position in procurement. I got this guy that's an engineer in the plant, he could be a good fit for us." And fast-forward 20 plus years later, I'm still in procurement and I love procurement.

>> That's awesome. That's awesome. Pratik, this is one conversation I'm going to have to make sure I force my children who are headed off to college in the fall to listen to because much of what you're saying here is sort of the gospel that I have preached to them their whole lives. Raise your hand. It starts with raising your hand, asking for whatever it is, the opportunities, the chances that you're looking for. Be tenacious, be bold, embrace change, embrace continuous learning. I feel like no matter where you come at, whatever it is you're trying to accomplish, whether it's your education and then you lead the university and you go out into the work world and things like that. And it's, generally speaking, the person who says, "I'll do it," that goes far. So what amazing. What an amazing story. Thank you so much for sharing that with us. And Barath, I'm really sorry that you have to follow that. But you know what? I am confident you are going to share with us your interesting career backstory as well.

>> Shelley, believe me, I'm not going to match that. I'm not even going to try match that, right? That was amazing story. What I love in that story is not the perseverance and everything ,but really Pratik, the town hall with the Maharaj, the town hall concept. I didn't realize it existed in that period that your grandfather really used that. So amazing story, amazing resilience. I always respected you, Pratik, so glad that we are here. Let me give my story, which is very simple. As I said, a lot of similarities, Shelley and Pratik, but let me give you a perspective of what has been my journey of last 24 years. I may be one of the few who have this experience of of course growing up in India, my childhood, my college, my education, everything has been in India largely. But then I had an experience of living in Asia in Singapore for a couple of years. I had an experience of being in London, Stanford, New Jersey for almost six years. And then I moved to Europe to be based out of Zurich for 10 years. That really helped me. As much as I'm Indian in me, I'm also a global human being who understand the cultural nuances of India, Asia, US across the board, different parts of the US that I've experienced and European region as a whole. Of course I've lived in Zurich for the last 10 years, but it has really made me understand the nuances of people in different cultures and how we experience that. And that follows through a point where I believe in continuous learning and learning from everyone around me. It's not about learning only from your peers or managers. Really somebody whom I have been, throughout my career, to learn from people who I observe, also learn what not to do as much as what to do. I've learned enough from various people what not to do. I'm not going to give examples to that, but a lot on individuals that I learned what to do, what to change, what to evolve yourself as a human being and respect. And one of the person I most admire and learn is my little daughter. She's not little anymore. She's 19 years old. When I tell her she's 20, she corrects me that she's only 19. But she has been a good mirror in my life to always highlight what I'm really as an individual. And she keeps highlighting... We have these unique sessions that we have every three, six months. What are the three things I observe about her? What are the three things she observes about me? Believe me, Shelley and Pratik, she has surprised me every time, right? One thing that she said, which is when she was actually around nine years old is, "Dad, you know what? When your friends, your closest friends, give you some thoughts or ideas or suggestions, you don't have any problem in accepting that. And the same idea mom would've suggested you just three months before, a month before, and you don't accept that. You resist. Do you realize that?" And I said, "No way, . That's not true." And she gives me three examples, three solid examples she gives me and then I have to accept that. And that made me really understand as a human being, how I respond to, of course, my partner in my life and how it has changed me over a period of time. But the point of, as an individual being willing to learn, observe and learn and evolve yourself is something I've always looked at. And something really surprising and unique, which has become a topic of conversation for me last three months, is after living in Zurich for 10 years, I decided to move to New Jersey since April 2024 for my new job, which many surprise, but not to me, I follow my dream. I follow my professional dream, professional career. I have always been a agent of change and it didn't surprise me, but that has become a part of conversation that, "Wow, Barath, you decided to move from Zurich to New Jersey after 10 years." That's me as an individual over the last 24 years. Don't compare it with Pratik's, but that's what I am.

>> You know what? I think you've had an amazing journey as well. And I think that what's very clear is that we are here as three consummate tech geeks. I'm sure we've been described by our family and friends as nerds along the way, but we all seem to love continuous change and continuous learning. And I think that that sets the stage for not only career success but really happiness in what we're doing. So fantastic. Thank you guys so much. It's been great learning a little bit more about you. And now we're going to keep learning, and we're going to learn from the two of you on the topic of strategic procurement. So it's safe to say we're in the midst of a transformation, from a mindset perspective, as to the role that procurement plays as a strategic enabler within organizations. And we've talked before, the three of us, about some roles that we feel play a little bit of a part here. Pratik, I know that you've got some thoughts on this. Will you share with us a little bit about your thinking about what those three roles are that contribute to success on the procurement front and why they're significant?

>> Yeah, absolutely. So I think when you think about the role of procurement, procurement truly is a strategic enabler. But in order to be a strategic enabler, I really think you need to be thinking about these three dimensions that I want to talk about. One is being an influencer. So we'll talk about what does it mean to be an influencer from a procurement lens, talking about it from being a process expert. Really understanding, what are the activities that impact procurement from upstream and how does procurements activities then impact downstream? And then also thinking about it from a risk management perspective. Because to me, procurement is the first and last line of defense. So when you think about influencer, so first off, influencer to me is someone that you have trust in. In order to have trust in them, you need to first establish yourself as a credible source that they can really rely on and be that subject matter expert. And so it's important that we build those relationships to be able to drive influence, not just go and reach out and have cadence with businesses, have cadence with suppliers, but really be able to understand their needs and be able to articulate with what their needs are. And transfer to the other party, that other party being the supplier, because we're the conduit between the business and the supplier. And so the supplier needs to understand what is it that the business is looking for, and for us to also give them the ammunition inside their organization so they can go and influence their leadership to drive the value that we want. And vice versa. We need to be able to understand our suppliers and really understand what differentiates them from others that are out there. Because especially in the IT services space, there are so many suppliers that are very similar in their capabilities. So how do you really differentiate that value and be able to tell the story back then to the business, so that the business can see that value and be able to capitalize on it and get the optimal value they can for the vision that that supplier has? Because everybody has a vision as well, and we need to be able to understand where we are on that journey of that vision and how can the supplier help us to get closer and closer to achieving their vision for why they exist, because then it'll get the most value. So that's as an influencer. From a process perspective, it's about elimination of waste. Waste exists in everything we do. These are non-value added activities. But in order to identify the waste, we need to really understand the process. What happens to the activities that ultimately then procurement is then helping to support? And so how can we ensure that we get better information? Because that is also helping to eliminate a lot of back and forth as well. How can we ensure we have standardized processes, so it's consistent? And then the work that we're doing, ensuring that we are doing that better, faster, and cheaper so that there's a positive experience with the people when they're interacting with procurement and our procurement process. And then on the downstream impact as well, we want to ensure that the work we do has long-lasting effects as well and not just something that we have to redo again because something was missed. Sometimes if you don't get the requisition correct, that could have an impact on delaying payment to the supplier too because we're not quite getting the right parameters around being able to pay that supplier. So process is so important to me. And then the last element is risk management. From a risk perspective, we are the first and last line of defense. The first line when it comes to the governing documents. So the contract, the terms and conditions that's governing our relationship. It's important that we understand the intent of everything we have in those MSAs or data processing agreements, or whatever the different contracts there could be. And we need to be that influencer in a sense with the supplier to ensure that they understand what risk they need to manage because we don't have the control.

>> Right.

>> And so I think procurement needs to take a more proactive role in being able to really help manage that risk. Or when it comes to financial risk, how we think about negotiations. To me, negotiations is very psychological. It's about achieving satisfaction, and it's understanding the aspirations of both parties and how can we connect. It's not about tactics, it's really about what are the pressures to buy and the pressures to sell, and then truly understanding each other so that we can achieve satisfaction. So those are the three key roles, from my perspective, for procurement.

>> Well, I think that makes a lot of sense. Barath, what are your thoughts on these three roles that PR suggests are key? And is there anything else you would slide in there?

>> Those three are the fundamental pillars, I would say, Shelley, as Pratik called out. Being an influencer, absolutely clear on how the process works today and what does it take to improve the process continuously with the difference. Now, what I would add on to that is really more about the procurement function having a deep understanding of the broader business goals. Only when the procurement function is on the table at the executive level, clearly understands the macro business, priorities at each line of business, they are very well positioned to influence the need of the business organization with the suppliers, of that bridge that Pratik called out. So absolutely influencer is one of the most important element, but with a very good understanding of the business priorities. So that becomes an important element. Now, the real change here is how the procurement function is a value creation function and not really a cost reduction function, right? And I've seen this in the industry with many leaders truly adopting value creation led by continuous innovation that really results in much better managed risks and improving the competitive advantage of the business with the way they engage with the external firms. So the whole element of value creation is so critical and the cost advantage becomes an outcome. If you're a value creator, you, by default, make sure that you have an outcome of the whole element of how you are able to save the whole cost spend that you have. And with that, Pratik beautifully articulated about the risk management, which is so critical. There, it is more about how you can, as a first line of defense, how you can really be proactive in managing your risk rather than reactive. And that is where you will use a lot of process enhancements, process innovation to be the proactive leader, to improve the risk that, at any point in time, may come up in future that you need to be aware of it today. That's what I would call out fully aligned to the three pillars, three roles that Pratik called out.

>> Yeah. Yeah, I agree. And to me, I think that in my experience, procurement isn't your grandfather's procurement operation, right? Things have changed so much as it relates to procurement. And what I'm hearing both of you say is that procurement leaders need a seat at the boardroom level. This is a business strategic conversation. Procurement plays an outsized role in so many of the organization's strategic objectives as a whole. And so again, this is not something that's just tucked over here in a section of IT or wherever we want to do it. It truly is a business catalyst, a change driver, and it's an important part of leadership conversations. And I doubt that either one of you would disagree with me.

>> No, absolutely not. I think if I can add on, Shelley, I would say that the key part for procurement to be successful is getting involved early, very early in the process when a need is established. When a need is established, involve your procurement stakeholders because what you do is you open up the door to a lot of different levers. There's this philosophy of a chess board. AT Kearney helped to build this a long time ago, and I have been brainwashed by AT Kearney around this chessboard, which is that there are 64 levers that exist when you think about where the buyer influence os, where the seller influence is, and what levers are available to you. And one of those levers is what we call an RFP or an RFI, a request for proposal, a request for information. But yet that is a lever that we go to a lot. But there are many, many other levers that are out there. And involving us early when the need is identified is critical. So it's not just having a seat at the table, but it's when you have that seat at the table.

>> Yeah, no, absolutely. And understand the value I think that your procurement team can deliver in terms of just business strategy overall. You started answering, Pratik, my next question. And what I'm going to ask you to share with us now is, so if I'm starting, I'm probably not going to start a procurement operation from scratch today. I'm probably going to step into an organization. I'm going to think about how can I structure or overhaul my procurement operations to modernize them. So if I was going to do that, what would you suggest is the key areas I might need to focus on in order to drive this transformational value that we're talking about for the business?

>> Yeah, for me, it really does start with an understanding of the value that procurement brings and that is with establishing the brand. Because when you establish a brand, you think about a brand as having a certain level from a consistency standpoint. When you think about Nike, we think about quality. We think about maybe athletics. So when you think about procurement, we want people to think about a value enabler. We want people to think about gatekeeper of risk. Or thinking about it in terms of, "Hey, they can help me with driving a better, faster, and cheaper execution overall." So it's important to ensure that there is a brand established for what procurement stands for, and it all centers are on better, faster, cheaper. So that, to me, is number one, establishing a brand that really people understand what that brand can do to help drive value for that. Number two is waste elimination, and we talked about that from a process perspective. So it's important that if you're establishing a procurement organization or helping to further evolve it is to think about what's happening today. What's in the current state, what are the pain points that we have in the current state, and how can then we drive a future state that eliminates that waste? Because that will help to ensure, again, related to the brand, the credibility and the trust that can be built into the brand. Because when you do things faster for people, when you have a better quality output for people, and if you happen to reduce costs for them too, it's hard for people not to rally around that.

>> Exactly. It's hard to say no to any of those things.

>> Yeah. And then I think the third element is how you leverage data.

>> Yeah.

>> Because data is everything. And today, we are so fortunate when we think about data and all the natural language processing, the tools and algorithms that exist out there and how we can leverage data. So it's important to have good data. So you want to ensure you have good data and that you have less variability in your data so that you can enable machine learning to take place and to help with machine learning where the data relationships exist, and how those data relationships can then drive a predictable outcome. Because, again, that will help to eliminate waste and drive efficiency in the procurement operation.

>> Right, right makes perfect sense. Barath, talk with me a little bit about how procurement teams can leverage technology like AI and machine learning, which Pratik just mentioned, to enhance their operations and to drive that strategic value that we're all in search of.

>> Absolutely. I would just add a few points to the earlier topic, deriving into the technology adoption in a minute. As Pratik called out, if we have to start a procurement function today, the few things I would add on, supporting Pratik's point, is clearly establishing a purpose and a vision, aligning to the business. I would do that today from a procurement standpoint, very well aligned vision and purpose to support the business organization from day one. So that's something I wanted to highlight. The second element is, as much as the procurement function has consideration of the internal stakeholders as their own clients, equally there is an importance of building a relationship with the external suppliers. And they're not vendors but truly partners, right?

>> Yeah.

>> Without compromising any ethical aspects or any preferences, you could still truly consider the suppliers as two partners and have an excellent outcome achieved being a partner versus vendor. And I've seen this with players adopting a partnership versus a vendor approach where there is a tactical outcome that takes you to the result versus a strategic approach of partnership that takes you one level above. So I would really call that out. And the last point we also should consider is a very agile and flexible process being established, because things are changing in such a disruptive manner at a short span. We need to be nimble to be very agile from a procurement standpoint. I would just add that now if you look at the three elements, technology plays a very, very crucial role, an important role. And there, I would say, technology from the basic element of procurement process, e-procurement process, well established organizations are evolving. I would say how do you digitize it? You can digitize the whole procurement, e-procurement process, especially on your collections, on invoicing where I've seen large institutions actually having leakage, actually having challenges and the invoices and collections not well managed, and it is a challenge for them. They lose, to an extent, the percentage of their own financial impact that they have. So there, the e-procurement process becomes very critical. With the evolution of new AI and the whole machine learning, and now the most fancy word gen AI, which is really getting adopted, is how you improve your analytics. Procurement actually has enormous amount of data. How you convert the data for your decision making on spend analytics, how you build insights on the data that is already existing with you today to improve and bring new ways of working with your partners, with your internal stakeholders. So that decision analytics that you can adopt on top of your data that is available through advanced analytics becomes very crucial. But there, what Pratik called out, the fundamental data quality becomes very crucial. And if you establish that and add on the insights, that's really an important element. And the third aspect, of course, how you use procurement function to be as flexible as to the internal stakeholders with an interface of what we have, the ChatGPT interface. Have people engage with your data that you have. The business users can actually chat and engage with that to get insights on the fly, on the fact that you don't need multiple people interventions. You provide transparency to your business users on your data. And of course there are a lot of things on technology that we could do, but these are the few things I would highlight the importance of technology adoption.

>> Yeah. Well, you're going to get no disagreement from either of us on that front, that's for sure. And really today, the reality of it is whether we're talking procurement or any other thing we're trying to do within an organization, data is the lifeblood of every organization of every size. And quite honestly in the research that we're doing, that's the biggest challenge that our customers have, that your customers have, in terms of getting their arms around their data, being able to manage it, being able to access it, provide access to the users who need it, being transparent about data, all of that. But that's the foundation upon which we build our procurement operations and upon which we build our other operations within the organization. So good call on the importance of data for sure.

>> Thank you.

>> So Pratik, this is one of my favorite questions. Can you share with us maybe a specific instance where procurement played a pivotal role in helping achieve some significant business outcomes?

>> Yeah, I'd love to share a couple of examples if I can. So one is more from a process perspective, because I think we all kind of face this challenge sometimes, which is that we have our system that we're using from a procure to pay standpoint to manage purchase requisitions and how we support the business. But then in that workflow, there are other stakeholders that need to be involved. And when those other stakeholders need to be involved and there's a change, maybe that we're asking them to be a part of our workflow that we have in our system versus their own system that they're used to where they do that work, then I think that's where there's inertia that kind of takes place as well. And so the example I want to share with you is legal. So legal has their workflow, they had their own system where they did their approvals, for example, and then they expected procurement to go into their system, put the intake into their system for where they need to engage. And I challenged our legal team, we went through a kaizen, if you're familiar with that term, continuous improvement was what it stands for from a lean standpoint. So we did a whole value stream mapping, mapped out the current process that we currently have, where the pain points are with that, where procurement has to go into this other system, how legal doesn't completely have visibility to all the contracts and the history with the contract. When we're in this other system, they rely on us to feed that. So there's a lot of waste. And so then we established the future state where we could utilize our procure to pay system, where legal can get the value that they need as well, and we addressed their pain points. One of their pain points was just really around mapping how the triage would take place within legal in our system. And so we took the painful exercise of building out this triage template for them, updating that, showing based on our future state so that they wouldn't have that lift initially. Then they saw the value of it, because today, we're more than five years in, and we're utilizing this, and it's working beautifully. They saw the value of it, and now they keep things up to date too, they invest into that. But initially, there's always going to be hurdles. And so how do you get over those hurdles? And sometimes you just got to roll up your sleeves and do the work so that people will see the value from it. So that's one example of where I think procurement can help to drive that value of rallying other stakeholders to drive efficiency. And another example is, recently, so we're talking about AI, I won't tell the company's name, but we have a solution from one of the AI players that a number of our businesses have needs for. And so we rallied all these different businesses. We kind of talked about, "Okay, we all have different needs here, but what we don't know is how much that demand will increase over time because it's so new in terms of how we're utilizing this. So we need to be thinking about how do we structure a contract that gives us that flexibility, the adaptability. Gives us the training that we need as well for our people to be able to leverage this platform. And also get a level of commitment from all the different parties, because one group is going to be the technical owner of this platform." And so then there's an allocation of cost that needs to take place from these others. "But if collectively, as a company, we meet the demand, then you're not going to be on the hook for that because others are offsetting it." So it's how do you build out a structure that enables an entire organization to leverage this platform, which is going to drive value for everybody. And so we don't have rogue activities then where different people have different contracts for the same platform, but build that flexibility in. And I think that's working out beautifully for us. And I love the support that we got across the company, because we probably had 20 people on a call initially to rally the different people. We had finance talking with the business as well, so that they can all align in terms of how we're going to support this to drive the value, because then we get a deeper discount as well when we pool all that demand. So those are two examples that I would share.

>> Well, I think that's an incredibly timely example because I don't think in many instances, when we're thinking about AI and gen AI, and integrating it in, and adopting it into business operations, a lot of times we're not thinking about that from a procurement lens. And so it is a procurement function and I love the approaching something like AI technology with a view toward flexibility and adaptability because we know that our needs today are here, but our needs moving forward are of course going to change. So great example. That's really timely. You must have actually thought about that in advance. I'm impressed.

>> That's perfect.

>> All right. Barath, would you share... I know you come at it from a different lens sometimes. And so I would love to hear your thoughts and maybe some specific instances where you worked closely with a procurement team to help understand their strategic objectives and maybe even going beyond your comfort zone, and really kind of how you might've reimagined your customer partnerships so that you can help deliver better outcomes.

>> Yeah. Well, absolutely an important element here.

>> Yeah.

>> Absolutely an important element here that I would call out, right? The fact really is how we move towards a win-win approach for both the parties, and that's the most important element. Pratik brought this point at the beginning of the call about negotiation. I will take that as a key pillar and give an example. One of the most important element is, it is never about one of the two entities winning. I've seen that happening multiple times, and I'm not going to give that example, but when truly the procurement function and the partner, I'm not calling it vendor or supplier, the procurement function and the partner, when they both operate with the intent of both the parties winning... And it is possible, and that's the beauty of negotiation. When you truly look at what is the intent that the procurement function representing the client organization is trying to achieve, and this is where the transparency comes into play, and the procurement partner who is negotiating with the supplier partner, they truly understand that if the partner compromises on some of the elements, you may get a beautiful contract to date, but within 3, 6, 9 months, my quality is going to suffer. And I've seen that here. I'll take a very unique example. Yeah, I can't call the country where I did this in Europe also because then it's very easy to know which contract is that. But this is a contract, substantially large contract. And the two players, we operated entirely with the transparency of what is in it for the client, what is in it for the partner. And we were willing to bring the transparency to an extent, to share the details, to achieve a common objective. And that truly resulted in a win-win situation for this contract. And it is sustainable contract that we have seen for the last five years. And that is what truly differentiates a winning proposition, when both the parties see a benefit. Not one sees, "Oh, you know what? I have compromised." And the other sees, "Oh, I have actually won my battle in this specific process." Then we are blocked. And actually it's a loss for the client. And that is what I would give as an example, Shelley, where it is truly an element of both parties thinking about each other with a common objective of, "Of course, success of the business," without compromising the risks. Like procurement is a first line of defense. You cannot compromise the risks, you cannot be preferential at all. You need to be absolutely balanced. But you could still make sure that you're not compromising on the partner. And that's what I would call out.

>> Yeah, but I have to applaud you for the comments that you're sharing because I cannot agree with you more. It is so, so important because the partner component is actually broader than just even our relationship, a buy-sell from a customer and you as a supplier, but it is also that ecosystem from that perspective. So in order to really achieve that satisfaction and drive that value, it is about how we're able to rally in and bring in all of the components, because it could be that platform provider, it could be the hyperscaler. That is a part of that too. So really bringing in all of those parts and understanding the true, to your earlier point about what's the vision, what's the business goals that we have? How does that align with yours? How does it align with the partners? And then when we're all synergistic in terms of that alignment, it is beautiful what we can achieve.

>> Correct.

>> And actually, Pratik, I can add mind reader to your list of capabilities because I was just going to ask you to help me wrap this show with sharing your advice as to what you might say to other procurement professionals who are looking to transform their roles within the organizations and to transform procurement operations within organizations, and how to be more strategic and more aligned with business goals. And to a certain degree, you've already answered that. But just, if you would, talk us through. I know there's the alignment factor, I know there's the partnership factor, but walk us through those key things, those key pieces of advice that you might give somebody looking to do this, because they're inspired by our conversation and they realize they want to change.

>> Yeah, I think number one is relationships. Harness the relationships, nurture the relationships and ensure that those relationships are sustainable to help drive the value and that are aligned with the business goals that the company has. And that, one, procurement understands what those business goals are, procurement understands what is it that you're buying, what is driving that need, that differentiated value that we can gain from buying a goods or service versus doing it ourselves as well. So relationship is a key component, both with our business and with the supply base. And the supply base goes beyond just the suppliers. It's the partners. It's that entire ecosystem. So harness those relationships, nurture them, sustain them. Number two, data. I forgot who said it, but I love this quote. "In God, we trust. Everything else is about the data." So let's make sure we have good data because when we don't have good data, that creates waste, that creates additional rework, that creates maybe looking at data that we think is good but is not really driving the decisions that we need to be able to make. We need to let data help make decisions, and we need to ensure we have good data quality, good data governance as well to ensure that that data can remain dynamic instead of static. So data is an important component. And then the last piece, and this is just kind of encompassing everything, is understanding where waste exists and how we can look to eliminate the waste. It doesn't matter what role you have, whether it's a procurement role or any role in a company. Understanding where waste is and how you can eliminate it. And I know I share this in other sessions like this too. So I wear, and you can't really tell because I think there's a blurriness here, but on my badge I wear the eight areas of waste that exist in any process. Because I want to be constantly reminded of what they are and to ensure that it's top of mind.

>> That's awesome. That's better than a yellow Post-it note, right?

>> Absolutely.

>> I like it. I like it. Well, that's awesome. Pratik and Barath, thank you so much for joining me today for this CUBE conversation. And with your vast industry knowledge and the expertise that you both bring to your roles, I'm not at all surprised by the amazing insights that you've shared. And I know our viewing and listening audience will agree. I said this before, procurement is definitely not your grandfather's procurement operations. It has changed tremendously. There is a huge opportunity for procurement to be a driver of strategic business operations and to deliver some amazing impact on the bottom line. It can contribute substantially to that bottom line. And then, as I said, when done correctly, it can be a tremendous catalyst for change and can impact business operations in a big way. So gentlemen, thank you so much for lending your time and your expertise in this conversation today. It's been wonderful spending time with you. To our viewing and listening audience, thank you so much for joining us. theCUBE is your choice, your stop for enterprise and emerging technology news, and we always are happy to have you join us. And we'll see you here next time.