Next up in our Procurement Leader Spotlight blog series, we sat down with Thomas Loffredo to talk about all things procurement, automation, RPA, and the skills needed to succeed as a procurement leader.
Thomas has over twenty years of management and consulting experience with extensive work in strategic sourcing and procurement. He has successfully managed multi-million dollar projects, negotiations, cost-reduction programs, and digital transformations including automation and RPA (robotic process automation). Currently, Loffredo is a Principal Consultant of Patriot Staffing & Services.
Q: How did you get into procurement?
A: I transitioned from the IT development organization of a large pharmaceutical company to strategic sourcing. The transition was born out of the desire to get closer to the business. The rigors of IT provided me with a foundation of analytical and requirements-gathering skills. Having been a customer, I was able to share areas of opportunity with the sourcing organization.
Q: Over the last 5-10 years, what are the most impactful changes you have seen in procurement?
A: The complexity of technology, contracting, and pricing models have had a profound impact on sourcing and procurement. Good sourcing professionals need to stay abreast of their customer requirements so that, when the time comes to construct a deal, they can lead the negotiation.
Innovation has given rise to smaller, nimbler firms that can be a market differentiator to our internal sourcing customers. That said, innovators come with risk. Balancing third-party risk management with business imperatives has impacted the profession significantly.
Q: Where do you see the procurement industry going over the next five years?
A: Despite the early buzz about artificial intelligence, I believe there are a plethora of near-term opportunities for robotic process automation (RPA) within the procure-to-pay cycle. The technology is mature, but, the availability of sourcing/procurement experts to implement is sparse.
Q: What skills do you think the future leaders of procurement need to be successful? What advice would you give them?
A: Procurement needs leaders. Unfortunately, my experience has shown that a lack of strategic thinking and basic customer relationship management skills, more often than not, dilute or eliminate the value proposition of the procurement organization. A successful procurement leader understands that we serve our customers by adding value rather than putting roadblocks (needless touchpoints or approvals) to the acquisition of products or services that our customers need to drive business results.
Q: AI, ML, RPA—all these new technologies pose a big challenge for procurement professionals. Can you share some keys to success for implementing these new technologies successfully?
A: The single most important aspect of deploying RPA in procurement is the organization's desire and ability to change. Too many times, leadership seeks to streamline (aka reduce headcount) only to be faced with associates who are not willing to change. This social dynamic, if not recognized and addressed by strong leaders, will subvert the best intentions and desired outcomes.
Q: Extra Credit—what is a trick for procurement leaders to get more spend under management?
A: It is a very simple and fundamental concept.
1. Recognize the business imperatives from the top of the organization and align procurement around the same goals. If, for example, the firm is in a growth mode, and your procurement organization is focused, exclusively, on savings, the two may be at odds. Establish organization metrics to support the business. e.g. reducing time to contract is critical to organizations focused on growth.
2. Provide value to each customer you serve! If your procurement organization is led by associates who understand that customers come first and trust that the customer has the best interest of the business in mind, organizations will want to work with procurement. A non-value added interaction with procurement is no good.