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Yesterday, Tradeshift celebrated the opening of their new London offices with a reception in the heart of the financial district of Canary Wharf in London.  Set in Level39, the Fintech community in 1 Canada Square it was an opportunity to see the Tradeshift vision of the future of P2P – and, I have to say the vision is as exciting as it is dramatic which was matched by the magnificent view of the river Thames and the rapidly evolving skyline of London. London Skyline   Christian Lanng’s presentation was actually superb, it really was, but there was one part of it when he made a claim that I suspect - just suspect - may not have been quite 100% based entirely in the broad realm of factuality - if you know what I mean - but more of that later.

This is how the thought process goes for AP automation: "Electronic invoicing could save us lots of time. We could automate accounts payable." "Wait - this could be to be complicated. We'd need a project manager and an expert. We may have to buy in some software or work with a third party. Actually this stuff doesn't come free. It could cost a fortune." "$1 per invoice must be cheaper than the cost of a paper and manual process but at 1 million invoices per year, we'll never justify that. Let's make an incremental step toward automation. We can scan our invoices and handle them digitally." Yeah, right!

[caption id="attachment_9451" align="aligncenter" width="413"]Something familiar out of context can have a dramatic impact Something familiar out of context can have a dramatic impact[/caption] Joe Hyland, CMO at Taulia, recently wrote an excellent piece about industry disruption in which he highlighted three of the characteristics of a truly disruptive strategy. Essentially, Joe advises: 1. Don’t simply reinvent the wheel. 2. Don’t plagiarize an existing model and 3. Don’t make incremental changes – be bold. I’d agree with all of that but there’s something that Joe didn’t say – perhaps because he didn’t want to blow the Taulia trumpet too overtly – so I’m going to say it for him.

One of the issues that procurement professionals complain about is respect. Or status. "Procurement isn't taken seriously". "They only involve us when things get difficult". It's a very common issue for procurement in many organizations. I've seen it at it's most extreme in financial services where procurement is so far removed from core business that it really is difficult, for what is considered by many as the the most boring of back office functions, to be taken seriously at a strategic level. But is this really any different from any other part of business? Perhaps procurement people need to take a look in mirror and frankly, get over themselves.

For my sins, I have been looking at the NHS Procurement Atlas of Variation – Metadata, the opening two paragraphs of which read: The NHS Procurement Atlas of Variation has been developed to deliver greater transparency by comparing the prices paid by different trusts for the same types of products. This will allow trusts and their suppliers to understand where better value is available and then act on this information to reduce costs (my emphasis). Discontent with the Atlas has been well documented and I don’t need to rehearse those arguments here. What surprised me was that, even now, after all of the improvements in public procurement in recent years, the DoH could issue a procurement policy document that treated price, value and cost as synonyms and expect to be taken seriously. This is an antediluvian notion, that procurement is about securing the best (usually lowest) price and nothing else. It is not.

It’s not quite a revolution. No-one is fighting in the streets but the world is changing. For decades – indeed centuries, banks have wielded a power over business and the wider economy that was virtually unquestioned. The effect wasn’t always negative of course. It is hard to see how the economic growth of the 20th century could have happened without these institutions. But neither was it all good. There are anomalies in the way the economies of the western world operate  - there are unintended consequences, winners and losers. The fluctuations that occur in our economies are exploited by the banks who have a privileged central position and their actions can amplify the ups and downs in exchange rates, interest rates and stock prices. These accentuated aberrations can be very damaging to economies, businesses and individuals. But there is one aspect of the way our economies have run that hasn't fluctuated and has always been pretty consistent – you never see a poor banker. But now there’s a change in thinking. Some of the anomalies that we see – in particular the unfair playing field that exists between wealthy businesses and their smaller suppliers – are now being seen as unacceptable. Extending payment terms in order to optimize cash flow is a good thing only if you take a very isolationist view – if you see self-interest as the only thing that matters. If you take a wider view, you see that delayed payment hurts vulnerable suppliers, it pushes prices up and can damage an economy – at the very least it does nothing to help an economy that is on it’s knees and struggling to get back on its feet. This is why there's been a change of thinking and ironically, it is the banks we can thank for the change.