Procurement as a Growth Driver – Kevin Bates, Founder @ Quantum 360

Automated Transcript

Alastair Cole 0:05

Hello and welcome to The Sales Scoop. This is a weekly live show for the founders, and senior leaders of technology businesses who want to improve how they sell. I'm Alastair Cole, a computer scientist and ex Software Engineer with two decades experience in sales and marketing and a heap of experience in today's topic around procurement. I've had positive and negative run-ins with procurement over the years, landing big enterprise deals. I'm very excited that we have somebody who's an expert in that field joining as a guest today. Kevin Bates, Hi, Kevin, hi Alastair, delighted to have you with us. Kevin, thanks so much for joining. You are a senior procurement Pro and heavily Accredited Commercial transformation leader, founder of quantum six, 360, in 2019 I think you may correct me if I'm wrong, Kevin, please tell everybody your journey kind of here today in procurement and what's happening with you in quantum 360

Kevin Bates 1:14

Thank you very much. Alastair, and first of all, thank you for inviting me onto the sales coup. I'm extremely pleased to be here. I am really passionate about procurement. I have been for nearly 30 years in terms of my career and the focus and the real value that a strong Strategic Procurement approach in all organizations, small, medium and large, can actually help and drive business value, business growth. It is something that is an exciting area to work in, and it just, it just resonates with building those sort of long term relationships, whether it's stakeholders or suppliers. It's just so important in terms of my career. I started out in finance a long time ago, and I found finance was interesting, but it was more about reporting a lot on what was already happening, rather than actually be focused on what you can do and how you can affect change for organizations or with organizations in the future, and a key role from moving from finance into procurement, you know, as a young, young guy at the time, moving from being an office based role to traveling the world through procurement, working with leading designers, fashion designers, on on, on stuff as well. It's just a massive, massive change from our finance role. So I was hooked on procurement from that point on, really, and it's continued. So I've got a long history of working in the private and public sector. I've led on some senior roles in places like NHS England, TfL, for example, started quantum 360 in August, 2019, as you said, Alastair. And the key focus around quantum is around working with organizations, as I said, small, medium, large organizations, to help them not only understand how procurement can support and drive value across their business, but really developing and building those long term partnerships where we can support and help organizations really unlock some of that value, and That value is key, actually, and I don't think any organization should not be without, I would say this, but should not be without a proper procurement function. Scale and size and focus will differ, obviously. But I really, really, really, really think that the value that a good team can provide is huge.

Alastair Cole 4:04

Yeah, it's such an important part of business and kind of neglected. And I can't wait to get into your sales group in terms of how procurement can be a growth driver. You mentioned something really fascinating there irrespective of the size of your business. And I'm keen to get into that too. But before we do, you know when I, when I, when I think of the word procurement, my mind goes back to the big deals that I've won. I think the two that jumped out to me really were Clifford Chance and KPMG in Canary Wharf in my agency days. And those were enormous contracts all leading up to a kind of, you know, there was a big moment and a big pitch. But obviously it's a test over weeks and months. And so for me, as an agency person, you know, I saw procurement either as kind of, you know, the good guy or the bad guy delivering those news. But I've been out of the market for, uh, for a long while on those kinds of super large deals. From the agency world. What's happening right now? Kind of at the Cole face, Kevin, what's what's happening in 2025 in the world

Kevin Bates 5:06

of procurement? Well, there's, there's, there's a lot going on, to be fair, and in terms of really driving value across businesses, there is a huge opportunity for procurement to step up to the plate and become that strategic function across organization organization. You can see in some organizations that procurement can be quite bureaucratic. It doesn't need to be. It shouldn't be. It should be agile. It should be flexible. It should be supportive of what the business needs are. But it's really around being creative and being innovative, understanding and knowing the marketplace you're operating in, where an organization has got these big deals, it's going after, it's making sure that the cost focus in those deals are set up correctly, and that whole supply chain, which is critical nowadays, because in all bids, you have to be able to have that visibility of the supply chain you can be working in and things like ESG, not just in the tier one type sort of supplier that's submitting those proposals, but all the way through that supply chain. It's just one aspect that's really, really critical. I feel that procurement leaders are visionaries for an organization across organisations, set right in an organization at a strategic level, and can really massively drive that value, because we talk to everybody. We have to be engaged with every single stakeholder in the business. We have to be engaged with every budget holder in the business, if it's set up correctly, we should be a key part of that whole business planning process, because coming out of that business planning process is a pipeline of activity that you're going to do, and managing the cost base is extremely important in any organization. You know, it's much harder to get additional sales than it is to sort of manage that cost base correctly. And there is, there is a sort of a ratio of, sort of four to one sales to sort of 20% increase in sales to 5% sort of reduction in costs. It's been around for many, many, many years, but every organization I've been into, you can easily find between five and 15% value based savings. And I want to make sure that people are really, really clear, this is not about cost savings, Strategic Procurement drives and offers a hell of a lot more than just cost based savings. But you can, you can drive at least at eight to 15% in a sort of fairly mature organization. So the other side that I think moving forward over the next couple of years is around technology, AI and procurement is one area where I think we will drive a lot of the AI revolution, if you like, because, again, we touch all parts of the organization. It's something quantum 360 is working on at the moment. We've got our own AI agents. We're building. We're also working with a partner organization around how we elevate data and data driven outcomes through more AI enabled sort of dashboards and data analysis, which is really, really critical within procurement to make it that strategic enabling function.

Alastair Cole 8:36

Yeah, you keep using that, that word strategic and strategic relationship. I think for me, I kind of grew up in the world of gloom, and I realized that it was more about a longer term relationship with individuals and groups, rather than a kind of box ticking or one off thing. It is that long relationship. So look, that's a great starter. Thank you, Kevin. You know, if we get into your sales group, right about how to show our audience and founders and leaders in UK tech companies, how can they make procurement a growth driver? I want to get into the how. What could they do? You know, after the call, what could they do today, tomorrow? What would be your first area that you want to focus on?

Kevin Bates 9:23

Yeah, I think for all businesses, founders, etc., I think the most important thing is to understand what your business is trying to do, what it's trying to achieve, and what a procurement function can do to help deliver those strategic objectives and outcomes. You know, it's different in every single organization in terms of what you may or may not want or need from a procurement function. And we would normally start with producing or developing a sort of maturity assessment for an organization, which just sets out where. We think they are on that sort of maturity curve. You know, a lot of organizations will start out being very reactive, very administrative, bureaucratic, Alastair, and that's where, unfortunately, procurement can get a bad name for itself. But as you move through those maturity curves and be more innovative, more creative, being more visionary, driving that innovation. Because it's not around just driving innovation in your own organization. You need to market your shape. You need to drive that innovation across the market as well. So that's really, really key. I think I think organizations just need to understand where they are now and what they think a proper Strategic Procurement function or approach can deliver for them. And I would say going back to the point eight to 15% value driven outcomes for sure in most organizations or a lot of organizations,

Alastair Cole 11:05

Yeah, understanding where you are in that diagnostic part is absolutely critical. What do you think? You know? It isn't. Procurement is no longer just about lowest cost, right? It is about that, that highest value, what you can get out of it. And like you said, leading on to innovation. Why do you think businesses are still stuck thinking about it just as a cost cutting exercise?

Kevin Bates 11:32

It surprises me Alastair, if I'm being honest, because 30 years ago, I started in procurement, and some of the things we did back then in a leading airline in the UK was very innovative, very creative, and a lot of organizations are not even having that focus now. This was really around properly understanding how you scope your requirements out, so you can properly go to the marketplace and drive those requirements, those outcomes, using data properly to really make business decisions is critical. Back then, we had an MIS system that pulled data out of all these other databases so we could really identify how procurement, working with finance, could really drive operational improvements. It was huge. And I say it's not changed huge amounts over the last sort of 30 years, and I think there's so much opportunity. But I do think the tech that's coming in now and the tech that will be coming in the future will help to drive more visibility and opportunity for organizations. Going forward, we are becoming much more data driven. I think procurement is coming to the seat at the table because of world events as well. You know, having to be agile, having to be able to move and change supply chains because of world events, price impact, inflationary impact. These are all key, key things, but you have to start somewhere as well. Alastair and culture in an organization is key. And I love the saying culture eats strategy for breakfast. I think that is just so, so true from a procurement point of view. You need teams of people that are very open, very honest, very transparent. And can communicate and talk and share ideas and thoughts with the stakeholders they're working with, and be able to take supplies along that journey as well. It's really, really key.

Alastair Cole 13:34

And what recommendations would you make, or what actions could you give to somebody in the audience today about something they could go and do in their business. If they don't have anybody dedicated for procurement, they're kind of handling it as and when it comes along with larger deals. What would you recommend that they do if somebody's kind of starting from a blank sheet of paper and they think, yeah, it's been on my mind, and now I need to really, you know, take procurement more seriously. What are the key steps they could take this afternoon, Kevin, to kind of start to get that culture going.

Kevin Bates 14:05

Yeah, simple, simple things, really Alastair, as I said earlier, assessing themselves in terms of where they think they are on sort of maturity, aspects of things. But have they got a process in place for procurement? Is that process effective? Does it support the business to make decisions, as opposed to is it quite bureaucratic? Are contracts being managed properly? Are the right people to manage the contracts? Do they have capability and capacity to manage contracts within their day, in their roles? How are we recording, reporting value from everything we're doing? Are we linking procurement and contracts together, or is there a big miss between you know, what happens a lot is you spend a lot of time and money investing in procurement and not in contract management, and therefore, when it moves into that side of the business, the value you've driven through procurement can. Can be lost very, very, very quickly. Visibility and data is key. Go and have a look at your spend data. See how many suppliers you've got in some of the categories you've got. See some of the value that you're being charged for, some of the key strategic types of areas of your business. And a lot of this Alastair is common sense. It's business common sense, and it's general common sense, quite honestly. But it's surprising how many organizations don't have that focus on their costs. And as I say, it's small, medium, large organizations. And it's also in mergers and acquisitions, one of the key things they do in that area is bringing two organizations, three organizations together, and looking at the cost base, so it's fundamental.

Alastair Cole 15:44

Yeah, I mean, I think you talked about focus there, right? It's about creating a group, if you don't have a group or somebody dedicated, it's about saying we're going to create a group. We can tell from what you've said that, obviously, there's data coming from different parts of the business, right? But that procurement group, or that procurement function, even if it's just one person, needs to start somewhere with culture, you know, whether that's a month, monthly meeting, or whether and you know, maybe it can become more regular. But some way for that, that kind of repeated behaviors, repeated positive behaviors, in the world of procurement Can, can build that culture. You talked about data there, right? Data coming from different places, and it feels like it should be coming from all aspects of the building, you know, our leadership. It feels to me like leadership teams are probably underestimating the value of that procurement data. What could that you've talked about, some of the way, some of the kind of the uplift they could see, What? What? What other kind of non obvious benefits they'd get from collecting high quality procurement data,

Kevin Bates 16:50

but it's broadening that data set as well. First of all, Alastair, so you've got things like your spend data, but using, and I'm going to be quite asked about those, using some of the latest sort of Gen AI tools to understand some of the market analysis, understanding when is the right time to go to market for the types of goods and services you have. I think these are key sort of things I just I think that procurement needs to, it needs to elevate itself to the top of the table, but it's got to prove that it should be at the top of the table as well Alastair, and that data, that data sets, is one aspect of it, but you've got to be out there talking to the business. You've got to be understanding the requirements and where each budget holder, stakeholder is trying to drive the business from their own individual areas and then help and support and reflect their needs with what procurement can deliver. We're a service function. At the end of the day. We're there to provide that service, but I believe we're there to knit everything together as well. I think those, those are key areas, actually, but elevating procurement is really, really important, but you've got to prove, and you've got to demonstrate, and you've got to be worthy of it, quite honestly,

Alastair Cole 18:13

yeah, so, I mean, that's a great point, right? Getting that data, having that kind of procurement culture building, right? That's all helping elevate it, but you know is that all that's stopping procurement from having a seat at the top table, or other other other biases, or, you know, things going on in the workplace you think are preventing procurement from having what should be rightly a seat at the top table.

Kevin Bates 18:39

I think a lot of it's down to procurement professionals selling procurement better as that key driver. I think there is, in some organizations, some of the big private sector corporations, it's very much at the top of the table. But in a lot of medium and small organizations, it won't be at all. And I think that procurement has a challenge to prove itself, and you do so by supporting, delivering, driving those right deals, those right outcomes, working with your partners across the organization. So, yeah, I think there's a long way to go, Alastair, but one of the key things that I like is a recent post from the CEO of SIPPs, Ben Farrell, which talks about the CPOs being the next CEOs. And if you can consider the role of a CPO procurement director, you know, understands right across the business the strategy understands and is embedded into delivering and is in a key part of driving and focusing and managing costs. So why wouldn't a CPO or. The procurement director is the right role to go into CEO roles in the future. I think it's a natural progression, but you don't see that very often.

Alastair Cole 20:11

Yeah, let's change tack a bit and talk a little bit about risk, right? Because actually procurement has that ability to mitigate IT risk and build resilience, right? Those are obviously big, big growth drivers. Right? You make fewer mistakes and your business is robust, because the world we will be living now is highly disruptive. What, what have you seen in your career as evidence that procurement can help businesses be more resilient and keep risk to a minimum.

Kevin Bates 20:50

Well, I've, for my sins, been involved in a number of different emergency outbreaks across the last 20 odd years, and again, procurement being a or seen to be a back office function, when things like that happen, you are very much put out into the forefront of everything. And getting control, getting focus, getting that supply chain set up and managed is really, really key. I mean, I've worked on, as I say, worked on incidents where, without management, the costs just went through the roof, massively. I mean, there's huge amounts of legal cases that were underway after some of those, but, yeah, procurement comes into its own on those. But I think procurement has to be a stronger driver of managing risk. You know, all organizations need to understand their risks. They will operate within and manage risk. Procurement shouldn't be averse to risk. It should be accepting the challenge of risk and driving the right strategies, innovative, creative outcomes. But going back to my point about data Alastair as well, a well constructed, procurement focused dashboard with AI enabled elements to it can also help the organization manage risk on its more strategic suppliers that they have. And you know, you've seen over the last sort of few years, this real drive of dashboards everywhere in organizations, yeah, but these dashboards, they need to be really credible. They need to be requiring you to make a decision from it, rather than just reporting on static data. And I think that's where procurement can really come to the fore. Is driving that agility and those sort of reporting mechanisms and linking things like contract management, contract performance and KPIs and stuff all through that whole corporate dashboard approach. But you need the right tools, the right processes to do that. Yeah,

Alastair Cole 23:14

yeah. So our picture is becoming clearer to me, that procurement team that I'm going to create this afternoon, and they're meeting regularly. They've got some kind of dashboard that the data is decent. It's not all aggregated and rounded and in terms of risk, you know, that should be on the agenda, right? You know, what are the current risks, or perceived risks? It does feel, though, that, you know, we live in such a disruptive world that, you know, I'm guessing, procurement just needs to expect and plan proactively for things that are going to go wrong. What in your experience do companies overlook most regularly when they're managing their supply chain? What do they miss most regularly?

Kevin Bates 23:59

I think some organizations take business continuity as a tick box exercise. I think the whole risk and issue management is a tick box exercise in a lot of organizations. I'm not saying it's all, but you know, my general view, or what I've experienced over time, it very much is, and they're not the levers, they're not the approach. They're not, they don't talk to the suppliers about how they manage risk in the event of something happening. So I think Cole, you know, being closer with that supplier base, certainly those strategic suppliers, which, if they're strategic to your business, you want them aligned to your business. So your vision, the strategy, the outcomes are very much aligned. You want the behaviors, you want the cultures to be aligned as well. Because then, if you've got that sort of approach, then you can flex and you can be agile together. It's where organizations have very, you know, I. Of difficult relationships with some of their suppliers, where that opportunity to be agile and flexible when you're in that sort of adverse environment is really, really challenging. I just don't think people plan as much as they need to around risk. I think the last sort of 1218, months, started to come very real for some organizations, certainly organizations that are moving goods across the world, supply chains that are very much impacted by global issues. But I don't think a lot of organizations are doing enough around understanding and really managing risk. Alastair closely,

Alastair Cole 25:46

yeah, yeah, it's a scary area for some people. I get that one area where a lot of our audience is looking is raising funds and speaking to investors, and obviously, that's another area right where procurement can, can drive growth. What? What? What? What can, what benefits can procurement add to the kind of investor approach?

Kevin Bates 26:13

Again, it's very much around cost management. Alastair is very much about understanding and the true value of businesses as well. I mean, one of the key aspects that we would look at when we are sourcing requirements is to undertake a fully detailed sort of evaluation analysis of an organization and their financial record and the like. So it's very much around that, but I would say procurement just needs to be at the early stages of everything that's happening. Yeah, and it can then drive that real value in any industry, in any size organization has the opportunity, the ability to help and drive real value outcomes, and that's not just about cost cutting. That's about understanding and really driving value.

Alastair Cole 27:08

Well, thank you. That's fantastic, Kevin, you talked a few times, mentioned a few times there quantum 360 and that's how people watching or listening, can head over to content. 360 dot co.uk, to read more. I know you've got something exciting coming out in the not too distant future. You want to tell us about that? Kevin,

Kevin Bates 27:32

yeah, we've got another guide similar to the sort of Contract Management Guide which is on our website, which you just put up on the screen. We've got another guide coming out towards the end of the month, yeah, which really, which really sort of sets out some of these points around driving growth and how procurement can be effective within organizations. Obviously, it covers a lot more things than we've covered in the session today. But yeah, I hope people take the time to read it, and I think it will be very informative and supportive for all businesses and industries to at least just review it and bring it into their own business, however they wish to do.

Alastair Cole 28:13

Yeah, so that's content. 360 dot co.uk, you finished it in one of their fantastic reports and guides, actually, completely coincidentally, Kevin, we, we've just put our new 100 day transformation packages on our website. It's literally the last couple days. And love to get your view . We are putting our prices 100% transparent out there, and you can download them from our website. Thoughts on extreme transparent pricing. Are you? Are you for it? Are you against it? What are your thoughts? Kevin,

Kevin Bates 28:52

I'm for it. Actually, I'm for Alastair, really driving dynamic pricing in any industry and any goods and services that are provided, because why wouldn't you? And then it gives suppliers the opportunity to bring forward reduced or competitive prices when they want to be so very much open to that whole sort of marketplace and that visibility, that transparency, for sure?

Alastair Cole 29:21

Yeah, well, we're hoping that's going to, you know, help us, because out there, it's one less thing to worry about. People can see the prices. Obviously we can. We can talk about negotiate, but, but that's kind of set in stone. So like, Thanks for your feedback on that. Thank you very much for your time today. You know, procurement is a topic that's kind of always been close to my heart since I've been working in professional services, and you've shed some real insights and truth bombs there that I think would be really useful to our audience. So thank you.

Kevin Bates 29:51

Thank you very much. Alastair, thank you for inviting me onto the show. I really appreciate it.

Alastair Cole 29:56

No, absolutely my pleasure. Kevin. I. If you want to see or listen back to any of the previous episodes, previous 46 Live episodes of the sales scoop, you can get them at the sales scoop.com and a week today, I've got Mark Bernstein on the show. Mark is a serial investor, founder and Exeter of his own and other people's businesses, and he's going to be coming to us about how to stack the investment odds in your favor. That's us. We're perfectly out of time. Absolutely great to hear from you, Kevin, some really, some really interesting nuggets and insights there. So thank you very much for your time.

Kevin Bates 30:38

Thank you Alastair. Bye everybody. Bye.