EP 022 - What is Procurement with Reba Cox, Global Head of Procurement at MongoDB

Strategy of Finance

In this conversation, Reba Cox delves into her extensive journey in the procurement field, transitioning from trading base metals to procuring them, and ultimately stepping into tech procurement. She begins by highlighting the fundamental skills and mindset essential for success in procurement, such as the importance of demand planning, establishing baseline prices for savings, and the critical role of building strong relationships with stakeholders.

Reba distinguishes between direct and indirect procurement, outlining the unique challenges and strategies each entails, particularly in managing software contracts. She emphasizes the necessity of understanding and planning for demand, alongside the crucial task of setting baseline prices to secure savings.

Further, Reba touches on the broader role of procurement within both manufacturing and tech industries, underscoring its strategic placement under operations in manufacturing firms and under the CFO in tech companies.

Additionally, Reba highlights the focus on security and scalability, especially in tech procurement, reflecting on the significance of these elements in today's industry. She also discusses the evolution of procurement tools and their value in facilitating the work of different teams, advocating for the integration of new technologies to streamline processes.

Moreover, Reba speaks to the personal side of her career, sharing insights on building a positive reputation, transitioning from a gatekeeper mindset to one that's more collaborative and aligned with business goals. She offers career advice and shares her ambitions, looking towards the future of procurement with an eye on innovation and efficiency.

Reba concludes by emphasizing the need for the procurement function to evolve alongside the industry, incorporating more advanced tools and strategies to address the complex challenges of today's business environment. This includes a strong focus on security, scalability, and aligning procurement strategy with the overarching goals of the organization, highlighting the transformative potential of procurement in both manufacturing and tech sectors.

Takeaways

* Procurement involves managing contracts, spend, and vendor relationships for a company's non-salary expenses.

* Building relationships with stakeholders and understanding their needs is crucial for procurement success.

* Demand planning and setting baseline prices are important strategies for achieving savings in procurement.

* In tech procurement, security and scalability are key considerations, while in manufacturing, savings and project-based initiatives take precedence.

* Managing software contracts requires careful negotiation, demand planning, and consideration of non-financial elements such as SLAs and security measures.

* Procurement is best placed under operations in manufacturing and under the CFO in tech companies.

* The lack of comprehensive tools is a major challenge in procurement.

* Automation and AI are key technologies that will transform procurement processes.

* Supplier collaboration and relationship building are critical in manufacturing, while in tech, procurement is often brought in only when something goes wrong.

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Quotes

“Procurement, by nature, is a function of functions.”

“Procurement is sales without the quota.”

“The more you absorb, especially when you're younger in your career, the more you'll be able to understand and piece things together.”

“The best thing to do when you come in is just absorb, ask questions, learn about other functions because your job as procurement is to make sure that everybody else's functions are basically happening and being protected.”

“Zero dollar touch means that we don't have a high threshold for spend at the company that doesn't go through procurement.”

“If you're an inquisitive person, it's a great place to be because you kind of know everything about everything that's going on.”

“Procurement handles contracting and spend and vendor sort of management at the strategic level for all the dollars that the company spends that's not on salary.”

“So I think that's one, I think, unique thing for procurement leaders. You really have to be a good relationship builder internally and externally.”

“I try never to have a new vendor with more than a one-year deal.”

“The first deal you do set your baseline for all renewals. And I think that a lot of people, especially in a software deal, don't understand that.”

“Procurement and sales actually have the same goal. We wanna close the deal as fast as possible.”

“The worst case scenario for a software deal is that your sales rep has forecasted a number that's just well beyond anything that you would spend because getting that delta close to closure is almost impossible.”

“In manufacturing, if you're saving 5 to 8 % year over year, like you're a rock star. And most of that comes through projects, not negotiation.”

“You do not want to be a procurement team that's seen as a hindrance. You want to be seen as the people that get stuff done and represent your voice in a way that a stakeholder cannot.”

“Never say yes to something you can't actually deliver.”

“No matter whether it's a new product, old product, indirect, direct, you should always have your vendors going through some type of a vetting process.”

“I'm really excited where AI is going to take procurement.”

“Procurement is never going to be a champion in tech procurement.”

“If you're haggling on price, you've done a bad job. That means that you have zero business case if it's just a haggle.”

“If I do a deal with you and it's bad for your business, then I've actually done a bad deal. A mutually beneficial deal is really where I want to aim to be.”

“You have to embrace failure. The biggest failures in my life have been the ones that have taught me the most. Now, you don't want to fail at the same thing twice.”

“My biggest advice out there is just never say no, and always take a chance on yourself.”

“I try never to ask someone to do something that doesn't personally benefit them. And my real motivation is to be a leader.”

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Where to find Reba Cox:

LinkedIn: https://www.linkedin.com/in/reba-cox-9959a625/

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Where to find MongoDB:

LinkedIn: https://www.linkedin.com/company/mongodbinc/

Twitter: https://twitter.com/MongoDB

Website: https://www.mongodb.com/

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Where to find Rohit:

LinkedIn: https://www.linkedin.com/in/rohitagarwal001/

Twitter: https://twitter.com/podcast_SoF

Email: [e-mail]

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Sponsor:

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