Ep 12: Placing Governance Before Generative AI feat Callum Jolly

Speaker A: Welcome to the Love Procurement Podcast where we bring you a fresh and light hearted take on all things procurement. Join us as we dive into the fascinating world of procurement with a twist of humor and a sprinkle of fun.

Speaker B: So welcome everybody, uh, to this episode of Love Procurement, um, podcast. Uh, my name is Stephen Carter and I'll be your host today. For the conversation here we're going to have an. And I'm joined by uh, Callum Jolly, um, who's head of Strategic Supplier Commercial Management at Smart dcc. Um, and before we jump into the sort of the meat of the conversation, Callum, is it worth quickly doing a quick introduction and background to your role and what you do at Smart dc?

Speaker C: Yeah, of course. Thanks Steve. Um, bit of a mouthful on the job title. So um, hi everybody, my name is Callum Jolly. I'm uh, a head up, uh, I head up Strategic Supplier and Commercial management. I told you it was a mouthful. Uh, at Smart dcc. So, um, Smart dcc for those that don't know, um, we effectively are responsible for um, building, maintaining and running the smart meter energy kind of infrastructure, um, within the uk. So um, a lot of uh, a lot of tech, a lot of um, kind of hardware, software, professional services. The model that dcc, uh, deployers are predominantly outsourced. So we do a lot of buying, a lot of supplier management, engagement, um, and so forth. So um, that's Smart DCC in terms of me personally. Um, so I wear two hats at DCC as the job title suggests. One half is around strategic, uh, supply management. So that's working with our uh, critical, our principal suppliers to create and generate value above and beyond what they're contractually obliged to do deliver. So that's focusing kind of away from the day to day, KPIs, SLAs and more on the innovation. Uh, what are the new things coming through the pipeline? How can we work collaboratively, form those partnerships to create kind of mutual value. So that's really exciting and interesting. And then the other hat I wear is kind of the commercial operations piece. So that's working with our uh, uh, procurement teams fundamentally and essentially trying to make their lives easier. So um, looking at things like data processes, systems, reporting, audits, all of that kind of the heartbeat, the brains, if I like to describe it, they're less complementary and setting those kind of guardrails and ultimately trying to set procurement up for success and make their lives easier. So that's the other hat I wear at dcc. Um, background has always been in procurement and kind of commercial management, um, Been at DCC for four years. Prior to that worked um, for a big water company again M strategy based roles as well.

Speaker B: Brilliant. So you've been. Yeah, you've sort of, you've got a couple of hats there and I think um, and I've seen you present a few times and we've co hosted a few, a few events. One of the lines I really picked up on when we, we've chatted before is you have this sort of mentality around or m mantra around people have to or things have to earn the right to transform and you have to earn the right to do something. And I want to sort of pick up on that theme in terms of, of your own procurement journey and your team and where you're sort of, where you're focusing in. On. On your. That, that journey and what ultimately you know you, you see as the, the flow for your organization with a procurement perspective and ultimately looking at AI. But let's, let's start with reality and where we are today.

Speaker C: Yeah, I think that, that earning the right piece is really important for, for us as an organization as a function and for two kind of reasons. I think there's, there's one piece m around. So we're really heavily regulated.

Speaker A: Right.

Speaker C: We manage kind of national critical infrastructure. Um so we're regulated by offgen. We have a lot of obligations with government as well. Um and with everything you know the focus is very much on as an organization how can we demonstrate we are delivering value for money and that we are, you know we have the consumers um interest at the heart of everything we do. And in order to kind of um, to do the kind of the nicer thing to explore and experiment with AI and to kind of invest to save and build those business cases. We have to convince stakeholders, the regulators and everybody else that we're doing it for the right reasons. And so ultimately the mantra is kind of let's get the network running and working as possible as optimally as possible if you like. And then we will earn the right, our stakeholders will want m us to do more. We'll earn the right to then take those next steps and broaden what we use this network for or broaden what we um, what we we do they spend to save business cases etc. So it kind of, that's a top down thing within DCC that there's very much uh, let's do the basics really well, get our own house in order and then you earn the right to do more of the kind of the extra stuff, the additional value Add activity. And then I think kind of if we bring that into a more uh, a more kind of macro level, a uh, more micro level, sorry, then within, just within my team, you know, we want to do these, we want to play with AI, we want to do the kind of bold transformational activities, but you only get the buy in from procurement from stakeholders that we work closely with. If you're, you know, you're ticking off the low hanging fruit, you know, you're, you're making that they feel as though their life is easy, you know, day to day, you're helping them, you're taking away that friction and then you earn that credibility. And they say, okay, we'll trust you, we'll let you take a leap there and we'll trust you to focus on those bigger programs and stuff because you've demonstrated that you can help us and the value that you add. So kind of a company level, but then also kind uh, of a more sub functional level. It really is, let's get our own house in order, let's get the basics right and then we will naturally earn the right to do more of the expansive kind of transformation with a capital T, um, activity.

Speaker B: That's uh, the right sort of mantras. It is interesting because obviously you bring in obviously your, your, your, if you like, your, your stakeholders into the business and also your organization and the rock, the regulators as well as well to risk or make sure that you're, you're doing uh, the basics as you say. How does that sort of impact on like the day to day experience of your procurement teams? I mean is that again something they do every day? They sort of make sure they're doing the basics and then look beyond that? Is that, is that part of that mantra?

Speaker C: It is kind of the shift, it's the shift we've had, we've had to make. I think. Um, we've come, we've come quite a long way in the last couple of years, um, from a position where so touching earlier kind of auditability, good governance, well documented decision making. It has to be at the heart of what we're doing. And I think we've come from a place where if I'm a procurement professional at uh, Smart dcc, I feel like I'm doing my sourcing activity, I'm running my procurement and those bits of pieces to demonstrate compliance are an ADD too. They're in addition to my job. Uh, I see the importance of them, but they take up extra time that I'd rather not be doing. And we've kind of shifted that to a place it's not perfect but more of a place of uh, it just happened, it happens. We have a system now. The documentation isn't a nice to have or an extra piece of activity. It's just fundamentally part of what we do. It's part of the job and where possible it's automated. We have workflows and things so we don't have to add additional documents and demonstrate sign off because it's built into the processes. I think if I was, if you were asking if I was sat here as a procurement manager at dcc, I definitely recognize that, that we've taken away some of that friction, that kind of administrative burden and made it easier to do their best work as a procurement team. Um, so I think that's come a long way. Don't be wrong, there's still areas of improvement for sure, but I think we have definitely made it easier and more consistent for um, to follow the right route to market, to apply the right controls and to produce that clear audit trial without really thinking too much about having to do extra if you like, which I think is where we were

Speaker B: before and did that obviously you know, um, as an evaluate customer. Did that sort of, that earn the right also and that sort of get the basics right actually influence how you then sort of deploy technology as, as a solution? Yeah, obviously you know, sometimes you can go off, off the shiny things but, and forget about the basics. Did that sort of again earn uh, the right mentality, sort of really help shape how you did deliver? That you just described is that, you know, the, the framework almost getting the, the job done.

Speaker C: Yeah, definitely. And I mean that was at the heart of the kind of the selection of Alia I suppose was around what are the, what are the must dos and then what are the nice to haves and what are the, you know, what, what are the really shiny things that we'd love to do? And fundamentally as I said it was around governance and auditability and repeatability. Um, and that was the kind of the, the, the must have criteria. And then you say okay, if we get all of that in place, um, what's the next, you know, what's the next step? Where's the build on that, you know, um, the benefits of having a single source of the truth from a kind of uh, if you want to shift from um, great, we're compliant. But now how do we be more proactive, how do we be more data led and kind of um, an insight driven function? Right. Well we need a system that we can Pull data information from and report on. We want a single source of the truth and repository for all of those artifacts and documentation and workflows. So um, you know we were coming from a position of spreadsheets and emails. So the baseline was really low. You know, we couldn't have picked. Whatever we'd have picked wouldn't have moved us. What do we need to get in place to be compliant, to demonstrate uh, we're doing the right things as an organization and then once we kind of know we're satisfied and we've ticked that off, where is it want to step into next? And that was, that was kind of the thinking and then thinking further ahead and think right. Okay. If we, if we get to a position where all of that's in a great place, can we look at AI, can we think about those other. The real kind of at uh, the time, more blue sky thinking opportunities and can we have a platform that will facilitate us some kind of a, in a step by step manner? Each time we kind of re, you know, we're on a stepping stone, we're on a journey and every time we get to that next stepping stone, is there always going to be a uh, right now, what's next? I think that was the thing about IVALU that excited us is that kind of modular, continual uh, ability to enhance and build on what we've already got and that.

Speaker B: So again uh, that's a mantra you have of owning the right. Did that also influence how you got your, how you transform the business? Ultimately you're going to have people in your organizations, ah, that's called laggards but that are a little resistant or you know, did that earn the right help to get them on board as well in terms of how you brought them forward or did it, you know, what was it sort of how was that transformational effect?

Speaker C: Um, yeah, I think it is a, uh, is a. And um, we found particularly so One thing that DCC is as an organization we're kind of only 10 years old give or take. So we're in this weird position where we are, we've grown really quickly but some of our, some of our processes, some of our behaviors are quite startup mentality almost. Um, and so we don't really have a single unified um, or we haven't until fairly recently, um, kind of tooling strategy as an organization level. It's more functional driven. So what we really quickly found was that when we did implement ivalue and we did start to um, showcase some of the things that we could do In IT and from a reporting, from an auditability, from all of the bits we've already spoken about, we've quite quickly found out there is the business saying ah, and that's really interesting. Could we, could we have a look at it, you know, not from a sourcing perspective but just from some of the functionality, you know, some of the um, the ability to um, you know, collaborate with other, with other, you know, with other stakeholders. We found that other functions were really curious not only about the product but also the journey we've been on. So it's okay. Okay, great. How did you go from, how did you build a business case then to go from having nothing to having to having something, let alone something as comprehensive as what you've got. So it is, it is a bit infectious. And um, and where we'd still love to we talk about that kind of, that journey, that aspiration within uh, dcg we're still so all procurement of any value is still managed within the function. And what we would love to do is get to a position where we start to release the shackles a little bit and say to the business, you know, for some of that low risk tactical procurement you can self serve here. And that would be a real step change for an organization like us. But we're growing in confidence. We're earning that right to say okay, ah, we have, you know, things are under control. We have really got spend under management nailed to a really large degree. We have got confidence in our guardrails. We can now start to let the organization buy their buy rows or call off um, a framework or a preferred supplier list or whatever it may be. And um, that's a really big step change. But the fact we're even m just having those conversations shows how far I think we've come in the space of two years.

Speaker B: So literally that sort of earn uh, the right is also applies to what you're doing every day. You've earned uh, the right to move to the next step in your maturity as a procurement team and then next step to be earn the right to then roll this out in a more dynamic way to uh, other parts of the business I suppose ultimately. And is that something um, from an organizational perspective then you know, when you're driving those changes, you know we touched a little bit on AI and obviously that is um, you know, everybody's facing the challenges of AI and where this is going to sit in, in the organization. But you know, how have you taken that approach, how you sort of use the earn the right if you like to drive some of the AI agent capabilities that you're, you're been looking at over recent, I know you've been looking at recently.

Speaker C: Yeah, so I guess um, we're really fortunate in that we um, kind of work with tsm, our implementation partner really closely and, and um, uh a good few months ago now we established an AI working group with a number of different Ivalua customers just uh, to initially just to kind of chew over potential use cases and think about where there might be opportunities to introduce AI into our existing processes. Um, and not necessarily just within the Ivalua suite but just more broadly. Um, where were we as organizations on that journey? So that kind of planted the seed certainly with us. And so we quite quickly started to understand uh, what was, was out there um, within Ivalua and start to have a play around um, with those in kind of a pre production environment. So um, and that was really exciting. And as I said I think being a kind of a, I guess we're a telco energy company but we are, you know we work with aws, your Googles, your Microsoft, you know, a lot of these um, companies that are pioneering um, and at the frontier of kind of AI and what have you. So we, we often find ourselves in really interesting conversations about AI. So there's a real appetite within the business to uh, leverage those expertise and to think about how we can um, we can use AI to make, to make our lives easier. Um, so that was kind of. So you know you can see there's definitely a really um, fertile ground for exploring AI use cases. And I think as an organization just using things like Copilot as a day to day assistant, um is already quite heavily used across the organization. It's um, already pretty well um, ingrained and built into people's day to day lives and activities. So the appetite is definitely there for exploration. And then what we did is working with tsm, we said okay, which of those use cases did we look at? And say yeah, I like that. So the first thing we looked at was the kind of RFP proofreader, um use case. So um, this is where you've either drafted your RFP yourself or you put in prompts to kind of create, co create the RFP um with either in Ivalua. Uh, but then just get you know, getting that proofread capability to have a look at the RFP and say you know, you could be clearer in these areas or there's some grammatical inconsistencies in this space or have you thought about including this um you know, an answer to this or this question or what have you. Um, I think you know, I could sit one, it saves time, right? Um, and then a manager proofreading and checking. But it also um, you know you could see the obvious improvement in consistency and quality of the information you're sharing. You know, reducing, hopefully reducing supplier um, clarification questions and all those kind of rafted benefits. So that was when we latched onto quite quickly and said yeah, I can see a really, really good quick uh, easy, it's easy to use, it's really intuitive. So that was kind of our approach. It was to say where are the ones we could quite easily implement? You know, kind of, they would fit in within our existing processes pretty easily. You know, we didn't have, we don't have to change anything fundamental that if I was a procurement manager I would look at and say I get that, uh, why would I not use that? It makes my life easier. And we just kind of started to drip feed them in there really. So that was our first one. We then started looking at um, things like um, supplier finder, you know, so, so identifying suppliers that um, had previously bid for uh, works of a similar nature and making sure they were included in our uh, sourcing uh, events and then asking EVA to go and explore the market and suggest other suppliers that might um, be appropriate to invite to bid as well. So um, again I looked at that and thought why would you not want something to help with that? You know it just saves time and effort Googling and doing whatever other market intelligence and research you might have to. So that was the kind of the approach was cherry pick the ones that um, didn't require too much uh, process change or adaptation but quite obviously provided a ah, business benefit to the day to day execution of procurement.

Speaker B: It's almost like rolling out again, owning the right to roll it out to a certain extent. But also the use cases had to earn the right to exist. They had to add value and really drive some change to your business from a process perspective. I mean do you feel that you sort of um, you've reached the tipping point now or do you still, there's still more work to be done in terms of the automation levels you want to get to and the capabilities. I think, you know, as a regulated body. Are you looking at other new procurement methods or are you sort of sticking to the sort of the foundations you have?

Speaker C: Um, I think it's definitely a walk rather than run into kind of more exploration use cases. There's definitely an appetite um, and I think what we're doing is looking at the kind of the, you know, the really simple straightforward ones that I've kind of described rather than anything that would, is going to revolutionize I guess the way that we procure. I think um, we've got a long way to go I think convincing the business to kind of tear up uh, the sheet and start again um, and moving towards kind of fully autonomous uh, bits I think, I think that's probably a bit too um, a bit too out there for uh, for the kind of regime that we operate within. But I definitely think we, we have only scratched the surface of even just those, those small intensive value add um, examples. You know, I look at um, as I said earlier, we've got quite good spend under control and management at dcc, but uh, there's still a big tail spend that I'd like to get stuck into and I'm sure um, AI could help us um, with kind of filtering through that tailspin and categorizing and helping us understand um, the size of the prize and how we go after that tailspin for example. So I definitely think there's some bigger use cases that we need to explore. But for the moment I think it's, let's kind of just build on what we've got, continue to uh, uh, create the appetite, earn uh, that right as we've said about, and then maybe explore those kind of bigger uh, more transformative use cases.

Speaker B: Yeah, and they obviously come with time and they come as technology evolves as well. You know, some of these things are now sort of becoming more just part of the platform. So it wants to be there, you know, natively. So and these changes are happening all the time and it's, it's um. Yeah, but they do need to earn the right to exist. You can't just, you know, use cases have to have value without a doubt. I mean so looking ahead, you know, what, what do you think, you know, what do you think it's going to look like moving ahead for your organization with procurement in general? Some of the challenges of being regulated, um, obviously as things happening in the UK right now, uh, what do you think the sort of, what's your future outlook look like from a business and personal perspective?

Speaker C: Yeah, it's a good question. I think um, we definitely, you know, we're definitely. There's still a long way to go on the kind of the procurement evolution I'd say at dcc I think we're still um, we still have a very one size fits all approach to sourcing at the moment it's still m. In order to deliver and uh demonstrate value for money you go through a you know multi staged tender, you know, rfq, RFP style, full tender, um thing. And I think we are starting to explore alternatives as I say preferred supplier lists, um, frameworks, you know, other bits which you know any other organ, most other organizations will say yeah that's, that's obvious. We are coming from as I say a highly regulated environment and one in which um you know we have to do things in a way as I say that demonstrates we are acting in the interests of consumer and we are still driving um value for money. So I definitely think there's still a maturity shift in just that kind of the core fundamentals of the way, the way we procure and our routes to market piece um at the moment we, we use our value as a source to contract piece um and we are um, kind of looking at the um P2P element at the moment as in finance are looking at it. The you know the place we want to get to has to be a kind of full source to pay journey if not in a single system and certainly in one that talks to each other rather than this disparate position we are at the moment. So we still have a huge opportunity from kind of a commercial pipeline right at the front end all the way down to POS and invoicing at the back end. We still have a huge amount of opportunity there to uh, join things up, to streamline, to digitalize and uh, and operate. So that's exciting. And then if I think about DCC kind of specifically in the sorts of things we buy, you know we are outsourced. We spend £600 million a year predominantly with suppliers. We have um, big contracts, you know, long lasting contracts in some instances um, with our ah, um and a lot of those contracts are um, aggregated as well. And so there's an opportunity to look at those systems and say is there an opportunity to disaggregate there? You know could we, could we do things differently? Do we have to just buy like for like each time? Or could. Is there an alternative approach that says actually we could disaggregate that a little bit, achieve value for money, gain greater control over the supply chain. So there's definitely opportunities in the next three, five years I'd say to look at those, explore those breakpoints and consider um the best way um to set ourselves up for the future. So um, they are the kind of exciting opportunities that I kind of see in the medium to short term really.

Speaker B: Well, I can certainly say that having, you know, when I worked at Crown Commercial Services, I mean framework agreements is what we did, if I'm honest. One classic use case of AI would be to actually understand those framework agreements because they can be a bit messy. So yeah, I mean that would be a massive benefit to bring those in and certainly sort of hopefully that will, yeah again hits on the tail end but also um, as you said earlier, automate some of the processes you could take, take m longer their reg, their frameworks, they pre regulated so you can, yeah, cut down the, some of the, the complexity of the sourcing event which

Speaker C: should be rather, I, I think selfishly as well we touched on earlier if we can start to uh, farm some of this activity out to the business. You know, if we've got really strong good frameworks in place, um, and we can build AI, you know, we can, you know, hand in hand just passing on some of that responsibility to the business, you know, because we have the right frameworks and guardrails in place to support them. Just frees up so much time for procurement professionals to you know, to do the things they enjoy most. You know, do the category strategies, gather the market intelligence, think about creative and new ways to um, you know, to buy services that we've been buying the same way for however long and you know, um, stretch that uh, you know, just I guess develop, you know, that personal development piece. Nobody wants to be sat doing the same activity, buying different things, but running through the same processes all the time. That's how we kind of develop and step out of our comfort zone. So that for me is a big, you uh, know, would be a big win if we sit here in a 12 months, 2 years time and say yeah, you know, for all kind of low risk, low complexity procurement, we've actually got the business running those themselves with some support from time to time. But it kind of runs really well and uh, we haven't seen a dip in compliance or um, those sorts of things. And that would be a fantastic position to be in.

Speaker B: Well that'd be brilliant because you certainly aren't the right to get there I think without doubt, I mean before we sort of conclude. It would be really useful if you could just share some of the love if you like of um. Yeah, a little bit of why you love procurement. Obviously you've been in a long time. But also any sort of piece of advice you'd like to give the listeners, you know, about, you know, where they should, where they should progress, what they

Speaker C: should look for why do I love procurement? You know what I think? Um, I, like probably most people had no intention of having a career in procurement and I think. But I was on a graduate scheme and he did rotations. I did six months working with a category manager. And I just, I love, I love the variety of interactions. So I love, you know, that was the first time I'd looked outwards of the business I was working in and worked with different people from different organizations that were in different stages of their career. Um, completely different backgrounds and just, you know, and just, I just, it opened my eyes up to that, to a whole world that was out there. Um, I love the variety as well. I think that for me, you know, I, um, no, no two days are the same. Um, and some people love it. Some, some people, you know, want to log on on a Monday morning and know exactly what they're going to be doing for the day. Um, and, and if they don't do that, get frustrated and other people, of which I definitely sit in this camp, would much rather log in on a Monday, set out to do something and then by 10 o' clock has gone out the window because you're working on something else and what have you. So there's never a dull day, um, there's never a quiet day. But I love the variety. I love the people that we meet. I love the negotiations as well. That's something that, um, you know, that I used to dread when I was first starting out. So I think it's variety. To be honest, Steve, I think that's the bit that really kind of, um, keeps me engaged, pushes me out of my comfort zone, which I love and enjoy. Um, and I think also just the fun of it is around. You can just see the value you bring to any organization. You know, every time you, you close a deal or you, um, you know, more simple than that, you put a framework in place or you, whatever it may be, you can see the tangible difference you're making to that organization or that, um, consumer bill payer, whoever it is, that's the end customer. So I think that's what I love the most in terms of the advice I would give. I think, you know, we've said earn the rights, transform who knows how many times on this, on this, on this, on this podcast. But I think that is, I do think it's really important. I think you shouldn't underestimate, um, the quick wins, the value that they bring, which individually might not seem much, but collectively and you know, as they accumulate, accumulate you, you Earn the right, you gain that credibility, um, and you're trusted to go ahead. And, um, you kind of, I think of it like credit almost. You have that credit in the bank that you can then go and spend on. The bigger, the shiny, the more exciting things. So I think don't underestimate the quick wins, um, the value of the stuff that's maybe less interesting, like good data, clear processes, consistent governance, because then you get to use, you get to play with the shiny train set, you get to use the tech, you get to explore all those interesting use cases, um, because you kind of, you've earned the trust of the business and your peers to do so.

Speaker B: Yeah, brilliant. So that's really good advice and I certainly, um, just, I reflect on what you said. I mean, I. One of the things I loved when I was in crime commercial wasn't, wasn't the negotiation. It was actually just chatting to people, chatting to suppliers and just getting to know them and just having a, you know, just have a friendly conversation with people. It was a great way of talking to people. So, yeah. So with that, are you happy for people who listen to podcast to connect to you and you know, on LinkedIn and that sort of stuff or.

Speaker C: Absolutely, yeah, yeah, LinkedIn is the best place to, uh, connect for sure. Happy, always happy to, ah, carry on the conversation. Anything kind of procurement transformation, supplier related, um, you know, go virtually or for a coffee. I'm based in London, so live in London. Um, so, yeah, absolutely. LinkedIn's the best place to, best place to connect for sure.

Speaker B: Brilliant. Well, thank you very much, Kellen. It was always a pleasure talking to you. Always a pleasure to sit and chat, so thank you very much. And, um, I think, yeah, if you love procurement, listen to the podcast and certainly I love procurement. Callum loves procurement. So let's go. Thank you very much. Thank you, Callum.

Speaker A: Thank you for listening to this episode of the Love Procurement Podcast. Join us every other week for fresh TV takes on all things procurement. Remember to subscribe, like share and rate the show so we can expand our community and share the love. Visit ivaluauh.com podcast to access all episodes.