“Fundamentally, every supply chain disruption we have today is because of design choices we made 10 or 20 years ago. And so if we don't start to change the thinking for the next 10 to 20 years now, we're just going to keep pushing that timeline out. And we're going to go from one disruption to another, all we're going to be is the disruption responders. And I want to get us beyond that as a profession.”
Dr. Elouise believes that suppliers need benefits translated to them, and indeed that in the future all our data should benefit us. She is emphatic about data and analytics literacy being at the forefront of our media and our minds. Do consumers know how much of our data is being collected and how it’s being used? Assuming they do is a fallacy.
Having just finished a book on the complexity of digital procurement, Dr. Elouise is already many steps ahead into formulating her next book. She won’t rest on the advancements of today when she is so aware of the problems tomorrow will bring. And she has strategic thoughts on how data can address issues within risk management and sustainability that she debates with Stephany.
Show host Katherine McCleery brings this foundational data discussion with TealBook Founder Stephany Lapierre and Dr. Elouise Epstein to listeners, including conversation on:
About Dr. Elouise Epstein:
Dr. Elouise Epstein is a digital futurist and Kearney partner based in San Francisco. She has more than two decades of experience working as a trusted adviser with clients to develop digital procurement and supply chain strategies.
Known for her dry wit, historical anecdotes, and direct tone, Dr. Epstein is a frequent presenter on digital procurement. She is author of the newly released book Trade Wars, Pandemics, and Chaos: How Digital Procurement Enables Business Success in a Disordered World and is already working on a follow-on book.
Links:
Stephany Lapierre, TealBook: website | twitter | linkedin | youtube | instagram
Dr. Elouise Epstein on LinkedIn
“Trade Wars, Pandemics, and Chaos: How Digital Procurement Enables Business Success in a Disordered World” by Dr. Elouise Epstein
Dr. Epstein spider graph
Transcription:
Katherine McCleery 00:01
Welcome to Data Unleashed, a podcast that brings you insights from procurement's most innovative visionaries. Alongside incredibly brilliant guests, show host Stephany Lapierre explores the power of data, how it challenges us, and how you can challenge the status quo. You'll be inspired, but more importantly, you're getting actionable advice in every conversation that will help you unleash the power of data in your own organization. Hey, Steph, welcome to episode number two. How are you?
Stephany Lapierre 00:39
Yes. Hi, Katherine. I'm so excited today about this episode with Elouise. The famous, the disruptive, the opinionated Elouise Epstein from Kearney. She's a friend, she's a thought leader, she's an pusher of the envelope across our industry. You know, I'm just so grateful for the opportunity every time I have the opportunity to spend time with her. I learn something, I'm challenged on something, I challenge her. It's always super fun.
Katherine McCleery 01:05
I was about to say if you didn't place the label challenger on her and you, honestly, the conversation that I heard, even in the pre interview and on recording day, I love the back and forth that the two of you have, how you respect each other's thoughts and opinions and approach. While not agreeing on everything. I think that is so healthy and it's fun to watch, it's fun to see the two of you - I don't want to say spar - but it's fun to see the two of you take on an issue with different sides of the coin. For everyone listening, if you haven't figured out from our comments so far, we're going to be interviewing Dr. Elouise Epstein. I'm Katherine McCleery, I'm co host here, and Steph Lapierre is the CEO and Founder of TealBook. She's the one sharing access to all of these great interviews. And this one, this one's a great one. I don't want to say that conversations with Dr. Elouise are my favorite, but they're up there. I liked how she really brought the mission of data foundation, what TealBook is doing right to the center of what she's trying to solve. And so we talked about the spider chart, we talked about future state, and what data unleashed means to her. So I'm not going to give it away. That's towards the end of the episode, all of you are going to have to tune in to that to find out what data unleashed means to her and where she sees the future state of procurement. But Steph, any other thoughts on that episode that you want to share before we jump right in?
Stephany Lapierre 02:44
I become friends with Elouise quite a few years ago, and you'll hear that in the podcast, how we developed a relationship. But I spent many hours, sometimes on Sunday, I remember one particular Sunday afternoon where I walked like 100 times around - maybe more - around my backyard just talking to her. Because we were challenging each other's thoughts. She was really trying to understand how I was thinking and I was really trying to understand where she was going. You never know in our conversation where it's going to take us. And this is actually why we brought Katherine as a co host because Katherine's like 'Hold on a second. Like, let's bring this back to Earth.' Let's make this tangible, and actually that people can understand or can bring back to their actual objective because we can go kind of a little crazy. She goes way out. Like I always think that I'm a little bit ahead of the market in terms of how we're thinking about data, how we're thinking about digital transformation, but she's like, I don't know, she's in another wave. Where as soon as I catch her, she's already now throwing, you know, something that's probably 10 years away from us. But what we've seen in the last couple of years is that things that would have taken 5 to 10 years have significantly accelerated because of all the market pressures, the investment coming in the space, the disruptions, the growing requirements. And so what she's presenting that maybe 10 years, or that you may not agree with, is where the future is going. I think it's something that you should know about and you should think about and start, you know, integrating as you're building your transformation, because there's some things in the future that you should start thinking about applying now.
Katherine McCleery 04:21
Right. So I do a little bit of harnessing the vision between the two of you and bringing it back to Earth. Because, like you said, you get going and you get going fast.
Stephany Lapierre 04:31
And Elouise in many ways, has been such a driver for our position in the market. As we position ourselves as the supplier data foundation that powers the buy side digital enterprise. It came by watching and listening to her, and you'll hear the story of me sitting at ISM 5 years ago or so now, and she was presenting her first version of that echo system spider chart and going from, like, disparate data silos per software to a data cloud AI hub to fully integrated technology stack. And I think analysts when they're thinking about TealBook, we were building the data set to address use cases but the market was a bit confused. Because like, 'Well, are you supplier discovery? Are you supplier diversity? Are you knowledge, like, what are you?' And so we were in the original spider graph, we were in the outside with all the other providers. But when she presented this migration from siloed data into each software to this fully integrated technology ecosystem, I was like this is TealBook - in the middle, that AI hub and that data lake. And so we spend a lot of time dissecting this in the market, because the one thing that's very difficult when you're building a tech company in a new space as something that never existed, is defining that position. The market to understand what you're building. And it was probably the biggest challenge in building TealBook, is people didn't understand it initially. And so to be able to hang on to something that was now in front of me, on a slide deck, by someone that I respected, it gave us something to start really carving our market positioning around. And we're really fortunate, we didn't pay to be part of that ecosystem. This is all Elouise and the fact that she put us in the middle of that spider chart, when we were raising capital, it allowed the market to get really excited, investors to get really excited. And that's when we shifted from really focusing on use cases that could solve for, which made us look like a software provider, to a data platform and data foundation. And then she released that spider chart, it all kind of come together. A lot of the growth that we've seen in the past two and a half years is really with that positioning in the market. So she didn't do this for TealBook. But we were able to shape where the market was going up with how we were trying to articulate our value proposition and our position in the market. And, you know, the rest is sort of history, still happening, in the making.
Katherine McCleery 06:57
Yeah, I loved watching that. It was like seeing a category being built in real time. Very cool to watch. And I hope that the audience takes from this conversation, a little bit of that future thinking that Elouise provides. Let it soak in, challenge it, and consider the possibilities because she takes us, like you said Steph, about 10 years ahead. Anyways, enjoy this episode. We had a blast. I had a great time with Steph and Dr. Elouise, this is another great one.
Stephany Lapierre 07:31
Yeah, and I know there's a lot of fluff right now. Or it feels like there's a lot of fluff. I think what she's saying as the vision, and then what's tangible out of that vision that you can apply today. I think that's the message to me, is sort of what is she saying? There's so many great, fantastic nuggets that are applicable today. Yeah, and then get inspired because the vision and where she's heading is, I think, is right on.
Katherine McCleery 07:54
Excellent. All right, let's get right to it.
Katherine McCleery 07:57
Welcome, everybody, to our podcast Data Unleashed. I'm Katherine. I'm so excited today, we have such a fun show. Of course, Stephany Lapierre, CEO and Founder of TealBook is with us, and special guest Dr. Elouise Epstein. Welcome to the show.
Dr. Elouise Epstein 08:16
Thank you, I'm really excited to be here today.
Stephany Lapierre 08:19
Me too.
Dr. Elouise Epstein 08:20
Stephany, you're one of my favorite people in the world.
Stephany Lapierre 08:23
I was just gonna say exactly the same. We'll provide some more context of how we got to know each other.
Katherine McCleery 08:29
Give us the background between why you two are each other's favorite people.
Stephany Lapierre 08:35
So we met four or five years ago. TealBook was still in very early stages, and I was invited to participate in the ISN Thought Leadership Council. And I thought 'What a great opportunity'. And it was positioned as the most progressive people coming together in the industry, a blend of thought leaders, consultants, CPOs. And I thought, 'What a great opportunity to be in the middle of that conversation'. And so, I think the first one we had was in Phoenix. And not only it did, you know, deliver on this group of thought leaders, but it created friendships in the small group. I don't know what kind of magic potion happened in that room that time, but we all ended up not only exchanging a lot of thought provoking ideas, and there was a lot of heat and a lot of energy, and a lot of strong opinions about the future state of procurement. And I have some examples that I still remember in my brain of you and Marcel going at each other talking about the future state. What I love the most about this group is we've all stayed friends. And everyone, you know that you think Jamie Bliss to Charlotte de Brabandt to Tim Herod... Marcel, Marco, that group continued to progress in their careers. Like really all evolved in a way that we've all been very supportive of each other and watching each other's career grow. And it's just been a phenomenal opportunity to build these connections. And in my view, now, they've all become friends. And Elouise has certainly become a close friend. What got me more excited, so when we first connected, we exchanged and Elouise understood what I was building, or had some, you know, it was sort of an exciting moment of talking to someone that got it. I got to sit at a conference, I think that was in Houston for ISM and see you present that first sort of notion of the ecosystem and where we're moving from disparate system with disparate data into the future kind of close state that had this data lake AI foundation, and then to the future state, which is a fully integrated ecosystem with applications. And every possible way that I was trying to articulate TealBook, we were always put in this box because data uncovers a lot of use cases, and so we were seen as a software company that could do all these different things. So we were always positioned as this discovery, supplier diversity, supplier performance management, all these things. But when I saw the middle of this ecosystem that said data lake and AI hub, I was like, 'Well, that's TealBook'. And so it was sort of the first time that I saw someone in the industry that I respected, clearly identifying what I thought we were, but what the industry had not yet understood. And so that was a long time ago, think about that, and how far that ecosystem graph and we've come along. But that was the magic moment where I knew, 'Okay, this is what can hang our hat on' and we started defining ourself as the supplier data foundation that powers the buy side digital enterprise. But that all started with you articulating this visual, that I still have probably somewhere in my computer but definitely in my brain. Anyway. So that's how we met and got to exchange a lot of thought-provoking ideas. And, Katherine, I'm so happy you're here today, because even in the pre call we get hyped up so much on the future. And so Katherine was able to bring us back down to reality, what's actually conceptually real and applicable to today's environment. Anyway, I'm gonna pause here, I'd love, Elouise, to get your version of how we met.
Dr. Elouise Epstein 12:17
Well, and yeah, I want to say, I mean, that thought leadership council and we gotta give credit to Amanda Prochaska for bringing all of us together. It was a unique time in all of our careers, you had just started TealBook, I had just come up with this grand unified vision of the future. There were others in the team that were just starting to their current trajectories. Jamie and Jocelyn - Jamie Bliss and Jocelyn Stahl - I actually wrote about in my book as sort of this next generation people that are going to change procurement and be CPOs one day, and watching what Amanda's done, and Tim has done in his roles. I could go around that whole room - even Marcel, we've had some disagreements, but we've pushed each other to be better. And actually, I think, it goes both ways with Marcel. We have some very intense and passionate discussions. But you, Steph, really, when you saw it, and then you internalized my vision. And you were actually able to give me feedback and push me to be better at defining what I was talking about. And I think as you get older in your career, the number of people that are willing to give you critical and tough feedback dwindles, and it dwindles pretty rapidly, and you don't realize it until it's too late. And so to have somebody that is willing to challenge and say, 'Hey, this is great, but you're missing that. Go define that'. And at the beginning to 2021 you did that to me, and I think you were doing it in 2020, I just don't think I was listening.
Stephany Lapierre 14:02
Oh, you were. I remember a Sunday walking around my pool probably 150 times, you and I talking about some fundamental that I didn't necessarily agree. Right? So we debated certain topics and when your book came out, I had to actually pause. I didn't want to give you feedback right away. I knew my feedback would be incredibly biased to our approach. And I didn't want, necessarily, that to be the feedback. I didn't want to be self-centered around TealBook. But you've always been so open: every time I provided feedback, you want to understand it, that you agreed or not, I actually never knew. You take that opportunity to dig deeper. Although I do feel that now you've moved, you know, you're light years now ahead of where we were five years ago. And, because the market is evolving so fast, and what I saw is in the last two years, the acceleration of what may have taken 5 to 10 years to get to has reached, you know, a speed that we could have never anticipated before COVID. That's why I think your thinking is moving as fast as it is. But I have a hard time keeping up with you.
Katherine McCleery 15:03
What both of you are referencing is something that I think a lot of people in the procurement / supply chain communities are familiar with, but we aren't naming just yet. But Elouise's spider chart for Kearney. It is the famous spider chart. And it's gone through a couple phases. And so I remember seeing it the first time, that was one of my first exposures - well, not first - but in the first year or so of knowing about TealBook. And now we've seen, recently, a second rendition. So I'm curious, what are the major differences with this second round?
Dr. Elouise Epstein 15:39
Early on, I had this concept that we'd have this AI hub in the middle. We didn't have to define that because it was just enough to show that we had all these individual capabilities, and some abstract AI hub. And when I say it out loud, I cringe, because it's like, 'Oh my God, how did I not define that from the get go?' But what I was showing early on, is the amount of innovation and the amount of precision that was happening. Now that's gone from, like, I turned on the garden hose to I've turned on the firehose, and there are so many capabilities, so many startups coming. And that's why you see... and what I do map, is I map the innovation that's happening around the procurement value chain. And I always say read the labels. Labels are the procurement value chain deconstructed, because I don't like abstract, big lofty concepts, show me the exact capability, the exact skill I need. And the more solutions there are for individual capabilities and skills, that's of interest to me. So that's the one big change, is that we've gone from, you know, like eight capabilities, which was blowing people's mind back in 2017 and 2018, to at least 40 or 50, if not more, I've kind of lost track. So that's the one big one. And then the other is taking that AI hub concept and breaking that down into its component parts. Because what - and Steph is the one that challenged me on this, because she's saying I'm at the center, and I'm like, 'Wait, what is the center?' How can I tell TealBook or whoever, anybody else, if you're in the middle or not if I haven't defined it. So I've gone through and defined that you have to have a good user experience, a modern user experience, what has become the app store concept, the data foundation, and, of course, the intelligence. And even those four categories are going through their own iterations now, especially the intelligence one, and we can talk about that separately, but I'm getting folks that are saying, 'Hey, you know what, let's push on this intelligence concept, maybe there's more sort of beneath that.' And that's one of the things I'm working on right now.
Stephany Lapierre 18:01
When I saw it publish, it went along our thesis that the market's been sold by cloud-based technologies, that because technology were moving from on premise to the cloud, it was going to fix data. Right? And so our first slide of our investment deck is the big fat lie is that software fixes data. That's what we believe. And if we look back at Salesforce, it was also that promise of having a unified view of your customers. But it didn't mean, buying a cloud-based software, that you necessarily got good data. So our thesis has always been you should buy the software that you need, because you do need those workflow and those piece of functionality to go deeper into the lifecycle, right, or to meet some of the digital requirements of the organization. But you're going to have more and more options, and having optionality is a good thing, right? And you need to be able to buy best in class and have a more interchangeable agile technology stack. In order to do that, you need to connect the data, otherwise you're going to try to connect the systems to each other. And if you do that, you're going to be entering, you know, an endless sort of infrastructure that's going to be very expensive. And you're still assuming that the data in those software is good, which it's never the case. And so that's why, you know, when when we saw your eco, and we were just in the fundraising process, we were saying this about ourselves, but no one was pointing the finger back at us and when your chart... Which we did not pay, I did not know this was coming out, but it was sort of the perfect timing because you defined that data, the notion of data foundation, which I know now is going through other reiteration, but it was on point with how we were positioning ourself in the market.
Dr. Elouise Epstein 19:44
Well, and I would add is it becomes almost the most important piece, this data foundation. The other three areas are equally important for different reasons. But the big lie, as I have taken the previous generation of providers, is that if you went with a closed loop suite, you would get that data integrity across all the apps. And that proved to be a colossal lie. And I've been very vocal about that. And so now, companies like TealBook and others, are focused on this core problem, which then in turn makes you 10 times more valuable than any transactional system. Probably 100 times more valuable. You are the most valuable piece in that puzzle, because everything else becomes commoditized, because the data is exactly the piece that you solve.
Stephany Lapierre 20:37
And I often say, when I talk to CPOs, because there's this notion right now, 'Well, I'm going to build the data lake, I'll build my own data foundation'. Recently, I was in Europe talking to a team that built a TealBook, internally. You're like, 'Arrgh', you know, we've been talking to them for five years, but they went and they started building the infrastructure for it. But the way that they've done it is pull the data out of their existing systems into a data lake. And I understand the notion of why you would want to do that and why would that make sense, but unfortunately, you're assuming, again, that the data in those systems is good. And if you're pulling together incomplete, duplicate, you know, messy data, there's so much insight you could generate out of it, very limited. And they put AI and they hired data scientists to start looking and mining this data. And you're like, 'Well, how much insight are you really getting out of it', because AI requires a lot of data, or a lot of users, or both, and, you know, in our space we just don't have millions of users like in the consumer space. We have very limited users. And if you're limiting to your data out of your system, again, sure you'll get some trends, some intelligence, but it will be very subpar because you're paralyzed by having limited amount of information. Yeah, so that's why I think having more access to more data, and then more users through that technology ecosystem, becomes really interesting. Because if you can learn from it, and inject additional intelligence, additional attributes that you don't have to manually collect and maintain, then that opens up all the possibilities. But I know we've had some debates on a lot of the application store.
Dr. Elouise Epstein 22:13
Yeah, I mean, because you're getting at a fundamental premise - is we go forward, having that data about the supplier, let's talk about supplier specifically, although it could be more broadly third parties, but that supplier data, the mistake everybody makes when they do it internally is that they assume they can do it better. But I always argue that the network effect is going to be much better. Every company could build their own LinkedIn. But you're not going to motivate employees to keep all of their information up to date, there has to be a payoff. And for the suppliers, this is what's missing in the broader piece, well two pieces. One is, we don't look at the supplier experience at all, we're always just 'Hey, come to come to one of 1000 portals and put your information here again', and I just wrote that article about the fullness of supplier experience management. But the other piece is, that even if you solve that, like a supplier record, just onboarding that information, is only a fraction of it. That's why IT groups think they can solve it, but they can't. Because you're not actually managing a record like you would with your material golden records or your product golden records, those don't really change. But suppliers are constantly in flux. They are constantly being acquired, their risk ratings are changing, their ESG capabilities are changing, their ownership structure is changing. And there's all kinds of other things that change. So you need to not only collect the information, which is what supplier information management is, but you need to enrich it. And then you actually need to do things with it, whether it's a transaction or a risk signal or ESG signal. And this is not something that corporate IT can do. This is something that you have to partner with the supplier, and do what I think you all have done very well, is automate this collection of the information and they can streamline that. Because it's a massive problem that takes a lot of resources to solve the problem. And you just can't do that with an IT group or a bunch of data scientists.
Stephany Lapierre 24:30
Or the STP by themselves because that's what they've claimed for a long time is that they could do it. If I think back in the early days of TealBook, we had built just like everyone else. Like, we had built a software where we could ingest a master data, and we could invite the suppliers to come and claim their profile. That was the TealBook way seven years ago. And what we found out is that suppliers were just not coming. Even if we had this debatably critical mass, have enough customers to entice the suppliers to come, they would still not come at the speed and the scale that was required. And the information that they would be putting in would be fairly limited to what they need to put in.
Dr. Elouise Epstein 25:06
What's the supplier want? They want to get paid, and they want more work. That's it. You know, your risk management initiatives, your ESG initiatives, your supplier doesn't care. Your collaboration initiatives, most of the time, what does that actually lead to for them? They put in a bunch of information and they, you know, never hear back or you never take their ideas? Or even if you do, you might hire a different supplier to do that. And even if we could solve that, then there's this whole issue of how many sourcing events do you run with these folks, and you're just including them to get that third bid of three bids in a buy? Or, like, what burden are you putting on your suppliers without even realizing it? Because you're following quote/unquote best practices in procurement? And I think this is especially for tier one, but I think tier one, we do this probably implicitly and pretty good collectively as a profession. But it's tier two, we could debate that.
Stephany Lapierre 26:06
I was just gonna say it's so hard to take tier one, we haven't solved for that, and you're going to tiering visibility.
Dr. Elouise Epstein 26:12
Right. But if you get to tier two and tier three, forget it. I mean, we're not even looking at that and that's one of the big big problems, especially as we look at it, because we're never looking at it from the supplier point of view.
Stephany Lapierre 26:24
Well, I think tiering visibility, which is becoming a requirement, right, which can unlock a ton of value and also risk mitigation, is challenging. I said that on stage a couple of weeks ago, we're talking about how difficult it is to collect basic information about your tier one suppliers at scale, like that's a problem in itself. And you ask any CPOs, do you have good, complete supplier data across your tier one today? They all smile, they don't have it. Now we're asking them for tier two, for tier three, so we can map this out, and that's a really big challenge. Because even the solutions today that I'm hearing that are focusing on the tiering and the mapping of the supply chain, it's still just focus on one potential element, being risk. And it could be also a standalone solution, so that you can have some visibility, but still doesn't give you the raw data that you need to then leverage, you know, that information based on what you're reporting, or your corporate objective, or your system setting. I think that's a big, big challenge, and I can only imagine what all the added requirements that are being put on procurement today, with all the noise, all the technology, all the methodology that are being suggested, how confusing, right? How difficult would it be for someone like Tim Herod, a CPO Albermarle, to go into transformation, or any other CPOs thinking how they're going to leverage today's environment to achieve digital procurement success.
Dr. Elouise Epstein 27:53
The greatest risk to any enterprise comes through the third parties. Most employees, they gotta lock down, like everybody goes through training, everybody gets sort of secured laptops, and you can sort of cascade that down to contractors and, you know, temp labor, debatably. But third party risk management is, like, we talk about it, but we're not doing it. And it comes back to this data problem. We don't even understand the totality of our place. If you have 50,000 suppliers, even 30,000 suppliers, you're not managing 30,000 suppliers. I'm sorry. And I have some clients with 100,000 suppliers, but you're not managing 100,000 suppliers. So we have to stop deluding ourselves to say that we are actually, we have some handle on this. We should be going to bed, like, with massive anxiety. I go to bed with massive anxiety and it's not even my direct problem. And so our greatest risks come from these third parties, but also our greatest opportunities, whether it's innovation or ESG. And we can't find, we can't transact, we can't figure out what the risk is, or the opportunity is. Because we just don't have the data to either illuminate all the different suppliers and what's going on, or to find the capabilities. And that's what drives me crazy.
Katherine McCleery 29:19
Okay, so I'm going to bring this conversation from 500 feet up, down. You're speaking in such visionary concepts, but there are people like me listening who want to know, okay, so we know there's a data problem, there's a supplier data problem, there's a huge challenge to be solved. There's an ecosystem that incorporates supplier data, and there's all these moving parts. How do we do this thing? How do we make a change? And I know that's a huge loaded question. But I think that that might be what some of us are thinking as we hear these conversations. 'Well okay, now how do I do this?' How do I move forward from, like, a large suite or maybe a disjointed ecosystem? What's our first step?
Dr. Elouise Epstein 30:14
So you could see exactly why I love Steph though, because we talk, like, we will talk for hours like this, at this level. And nobody else listening, just on and on and on. I'm sure our spouses are like 'Will you two shut up.' So that question, though, is a great question because that's why I wrote the book, is because at a certain point we have to actually define what we're talking about and come up with a plan to execute this. My current book was, how do you do this digital transformation? How do you adopt digital and break the big massive problem into very bite sized chunks, and that's what I attempted to do, whether or not I was successful, everybody can choose for themselves. I just made it available to everybody. And so what you do is you break the problem down in its component parts. And I think the other piece that I did, specifically in the book, is to highlight people that have done this, that are doing this, to say that, you know, this is possible, this is real, we don't have to, doesn't have to be, in fact, it should not be a massive effort. We should measure progress in three to six week increments. Because if we're waiting months and months and years and years for the value, it'll never come. And that's what the previous generation, we got wrong in the previous generation, myself included. So it's much more tactical and practical. And it's very much in the 'try before you buy' kind of era. And so I think that's my first piece. But also, the other piece that I highlight is that we collectively are in a much better community. And I talk a lot about the procurement foundry. There's other communities that have put that, I think, since the pandemic, that's one of these big things is that we're all sharing information. And we're all helping each other out in a way that we didn't before. And I think when you look at it from a community point of view, that helps everybody in their individual careers, on their digital transformations, or whatever other program they're trying to get started. And I think that's what, those two things are what's different.
Stephany Lapierre 32:23
I 100% agree on the community side because, you know, same procurement foundry when it was founded to what it is in such a short period of time. And I think there's a lot of resources now for procurement to be able to exchange the best practices, although there's still a lot of noise. And I would say, my conversation with a CPO last week, like he described nirvana, and I was like, 'Did he accomplish nirvana?' Like, did he actually do what he says, because he's describing this future state in a way that I was listening to him and then I had to talk to another CPO about it, and he was like 'No Steph, I'm talking to all CPOs right now, and everyone's facing some massive challenges'. No one has the answer. And I'm telling you, because I've been through every single, you know, community based roundtable of CPOs. And there's no one that has nirvana. It's a nice vision to sell to the market. But the challenges are real. And so I think those communities are good to be able to exchange best practices and understand what is working and what's realistic and tangible, versus what's visionary and nirvana-like that may not actually really exist.
Dr. Elouise Epstein 33:27
If I could drag consultants for a moment, I think that's the, we've looked to consultants to give us this insight. We've looked at it, and consultants, whether it's good or bad information, is lagging the market, because well, for a variety of reasons, by the time it actually gets published and out. Whereas I think the difference, the a-ha moment I had, is the communities, it's like real time, and now we saw this, and I wrote about this with procurement foundry, all of a sudden, at the beginning of the pandemic, you know, people are exchanging information on where they found N95 masks or transportation from here to there. Like, the information exchange was instantaneous. And that's carried through of, 'Hey, I need to go, we're inflation city oil right now, or whatever commodity, anybody have any ideas on this?' Or, 'Hey, what's your thoughts on IT labor sourcing', and seeing that exchange, real time exchange, of information point to point, oftentimes I think consultants used to be, just because of our positions, we used to be the arbiters of that information. And now, like I said, the a-ha mom was like, 'Whoa, that's all happening organically outside the four walls in a way we've never ever seen or conceived of before'.
Katherine McCleery 34:46
And this is a question for both of you. Would you say that data literacy is a huge gap to fill and is getting filled right now, is that the key here, in the next phase of procurement and supply chain success with data?
Dr. Elouise Epstein 35:04
Well, I'm glad you mentioned that because that's going to be one of the topics in my next book that I'm currently writing. Because I think we have a data and analytics literacy problem. And I don't say that pejoratively, I don't say it negatively, I'm not trying to create, you know, a problem that doesn't exist. I think as society, we have this problem. And I don't think we, at least in America, I don't think we understand just how pervasive our data is being used. It's being collected without our consent, it's been used without our benefit, on and on and on. And I don't think we fully understand how we as consumers are being manipulated by our own data, and the lack of attention around that. Like, among the issues that should be consuming the media cycle, that should be up there. And I don't think it's even a Top 20 problem for Congress or even beyond. And I think it's different in the EU, and certainly different in APEC, but I think what it points to me is that we have a data literacy problem and an analytics literacy problem. And I think understanding what algorithms do, how they operate, not just saying big data and AI, I hate hate hate buzzwords. But understanding that, and really, when you talk about data, what is data? Defining what it is, and making it applicable to people. I think most people in general don't have the requisite level of literacy that we need in this. And I'll tell you just a little anecdote. So, because I sit in a lot of meetings where there's a lot of charts and a lot of PowerPoint of charts, you watch people's eyes, and you can watch their physical cues and behavior, even on Zoom you can watch this, because the attention span, usually after the second or third chart, just wanes, just... And I bet if you were to test the comprehension, I think you'd find that people are not absorbing the data in the way that we think they are, we hope they are. I think a select few are. And I think they're assuming that everybody is.
Stephany Lapierre 37:17
Yeah, I would add to this when - and this is a conversation I had with Chris Sawchuk at The Hackett Group - because when they came out with their top focus for CPOs, data was not one of those focus. When I confronted him, I know Chris, Chris is also a good friend, I said 'I'm gonna challenge you, why is this not one of the most important pillar in your chart?'. He was like, 'Well, we have insights and analytics'. But data enable all these pillars, like it enables savings, it enables your sustainability goals, it enables enablement, it enables better supply performance management, it enables your insights, your analytics, if you have bad data, and you put Tableau, you're not going to get great analytics because you have an analytics solution. And so that's been my argument for a lot of the trends that I'm seeing, is data is not at the core and data should be foundational to a digital transformation. And we haven't, it's always like, 'Oh, I'm going to implement the system and figure out the data after' versus thinking like, 'Hey, if I get my data upfront, and I can feed that data into my new system, the time to value of that system will be significantly faster'. The quality of information across 100% of my supplier should drive better compliance and performance of those systems. But we have this kind of notion that data has been so hard. And I'm talking master data, mostly, right? But it's all data. It's been so hard to do. That's almost like the acceptance of garbage in/garbage out, portal potties. Like if only we could fix this master data problem. What I'm most encouraged about is that being out again, at conferences, and speaking to procurement teams, I find them to be more literate than they were even a year ago. Like we're talking to procurement teams that are bringing people in their organization that are asking the right questions. They're smarter about the question that they're asking around what type of data, you know, what's the quality, what's the provenance of your data? Which attributes are you doing better than others? And it's more realistic that, hey, you're not going to get perfect data, doesn't exist. And you're not going to get best data across all attributes, like what attributes are you mostly focused on that enables a use case or one of our corporate objective, right? It's a much smarter, much more tangible conversation than we have before, because the expectation of procurement a year or two years ago, one they didn't necessarily understand how or if it was possible, and then they were hoping for this, like, you know, perfect state of data. And so anyway, I just, I'm seeing a big change and it's really encouraging.
Dr. Elouise Epstein 39:50
I think that's a fair point that I think it is changing, but I think we have a long way to go. Because I think if you walked up to, you know, 10 people and ask them what data is, a large percentage would probably reference, like their visual idea of data would be numbers in a spreadsheet. How much we spent or, you know, budget numbers. And that, data is so much more than that. And if you want to conceptualize the supplier golden record, this is back to our conversation a few minutes ago, well, what is it? Is it my, you know, address information? Is it my banking information? Well, yes, and it's all my subsidiary information, it's all my or my parent information, it's all my warehouses, it's all my, like, its this conceptualization of data that cascades, it's this risk data, it's all the sourcing events that you responded to, on and on and on. Then we have a much different conception of what data is, and I think that's what I'm pushing for.
Katherine McCleery 40:52
So I think that you've kind of answered this question in a roundabout way, Steph. I definitely think that you just painted the picture of what data unleashed means. But Dr. Elouise, if you could give us, you know, your future vision. What does data unleashed look like to you?
Dr. Elouise Epstein 41:14
Oh, I'm gonna try and say this without sounding cliche, so bear with me. I think I'm gonna have to think out loud on this one. But it's data becomes that foundation to change how we operate in the world. And in just building off of my risk and sustainability and innovation, we throw those terms around like, of course, well of course, we're doing risk management. But are we really? And are we really helping the planet? Like, I think I would argue we are on our way. When we talk about risk today, we're really talking about risk elimination. A good thing to do, but risk management is far different and far more complicated. Same thing with ESG, we're sort of reporting our scope two, three, emissions, whatever are doing, you know, ratings on companies. Good, nothing wrong with that. But that's not changing how we operate. Like, we need to be able to see the data, to see - I like to use as an example Everest Labs, they have robotic arms in recycling centers, and I think its a great thing because once you put cameras on the conveyor belts and recycling centers, you start to see what's actually happening in recycling plants. Remember, I said greatest risk and the greatest opportunities come from the places that are hardest to see? Like, how many people look at what goes down a recycling conveyor belt on a daily basis? Almost, if you don't work in the waste management, nobody's looking at that. And so if you were to look at it, you'd start to see the amount of recyclable aluminum going just straight into landfill. Like, that's the problem. I don't care about, I mean scope three emissions, you know, reporting good, yes, good. But phase zero, let's figure out how we can reclaim more or, you know, reclaim more from the recycling center, you know, then a lot of the work. In packaging, reducing packaging, eliminating packaging, and reusable packaging, like we need to get to that level of conversation. We need to do the same on risk, by the way. The only way we can do that is through data. Because data, when we understand, when we have a visual - optical sensors that can tell us that this many aluminum cans went straight into the landfill, or you have this many industrial controllers that are at risk for this kind of virus, or this kind of hacking attempt - when we get to that level, that's when we're going to start to get to risk management. And it's all going to be driven by data. And this, like I was explaining, this larger conception of what data is. That, to me, is when data will become unleashed to change how we operate.
Stephany Lapierre 44:02
I think you said something that resonates with me, is that you get the most impact on the things that are really hard to see or access. And that's when I think, I know we're both passionate about supplier diversity, and I do think, you know, if I combine that thought with improving supplier experience, like to get visibility and ask small, diverse businesses, which are 1000s. Right there, the long tail is usually where you spend the most money across small businesses, it's not the biggest spend, so you may not be paying attention to it. And also you're asking these small organizations that probably don't have the resources and the time and the infrastructure to maintain hundreds of portals with their requirements. Meanwhile, it's where you can introduce risk, it's where you have the most innovation, it's where you can make the biggest impact, from a small diverse spend into also their communities, their employees, right? That social economic impact. It's where you can also help businesses that are doing things that are sustainable, that can introduce your organization ways to change your operations, or being more sustainable, as well as support these businesses that are operating with sustainable practices. And that's where I think data becomes really important. Can you get visibility on those 1000s of small, diverse businesses, because that's where you can drive some of those corporate objectives at the speed and a scale that traditionally you just focus on those large organization. That's why I think the combination of bringing visibility to those organization, and then reducing the demands on those suppliers to pay 1000s of dollars to be certified, to maintain hundreds of different portals with the same information they call the black hole, because it doesn't give them an ROI, doesn't give them more business to do this, right? And so how can we make it better for them? And that's where I think democratizing the data that they have to distribute, that's often available anyways, if you're able to accelerate and make it more automated for them. And we talked about the digital wallet, you and I, in our pre call, is that ability for supplier to own their information and be able to distribute it and validate it, right, enhance it, and then distribute it across all of their customers, not just for the benefit of updating information. But what's also the benefit back to them? Like, how do you build that social currencies, you know, so that they can maybe monetize their data? We talked about that concept, we went way out there, we can definitely continue on that topic, but mostly is, can we give back to suppliers a way that they can actually leverage that derived insight to generate more business, get more visibility, focus on customers that are more alike, right? Understanding budget trends, timing, reducing the burden on them to do business with those large organizations so that they can win those contracts, right? Grow their businesses employ more people. And so that's a full circle that I think we haven't quite successfully leveraged today. Like, if I look, you know, across the industry, we're still very much putting a burden, and still don't have nearly enough visibility into small businesses.
Dr. Elouise Epstein 47:10
Well, I think the book right now is taking more time, because it's top of mind. And it's stuck in my head, and I need to get it out, but it's really driving at these concepts around data and analytics, literacy, how we learn, how we learn or more specifically how we do digital, because it's tied back into how we do risk, how we do sustainability, how we do innovation. That's really top of mind. And then, sort of related to that are two concepts that one, Steph just alluded to, is talking about the digital wallet. Because I think it goes in line with this, is that as a supplier, I should own my data, and I shouldn't have to pay. If I start my own business as a trans woman, I should be a diverse supplier.
Katherine McCleery 47:57
Yeah. What I love is that both of you are speaking the same language, and are on the same thought here about data and what data unleashed looks like. The data foundation. It's just incredible to be a part of the conversation that's happening in real time live, that is going to be so impactful. And watching everything unfold the last couple years has been really cool. And seeing the both of you, kind of at the center of advocating for data, and supplier data specifically, has been really cool. And Dr. Elouise, I know you have some really interesting projects coming up, you alluded to a book, what else do you have cooking this year?
Dr. Elouise Epstein 48:46
Okay, so I am working on two concepts that, one Steph just alluded to, one is the digital wallet. And I think increasingly, that's going to get to a trend where we own our own data as consumers, and especially as suppliers. And more importantly, we benefit. Because if I'm going to spend all this time putting all this information about myself as a supplier, then I want to be able to distribute it quickly and efficiently, but I also want to benefit from it. Because it's very likely that others will benefit from my data, and so I should get some benefit from that. And to build on a point Steph made a few minutes ago, is if I start my own business as a trans woman, then I would be a minority owned business, and a women owned business, and I'm not going to have 1000s of dollars to go through that certification. And so I should be able to state that and have that put into a system and not get rejected because I don't have that $3 or $5,000 certificate. Similar thing with, I think, would be true with sustainability in who's certified in various pieces. And I think what happens is certifications become a business of themselves, and a gating factor to progress. Because there's a difference between progress and a difference between certification - that doesn't mean certifications are bad, it just means you have to have a certain financial threshold. So I'm looking at this whole idea of digital wallet as a proxy for suppliers owning their own information, and how that comes to pass. The other piece, which is, I think you all will appreciate, is I am going to take down big ERP. Well, I should rephrase that, because I don't think I'm going to be successful, but I'm going to start the conversation that will move us beyond the ERP era. And one of the reasons that I think big ERP fails - and there's a lot of reasons why, they're big, they're complicated, they show very little ROI - but I think one of the big failures is to look at, if you look at it architecturally, what's missing? Data. Data is, and more importantly, third party data. And in an era where we are syndicated with third parties in our supply chains, the fact we don't have this strong data backbone is like the fundamental red flag that says the ERP era is over. And now, I'm going to be long retired, I'll probably be long dead by the time we have get past ERPs, because they're such an entrenched bureaucracy. But I'm starting that conversation, because that's the next conversation we need to have.
Stephany Lapierre 51:35
I think with ERPs - I was having a conversation recently with someone fairly senior at one of the large ERP - and the biggest challenge they have, it alludes a little bit to what you said earlier on, is that data privacy is that they're more so on the conservative side, and they've been in business for so long, and they have contract with customers across different modules, or maybe through acquisition, that doesn't allow them to share this data. And so they have a data limitation of how much they're actually able to leverage, even though if you could democratize that, it would be amazing. They just can't legally do it. And so I think there's opportunities - not necessarily because the ERP in itself, there's a, and we've argued this, but I do think that there's some benefits that are well beyond data in the ERP that is needed for the organization. And maybe some process over time that would be eliminated through data, I agree. But I do think that if you marry a good solid data foundation with whatever system - that its ERP or source to pay or the latest new RFP tool or the latest new contract management system - if you can connect them through data foundation, you can get the best of both. You can feed the data that's required for those systems to actually deliver on this promise. Because a lot of the ROI that is being justified as a way to invest in those systems, assume good data, and it's never the case. So you're always discounting the ROI of your system by, I don't know, 50% I would guess. So I'm a little less on the 'let's kill ERPs' versus how can we actually make that investment, you know, better. But hey...
Dr. Elouise Epstein 53:08
But I think, back to this silo problem that you just described to the person you talked to, again, if I own that, connect that to the digital wallet, if I own that data, then I can control the syndication, and then you as the ERP provider can do that. But the other piece about the big ERP, and the reason they're the impediments, they're the problems in that discussion you just had - I agree with everything you just said - problem is they're charging 10s and 100s of millions of dollars, and if they're not providing the whole totality of the solution, then we're going to have some uncomfortable conversations. Because why should I pay for the data foundation, when they're supposed - again, that's another big gigantic, this would be the colossal lie, not the big lie - the ERP is supposed to have all this information, and increasingly they don't, and they're getting exposed. And instead of, like, admitting it and actually solving it, they're sort of doing the obfuscation. Because if I pay TealBook or whoever does data, you know, a million dollars, its like, well then the - and I'm cheap paying $100 million to the ERP provider - there's going to be some uncomfortable questions. Why would I pay $99 million for a transactional system? When the data is the valuable layer? I still contend that data is the tail that wags the dog.
Stephany Lapierre 54:36
Well, so I'm, you know, I love that statement for many reasons. I still think having a data foundation into your investment in software is almost like an insurance that you're going to have a better outcome out of the investments. But I think, again, you're always moving light years ahead of me. So I'm thinking, you know, what can we do today for our customers to leverage both technology, the data plus software equals digital procurement success. You're like, you know, 10-15 years out thinking, like, we don't need all these systems. But I think we have some ways to go.
Dr. Elouise Epstein 55:07
I mean, you're running a business, you're solving today's problems for people, and you're doing a great job of it. I'm trying to solve and get ahead of tomorrow's problem. Because fundamentally, every supply chain disruption we have today is because of design choices we made 10 or 20 years ago. And so if we don't start to make the change the thinking for the next 10 to 20 years now, we're just going to keep pushing that timeline out. And we're going to go from one disruption to another, all we're going to be is the disruption responders. And I want to get us beyond that as a profession.
Stephany Lapierre 55:44
I think everybody does share that. And I cannot tell you the number of customers who have used that spider chart to sell their investment in TealBook, because they've pointed to that middle and they're looking at their Frankenstein of an architecture saying how can we move to this more agile, flexible, interchangeable. And so I think it helps them articulate the value proposition of data foundation. So I'm incredibly grateful. And, you know, I'll keep watching as your middle layer evolves, because I want to make sure we are relevant, and we are considering all the different pieces that are important to our customers. This and I always love spending time talking with you, as you say, we could sit for hours and hours. And there's so many things that I want to unpack today that I was, like, 'Oh, I want to go back there', and, you know, and limitation of time and bandwidth for people to listen to both of us rant, I'm gonna close this out. But I just am so grateful for your thought-provoking ideas for pushing our industry forward, for your friendship, for welcoming my oppositions and feedback at times, even when it's self centered around our position in the market. Because I always usually do a claim of this, I'm always conscious of it. At the end of the day, I think we're both very passionate about moving this industry forward into the next century. And to your point, making procurement that value add to the organization and not always reacting to market changes that are pushing, and then we're following, and trying to find answers. That we're so ahead of it, that we have the infrastructure, the data, the mindset of procurement, to be that change agent for the organization. Because it's truly a unique position. And if we can, as a procurement function, get in front of this, we can get that seat at the table that we've been, you know, as a function begging for a long time. And with data, with information, with insight that are relevant, with predictive also, you know, now we're talking a little bit further down the line. You know, how powerful would it be to be able to start being more predictive to your organization on what are the trends that are going to impact your business, your revenue, some potential risk, etc. So we're in a really fun, exciting, I think, function and time. Even though it seems daunting and scary and creates anxiety when you're going to bed. I know a lot of our our customers and procurement leaders are feeling the same way. So thank you.
Dr. Elouise Epstein 58:06
Thanks for having me today and for being a thought partner and challenge partner to me. And I've enjoyed this conversation, and I enjoy our friendship and our debates. And so thank you for going on this journey.
Stephany Lapierre 58:20
And thank you, Katherine, for bringing us back to reality and make it more tangible for people that are listening.
Dr. Elouise Epstein 58:24
Yes, thank you Katherine.
Katherine McCleery 58:26
I'm just glad I can be a part of it and get to ask questions to both of you. It's a privilege. I'm looking forward to the next conversation because I still think that we have a lot to unpack, like you said Steph, with digital wallet. We ran out of time today, but just so our audience knows we will return with an another installment of Dr. Elouise. So look forward to that, and thank you both, this has been incredible. And Dr. Elouise, I wish you continued success. And yes, thanks again for your time.