Alright.
Here we are. Welcome.
Welcome today's webinar. We we were thrilled to have, three of us today to talk about procurement, and we have some amazing topics. We are recording. And so we will make that recording available, and, we absolutely encourage questions. So, by all means throw those into the Q and A box. Dave Brad Wilcom.
Thank you for having us.
Austin Vier. I feel, Like, I'm I'm among greatness here. Two two of the great practitioners in procured. I'm I'm just pretending.
So, you know, Dave Campbell CEO of Trop, great to be here with you guys. Brad Shields, always a pleasure. Excited to get down to it. Yeah.
So I was gonna do some quick intros, but Dave, you're, you know, you You have quite the eclectic background that we've heard on, LinkedIn and other places, but now you're the CEO of an amazing company called TropIC, which continues to grow and defy odds. And as I understand it, the most important title in your life is the fact that you are a dad. Anything I missed? No.
Definitely dad first, CEO second, and drummer third, I would say. And if you're not familiar with tropic, traffic is a procurement platform that is modernizing procurement experiences. And I think that like my two seconds I would share on that is I think that right now is a really important and interesting moment for procurement because it is moving into the modern era. We're seeing better and smarter procurement practitioners.
We're seeing better and smoother consumer grade procurement experiences, and we're seeing that procurement is now maybe the most strategic lever that you can pull in your business to drive efficiency, which in tech, especially, is maybe the most important thing you can do for your company. So very exciting time.
Procurement is in the spotlight. And as I said before, we have two of the best to ever do it here on the call. So very excited to get into it, guys. Awesome. Well, Brad, I'm not sure there are a lot of famous people within the procurement function, but I I certainly consider you one of them. So you've been in procurement for a couple decades with companies such as Best Buy, ATK, Walmart, etcetera, and you're now the head of technology procurement at, Discover Financial.
You've written a book called Software, the Silent Killer of your company's budget, and you have a locked one in your life. I hear you coming out with a new book this year, and you just bought a boat. So that's pretty cool. The boat's the key there.
Just like David has, you know, my kids are all grown at this point. So that's my baby. Oh, my wife calls it my girlfriend Boat's number one. Boat's number one.
Yes. Alright. Well, like Got the kit thing done. There you got a kid thing done.
I still have a lot of kid things going on in my life. I but I look, I I don't have as much experience as you, Brad, but am a procurement enthusiast. I'm not sure how many of those, of us exist in the world, but I'm one of them. So I I think a lot of people accidentally find themselves in procurement.
Me, like, I was supposed to get a degree in finance, but when, you know, the markets collapsed, you know, in in two thousand eight, I thought procurement was, gonna be an awesome opportunity to make a difference for companies. So been in companies such as Honeywell, led procurement companies like Qualtrics and MX, and now I'm I lead procurement strategy here at Trop. Where I'm helping as Dave said build the the dream software for procurement folks. So I'm extote I'm stoked to be sitting here with to you today. Let's let's jump into it. We're basically gonna cover four topics.
We have to discuss these, but we don't really have any formal slides or or or comments. So it it could hopefully get pretty interesting.
I guess maybe what I'll just say is I personally don't believe that procurement can use the same playbook it's historically used.
Companies need savings more than than ever, and thus procurement has been, as you said, Dave, thrust into the spotlight, absolutely needs to needs to perform so if we start with, like, the first concept, this
idea of, of stop fighting fires and, and practice, you know, practice proactive procurement, maybe I'll start off with a quick stat and then we can kinda rift from there. But Dave, when we onboard new customers, we ask them a variety of questions, and according to our our our team, eighty one percent of the hundreds of companies that we've onboarded stated that, you know, prior to traffic, at one point in time, they've missed a renewal in the past sixty days. So that, I don't know, any initial thoughts there as as, you know, is that a big deal, small deal, I mean, it was kind of a leading question, but, it can have big impacts.
You wanna go first, Brad or slide? Let let me jump in for just a second. I I don't wanna step on your toes, but there are a couple things related to that. Right? I mean, you made the comment, that that it's business as usual or it can't be as usual.
And and and that's absolutely hundred percent true because when you when you look at it and relate it back to what something you said, David, Indirect procurement and technology procurement specifically is really immature. I mean, we haven't been around that long. When you consider, the the the whole history of procurement. I mean, it it it nineteen fifties sixties, it started gaining some traction, very minimal traction.
That was on the direct side. Right? So now, you know, we're just entering the the phase of procurement to really make a difference, to really be the, the center of information for a business and for all businesses really, and we'll talk about that more later. I'm sure.
But it can't be business as usual because the old models were built on other procurement practices and other needs that, to to meet the business, you know, where it's at, and this just hasn't been a focus.
Yeah. I I totally agree with that. And I think that quite often when a real IT procurement practice is developed, And if you are a technology company, in many cases, your procurement team is basically just IT procurement because most of what you're deploying is software. Right?
It's usually a, a pretty, I guess, abrupt introduction to procurement in an organization. It usually kinda gets shoehorned in, and it's generally, I think, very reactive. Right? Percumin is there usually initially, if done poorly, as this new process that stakeholders don't want to use. They prefer not to use procurement because they don't understand that procurement can be a knowledge center as you said, Brad. And, so they don't bring procurement in until it's way too late.
And being brought in way too late creates friction everywhere. It's friction for the end user who needs to get the thing that they need to get. It's friction for the sales team that is on the other side of the procurement event. And all of the way to that falls on the procurement team's shoulders. Right? And I think that the old school procurement attitude colliding with this, like, shoehorn technology procurement approach has created a lot of friction and companies that haven't turned that corner yet.
And I think that by contrast, the companies that are doing this really well have procurement leaders that are Some of the most cerebral, you know, people I've ever met, the best project managers, what I think most people don't realize, you know, especially salespeople is that, like, you know, you think sales is hard. Imagine if you have to do that times one hundred times two hundred and understand all those licensing models and all those contracts. Right? And I think that the best procurement people run that book of contracts like a business.
Right? So, obviously, you need to get visibility into the contracts and sure anyone listening to those has been pitched by two hundred vendors that are gonna help you do that. So we're not gonna go down the road of how to get visibility. But if you have that visibility, I think taking on the attitude of, you know, I'm the CEO of this.
And these are the opportunities that I have this year to make the company money in the way of savings I can now start to plan strategically at the beginning of a year against a big list of contracts as, you know, as opportunities. Right? And that's where you start to see Maybe it's not about rake in every contract over the coals in a vacuum. Maybe it's about cleaning strategically.
Like, do we have tools that are doing the same thing? Do we have renewals that we need to start six months ahead of time where we have other renewals? We can start thirty days ahead of the time ahead of time, and you can optimized with the holistic view of the playing field. That to me is kinda what proactive procurement means.
It's like, you know, I have a P and L. I have a target. I have a goal.
Instead of driving, you know, revenue, what I have to do is drive savings, and that's what I'm gonna do, with with my, procurement pipeline this year.
You know, we we have a lot of data, you know, with with the traffic platform. And we and we see that customers who start the renewal ninety days in advance compared to, say, two weeks in advance, save five times as much. And that's pretty compelling. But, yes, I I mean, I've seen this happen time and time again where procurement, professionals, they, you know, they assume stakeholders are monitoring the renewals.
They're kinda waiting to kinda be broad in the game. And and if you're making that assumption I mean, first off, I don't think that stakeholders respond ability to do that. But if you're making that assumption, you're wrong a bunch of the time, I remember talking to a a a CTO right as I joined a company and he was tracking all of his renewals and spending a spreadsheet. And he stated that he did this because he knew there was value and engaged in early, but he didn't trust the in house procurement team to do it because he had been burned so many times before.
And that that was a that was a gut punch right there. Yep. Yep. Well, and and the the the business stakeholders, whatever terminology you wanna use there, don't understand the contractualties and Cs of that license model, that license contract, most of the time.
There are a few examples, but most of them do not. Therefore, they don't know, you know, They know about the renewal, and that's the the date on their calendar. They don't understand the notification period. And once you fly past that, you lose a lot of your leverage which allows you to give that five, ten, fifty percent discount for effective negotiation.
Right?
Should pro tip, like, if you if you're not doing this, that's such a good point, Brad, like, the the moment that everyone should be focused on is the opt out The renewal date is is not the important date. It's the opt out date. A hundred percent. Well, I like what you said date too is that the date to when, yes, the opt out date absolutely really important because you you go past that. Your options become much smaller.
But you need to know your suppliers well enough to know, hey, maybe some engaging thirty days out is fine, and maybe some you need six months out. Maybe you need eight months out. Like, understanding that difference, to make that's that's next level, I think. Yep. But use that three month, six month, nine month engagement period off of the renewal.
Not the renewal. Sorry. What you're calling the opt out day, what I call the notification date. Yep.
Yep. Yeah. And I I think that that that's a really good point, you know, to your point around maturity, Brad, ninety percent of companies that that we talk to have kind of a blanket lead time number for all contracts. Right?
It's like get them all in sixty days ahead of time, and that already kinda sets you up to be poorly optimized against the work that you're gonna have to do and the impact that you're gonna need.
So really going supplier by supplier is the way to do it. You don't wanna be navigating the Salesforce renewal thirty days before the opt out because with them, it's a you already don't have the leverage. Right? Right.
Well, you know, we have a question here from the audience, asking what is what is What is one software cost that you expect to see go up in the coming months? And similarly, what do you expect to go down in price?
I'm happy to I'm I'm happy to kinda lead off with that. I you know, the the commercial executive team at Atropic, we we see thousands of of renewals a quarter. And, we certainly have seen, you know, from a macroeconomic point of view that there are more software companies raising their prices then then we've seen in the past, you know, probably a couple years, to be honest with you. Some that haven't raised their prices a long time are are starting to do that And so uplifts are gen generally higher, than we've seen.
However, the way I like to look at it is you While that's true pretty much across the board, we're also seeing a lot of rationalization and and kind of plays in the market to where there's consolidation of, players, and there's a lot of hyper, you know, competitiveness as as they kind of move to this platform concept. And so where there's a lot more, you know, from a technology perspective, where there are certain categories where it's a lot more, competitive if you do procurement right And if you can leverage competition, you can actually drive some savings despite the pressure to, to, you know, to, to have uplifts, where in some of the other cases where, you know, there there's it it's more sticky, than obviously it's harder to do.
So I would say holistically across the board, you're seeing more uplifts regardless of the category, especially from a software script perspective. But when you look stickiness and competitiveness, that's where you have more of ability to push back.
Yeah. That's a great point. And and pay attention for that reason too. The M and A landscape too here, right? Like, if you look at sales engagement is one I'm sure you're thinking of of shields where we're seeing a lot of consolidation and companies like Zoom info and Clari and Outreach that never would have historically really thought of themselves as competitors move on another are now squarely competing collapsing set of features.
And a lot of them are growing by acquisitions. So when you see, you know, a small, you know, seed stage or series a company gets scooped up in one of those areas, procurement incidentally is also one of those areas that tells you that all of these companies, everyone that's doing well, I think, is recognizing that the key to your wallet is to be a platform that creates commercial opportunity, where many, you know, best similarly similar features would have been bought best of breed maybe two years ago. That's that's not as much the case. So, you know, there are, I think, compelling competitive situations that emerge from that.
The key is to be paying attention because these things are happening very, very quickly. I think that companies, that are struggling to reach the growth goals that they set out to achieve before the market turned, are selling, lower prices than we would have thought and companies that you would have thought is smaller than the type of company that would buy a bunch of other companies are going out and buying a bunch of other companies and integrating them and It's creating confusion in the landscape.
But if you're the one that understands the confusion, that creates leverage for you, I think, to shield's point.
Yeah. I will say this. Anytime I see one of those M and A activity that you mentioned, Dave, I I I I see it certainly as an opportunity, especially if if I have a competing solution, or maybe I already because what that company is looking to do is they're looking to prove that the acquisition that they did is is gonna be adopted. And so a lot of times, they'll be more flexible on price during that initial acquisition period. Because they're trying to get the adoption there. They're trying to get it into the hands of users, and so that's certainly an opportunity.
Brad, anything you wanna add? The only thing I'll add. I mean, as far as prices going up in the near future, we've seen the the pressures of inflation and things like that, which is real. I get that.
But the level of which people are trying to impose increases as b as in b, s as in s, that does not play well in in any of my negotiations or anything like that, because then they're gonna give you the same. Well, well, our, you know, our revenue or our, are, we're, you know, we're investing twelve percent back into the company. The big guys aren't investing twelve percent of their revenue back into their r and d. It's not happening.
It's just, you know, you just have to hold firm and say no to some of these things.
But back to the earlier conversation, if you go past the renewal notification point, you've lost your leverage on those increases, where if you if you ping them and you get them engaged before the notification period, you've got a lot better chance of avoiding them. Brad, I wanna be able to fly on a wall in in a meeting with the supplier, were you were you, you know, refute the fact that they're how much they're investing into their product? That would be a lot of fun. I I I had one last week that I I would have recorded. It would have been really, really fun when when I told one of the top ten probably companies in the software world that the their ability to increase price year over year is total crap because, you know, their cost of data transfer and data storage just goes down eight to ten, twelve percent a year, unless they're store unless they're sourcing people don't know what they're doing.
So and he he can't refute it. Right? Cause it's true.
But, it just helps me leverage the fact that I'm not paying any uplifts.
Cool. Well, look, before we before we jump onto the next topic, this has been a fun one. There there is one more, question in the queue. On that note of M and A landscape in the software space, what resources do you recommend to to follow to keep on top of that activity?
Yeah. I I can speak to that a little bit. I think, you know, the the the basic ones, or you look at crunchbase, you see what articles are coming up on Tech Crunch. You could set up, you know, Google alerts for suppliers that you're interested in in kind of paying attention to.
But quite honestly, one of the best resources and one that I just kinda now starting to see really get embraced by the procurement community is LinkedIn.
LinkedIn is where all startup news breaks first. You know, it'll it'll be on TechCrunch, but then the CEO who's waiting for it to hit in TechCrunch will post about it five minutes later, and then it will proliferate across LinkedIn really quickly. I actually think that while this isn't exactly the question asked, like, you can see M and A activity by being very active on LinkedIn and following you know, more and more people so you can get exposure more and more news. I also think that this is just a good career move in procurement. I think the more people kind of put themselves out there and start to build relationships and networks and start to speak more and kind of put themselves in the spotlight the more, you know, strategic alliance opportunities come your way. The more you can build relationships with the suppliers that you're focused on, the more you can follow along with the M and A activity.
I think that LinkedIn we've turned the corner on is now a useful resource, and I'm seeing more and more procurement people lean into it. As a soapbox and also a place to listen. So that's usually where I find out about it is frankly there. And then I go to crunch base and see if it's true.
And and by that, he meant by my procurement planner.
I'm on I'm on version three now. I've sold out the first two, getting great comments. Yeah. Give it.
Give a thirty second plug for this. This is this is off script. Give a thirty second plug for this procurement planner. What is this?
Well, it's sold out. So I think there's there's not gonna be any available for another four to five weeks, but it it basically is aligned at the procurement professional from a daily tracking, keeping you focused, helping you remember to do the communications, because, honestly, I believe, as we mature, one of the biggest things that problems that I see in our in our categories is a lack of communication, not just internally, certainly. I mean, to David's comment about the suppliers a second ago.
You know, we know what the heck we're doing. We don't need anybody else to help us or tell us what to do.
We're not always great communicators, and this will help keep you focused on that as well as what's important, and then slide the things that are just ankle biters off to the side a bit. But it's doing really well. I mean, people have the comments that I'm getting or, you know, this changed my life, this changed my career, those kind of things. So Wow.
I'm thrilled. I'm really happy. That's awesome. And I don't I don't take you for one that o overhyped something.
So that's, you know, I'll take I I think that that's a a good statement there. So let let's talk about the next topic.
That first one was a lot of fun. And this one actually aligns pretty good too.
It aligning goals and gains Kholder's trust.
Absolutely important. I I to be honest, procurement doesn't and maybe I would even say often have the best reputation. Clearly not among salespeople, but let's let's ignore that for a second. But internally, where it matters, they they don't always have the best, reputation.
So Brad, you and I were at a conference a few months ago, and we were chatting, and I don't remember who's between meetings or what, but you told me that when people meet you, once they get past being starstruck, the thing that they bring, comedy.
The thing that they bring up to you the most is this topic. This idea of, hey, how do I go and gain stakeholder trust. So let's let's, kick it off with you. What pieces of advice, you know, can you share or or do you share when you get that ask?
Yeah. I mean, the the it's the number one question every time. It's how do I get involved earlier? Well, how you get involved earlier is to have the trust of your internal community, right, and your stakeholders.
There there's a number of different things. I mean, and and David was referencing some of those just a little bit I I'm a big proponent of setting up those alerts. If you're the person responsible for Salesforce, Microsoft, I don't care who it is, pick somebody. Set up some alerts.
That you don't have to go search for them, and you get those feeds in, you will know more about that supplier.
Listen to their quarterly report outs to the street.
It's those kinda little nuggets of information that when you're communicating with your stakeholders, that will make a difference. I mean, let's face it. The the the stakeholders are only getting one side of the story. The only thing they know about these companies is what the salesperson has pulled them about their company and or what they've learned at a conference, which is also very one-sided.
So bringing a little bit of a, a background of truth and, you know, you know, who they have acquired, what's not what's their roadmap look like. And you will gain that credibility more and more. And it's honestly not real tough to know more about the stakeholder than our internal or about the supplier than our internal stakeholders. Right? They don't put a lot of effort into that because they feel that they've already got that knowledge and information from the sales guy or girl.
Yeah. You know, I love the concept of being up to speed. I've seen a lot of procurement people sit down and am meeting with a stakeholder, and it benefits the procurement person a lot because they're asking a lot of questions. But a lot of these questions that they're asking are ones that they could have gotten themself.
And so they're gonna wasting their stakeholder time. And so, you know, granted I recognize that depending on what sector you're in, depending on how big your procurement function, and sometimes procurement people are very specialized. And sometimes they know a lot about what they're procuring, they're true experts. Other times, and often in the tech sector, where procurement, you know, doesn't have a, a lot of bodies.
They cover a wide swap, you know, swath of the business. And and and yet it it bothers me that they don't adequately prepare for those state court meetings. They don't you know, and and and sourcing. No knowing a little bit about, you know, the what their what, you know, what the renewal is coming up.
Have they done their due diligence? Have they looked at the contract? Have they read in the news what's going on. Have they been to the supplier web page?
That's all, like, really helpful stuff that can take you from zero to twenty five so you're not starting at ground zero, so you don't look dumb. When stakeholders think you, you know, you don't know what you're talking about, they're just not gonna it's not worth their time. And and then I think another really big thing is don't sleep on the power of just some early sourcing. You know, do your homework on what does a competitive landscape look like?
That way you can insightful questions. That way you can ask them if they've considered working with competitor X, that goes a long way in building trust.
Yeah. And the the only thing that I'll add to to to how to get engaged, and it's not it's never a quick process to gain trust. Right? It takes a while to to gain trust in any situation.
But It takes a lot of gain trust, but it doesn't take a very long lose that. To lose it? No. Not at all.
I totally agree. You may have, like, one one chance really quick. Right. But And then and then if you mess that than it then it's really painful.
Whatever. Right.
The the the the thing I would say is and and this, again, is hard for for procurement people and hard for humans in general.
Let the stakeholder be the hero.
Right? Let them present the deal. Let them be the one that gets the glory for the the the great decency or however they wanna present it to their leadership or whatever the case may be, don't fight that. Let them be the hero. And it'll go a long way in allowing them back, you know, allowing you to get into their their core team, but easier.
Yeah. I think I think that's a great point. Few really good points, which I think are about first having doing your homework and having a fundamental understanding of technology. Like, if you can surprise and delight a stakeholder with something they didn't know, like, you know, that's where you then are somebody that they might come to and ask for more information later.
And I think that, the idea of who drove the savings is kind of a legacy idea. Right? It's like we drove the savings. Together.
Yep. Exactly. What matters is the bottom line of the company, not, you know, me or you or our paychecks. Right?
I think the last thing Dave, Dave, I just wanna I just wanna quickly interrupt you because I think that was a really good nugget there of, like, when you can bring a little tidbit of information or insight that maybe you're that that that the stakeholder doesn't know. That's a that's an opportunity to to delight and really gain their trust really quick. I just I keep on what you're saying, but I just wanna No. Definitely.
And I think, you know, we are seeing a rise of, you know, ways that you can do those companies, you know, like traffic, but there's a bunch of others too that are able to aggregate insights and learn first in a market when things are happening with specific technology providers that give you that inside baseball to help you earn that trust from the stakeholder, and then you can win the deal together, to to Brad's point. And then to speak to the point in the chat, or the Q and A rather, really, really good question. Like, that's all well and good, but if it's a high friction process that requires a lot of work of the end user and the person who owns a contract, that's where you're gonna, turn people off to the concept of procurement quite often.
What people think procurement is is a process that slows them down. They don't know the value, the strategic value of procurement, and what it's unlocking for the organization. So know, this is obviously something we've invested in tremendously. I think if you look at modern contract owners in, you know, and startups, but also in fortune 50s now, increasingly, these are millennials.
You know, sometimes even gen z, right, people that have grown up, you know, digitally native with an expectation from tools and process, and immediacy, you know, people live in New York. Like, I'm like, I'm gonna order groceries, and I'm gonna have my door in eight minutes. And the idea of then needing to engage in a very high friction, sometimes months long procurement process, that requires me to do a lot of things. That requires me to jump across many different platforms, many of which were not really designed for the end user, but were really designed for the procurement person.
That's where you run into a lot of friction. And usually what that friction looks like is a huge wiki entry with like a hundred things that you need to know to buy stuff if you're a stakeholder, you need to submit a request. Like, if you're buying hardware, you go over here. If you're buying software, you go over there, unless it's above this amount, then you go over there.
And I think that in a lot of companies, the onus is on that end user, whose job is not to buy things, to do a lot of that leg work. And, you know, modern companies are simplifying their processes. They're removing steps from that. That experience.
They're at at a minimum, customizing the steps required based on what it is that needs to be bought, and, and automating it. You know, I think the winner in procurement is going to figure out how to deliver a consumer grade experience, to digitally native end users that makes it very easy for them to to navigate the process. That's, that's something that I think is gonna increasingly be where folks are investing in procurement. And, you know, we have our take on that atropic, of course.
There's other companies out there for doing this with Longtail and other types of commodities. And I think that we're gonna continue to see a major focus on delivering experiences that delight the end user versus the procurement person because the procurement person knows if I can delight the end user, they'll follow my process. And then I can create the outcomes that I need to create for the company. Yeah.
One one thing I'll maybe add on top of what you were saying is, look, in in today's world, there are gonna be complexities in the process. Okay? But the but the stakeholder doesn't need to feel every single complexity. How do we make it seem simple for them?
You know, you think about buying something on Amazon. That's probably a lot of complex process behind the scenes. The stakeholder is protected from a lot of that. How do we make it so the the user experience, the the user interface, the the tool, the the process doesn't seem so hard.
And if If part of the value procurement brings is helping navigate it through the right way that they'll come to you and say, Hey, I know it's hard to buy something, but when I use procurement, it becomes easier. Then they'll come to you because they want to, not because they have to, which I think is, a big difference.
Yep. The other thing that came to mind oh, go ahead, Brad. No. I just said a hundred percent agreement.
Yeah. The other thing that came to mind is a lot of times when when we engage with stakeholders. We're focused on our own goals. We're focused on, yeah, savings, and that's important, or or maybe we have some goals around rationalization.
But how well do we know the stakeholders' goals? Do we look into the system? Do we look at their OKRs? Do we do we align our objectives with theirs to help them achieve their goals.
Right now, spend rejection seems to be a a very common goal, but that hasn't historically been the case. So perhaps supplier performance is a bigger deal to them. Perhaps, you know, sourcing or input or introducing a new, supplier could really help them out too. If you don't know what success looks like to the internal customer and internal stakeholders, you're never gonna get.
You're never ever gonna negotiate.
The best contract for your company. You have that's the first thing you have to do. Sit down and ask point blank. What does success look like?
For you in this deal. Right? I mean, because you don't know. It may just be price, or it may be displacement of another solution or two solutions. Right? It may be a timing that you just don't know what is critical and and you have to understand that.
Right point. You know, prior to COVID, I worked for a a a company that basically always were in the office. And And our our procurement team was very much centralized under the under the finance umbrella, and we all sat together. But I would encourage them occasionally to go sit in the department of the, you know, amongst the people they were supporting, you know, not, you know, find find an empty desk there for a day just so they could under stand, like, how they operate, what was important to them, build the relationships, and it was amazing to see how many new initiatives my team got involved with because they were present. I know a lot of us are working from home or or doing this webinar here, but that's not to say you can't occasionally, not every time, but join their join their staff meeting or or join, you know, their town hall. All you know, get to know them as a department a little bit and and I think you'll be surprised at how well you begin to integrate with them.
Yeah. It's it's interesting because I feel like excellent procurement people are really good, value based negotiation where you're aligning outcomes know, you're really deeply understanding what the other party needs. And, like, it doesn't mean you're always gonna be able to give it to them. But if you can really understand it, you can, you know, sometimes find that way of threading the needle and achieving the outcome, but the same time isn't spent with the internal stakeholder, right, to, like, to get aligned with with them and, like, what they view as a success and in the very, very early days of traffic.
I think we missed the mark on this a couple times because it's like we'd come back with, like, outrageous savings performance be like, look, we drove this outrageous performance. It's the best. And then they'd be like, well, I didn't care about saving money on this. I was actually, you know, I was focused on getting free seats, or I was, like, really focused on getting quarterly payment terms as opposed to upfront, right?
So you gotta remove that, that lens of what matters to you really understand what matters to that, and I think that was a really astute point. Awesome. Love it. In the interest of time, this has been a fun one And I I do think it's important, Brad, to your point.
I know a lot of people ask about it. Clearly, there's a lot of work that can and needs to be done to build that relationship between procurement and the stakeholders to change the perception of procurement. I think Davey brought up some good points about championing the value But but let let's let's move on to,
you know, the the next topic here. Leveling the playing field and software negotiations.
I know I felt many, many times where the deck seems to be stacked against me a little bit. And it makes sense. You know, in procurement, we may see a particular deal once a year when it renews. Maybe not even that often because we did a multi year deal. Guess what? The salesperson that you're working with, they're selling that same I think, Brad, this is what you told me one time. They're selling that same deal multiple times a day.
Yeah. They only have to they have to only have to know one contract a handful of solutions, but with maybe two or three different companies, right, where the procurement person has to know a hundred different companies, eighty different contracts, and, you know, who knows how many applications and licensing models. It's it's not a fair playing field. They've they've maybe let me tee you up a little bit. You know, traffic has a a large commercial executive team and they're they're specialized.
You may maybe maybe, you know, to talk about, you know, it's a leading question, obviously, but talk about why you moved in that direction. And what, more importantly, what results you're seeing because if our customers are are seeing results, then, you know, whether they're internal procurement teams are external, it it probably be very similar. Yeah. Yeah.
A hundred percent. And just to kind of reiterate the point that Brad just made, that is, like, the central thesis to why I started this company is I was, like, These guys over here that are selling the product have twelve tools in their stack, cutting edge, data, cutting edge, you know, sales engagement platforms, and most importantly, the ability to practice hundreds of times per year, like objection handling documents that they're that they're going to, like you know, competitive, you know, differentiation tables that they're going to, and the the infrastructure to support a sales team is like phenomenal, right, and the infrastructure to support a procurement team is like fledgling at best.
It's now starting, I think, to grow. But one of the challenges is you know, I've I've had people reach out to me for like mentorship or guidance or whatever and say like, hey, like, I wanna be the best at sales, like, what do you recommend I do? And I'm like, go learn procurement, man, because that sales queued.
It's learning every sales pitch. And learning every contract and every price point, just like you said, Brad. So the idea behind traffic was really pretty simply like what if you could level the playing field? What if you had access to the same amount of data buying that the salespeople do selling.
Like, what would happen to the market dynamics if everyone was on a level playing field? And and also what would happen if you had tools, they made it easier for you to do your job, easier for you to you know, manage the process the same way that salespeople do, right? Like, when you talk to a great sales organization, they're like process process process. We've optimized our process.
This. Right? And I think quite often procurement gets pulled in so many different directions that you wind up accidentally with many different processes depending on the supplier, depending on the state holder, depending on the budget and everything else. So, you know, so one of the things that we did is we built the the the services team, add on to our software.
We said, alright, we're gonna have a team that buys suppliers in a specialized way the same way those suppliers sell in a special this way.
So, you know, we have customers that are buying and renewing NetSuite, and the NetSuite sales rep is selling NetSuite hundreds of per year, then we need somebody that's buying NetSuite hundreds of times per year. Right? And we we hired somebody that that just does NetSuite and that's it because, you know, it's not about it's about having an even advantage, like, or no advantage to either side. It's about creating kind of true data symmetry.
And the advantage that we have is traffic every single customer now becomes a node for gathering information on a given supplier. If they have that supplier, this person who's special, I don't mean to pick on NetSuite. You know, we have a bunch of them, but this person who specialize in NetSuite is gonna hear before the rest of the market hears when things are changing with NetSuite. When a price is gonna change.
A product doesn't work as expected. There's an outage. There's, you know, an RFP that's, you know, credible with another competitor.
And once our specialist learns that once, every customer that has NetSuite knows that too. Right? And that's, you know, our response, I think, to the sophistication of a sales team with limitless data and endless repetitions is like the only way to counteract that is to build the equal opposite in terms of data tooling and and specialization. So, you know, when we started, admittedly, we weren't as specialized as we could have been.
Right? We we thought all you really need is data in a playbook, and, you know, you can go out and get outcomes. And what we found is that. And and what I mean by that is we would rotate who is on a given ticket based on capacity and you, you know, might get the same person you might not.
And we realize that that doesn't work because to build the muscle and to build true authority, like credible authority that an end user who owns a contract is gonna understand, you gotta be working NetSuite all day every day the same way that sales rep is. And that's kinda how we structured our, our team. And what we found is, one, we can definitely achieve significantly better outcomes, but also two, significantly better outcomes doesn't always mean the lowest imaginable right? It's, you know, what is the right solution for this customer based on their needs, the other tools that they have, the integration points that they're gonna require, all of those things.
We have great pattern recognition because we see it hundreds of times, right? So, when you can move beyond just a bread and butter commercial conversation, and start moving into like a solution in conversation and start really showing an end user, hey, look, you know, I bought three hundred NetSuite deals this year. And I've seen everything next week has to offer from top to bottom and here's what I think is gonna work for you guys. It earns a lot of trust and a lot of credibility.
So that's that's why we had specialization. What Shills didn't tell you is that was actually his idea. So thank you very much for that, Michael Shills. And Yeah.
That appreciate that. You know, it it's interesting. I I do remember when I first explained the concept, you know, I I I compared it to, you know, baking. I said, look, we can give three, four people, all the same ingredients, all the same tools.
So in this case, the data, as you were suggesting date, we had the data But if you have someone who's been been trained in the art of of baking and then, you know, has the experience One cake is gonna come out better than the other. Let's just put it that way. Does that make sense? And and that's, and that's where you take the data to this whole another level.
We combine it with that experience. We you combine it with the know how, and that's that's really amazing. So it's it's cool now that we, you know, start off this conversation talking about, hey, let's let's be proactive and and how time is so valuable. And now we've combined it with data and experience.
Like, that, that's, that's the second really strong key to success running procurement data and time Brad, you know, I the first you you've been a a friend atropic for a while now, but the first time you sell our platform, obviously, you were clearly impressed with with everything you saw, but you texted me during, during the, or maybe it was right after. I can't remember, during, during the demo, and you were excited about one thing in in well, one thing really, really stuck out to you. You remember what that was? Yeah.
I didn't realize you guys did benchmarking.
Yeah, benchmark. So That was a that was a surprise. Why why was that so interesting to you? Was it just the fact that you didn't know we did it, or was it like that was compelling?
No. I mean, you you're getting lots of great data points. So it's a natural fit for you guys. I just didn't realize you did it, and it's always beneficial, as an internal practitioner to have that third party reference and understanding of what the market is saying. So, it and and to to jump on what Dave was talking about, what you what the the brilliant idea that you hadn't launched, inside of tropic as an individual practitioner I follow that same belief system internally, but we don't see the hundreds of deals like you guys do. But I will have subject matter experts for specific suppliers.
Period. If I have a deal come through for you name the supplier, I will have the same person working on that, that deal, which is the most exposure that I can get as an individual practitioner. Right?
Yeah. It puts some yeah. And that and that's the that's what we're seeing as well is just the they're they're, you know, so much more effective when they've seen it before, you know, combined with, you know, benchmarks or or data points, etcetera. You know, there's a Forest store there's a Forrester stat out there that says companies with accurate benchmarks save twenty one percent more on average.
That's, I mean, when you twenty one percent, that's a big number, more on average. That's that's pretty compelling right there. Yep.
Okay.
So last kind of
topic here, turn software buying into a long term strategic advantage. Brad, one of the things that you that you you know, I think I pulled up for your book or you said it one time on a slide, but you said imagine the advantage you could have over your competitors If you could procure your software portfolio five, ten, twenty percent cheaper than they could year over year. You wanna can you expand on that a little bit? Yeah.
That's a direct reference into the there's more kind of like we're talking about earlier. There was there's more to the contract than just the initial price. Right? That's what a lot of the stakeholders understand because it's their budgets, it's their leadership pressuring them on it.
They have to deal with the finance group inside their companies, but it it's this is where you tear into the Ts and Cs, and you extract as much by a value long term. Again, this is where the old procurement models don't work, the seven steps, things like that.
They weren't they didn't have technology, in in in mind when they did that. This is where you, you know, lock down zero increases year over year. This is where you lock down reducing costs year over year. This is where you get other freebies as, you know, tiered pricing. There's a lot of different levers to pull, but I can guarantee you ninety percent of your competitors aren't doing it.
So this will give you a true competitive advantage, and this is one of the things that makes me most excited about procurement. And I think it's probably gonna be one of the best careers going forward, and I wish I was twenty years younger, but it's gonna be an amazing place to be, as we mature and grow. It's it's gonna be the hub of business going forward.
And there's there's ways to get that five, ten, twenty percent. It can be through negotiation. We've talked a lot about that. It can also be through optimization.
You know, if you if you go and and negotiate ten percent off of you know, a million dollar deal where you're buying a thousand licenses, that's great. That's impactful. But what if you can What if you can realize that you only need half of those licenses? What if, you know, what if you actually end up paying more a little bit more per license, but, you know, you can cut your cat cost by more than twenty percent because you're optimizing. I mean, we know shelfware is a huge issue.
Cost companies billions of dollars a year annually.
This seems negotiation is very effective and powerful, but, you know, SaaS optimization and waste that seems like a really big way to to potentially increase this advantage as well. There there can't be waste in SaaS because all the sales people that sell this stuff say it's consumption based model. So you're only paying for what you use. Right?
I mean, I would argue there. I would say there's a lot of waste in SaaS for sure, but Oh, you mean they make you buy more than you actually need? Occasionally.
Same from time. Snakes.
Yeah. I think, I think this is a a real interesting one. There's for a couple of reasons. So, you know, a lot of the companies that we work with have some kind of virtual product, right, either their B2B SaaS company, or they're not, but they have a digital product for something in their business.
And I think that on a long enough time horizon, every company will will have that. Right? And when you look at supporting functions for any type of business, you know, you're gonna see cloud in there. You're gonna see, you know, or data center if you still have that and you're gonna see software that gets rolled up into it.
Especially, as I mentioned, if your core business is software, like, your cost of goods sold as software, right? And that means that your ability to buy that software strategically, make sure you have the right mix of software in your like SaaS supply chain that's bringing your product together is going to create real competitive advantage. It's gonna create better margin for you gonna create better pricing power for you. Like, what, you know, if you can buy software twenty percent cheaper than your competitor and your competitor is building competing software, That means you can price nineteen percent cheaper than your competitor and run a better business and win every deal.
Right? So, like, It's how procurement, I think, really folds into not just, you know, hard cost savings, but overall efficiency of business profitability and even you know enabling top line growth. If you have a more efficient business, a smoother, you know, SaaS supply chain, you can commercialize your product better. Right?
So it's like I think that this is kinda what I meant at the beginning. I think procurement is really becoming the superhero of most companies that we that we work with like sales has been deemphasized.
Partnership have been deemphasized.
Huge focus on retention and efficiency, right? And and, you know, there's only two ways to drive efficiency, right? And, procurement is responsible for one of them and probably the most impactful one that you can do, which is, you know, buy buy smarter and and cost effectively. Right? So I think that the more procurement can demonstrate to CFOs and the more procurement can demonstrate to the board and get involved in those strategic conversations that this is about a lot more than just, you know, saving five percent on Google Workspace.
This is about running a better business that sells better, that competes better, that retains better.
That's gonna be the big unlock. And that's, you know, I I think that this is the, you know, I've been using the sales analogy a lot today. I think the procurement is in the same hot seat that sales has been in historically. In terms of the most important, driver of impact in the business. So that's the advantages spread way further than running one good negotiation. You still obviously have to do that. You know, negotiating effectively, I think, is table stakes and increasingly procurement is called upon to do a lot more strategic activity.
Agreed?
There's a couple questions Dave, maybe look at specific to tropic. Brad, there's one question here that says, How do you know your software control costs, controls are working? In other words, how do I gauge the ROI of putting various cost cutting measures in place? Any thoughts about that?
That's a whole another hour, man.
And it depends on the deal. Depends on the environment that the deal is being written in the company, the effectiveness efficiency of the company and launching products. If it's SaaS, you've got the carry over your I mean, back in the good old days when you have perpetual license, you could just cut off, you know, maintenance and but now you gotta pay for two, you know, solutions at the same time while you're doing the trans I mean, there's there's just so much to that question. I I apologize, but No.
Visibility certainly plays a big role here. Okay. Yep. Because if you have visibility into how many licenses you buy versus how many licenses are deployed versus how many licenses are utilized.
Like, certainly, controlling that, the ROI becomes really, really obvious. So I would I would argue that a a key piece of it is is is visibility and metrics. You know, what what type of goals do you have in place to to track effectively, you know, your utilization and your your optimization?
I just don't know any companies that have a a a true, truly effective software asset management solution.
And program. So, I was taking the manual course around it. So, yeah, if you have that, fantastic because that's what we should do.
Well, resist the temptation skills.
Cell topic.
If you're interested, you can ping us about software asset management later.
I, I wanted to quickly, hit on some of the questions from the chat. So first, one that I'm seeing or from the, Q and A rather, first that I'm seeing is, SAS Avenue comes with professional service agreements, can traffic app tracks, yes, but as well. So, yeah, you can you can use our platform to manage all of your spent.
Our platform is built to universally handle all types of spend management. The reason that we're spending so much time talking about software is it's very opinionated towards software and that It does come with asset management. It does come with SaaS specific benchmarking. And the reason that, you know, you can still buy and manage marketing spend, you know, real estate, whatever else would like to, but the reason that we've chosen to focus a lot on software is that's that's the slippery one.
The one that I think has least developed, the one where information the scarcest and also the one that increasingly is a top five, top four, or top three line item, for for modern companies. Right? But you can you can do all manner of spend management on our platform. And speaking of which, for the second question, you know, can you comment on how traffic approaches your leverages benchmark data?
When contract pricing is often proprietary. So there's two types of data that we think matter.
One is price data, and we'll come back to that in a minute. The other is, you know, for lack of a better term negotiation data or negotiation insights. And that's like, how does the business desk at this company work? Like, what are the different empowerment levels know, what can what can the sales rep give you?
What can the VP of, you know, RVP give you? What can the VP give you that kind of stuff? What are the flagship products that they're putting a lot of weight on and their pricing, like, you know, if you're buying Microsoft three years ago and they would give you, like, anything you wanted if you bought Azure, stuff like that. Right?
That know how we collect first party from doing our work. And we own it because it's data that we're gathering and and and, and collecting and administering.
The price data to your point, you know, having concrete data points connected to specific suppliers and connected to specific customers that is obviously confidential. The way that we do this is we aggregate and anonymize the data. And by the way, it's not a new practice, you know, Gartner, places like that have been doing things like this for a long time. And basically, you know, you're opting into a cooperative, which is saying, like, I recognize that my information is gonna be aggregated and, and anonymized and used to kinda create, a more powerful product with tropic.
This is happening in a way that, you know, creates no risk for me. And I'm benefiting know, my trade here is that I'm benefiting from all the data that others have, you know, donated for lack of a better term into this kind of aggregate data set. And I think that this is, you know, the way that we've written our contracts and the way we conduct business, we're doing this in a completely legal and compliant way, but I also think that this is like an important sea change that we're going to see driven. Like, if you look at procurement as a category, data companies are on the rise.
Transparency is on the rise. This is something that buyers are demanding.
And it's like, what other product can you think of? Like, don't go to the store and buy something and, you know, get sued if you tell your friend what you paid for it. Right? It's like that idea, I think, is indicative of the fact that this entire commerce equation is backwards, right, and that the buyer is actually the one that should have the power. And I think that we're seeing, a sea change happening there.
And, and we're, you know, as I said, the way that we approach this, we do it in a way that's totally risk free for our clients. And if anybody ever wanted to be noisy about you know, the fact that, aggregate benchmark information is being used the same way your personal information is being aggregated in systems that sales reps are using I would love to have a conversation about why we think it should be illegal to know what a product costs. Because if you forget everything you know about SAS and just think about that in principle. It's insane. It's kind of an insane idea.
I think that we're gonna see price normalization be driven in SaaS, think that we're gonna see that be driven by, you know, transparency. And, you know, we kinda wanna be a part of what we think is a positive change.
Love it. Look, we only have two minutes left. So just kinda wrapping up. You know, really appreciate everyone joining today. It's been an awesome conversation, Brad.
Yeah, and Dave having you here. Look, I I firmly believe that, you know, this is procurement time to sign. This is procurement's opportunity to step up and and deliver meaningful results to a comp to their company when they need it the most. And And it's it's gonna be stressful, but it's a time to learn and grow as well. So I'm personally, you know, excited about procurement, and and I think there's a, you know, a lot of ways you can go about doing it, but certainly, you know, some best practices that, you know, including those we've discussed today. So Brad and and Dave, thank you for for joining. And, yeah, I appreciate everyone's input.
Oh, always always a pleasure, guys. Great hanging with you again. Appreciate the opportunity.
Yep.
Thanks, everybody.
