Meet the Man Behind the Startup That’s Making Procurement More Strategic and Simple 🚀
The Norway startup scene is one the rise, and one emerging company from the Nordic country that has been gaining a lot of speed and traction is Ignite Procurement. DPW caught up Sigbjørn Nome, CEO & Co-founder of Ignite Procurement to talk about his company and how he sees the future of procurement.
Why did you start Ignite Procurement? What problem were you looking to solve?
Nome: I started Ignite Procurement after working in BCG (Boston Consulting Group) as a Consultant for a couple of years. While conducting several procurement transformations in BCG, I was astounded by how large companies worked with procurement and that businesses and procurement teams were making multi-million dollar decisions based on gut-feeling and limited data support.
Simultaneously, BCG teams could bring immense value by helping clients work with a more data-driven and strategic procurement approach. During my time in BCG, I also met my co-founder, Børge Langedal. He also worked as a Consultant across different cost optimization projects, including lean, reorganization, and procurement. He shared the same experience as me that procurement projects yielded the highest return on investment for clients. Together, we decided to leave BCG and start Ignite Procurement back in 2016.
I’m astonished by how many companies today have a CRM-solution in place, but only a few have a solution for strategic procurement. I think we will see a significant change here in the coming years.
- Sigbjørn Nome, CEO & Co-founder, Ignite Procurement
In the early days of Ignite, we continued to work as consultants on a “no cure, no pay” basis. However, we quickly realized that a great deal of the value we created was linked to providing insights and finding opportunities and risks. A lot of this work could be automated using modern technology. By bootstrapping, we started to build a small team and a cloud-based solution to automate the insights through spend and procurement analytics. We managed to get selected Norwegian pilot customers onboard and received excellent feedback from them. Since then, we have not looked back and have rapidly developed the company in terms of product offering, employees, and customers.
What makes your technology stand out from your competitors?
Nome: Our spend management solution is built on a battle-proven, strategic methodology derived from our BCG procurement experience. It helps our customers drive insights and value from their data with an unparalleled time-to-value. Combined with an intuitive and user-friendly interface, this helps procurement professionals to focus on what matters most. In my opinion, the lack of user-friendliness in legacy procurement software is one of the reasons why strategic procurement technology has not taken off yet. We also believe that we have a more holistic approach to procurement than other procure-tech solutions in the market.
In your opinion, what will determine the procurement’s success in the future?
Nome: External spend typically accounts for 60-90 % of the total costs in an organization, where procurement is crucial for innovation, cost optimization, and sustainability. But to unlock the full procurement potential, the function needs to reallocate more of its focus and resources to become a cross-functional strategic business partner – and move away from the more traditional operational and transactional mindset. For this transformation to happen, I believe three essential elements need to be in place:
Cross-functional capabilities within the procurement teams
It always starts with people! Companies need to invest in a broad specter of capabilities to drive procurement forward, including analytics, people skills, business acumen, and change management.
Leverage technology both operationally and strategically
Operational purchasing (e.g., P2P) will continue to be automated with technology. However, the next big step would be to leverage technology for the more strategic parts and link it with the operational technologies to have a seamless dataflow. The strategic solutions will do data management and set the guidelines for operational purchasing. Procurement is years behind other functions in terms of leveraging data. They need to take ownership of the data, start using what they have, and improve as they go along. Unused data will always be bad data!
Procurement needs to become a business partner looking at all three pillars containing financial, environmental, and social impact. Similar to how we today monitor costs, we will, in the future, track how procurement impacts the environment and human capital. Procurement should take “the driver seat” in this transformation, or else other functions, such as finance, will get this responsibility.
Give us one fun fact about you.
Nome: I once was a Norwegian county (Finnmark) champion in ski jumping, although as the sole participant.