Category Spend Management Lessons Learned from Zuora & Salesforce
In this episode, Maria Centeno, Head of Procurement at Zuora shares her learnings from her many years of strategic sourcing for tech giants such as Salesforce and eBay. She tackles how to best manage category management for marketing and tradeshow spend, and how procurement can work with finance to make the best spending decisions.
Speakers: Maria Centeno, Head of Procurement, Zuora
Maria Centeno is the current Head of Procurement at Zuora, a publicly-traded enterprise software company that creates and provides software for businesses to launch and manage their subscription-based services.
Prior to her role at Zuora, Maria led strategic sourcing efforts at Salesforce as the Director of Strategic Sourcing and also held the role of Strategic Sourcing Manager at Ebay.
Maria is a procurement leader experienced in supplier relationship management, contract negotiation, capturing supplier innovation, category strategy development, and execution.
Listen to the Episode Here:
How does your marketing background relate to your current role with anyone who you have spoken in the procurement field? How you got started in procurement and what made you choose tech companies?
From Chemical Engineering, to Brand Management, to Procurement Leader
For sure. I will tell you that I did not want to end up being a procurement person. You know, that’s not how you grow up in life – you want to be an astronaut or you want to be a doctor, but you don’t want to be a procurement person. That’s not in the spectrum.
I actually have a background in chemical engineering, and I’m very comfortable with numbers and analytics. As an MBA, I specialized in brand management in marketing, which is something that I really like, and that’s how I finished business school. I went to the workforce and joined a leadership development program. You know, the ones where they recruit fresh MBAs who go through rotations. My first rotation was marketing communications, so that was very related to the background that I have from academia. Then, my second rotation was procurement, and that’s how I first got in procurement.
When I started working initially in procurement, I was doing what is called direct procurement, which is related to direct materials.That’s all a very, very short stint.
eBay – Maria’s Glimpse Into the Tech Procurement Scene
After that, I was recruited to eBay, you know, and that’s how I initiated my career in the tech scene. I was very fortunate to receive a call from eBay back in 2006. You know, it’s not the way that we know today — eBay in 2006 was a humongous company. They were centralizing their procurement function, and I was given the opportunity to have a category role. I started with real estate, and then from there, I moved from there to add a little bit of tech.
It was a very exciting time in my career that gave me a little bit of network here in the Bay Area and the technology sector.
Love the technology sector, love tech in general, you know. That’s one area where I’ve devoted myself. I have a strong belief in a functional procurement team in which people who have strong subject matter expertise in category management. They are really good at sourcing, you know, and working with suppliers. I think there are very good business cases for a generalist, but I think the further and the better relationships you establish with your business partner that in most cases through knowledge, is what takes the function of procurement further and makes them more effective in companies.
I love the terminology procurement business partner. What does this mean?
Procurement is Enabling The Success of Other Functions – Alignment of Goals is Key
It’s important to establish yourself as a procurement business partner in the organization, and collaboration is critical. You know, one core aspect of procurement is analyzing the spend data, and you need to have visibility to many other departments.
However, if you don’t know the drivers of the other functions you work with, you don’t know the goals and their benefits. Let’s take the marketing function, for example (I worked with many marketing teams when I did category management), it’s important to understand what language they are using and what are they trying to drive. It’s more important to communicate the shared goals, which are ultimately savings, optimizing the investment, and controlling risk. Once you understand what their goals are, you can align that with the business, and that happens through lots of development, and through a mutual partnership.
Something that’s interesting, though, in some earlier stage tech companies, they actually lack this kind of role in procurement and they don’t get one till very later on. This causes obviously some challenges. So how do you think a CEO or founder can start thinking about filling that procurement role and when is a good time to do that?
Exactly – getting a [procurement role] is very important and seeing the other side of the coin when it comes to the spend. Would a company that is new or too new in the startup phase be attractive for a procurement professional as well? It’s a double-edged sword there.
Procurement is a Crucial Function When it Comes to IPOs and Compliance
I think to be honest with you, most of the types of positions I’ve been attracted to are post-IPO companies, and they have the real incisive need of the procurement function is mostly when we’re trying to establish compliance when we’re trying to get transparency in spend management for an IPO or post-IPO.
However, I do see a lot of my business peers are working in pre-IPO companies. And, you know, I see the function of procurement becomes important when each one of your business functions is starting to manage our own P&Ls, you know, trying to see how to execute their functions in the most optimized and rational way from a financial perspective. And the function of procurement can be seen not only as cutting costs, as you very well said, but it’s really the real financial connection with a business partner. You know, there might be a connection where the FP&A partner, is managing the budget, but it’s almost forecasting that’s almost a precursor, and procurement will do that closure piece. For example, how can we use this budget that I have to then go and manage to meet these goals? What is it that we need in the company and how do we connect the dots to my budget, to my needs and the industry.
So I think that while, again you know, most of the jobs that you will see out there will be in software companies closely post-IPO, I feel, or well after the IPO, the public offering of a company. Thinking about procurement or hiring for the function of procurement as you are getting closer to gearing up to an IPO is a smart thing to do for any CEO.
Coming from a huge company like Salesforce to Zuora, what is different from this role compared to your category management roles at previous companies?
An Opportunity to Structure An Entire Procurement Function, Grow People, Improve Processes and Choose Tools for Success
I have more experience with slightly bigger companies, you know. My previous roles were in category management, but at Zuora, I was given a very unique opportunity, which is to oversee all the procurement function.
So my responsibility is not only exercising the strategic sourcing part, which is good relationship management with your suppliers doing the deals, but now I’m also thinkikng about how you structure a procurement function for a company that wants to grow at the pace that Zuora and any tech company wants to grow? How do you sustain the operations so we are scalable? What type of talent do you have to bring in? What are the expectations?
So usually for the procurement function to run and function well, you will need people who want to think critically, who are open to innovation and technological change and understand systems, and you will need a plan. And that’s something that I saw that I was given the opportunity to do here. These, I must say, are very important building blocks for the procurement function. And, you know, systems were already there. There was transparency on this page and where to find the data.
Using Technology as a Key Enabler in the Processes
Those were part of the questions I was asking during my interview process. But having those building blocks there, you know, it only makes things a little bit easier when you will move toward the next layer. Usually, you sit down as a leader in the procurement and you map out the systems. Like any other business function, we have a humongous proliferation of technology that can support that function. So technology that can help you out in negotiating contracts, you know, executing contracts, contract repository, artificial intelligence, A.I. that can help you uncover your spend data, and managing approvals are all very important.
Some other questions are what are the things that I want to do, the disciplines that I want to fulfill? You have to fulfill compliance. You have to fulfill their savings. And the way I usually do that is to create a mind map of all the items on the list, and then you establish a timeline of which things come first.
So in regards to kind of the practices that you’ve seen throughout your career in category management and maybe for people who are newer to a procurement role in tech – what are some of the things that they do wrong, or challenges in a new role like this?
Processes are Not Rigid, and Technology is Not a Lifeline
I think the first one is the one is sticking to a process and thinking that this is the process, it is viable, and I will never touch it. Processes are not the holy scriptures. You know, they are there to serve us and business processes are there to make sure they make business more efficient in a rational matter. If a business process stops your business’ pace and is more of a blocker to business partners, it needs to be revised. So that’s one of the first things, which is to make sure that you prove and test that process first to become familiar with that process. But if you find holes, you gotta find ways to streamline it.
The other big trap has to do with technology. Technology could be a double-edged sword. There’s so much and so many out there. Every time you go to a bar with your colleagues and you’re talking to someone — within minutes or two of the conversation, they will tell you this exciting startup they found to manage your spend. So you really need to come to a point that you really need to rationalize and think about how many applications, how many systems do I need to run my function? And today, I think that’s one of the most important questions we have to ask ourselves as head of procurement, as a cateogry manager or head of the strategic sourcing function, because it’s not only you who are using all these apps, it’s the rest of the company too. Essentially, you’re making a purchasing decision for your whole community.
Do I really need six or seven apps to do procurement? So in many ways, procurement also has to become a bit of a function that facilitates the ease of process for procurement to your business community – so how can you and the solution you pick make their jobs easier?
This interview is taken from an episode of the Spend Culture Stories podcast.
If you’re interested in hearing more stories from procurement business partners like Maria, you may enjoy these Spend Culture episodes:
- Nakita Gates of Executive Search Recruit on how to hire your first procurement executive
- Anthony Clervi of Una on how CEOs can empower procurement and sourcing heroes
- John Evans of Procureability on how high growth startups can best create their first procurement strategy
For more tips on streamlining procurement processes and spend management:
- Some great tips on building a remote procurement plan
- 3 ways to embrace today’s procurement best practices
- How to choose the best procurement software solution
- 6 ways procurement can get ahead of a recession
- 4 procurement KPIs you should know immediately
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