I gave the exit Zažeh and went to Ostrava to see Lukáš Vyskočil from PROEBIZ.
It was a long trip, but it was worth it. The conversation was more than interesting.
If you look at Lukáš's LinkedIn, he has "man, father and product manager of PROEBIZ". He prides himself on that order and lives it. It may seem strange to some, but Lukas sees many parallels between fatherhood and business. And when I listen to him, I find that he is right.
Lukáš's journey in PROEBIZ led from IT specialist to purchasing. He has been there for almost 13 years. Originally an advertising agency at the beginning of the millennium, he created the first software that surpassed anything they had done up to that point. And they did so well that they began to specialize in digitizing corporate purchasing, procurement and e-auction processes. Buying and selling is their domain.
So not only did we discuss the marriage between buying and selling, but I also asked other topical questions that we are all interested in at this time ...
🔸 What is the situation in the digital shopping in the Czech Republic and Slovakia?
🔸 As a small and medium-sized company, why should you be interested in the computerization of purchasing?
🔸 What is the difference between buying a commodity and a complex solution?
🔸 How is purchasing dealing with the current crisis situation?
🔸 What trends to expect in purchasing?
TRANSCRIPT OF THE INTERVIEW
Martin Hurych
Hello. I'm Martin Hurych and this is Zahžeh. It is a special one, it is an away day and today we are enjoying the hospitality of PROEBIZ. Today's episode is going to be about buying and its relationship to business and when we talk about buying, it's with Lukas Vyskocil, husband, father and product manager at PROEBIZ. Hello, Lukas.
Lukáš Vyskočil
Hi, Martin.
What are the parallels between fatherhood and business?
Martin Hurych
I was going to ask how important is this sequence, man, father, product manager?
Lukáš Vyskočil
There's a small mistake, it should be man, father and product manager. The sequence is important in the exact order it's in. When I say it on the PROEBIZ floor, it's not the best, but it's true, for me, the job comes third. First is the man, below that is the father, and then the job and the product manager at PROEBIZ.
Martin Hurych
English on a LinkedIn profile can be a bugger. I was going to ask, what can one take to work from being a dad?
Lukáš Vyskočil
I think a lot of things. There are many parallels and comparisons or situations that can be used. It's kindness, courtesy, building a relationship, behaving with a child that we can think of as a client, a supplier. We can use some elements of force, aggression, authority, but still treat the child as an equal partner. I think that exactly how it works with children can work in business and in collaboration in any field we can imagine.
How did Lukas get the purchase?
Martin Hurych
What was Lukáš's path to purchase?
Lukáš Vyskočil
Admittedly, my colleagues will probably be watching closely what I say here, because I don't consider myself an expert on buying, but I've picked up a few things in the years I've been here. I've been to a few conferences, a lot of client meetings, but I don't consider myself a purchasing expert, it has to be said. The journey was like a blind man to a violin. I didn't finish college and the story is terribly convoluted in that my father told me to go to work. I applied for the first job advertisement and they took me on. The story is very convoluted, terrible, full of twists and turns, but the end result was that I came, they took me, I still haven't understood why it happened, but I guess it was fate. Since then I've been learning what an electronic auction is, what purchasing is, that there is some purchasing even in big companies and how those companies look at it. I've tried to pick up mostly from conferences and client meetings things that relate to that purchasing. But I started out in IT, so I was in IT for many years and it's only been the last 3 or 4 years that I've been cycling through the business for products and things like that.
What is the position of PROEBIZ in purchasing software?
Martin Hurych
For my bubble, who doesn't necessarily know PROEBIZ, let's introduce the company a bit. A few terms like eAuction have been thrown around here, so what is PROEBIZ and what do you do?
Lukáš Vyskočil
PROEBIZ is actually originally an advertising company and has been on the market for 30 years, which is quite a lot for a medium-sized company. I always say we are such a family business. Anyway, the company started as an advertising company and then suddenly a big client came along, Vítkovice. In that story the idea was born that we could help that client on a different basis than just with banners and some promotion. We wanted to help him in the supply chain field, to negotiate better relationships, better terms and better prices. Around the year 2000, the idea for the first software was born, called PROEBIZ. This software subsequently surpassed the entire company in fame. The company was originally called NAR marketing, but with the increasing pressure of the biggest player in the form of a product, we then all introduced ourselves on the phone as PROEBIZ. Since 2000, the main one has been the software for electronic auctions, but of course also for tenders in general, and since then we started to build a market because there was none. Back then, envelopes and arranging were the rage and nobody wanted to do it online. Today we are dealing with almost the whole process of that purchase and we have about 6 software, so we have some family already. We know the catalog, we know the workflow, we know the whole lifecycle of the government request. Cities or institutions have to make requests electronically to comply with the law and we have certified software for that. So it's still a core business for us today, although we do enjoy other projects.
What is the situation in the digital shopping in the Czech Republic and Slovakia?
Martin Hurych
During Covid, after it and now, the term electronization, digitalization and automation is very much in use. What is the situation in this field in purchasing in the Czech Republic and perhaps in Slovakia?
Lukáš Vyskočil
The best are a long way off and those who haven't caught the train are still sending emails, heaven forbid opening envelopes. The best ones are really already on some robotization and automation, already thinking to make the whole process go without human intervention. Nowadays, it's not enough just to be digital anymore, it has to be really automated, robotic and without human intervention. Today there are warehouses where there is no human being, so you can really see it. Then on the other side, of course, is the reality of that market and the masses of other companies that still have a long way to go. So it's company by company, which is probably everywhere.
As a small and medium-sized company, why should you be interested in the computerization of purchasing?
Martin Hurych
My bubble is a small, medium-sized company. As a small, medium-sized business, why should I consider e-procurement?
Lukáš Vyskočil
I think that path is for everyone. However, it has to be said that PROEBIZ specializes mainly in large companies, because the purchase there has some volume and the licenses are not cheap. Of course, we are not the only ones on the market, there are startups today that are doing it all through other tools and computerizing it. That way is easy because I think it's efficient, there's time savings, some error elimination and of course statistics, reporting and insight. For example, in startup companies, automation works based on relatively cheap or almost free tools. Considering how small companies work, I think that's the only route I would take if I were starting a company. Starting a company today and not addressing digital at the outset, I think, is a mistake. When you're a small company that's had those processes for 20 years, it's going to be harder.
Where is an electronic tender most appropriate?
Martin Hurych
On LinkedIn, sometimes there is a storm between business and shopping, very humorous from both sides. I wanted to ask from the position of someone who develops software, where is e-tender the most appropriate method?
Lukáš Vyskočil
I would no longer define it as the most appropriate method. When we started, e-tender was science fiction. Hats off to my colleagues who were going around to software companies in the 2000s and telling them to put it in Auctions. Anyway, it's now a pretty standard part of the buying team. If you're a larger company, it's perfectly normal for it to be part of the purchasing strategy. Where it's most appropriate, you can certainly tell where it's always good to use it. It's tenders where you have a clear specification and you know exactly what you're buying, or you have multiple suppliers and you want to squeeze that price. It doesn't matter at all that you can then negotiate with them in multiple rounds. But I would say the best way to do it is to have it as part of that buying team and then depending on each of those tenders that you have coming up, choose a strategy. Even today we've got to the stage that somewhere that tender just doesn't make sense. For example, today you can only do a tender if there is a small volume or you need to have it quickly. I collect the prices from the market, I get the prices, in two days I have it collected and I can buy. Of course, I'm not able to do that with a tender that's a billion dollars. So for me, it is advisable to have it as part of the buying portfolio and then choose according to the situation. It can certainly be a demand, it can be an auction, it can be another type of auction. I have few suppliers, I'll go with a type like Nippon or Holland, where the suppliers are not competing with each other, but competing with the automatic machine. The machine tells them, after a certain time interval, if they are able to reduce the price by 2,000. If they confirm it, it goes on, and then again in 2 minutes. The suppliers look at it like it's unfair, non-transparent and fighting windmills. There are many opinions on this, of course, but each contracting authority can choose the strategy that suits them. We always say, as long as you inform up front and communicate properly, we don't see any problem with you basically determining the strategy you use with a supplier. The last key factor is having everything in one place and everything online. It doesn't have to be everything, of course, but companies today are trying to keep track of 99, 98% of the tenders so that everything goes through some sort of system. It's then traceable, I can look at who competed there, what the tender was, what the suppliers were, how it turned out and the goal is not to do it outside the system. I think that's the key factor that is proving to be bigger today than, say, the savings in the auction.
What's the difference between buying a commodity and a complete solution?
Martin Hurych
Come give the traders a little behind-the-scenes look. From a buyer's perspective, what do you think is the difference between buying a simple commodity and something that is very complex, like an information system, a wind turbine, in short, something that is often a one-off purchase?
Lukáš Vyskočil
In my experience, it's always about collaboration. What is discussed in purchasing and at conferences is that the buyer needs to understand what they are buying, but they generally don't do it alone. They have to ask around, if it's going to be an IT system, they have to work with IT and find out what the exact specifications are there, what I actually want from the supplier, what the key factors are, what to look out for, what the service is and so on. In short, that's very hard for the purchasing person to figure out, even if they understand it. So the key, I think, is collaboration. Of course, we see in the marketplace that that collaboration doesn't always work. You yourself mentioned that there are sometimes disruptions and every company has it differently, but I would argue that it is wrong and in this more toxic environment it is then difficult to make a good purchase. We have a slightly gender-incorrect analogy. I mean, it can be like husband and wife. Business is the husband and shopping is the wife doing it at home. The store is the one that goes out to work and then comes in, the home is neat, clean, beautiful, and if I say what the wife did all day, that's not an ideal opening sentence to come home to. I imagine it's very similar here. A company is made up of many units, but it has to be said that for a business, the impact on earnings is often far less than the percentage impact on purchasing. For purchasing in larger firms, it can be as much as 80% of the firm's costs that purchasing can affect. That's why we try to build pedestals and statues to buyers, because retailers have a lot of them and buyers have a few. It's true that a well- functioning procurement can save a lot of money. If the other parts of the company help and pull together, then it is the best situation.
Martin Hurych
I meant it a little differently. Obviously, a profitable company has a very good business and buying because on the one hand I am making a profit and on the other hand I am saving, thus increasing the margin on both sides. I rather meant that when a husband from one family goes to a wife from the other family, how do you actually arrange the relationships there? What I see a lot of times even on LinkedIn as a recommended method to the buyer didn't talk to anyone, hid and used eAuction as a broom. I can understand that very well in commodities, for example, because we used to do more or less the same thing. That's why I'm glad it was mentioned that the buyer should communicate across the company, but also with the supplier, because there are things that don't fit in an excel spreadsheet. How do you then proceed in those cases?
Lukáš Vyskočil
It is often said at our conferences that purchasing is also a vehicle for innovation. Buying from the best companies that present at our conferences really sits in the boardroom and is part of the mainstream ones. It sits there with manufacturing, sales and is involved in the running of the business. Sales does nothing without purchasing, purchasing does nothing without sales, without manufacturing, and so on. That is, of course, the ideal state and it's very hard to get there sometimes. As for the husband and wife from the other family, we're very much on the edge, anyway, I've seen those types too. Anyway, we recommend from experience that a trader from another company who wants to sell or offer his wares somewhere should not avoid buying locally. I think the other way around is preferable, because unless it's ice cream or a pencil that doesn't need to go through purchasing, and if it's a bigger item, it very likely needs to go through purchasing anyway. In my experience, it doesn't work out well when they try to do it in a way that the purchase can't affect it. That doesn't generally help the company. It doesn't help both sales and purchasing because that collaboration is key there and sales doesn't know things that purchasing or manufacturing knows. Again, it's about that collaboration. Personally, I wouldn't be afraid as a salesperson to communicate with the purchasing department. One interesting thing I found out is that some study said that there is a communication barrier quite often. Buyers are more likely to use mailing when a salesperson wants to meet. It's a factor when they don't get a deal because the merchant is unable to accept that they don't want to see them. In fact, the buyer wants to send 10 emails and resolve it through the mails. That can be a problem too.
Martin Hurych
I would definitely sign that the store does not ignore the purchase. What I often see is that buying not wanting to see or not wanting to communicate is taken as a scourge, not letting someone in and making my job easier by not having to argue to the shop why I don't want something. I've even heard that progressive buying is innovative. On the other hand, I've heard that buying that doesn't communicate is a brake on innovation because it doesn't admit anything other than what's in the excel spreadsheet. It doesn't allow for any other options that, even if they don't fit in the Excel spreadsheet, might be more economical for that company. It's just about communicating not only with the buyer, but with the people behind the buyer, which a lot of more technical professions can't get to. How do buyers, for example, look at it here? We are asked to communicate, but buyers often artificially put up a barrier towards the company they are buying from.
Lukáš Vyskočil
I can confirm this in the sense that the barrier is being built on both sides, of course. In our conferences, people say that purchasing belongs in the boardroom, or maybe under the CEO, CFO, but it's not going to work by itself.
There is pressure going on and it mentions that you have to do it with your diligence and you have a liaison officer who has to communicate it. Certainly just because we buy well, or can communicate well with suppliers, doesn't mean that the store or management will respect us. Again, they are connected vessels and if they don't have fun, it's wrong. Of course, I've seen examples from the other side of the fence that once it's blocked from both sides, the stakes are already being thrown and then it's very difficult for anyone to communicate with anyone.
Who is a fair sourcer and what are their characteristics?
Martin Hurych
Your conference is called, if I remember correctly, eBF. As part of the eBF, you award the Fair Sourcing Award. Who is a fair sourcer?
Lukáš Vyskočil
It's an appreciation of the purchase. I go back to the idea where we said that salespeople put pedestals and statues in front of companies for their best year and then purchasing throws eggs. So our CEO also wanted to do something that recognizes the best of the best in the buying community. It is divided into two categories, one is trend and the other is master. The trend is for some innovative approach and project for the year and the master is for individuals. Trend can be more for a group, a company and master is the person who is really taken as a capacity in purchasing, has taken that company somewhere and is taken as an expert in the word. The award is given every year and it is to the best buyers who are on the Czech, Slovak and Polish sands.
Martin Hurych
Jaké vlastnosti má fair sourcer?
Lukáš Vyskočil
I think they have to have polished communication and be able to sell themselves. He has to be able to justify to the board that it's going to be his way and that it makes sense. Secondly, he has to be a great leader and he has to be able to work with people. He has to be able to communicate with them, motivate them, and make their work meaningful. At the same time, he should also be a good visionary so he can envision where purchasing will be in the company in 5, 10, 20, years. So that's another key quality. Plus, when I'm with these people at the after party, they're all awfully nice, so I think the last key quality is also some humanity, kindness and common sense. That fits in so nicely.
How is purchasing dealing with the current crisis situation?
Martin Hurych
There was a time of plenty, when shopping was paradise in my opinion, because there was plenty of everything everywhere. Now that situation has changed rapidly. Sometimes I see that either something is not there, or I don't know what I will buy, when I will buy it, and so on. Is there any advice for shoppers on how to handle this? For example, what do you see with your clients, how do they behave?
Lukáš Vyskočil
There is a time of crisis, when of course everyone gets down at first, but then there are these beautiful examples of finding the way. I have a nice example of when a crisis can be an accelerator of progress. It was here with my colleague Honza Hirsch, who presented it at our conference. It is a festival, I keep saying conference, but it is a festival of several days. So he was saying that in a large-scale manufacturing the factory needed nickel. He was pointing out in the story that there was absolutely nothing that could be done about it before the crisis. They needed nickel, they had to sort it out and get the best price. When it got more expensive, it was bad, but there was nothing to be done. But then the crisis came and they found out there was no nickel. Suddenly, however, it turned out that if they thought about it, they could do it with a different manufacturing process without needing nickel. That actually showed that at the time 2, 3 years ago it was unfeasible and you couldn't do it without nickel and suddenly they're doing it without nickel and even cheaper. We found other materials, we found that we could do it differently and we're doing it without nickel. I say this as an example of how you can use a crisis to your advantage. Of course, we will all cry at first, but then we can look for advantages and new possibilities that we would not have found otherwise.
Martin Hurych
That's a very nice example of broader collaboration within the company, because purchasing doesn't do this alone. What about where I don't or can't have that collaboration? I'm alone and I need to buy what I've been buying. Are there any tips, tricks, anything that works where I can hedge my price, hedge my delivery, etc.? How does this work in this case?
Lukáš Vyskočil
I confess that I don't know the details anymore. So I'll try to tell you something from the experience I have, and then possibly my colleague directly from the purchase will continue in the next part. What has been said is that price clauses no longer work. For the client I'm implementing on the catalogue, the prices used to change once a year and now it's maybe every 14 days or once a month. It's really a completely new situation. It's not even negotiation anymore, the supplier tells you how it's going to be, and at that point you feel the difference between negotiation and announcement there. When we dealt with the client, we said that they just had to accept that there was no other way. I'm sure there are ways to contract it out, negotiate a better price, try, but I honestly can't give you 5 tips that will help in this situation.
What is PROEBIZ planning for the future?
Martin Hurych
What you can definitely tell is what we can expect from PROEBIZ in the future. For example, what are the trends you are preparing for, or what trends will you set in the times to come?
Lukáš Vyskočil
We are actually fine because every crisis has been an opportunity for us. When there's a crisis, people want to save money and then they want software that saves them money, and that plays into our hands. I say that quite publicly, because it's the plain truth. Otherwise, we are now investing a lot of time in projects outside of software. Of course, the software has its own teams, I lead one of them, it is developed, implemented in some way and deployed to clients. But the way we've been advertising, we really enjoy interacting with people, being in a community with them and trying to connect them to share experiences. When 50, 100 of the biggest companies say what we say and exchange buying experiences, we think that's the most important thing that can happen to them in the marketplace. That's why we do educational events, which is what the shopping festival in Ostrava is. Then we also do a semester course in cooperation with the Mining University, where the best specialists from our community speak. It's a semester course, it lasts 6 or 5 months and the specialists are there every 14 days, both live and online. It's a complete mapping of the entire purchasing process and everything that happens around purchasing in a company, from people, crisis management, negotiating with suppliers, relationships, sustainability. I dare say it's one of the best training courses on the market. Now we are going to have the second edition in September or October. The third thing we are dealing with is where we sit now. It's our studio where we've made a little dream come true and we owe it to Covid. Covid has been an accelerator of change for us as well, where we wanted to go.
We couldn't imagine that our events could be online, the festival hadn't been for 3 years and we had to find something to keep us in the community. So we came up with streams, now it's Procurement Board TV, which is purely focused on professional content in the form of procurement. Eventually I think there will be some management skills and possibly some workplace ergonomics and employee nutrition. We'll see what all we put on there, but for now it's purely focused on purchasing and negotiation. That's what we've been talking about lately.
What trends to expect in purchasing?
Martin Hurych
If we had to pick out one procurement trend that will come up in the near future from what you see at the festival, or what your guests talk about on Procurement Board TV, what would it be? Where will procurement move in the next 12 months?
Lukáš Vyskočil
There are more trends, so let me say more. In the area of digitalisation itself, it is definitely automation and robotization. There is a lot of hype about this right now and companies are trying to have more and more activities and processes without human intervention. I think that is a big trend, because digitalisation itself is now being taken as standard. The other one I've noticed is definitely sustainability. I call it real sustainability. For example, at the festival I saw a lecture from Asahi, or from Pilsner Urquell, which was absolutely phenomenal. You could see that the sustainability was real because it was really calculated, thought out exactly to one can, where we're going to be in a year, in 2, in 5, in 10, and that's where we're going. Sustainability makes sense, but it has to be lived. It's not that I say, let's go for it, but in 10 years nothing will change. It's not even a form of digitization where we have things on the computer to print out and sign. That's the unreal sustainability.
Martin Hurych
The trend is therefore towards digitalisation and sustainability in purchasing. Thank you for a very nice chat and a little battle. I look forward to the continuation.
Lukáš Vyskočil
Me too.
Martin Hurych
This was a Zážeh about buying with Lukas from PROEBIZ. We have already mentioned here that this little shootout and insight into procurement will continue as this topic will be discussed on Procurement Board TV as well. So be sure to watch what will be written below the recording, there will be a link to the second episode as well. Otherwise, I hope we've done a good job of bringing you a preview of procurement, the first one in the Ignition by the way. If you liked it, be sure to lick where you're listening or watching, because without liks this episode won't see much of the world. I'm sure you'll help us out. Also be sure to check out my website, www.martinhurych.com, where in the Ignition section there will be a full transcript of this episode and links to everything we've mentioned here. I can't help but keep my fingers crossed and wish you success, thanks.