As our blog series continues taking a Road Trip along the Procurement Transformation highway, it becomes crucial (and abundantly obvious) that you’re going to need to select the right “vehicle”, better known as the technology, for your road trip! As you well know, there are plenty to choose from, but generally speaking, they can all be summarized by three options:
Those organizations whose mantra continues to be “the way it’s always been done” tend to stick to tried and true classics. They believe that what’s worked in the past is good enough so strongly that they cannot see just how tactical their operational practices and processes are, and this doesn’t just apply to procurement. In fact, in most cases, these organizations are stuck in time so much so that even the roles for indirect procurement are designated as buyers and the team is simply a purchasing team.
With regards to technology, they’ve over-customized a 20-year old system like SAP ECC or PeopleSoft so much so, that the respective provider has not supported the system for over 5 years. Data and analytics are a foreign language to these organizations. They’re learning nothing from user behaviors. Sourcing is done via Excel spreadsheets or a simple “three bids and a buy”. Very little spend is under management because stakeholders use suppliers that they have relationships with versus creating digitized contracts, and strategic supplier discussions are unheard of.
On the Procurement Transformation journey…well, let’s face it, they’ve been broken down in the same one-horse town for decades, and the prospect of getting out now terrifies the majority of Baby Boomers on staff. Their vehicle stalled out long before the journey even began.
THE X FACTOR
Organizations leaning towards, or deciding on, the Tesla Model X can’t hire enough millennials in the Bay-area to fill their open concept campuses. Savings is an after thought because, assuming they’re profitable, work-life balance, sustainability/CSR, and handing out participation trophies to suppliers is the name of the game for them. They’re not looking to leverage procurement as a competitive edge because their “competitors” are looked at as business partners who elevate each other’s game. Malcolm Gladwell and Simon Sinek quotes are referenced in every one of their meetings conducted over Slack, and they’re already anticipating the challenges that colonizing Mars will have on their supply chain.
The problem is that they can’t even solve for their challenges here on Earth. There’s little personal engagement with their stakeholders. Policies are flimsy and loosely followed. Rogue spend is rampant. Their focus for choosing a “vehicle” is on AI and self-driving features that aren’t even proven and cannot yet interact with a human dominated world. Their Source-to-Pay platform was selected on the basis of self-deployment, an expeditious Go-Live, a sexy UI, the premise that any user within the organization can be their own procurement person, and assurance that every module is seamlessly integrated with the next.
The reality, however, is that technology will not solve all your problems. Unless you have air-tight processes, technology is only going to exacerbate your issues. And without a rock-solid change management program, redundancy in training efforts, and post go-live support, user adoption will be a failure. Modules can integrate but need additional configuration tweaks and/or customizations with even the slightest bit of added complexity based on your business rules. And lastly, a visually appealing UI doesn’t necessarily mean it will have the depth and breadth to meet your requirements.
So, while the X Factor is certainly more forward thinking than the Beater, be cautious of the over-engineering and lack of ability to self-drive around pot holes, is unable to avoid the texter who isn’t watching their blind spots, or trusts that the navigation knows not to turn down a One Way road the wrong way.
Nothing screams road trip more than an RV. How can you ever distrust a vehicle that can instantly become a hotel room (inclusive of water and electrical hook ups at any KOA) at any point during the long haul? And with a nickname like ‘Winnie Cooper’, you know you’re getting the full package.
The Winnebago on the Road Trip that is Procurement Transformation represents careful planning and a well thought out strategy. It’s measuring end-to-end platforms versus best-of-breed niche solutions, carefully mapping each to the set of requirements established by the selection committee as end users, or (sticking to the analogy) each member of the family voting for a noise-reducing divider that has had to suffer through Dad’s tone-deaf excuse for singing while driving. This vehicle provides the right balance of options for bolt-ons, additional modules, and a choice of software upgrade features as they become available. It allows for engineering to respond to the needs of users for commonsense bug fixes, and provides services to match the needs of the customer where they may lack expertise (think simple tasks like oil changes, tire rotations, or brake pad replacements; or complex projects like fuel pump repairs, transmission replacement, or rebuilding the engine after a few hundred thousand miles).
The Winnebago is executing on your Category Manager’s strategy. It’s anticipating the need for the right driver for the conditions, the right partner to help identify and re-engineer your processes, then managing the complete implementation from change management through post Go-Live support as a team. It’s realizing that selecting the software is only one third of the battle and that this piece of the Transformation specifically cannot be done in a vacuum. The Winnie Cooper is built to withstand all elements of the road and of the road trip, and thus it is the vehicle to support you as you embark and continue onward with your journey.
In closing, we’re having fun with you, our readers and potential clients, as we review and identify the necessary considerations for preparing for, or revisiting, your Procurement Transformation journey. We’re sitting in the back seat traveling across America with you, eating breakfast sandwiches and sipping coffee, or snacking on Pringles and cans of Coke (depending on the time of day) while we discuss the layers and complexities of all that’s involved in your endeavor to grow from a laggard to best-in-class. We’ve covered who should drive and in what vehicle we should be riding to advance the journey. But we don’t want you to have to just take our word for it. Next in the series you’ll hear about addressing the unexpected variables, The Weather, which is represented by Client Partners. Thankfully, we’ve grown alongside our clients, both becoming successful on the road to Transformation by working together; and, thus, one of our clients will be guest writing about encountering their inclement weather on a recent road trip and how, along with Velocity Procurement, they overcame the obstacles and past through the barriers to begin their own journey to success. Thank you to all of you who are following along. For now, it’s time for a pit stop…