When I speak with providers and practitioners about best practices, I try to put them into context in order to really understand the use case as well as what the implications might be. Often, or ideally anyway, this helps me discover areas where existing resources, data sets, and solutions can be used in new areas or in fresh ways to drive additional value. I find that providers and practitioners alike develop a certain level of myopia that can prevent them for doing the best with what they have available. It is hard to see the forest when you are constantly bumping into the trees.
Similarly, during the briefings I have with technology providers I try to provide feedback along these lines, to see what the boundaries are and what their plans might be, as well as to size up solution footprint, potential strengths, and areas where partnerships might make sense. A company is rarely as narrowly focused as they think they are, so I encourage providers and practitioners to reflect on what they do and seek an external perspective. This can be quite valuable. In the case of Spend Matters, this might be one of the true hidden-gem benefits that come with working with us. A relationship at any level.
Then there is the truly big picture – and this gets to the headline of the article – where procurement comes into play at the macro level. Some of this falls into areas such as supplier diversity, as well as CSR or other “subjective” spend areas. (I’ll have to give credit Rod Robinson at ConnXus for the clever term subjective spend.) My point here is that procurement goes from tactical and efficient to strategic and effective, along with societally transforming. You might not think about your work in procurement this way, but what you buy, who you buy from, and where you buy it from all makes a long-term difference.
Some people think this line of analysis somehow gets overly political, but it is what it is. If analysts don’t point out the consequences of supply chain decisions, who will? Conversely, if politicians come up with rules and regulations that affect procurement or other corporate functions, shouldn’t those of us who look at supply chain comment on the consequences of these policies? When bad policies are set, best practices can be thrown out the door and we are all of a sudden working with suppliers we really had no intention to work with, because the ones we wanted to buy from are now either outright prohibited from selling to us, or priced out of the market because of regulations.
Here is one example from sugar policies affecting the food and beverage space – the protectionist U.S. sugar tariff system (from the mid to late 1970s) that has forced US manufacturers to switch to taxpayer subsidized domestic high fructose corn syrup instead of buying on the global market. And now our politicians are implementing rules to stop companies from selling so much sweet foods and so many sugared beverages (in larger than 16oz containers at that!) to children of all ages. Sure, if you buy sugar, you might do it according to best practices, but ultimately you are arranging the deck chairs on the Titanic – decoupled from market forces on both buy-side and sell-side.
The above example is relatively straightforward and graspable. But if we were to discuss the more services focused sectors such as life sciences, healthcare, insurance, finance, and education, it gets convoluted in a hurry. Much like the sugar example, forcing the services industries to answer to policy regulations rather than operate against true market forces will not lead to effective services delivery. Best practices become useless, and instead practitioners spend their days busily rearranging the deckchairs to conform to the latest desired policy outcomes.
What a senseless waste of human life – Mousebender (played by John Cleese)