More on Procurement Transformation – our readers comment

- November 23, 2012 10:31 AM
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Our post on Procurement Transformation last week created, as we’d hoped, a good level of debate and comment from our esteemed readers. So I though today we’d feature some of that thinking (as I know not everyone follows back to all the comments), then next week there’ll be more from us on the topic.

We had a bit of cynicism – although not as much as I expected – and Bitter and Twisted (B&T) made a serious and pertinent contribution ! “The meaningful use of “Procurement Transformation” is purchasing changing from order jockeys to a real function”.

Later on in the discussion, B&T had a Eureka moment:  Transformation” = Redundancies

A modicum of caution is not surprising anyway, given that “transformation” has become a much-overused bit of management jargon of late! So it “simply means whatever we want it to mean”, said Dan.

Others felt it shouldn’t be seen as something special – Ian Heptinstall commented that “changing things for the better, should be a core part of the job of most people in procurement, rather than some initiative”.  I’d absolutely agree with that. However, RJ gave a thoughtful analysis that explored that further. Our role is to transform constantly, he argued, but sometimes something special is still needed.

“In many respects, continuous improvement is the way in which we respond to immediate changes but there comes a point in any organisation where the law of diminishing returns applies and a more radical change is needed in order to stay ahead of your competition (or your supply markets)… Having to go through “transformation” needn’t necessarily imply that you are “getting something fundamentally wrong”, it might just mean that you need to respond to what others are doing or stay one step ahead and you cannot achieve that within the current constraints (technical, skills or organisational) of your existing set-up”.

Derek Lancaster came up with his own definition, now copyrighted by Spend Matters and available for use in return for a small fee (only joking Derek).. .

“Procurement transformation is a structured programme with a clear vision aimed at introducing and embedding excellence in professional practice to help the wider organisation deliver greater value through its contracts with suppliers”.

PlanBee focused on transforming outcomes to achieve cost transformationandProcurement Transformation for me would result in a step change in the performance (and perception) of the Procurement Function”.

Steve then introduced a new and I think critically important aspect to this debate – that it should go beyond the procurement function.

“I reserve “transformation ” for when it is organisation-wide change. That is, not just an improvement within a purchasing function, but reviewing the whole way in which an organisation relates to its suppliers. That should be good news for the purchasing function….  But in practice, does the organisation see the existing procurement team as part of the solution, or part of the problem”?

Alison Smith agreed:

“For me procurement transformation has to be about a step change in the process of procurement across the whole organisation. Any programme that purely focuses on transforming the procurement team and its activities will never achieve the objectives most organisations would have for such a change programme. As David said it’s about mindsets being changed – for me it’s essential that also includes the mindsets of those of the procurement function’s stakeholders”.

life was somewhat more cynical again –

“Procurement Transformation” in commercial use is clearly intended to summon something of the nature of a caterpillar bursting into a butterfly, and obviously some people do find it convincing enough to rush to their wallets otherwise it wouldn’t be used, I guess. As pointed out above though it’s ultimately unreliable as it talks to capability rather than efficacy.

And eSourcingSensei gave a view based on personal experience:

I have been involved in a number of transformation projects – often as the person that is meant to be being transformed. So very often within 2 years of the supposed transformation taking place the organisation reverts back to its original practices leaving the supposed radical improvements back on somebody’s drawing board.

He isn’t sure there’s anything he’s seen that really “transforms” procurement rather than just “improves” it, but he holds out some hope that technology might change that.

Great comments as always, thanks so much, and I’ll give you some more of my thoughts next week.

 

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