Six Procurement Truths for the New Year (Part 2)

Continuing with some “final” high-level thoughts from me – points one to three are here. If you remember nothing of my writing but these six points, you probably have most of my critical IP … good luck!

Technology is wonderful, but …

Effective and appropriate processes and governance are essential if you want to get the most out of technology.  We’ve seen huge advances in procurement technology, in breadth, depth, speed, ease of use even, in the eight years I’ve been writing here. But that leads to a danger too.  Many organisations see tech as the magic bullet, and go through the process of buying and installing P2P, S2P or whatever - then wonder why “procurement transformation” hasn’t magically happened.

Transformation isn’t easy, whether it is digital, analog or any species! In procurement terms, process (operating models and the like) and governance (the “rules of the game” for stakeholders) must support the technology if you really want to have a top-class procurement operation. Getting these aspects right is just as important as the tech if you really want to achieve transformation.

People

But even if you get the technology, the process, and the governance right, the most important factor in top-class procurement organisations is still people, and “transformation” will fail again if you don’t have good people, skilled and well-motivated, in place. That is a bit of a cliché, but it happens to be true, and many organisations talk the talk but don’t walk the walk – spending far too little on training and development and running lousy recruitment processes that actively discourage applicants.

So, the most important thing you can do if you are in a position of power is develop your team, look to be an employer of choice, and help your people achieve their full potential. By the way, that last point is also one of the most satisfying things any of us can do in life, independent of any business benefits of doing so.

But always remember, we have no right to exist

We should always remember that it is not compulsory for organisations to have a procurement function, and (aside perhaps from the public sector in some developing countries), it never will be. Of course, organisations will continue to buy from third parties, for as long as commerce in some form survives, so there will be activity that resembles what we call “procurement” today.  But it may not be the procurement department or people that carry out those tasks.  (It might not even be a human).

That’s what the challenge is for the next few years for everyone in procurement – how do we demonstrate the value we can continue to add in a rapidly changing and digitising world? Because if we don’t demonstrate that, I have no doubt “procurement” as a distinct profession / discipline will disappear.

So good luck with that to all our readers! And I’m sure I will continue to comment on procurement matters, somewhere and somehow – I suspect I’ll continue to find it too interesting to ignore the world I’ve been part of for 30 years.

First Voice

  1. Barry Leighton:

    Wise words Mr Smith, do keep writing……and watch what we are doing here in Cumbria.

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