Millennial Procurement (Part 2) – a New Generation, a New Approach

In her second post, Sibby Smith, Management Consultant - Procurement and Commercial with AECOM, a global provider of professional technical and management support services, explains how the Millenial procurer hopes to do things differently. 

In Part 1 yesterday we began to explore the millennial generation as they enter their prime spending years. In this issue, we will explore  how the B2B marketplace can start to replicate the same economic benefits the B2C community is now enjoying, whereby online ecosystems exist on mobile applications providing immediate access to global innovation.

What if we were to use Twitter, where all communication is limited to 140 characters as a platform for initial Market Engagement? Next, an early round of supplier selection could be facilitated through the creation of an app allowing suppliers to respond to a problem with imagery and video solutions: clients can simply swipe “yes / no.” After all, humans are visual thinkers and millennial humans have neither time nor appetite to read through reams of text-based paperwork.

Introducing… The Millennial Procurement. Faster, shorter, more nimble competitions linked to agile commercial arrangements and aligned to lean strategies. Suppliers would be empowered to respond with ideas rather than prices, which could be amalgamated to create a well-rounded specification, and which  buyers could then take to market. Alternatively, buyers could run full output-based competitions with their potential suppliers, and use non-competitive methods such as benchmarking and cost analysis to establish a fair price.

This would turn the focus towards quality and innovation and shift the commercial position from being short-term bottom-line driven, to being able to operate a longer-term strategy and successfully achieve an 'innovatively'-driven programme.

What sort of collaborative and innovative benefits could be derived from simply posting a short problem-specification on a portal and saying, “This is our problem: if you think you can do it faster, cheaper, more sustainably, and/or more innovatively then let us know at procure@doitlikeamillennial.com.”

Inviting supplier communities to engage in a managed online crowd platform and put forward their ideas, with the promise of a win-win arrangement if the idea leads to the development of a new product/service, would establish co-creating relationships and a forum for innovation. This would enable businesses to reach outside their organisations in a way which is relevant to the new millennial-led business operation.

It is the ultimate elevator pitch for a bidder and an ideal way for buyers to apply Millennial Procurement, creating fluidity in the supplier base through the crowdsourcing concept. It would generate innovation, provide efficiency and reduced cost in the sourcing process, and afford buyers the ability to tap into global knowledge.

In order for this to be successful, the B2B community needs to step away from the traditional Master-Slave mentality of many contractual relationships - the root cause of risk aversion - and move towards a more open, trusting, and cooperative philosophy which enables them to take advantage of the benefits that can be derived from a wholly integrated, positive engagement with the technology available. If businesses start placing themselves at the boundary of their risk comfort-zone, they can take advantage of the rich opportunities which lie there.

Millennials are far from perfect, but we are ravenous ambassadors for doing things differently and when it comes to procurement, we are present and correct.

Voices (3)

  1. Sibby:

    Hi RJ thanks for your comment and you outline a number of key challenges which are absolutely correct to bring up. Some of what I have written about could be considered “blue sky thinking” by many industries and organisations but my opinion is that it will become a reality as the younger generations push up and start having the authority to enable them to do things their way.

    In terms of making it a reality, some will naturally lead and others will have to adapt- this could be a slow burn for some and the blink of an eye for others. As you point out, the human factors element can’t easily be planned for and can completely sabotage a new way of doing things. It all comes down to educating at grass-roots level and sharing experiences at the higher delivery levels. Open communication, success stories, access to the know-how (and being willing to share it through multiple networks)… all these things are key to making any new idea mainstream: it’s a case of gaining that critical mass and watching it snowball.

    Best practice- by its very name- must be forward thinking and future-proofing otherwise it is not best practice at all, it is merely practice and will begin opening up the obsolescence doors for you to walk straight through to your ultimate demise/ major rescue attempt. Unfortunately there are always going to be bad behaviours by certain individuals- I’m not sure you can control that without being so overbearing with the red tape that it defeats the purpose- but it’s about taking the time to complete a full lessons learned process and acting appropriately the next time. It’s about being open to failure and growing from it: getting back on the horse so to speak.

    Making this a reality for the broader community rather than just the early adopters requires the early adopters to openly share their experiences, some forward thinking individuals in the broader community at leadership/strategist level, and a business culture that will align to those forward-thinking leaders without being their own limitation factor.

  2. RJ:

    An interesting and challenging view, Sibby. It strikes me that there is a fundamental split between the kind of approach you describe here, which is what we might stereotypically expect (although in my experience, very rarely see managed well) in the hi-tech and marketing industries and the direction of public sector and regulated industries’ procurement activities.

    Some sectors of business are wanting to move into an era of rapidly changing and cooperative working practices, as you describe above, and this will challenge buyers to understand how they can accurately benchmark and assess “value” if they are no longer conducting a traditional RFx process. Equally, concepts such as measuring “trust”, “confidence” and “ability to deliver” when you are effectively taking a sourcing decision before all issues have been closed off become problematic and demand new skills and processes to manage them effectively.

    Other industries, however, are being increasingly shoehorned into what we might now consider outdated “best practices” from 20+ years ago because of the bad behaviours of certain individuals. These industries (and here I include most of what I see in the public sector) are thus constrained in their access to innovation and efficiency.

    I’d love to enter into the debate as to how to make this kind of approach become a reality for a broader community than just the early adopters.

    1. Sibby:

      Hi RJ thanks for your comment and you outline a number of key challenges which are absolutely correct to bring up. Some of what I have written about could be considered “blue sky thinking” by many industries and organisations but my opinion is that it will become a reality as the younger generations push up and start having the authority to enable them to do things their way.
      In terms of making it a reality, some will naturally lead and others will have to adapt- this could be a slow burn for some and the blink of an eye for others. As you point out, the human factors element can’t easily be planned for and can completely sabotage a new way of doing things. It all comes down to educating at grass-roots level and sharing experiences at the higher delivery levels. Open communication, success stories, access to the know-how (and being willing to share it through multiple networks)… all these things are key to making any new idea mainstream: it’s a case of gaining that critical mass and watching it snowball.
      Best practice- by its very name- must be forward thinking and future-proofing otherwise it is not best practice at all, it is merely practice and will begin opening up the obsolescence doors for you to walk straight through to your ultimate demise/ major rescue attempt. Unfortunately there are always going to be bad behaviours by certain individuals- I’m not sure you can control that without being so overbearing with the red tape that it defeats the purpose- but it’s about taking the time to complete a full lessons learned process and acting appropriately the next time. It’s about being open to failure and growing from it: getting back on the horse so to speak.

      Making it a reality for a broader community rather than just the early adopters requires sharing of experiences from the early adopters, some forward-thinking individuals at leadership/strategist level in the broader community and a business culture that will align to those leaders without being their own limitation factor.

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