Digital Procurement: Unintended Consequences Can Be Golden Opportunities

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Editor’s note: This is the final post in a three-part series on digital disruption from a procurement professional’s perspective. Also check out Part 1 and Part 2.

Unintended consequences are mostly thought of negatively, but sometimes unexpected things open the door of opportunity. When you undertake a digital project, you often are dealing with the new and untried — and the chance of some pleasant unintended consequences. That’s when things get fun.

Bring Down the Tower of Babel

I recently worked on an analytics project that set out to prove whether a new technology could combine data from internal and external sources to produce insights for category teams. Pretty straightforward, right? The result was exactly what we had hoped — new dashboards for category management to use as input to the next iteration of strategies. We combined budget data with spend data. We also combined external supplier data with spend data to understand financial risk in the supply base.

But something curious happened along the way.

By contacting other functions to understand data sources, the procurement department was forced to use their terminology. Reaching out to finance to get budget data meant you had to talk about “cost centers” and “general ledger codes.” This language carried through to the reports we created.

When we stepped back and looked at the new dashboards, we realized we produced something that talked in broader business language, not just “procurement speak.” Like trying to talk to a taxi driver in Istanbul, not speaking the same language is a major barrier to effective communication.

The same holds in business. Through a seemingly simple data project, we had something that could now be shared with another community in the organization. We had shared language. You seriously boost the credibility of procurement by incorporating someone else’s terminology into how you communicate. You can’t tell me that isn’t cool.

The implications of this are significant. In many cases, major change comes about through incremental improvements. If you think about the kind of outreach you did to successfully execute digital projects, you can see a more integrated business community. These projects not only elevate how you do basic things like create reports or interact online, they also have the power to change the dynamics of how your company operates. That is huge — and rarely accomplished in the realm of procurement.

Carpe Diem

Let’s say that you nailed the implementation of a digital project. You’re now ready to show it off to senior leadership and take your victory lap. As soon as you get through proudly describing what your team achieved, someone throws you a question about how it relates to some other business question. Your palms sweat, you get dizzy, your career flashes before your eyes. How you react can create either a vicious or virtuous cycle for you and future projects.

Some of us, myself included, tend to read these questions as failure to take everything into consideration or a lack of preparedness. You go away and try to answer the specific question asked. And you come back with a specific answer. Which leads to more questions that you can never seem to get in front of. Welcome to the vicious cycle.

Questions that come out of left field often uncover opportunities. Take the supplier risk dashboard. Let’s say someone asked how this new reporting capability overlaps with another function in the company that interacts with the same suppliers. This is your leadership-sanctioned opportunity to create a cross-functional team to take your project forward into an enterprise-wide solution. You rise to the challenge. Your next meeting will cover not only the answer to that question but a plan for what can be done next, along with the benefits it brings to the company beyond your function. Procurement (and you) becomes a strategic contributor at a higher level. This is the virtuous cycle.

Disruption has a funny way of not always being contained to a scope of requirements. It’s what draws me back to these projects time and again. As you move along your path to digital procurement, keep an eye open for the expected. Look for opportunities, sometimes disguised as problems. Turn unintended consequences into very intentional possibilities.

Rebecca Karp is a principal of Sourcing Synergies, a procurement strategy company based in Chicago. You can reach her at rkarp@sourcing-synergies.com or follow her on Twitter @rebeccakarp.

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First Voice

  1. Chris Boucher:

    Great article, and timely. Happens that I am currently on a cross functional team focused on contract management (roles, responsibilities, risk assessment, organizational processes and – potentially – structure, etc) and it has opened many eyes internally about the value of speaking a common language and including the entire organization in the assessments and change initiatives. Making great progress and looking for tremendous outcomes.

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