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Happy digitized, purposeful Christmas to everyone …

12/24/2020 By

Peter Smith, procurement consultant and author, talks about his new book on sustainable procurement.

In previous years, at Christmas I wrote articles and papers for Spend Matters that attempted to be seasonally humorous. Father Christmas using spend optimization technology comes to mind as one of our favourites.

That doesn’t seem so appropriate in 2020, and in any case, it’s almost exactly two years since I stepped back from Spend Matters, having started the European side of the operation in 2010 with global founding father Jason Busch, then run it for eight years with current European editorial head Nancy Clinton.

I took that step in part because the increasing focus of Spend Matters on giving the best analysis of procurement technology meant that amazing people like Michael Lamoureux, Magnus Bergfors, Pierre Mitchell, Xavier Olivera, Andrew Karpie, and Jason himself were obviously much more suited than me to digging into the heart of how tech could bring value to procurement and supply chain leaders. But also, I wanted to write books rather than 400 articles a year.

So in 2019 I published a compendium of my favourite Spend Matters articles, and then this year I was fortunate enough to persuade Penguin Business to publish “Bad Buying — How organizations waste billions through failures, frauds and f*ck-ups.”

I’ve now finished the first draft of the next book, which will be all about sustainable procurement — the direct opposite of “bad buying,” if you like. I am looking at how organizations can spend money with suppliers to support environmental, social and economic goals beyond basic short-term profit and revenue objectives.

In putting that together this year, my friend and collaborator Mark Perera and I have been interviewing interesting people with something to say on that topic. One of those is Bernhard Raschke, from top recruiters Korn Ferry, who is one of the smartest people I’ve ever met in our field.

He said something that was very pertinent to this crazy year of the pandemic.

“Organizations that have a strong sense of purpose will do much better than those that don’t during this period,” he said.

His argument was that with people working from home, remotely from their teams, their office and their boss, there would inevitably be times when they weren’t sure quite what to do or how to act. And they wouldn’t be able to pop over to ask a colleague or their manager in the same office.

But if they were guided by a clear sense of corporate principle and purpose — as firms such as Mars, Unilever, J&J and others have developed over the years — then they would have a much better idea of how to behave, compared to those whose firms did not have such clarity.

It struck me though that there was another dimension to this aspect of pandemic-related remote working — technology. There has been so much nonsense written in recent years about procurement digitization and the digital organization, but I suspect this year has sorted the sheep from the goats.

If you had users and budget holders who could order through online catalogues, with a clear process flow, if you had e-sourcing tools with shared digital information and workflow, if you could access your spend data remotely and play with it to gain the insights you needed, then lockdown was probably manageable from an effective working point of view.

On the other hand, if you still had paper-based sourcing processes, relied on people walking invoices around the office to work out “who ordered this,” or had to rope in half a dozen interns to build Excel spend cubes … then this year has probably been a disaster.

In many other areas, from first-line healthcare to most retail, from home-delivered gourmet food boxes to school education, the pandemic has compressed 10 years of innovation and change into one, all with technology playing a central, enabling role. Procurement management has perhaps not changed quite so dramatically as some of those examples; but it probably should. However, there is no doubt that the leaders have accelerated away even faster from the followers in this regard.

So if you are not in the leading group currently, I suggest you look on 2021 as the year you will use this seismic shock to really get to grips with “procurement digitization.” There are plenty of benchmarks and exemplars out there now to inspire you.

Many thanks to Peter — and Spend Matters would like to wish all our readers a restful, healthy and happy holiday season with all good wishes for the new year ahead.