Giles Breault on the Procurement Digital Roadmap – Think Tank Gets to Grip with Technology

We’re catching up on our reading over the quieter summer period and an article from Giles Breault on LinkedIn is worth highlighting. Breault and Sammy Rashed founded and run The Beyond Group – we’ve mentioned them before, they held senior roles at Novartis (Breault was CPO) and are first-class in terms of both their conceptual thinking and practical understanding of procurement.

The articles relate to the second session of their 2018 EU “Productivity think-tank” which was held in Gothenburg in June. This is their sixth year of running the think-tanks, which bring together a group of senior executives from different firms to consider major strategic issues for procurement – and attempt to come up with real solutions and positive actions.

This year’s focus is very much around the digitisation of procurement, and the challenges it brings. Their first 2018 session looked at the roles and competencies that will be demanded in a digitally enabled procurement function (see link), but the June session “plunged into the deep end of the pool and addressed the topic of the underlying technology that will drive digitalisation for procurement teams”.

Breault starts by drawing a parallel with the dot-com hype of the early 2000s and puts the experience many of us had at that time very well. “It was a painful experience to wake-up after the drunken party where we were all promised the un-ending benefits of inter-connection and universal collaboration on the back of technology that no one had a good idea of what it would actually do (and in-fact were incapable of delivering)”.

This time round though, we are (hopefully) realising that digitisation is not magic, but takes careful thought, time and resources. So the think-tank participants got into what is needed practically to make this work, and the article highlights three key steps:

  • Understand the first step towards digitalisation 
  • Assess the overall technology landscape, sorting out the basic vs. more advanced
  • Build a step-wise decision process to ensure technology is fit-for-purpose

We also liked the lists of “Winning Ways” and the “Traps to Avoid” given in the piece. The first winning way is very interesting: “ Drive your process top-down. This seems opposite to all the hype we hear about lighting a thousand candles and experimentation. Clear governance coupled with realistic expectations came through as the surest way to substantial benefits”.

That seems right – while we would argue there are areas where experimentation is appropriate, designing a serious procurement digitisation strategy and implementation programme is not something that can be done on a wing and a prayer! One of the traps is also maybe a little controversial – don’t rely on legacy systems and processes. “Procurement functions have built up considerable knowledge and processes that are purely operational and not built to provide insight. The continued use of these processes slows down the delivery of benefits”.

In our experience,  there’s often an element of the sunk-cost fallacy at play here,. It’s easy to think that as I’ve invested all this money over the year in these systems, I should stick with them. Well, no – what you have invested in the past is irrelevant to your decisions about the future.

The final section of the Breault article covers “the way forward”. We’ll let you take a look yourself if you want to see what the think-tank came up with on that, and we’ll look forward to seeing what comes out of the third session to be held in the autumn.

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