Key Procurement Tensions/Trade-offs for 2017 – Agility versus Process (and More!)

Last week, we outlined five key areas of interest or tensions maybe for procurement in 2017. This week, we’ll look at each in a bit more detail, and in each case, give three key actions for 2017 that might strike a chord for you. Today, our tension is agility, speed and responsiveness versus process, compliance and governance.

Attending conferences in 2017, this was the area that seemed to have moved rapidly up the priority list in terms of issues that CPOs and others were thinking about and trying to address. As the pace of change in business increases, and many firms are faced with “disruptive” competitors (Airbnb in the hotel business, just as an example), then the need for procurement to move fast and be aligned with that ever-increasing rate of business change is paramount.

There just isn’t time in many cases for procurement to say to a budget holder, “yes, we can research the market for you, run a tender, negotiate a contract with the chosen supplier and have all that in place for you in, oh, let’s say six months”.  Six months! The stakeholder is looking to have their new product launched and established in that timeframe, which means the critical path says “suppliers identified” by the end of week four!

Yet experienced procurement people know that lack of time is often used as an excuse for stakeholders who simply don’t want to use procurement or good procurement processes because they are lazy, risk-averse (“I just want to use my regular supplier”) or even corrupt. And procurement does have some role to protect the organisation’s money and reputation, so getting this balance right is a real challenge. We can’t ignore this issue of pace, yet we must look for ways in which procurement can still add value in this accelerating world.

So, our three thoughts for 2017 are:

- Procurement needs to get close to stakeholders and more involved at business planning stage. Hearing about a project for the first time when it is only six weeks from launch is not good enough, but it will have been discussed for longer than that almost certainly, it is just procurement was not involved. Getting early procurement involvement can also be presented as a “win” for the stakeholder as well, because it will enable faster progress once the “go” button is pressed.

- Procurement needs to think about how processes can be accelerated. Think creatively, and this is one area where technology can certainly help. How can we run a competitive process in weeks rather than months? Can we use standard templates more often? Can the contract negotiation process be compressed by locking the participants and lawyers in a room for two days rather than the usual back and forwards over weeks?

- Professionals need to become more business-focused (while retaining that core professionalism, we should say). We’re a bit cynical about the call for procurement to be “entrepreneurial” – that’s easy to say, but hard to define just what on earth it means. But having a focus on the business solutions, being aligned with the success of our stakeholders, looking at the wider picture beyond just “procurement” – these are attitudes of mind that we can cultivate in our teams and ourselves.

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