Is Procurement Reaching Its Innovation Potential?

We welcome this post from Daniel Ball, director at eProcurement specialist, Wax Digital.

When it comes to innovative career paths, procurement would not necessarily be one that springs to mind, more likely candidates being fashion designers and choreographers, according to recent data. However our own research found that procurement professionals are now seeking to innovate, and want to do so more in the future. It’s good news, but be mindful that common risk aversion, non-competitive attitudes and a lack of focus on leadership may also all be holding progress back.

Of the 100 UK senior procurement professionals we surveyed for our Procurement Innovation Pathway report, over two-thirds considered themselves already pivotal to business innovation, while over three-quarters thought they would be in the future. Clearly innovation has grown in appeal for procurement, not only for effecting change in its own department but playing a role in helping the business to change too. As many as 86% want to be a part of all ongoing product innovations and service developments across the organisation.

Innovation contributor or innovation driver?

One of the biggest questions raised by our research was whether procurement is equipped with the soft skills and attitude required to truly lead innovation, or whether it will simply be a contributor to the process. This is illustrated by around three-quarters saying that they are ‘involved’ in business innovations and just one quarter saying that they are ‘leading’ them. Despite most respondents saying that they play a pivotal innovation role, many seem to be more comfortable being part of the team rather than the one driving it from the front. In the main they are innovation contributors.

Procurement’s view of what makes a business innovative also appears to be impacted by some of its traditional thinking. Key innovation related attributes like a willingness to take risks and invest in R&D were at the bottom of its priorities.

Is procurement held back or holding itself back?

Procurement clearly understands that a single-minded vision is really important when innovating, as is the ability to be agile as a business and able to react or change when the market demands it, but there are also some gaps in the sort of skill set you’d typically associate with innovators. This begs the question – is procurement held back or holding itself back?

Procurement identifies other factors stopping it from innovating, including the way other departments view it, a lack of required skills and being too bogged down by time-consuming processes. While these factors may clearly play a part, other attitudinal setbacks may do so too, such as the fact that only 10% feel comfortable ‘challenging’ business objectives, just 14% prioritise competitiveness and 18% nurture leadership skills within their team (and these are declining traits).

While there may be external roadblocks in the way of procurement’s 'innovativeness,' some of the roadblocks may be being put there by procurement itself.

The desire to win?

Innovation is also often linked to growth or ‘beating the competition’ but procurement doesn’t appear to have a particularly competitive attitude and may not feel the need or desire to ‘innovate to win’. This could indicate that procurement needs to be less passive in its approach to innovation and more willing to challenge the norm.

There’s certainly no doubt that most procurement functions today are vastly different from what they once were and they are innovating more than ever before. But are they heading in the right direction or truly prepared to break the mould? Overcoming discomfort with taking risks, a lack of leadership skills and competitive drive are critical success factors.

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