Wax Digital Launch New Report – the “Procurement Innovation Pathway”

Wax Digital, one of the leading British owned eProcurement providers, recently carried out a survey of procurement professionals with "innovation" as the topic. "This Procurement Innovation Pathway report summarises the views of 100 procurement leaders in medium to enterprise level organisations in the UK".

It's a hot topic at the moment in the profession, although we sometimes see confusion, perhaps more notably in the public sector, around the terminology and what it actually means. To be clear, there are two aspects to this, both important, but we always have to make sure we know which one we are talking about. First of all, we can look at doing procurement in an innovative manner. That might mean using the latest, exciting, "innovative" software to support our activities, or it could mean adopting some unusual negotiation tactics, a whole new approach to category management, or whatever.

Then we have the whole issue of how procurement supports the organisation in buying innovative goods or services. That might range from using third-parties in the pharma industry to invent new drugs, to the public sector looking for innovative approaches from suppliers to reduce re-offending rates, to buying the latest CRM or digital media technology products.

We could even combine the two - we might use innovative procurement techniques or processes in order to buy more innovative services for the organisation! So all those options are fine, but we must always be clear what exactly we're talking about in this context.

So after that lengthy introduction, let's take a look at some of the highlights of the Wax Digital report, which focuses on both of the meanings of "innovation" and indeed at times the link between the two.

There appears to be a desire amongst the procurement sample to be more involved in innovation in the wider sense, and indeed the numbers claiming to be involved or even leading various innovation type initiatives already are impressive - for instance, 30% of respondents are  "leading" and 73% "involved" in "Exploring new channels to market". That seems surprisingly high.

There are some interesting findings around the skills we need in procurement to achieve a more innovative approach, although there seem to be some contradictions between answers to different questions. One frustration I do have (as a mathematician / statistician by training) is not seeing exactly what questions have been asked, which can often help us make sense of the answers. But here, at one point we get "analytical skills" being placed in the highest category of desired skills in one chart, then later apparently only 9% of respondents say they want to recruit people who are "good with numbers".

But in general, there is a desire for people who can work collaboratively and be creative. That seems to be stronger than the desire for leadership skills - that's a tough one when we consider innovation. Ideally we would like people who are both, and there is a sense (as Wax Digital point out in their commentary) that the picture is one where procurement are seen as enthusiastic supporters and followers in terms of innovation, rather than a function that is trying to lead and drive it.

The picture on technology is also mixed and somewhat surprising. Do more organisations really have Supplier Relationship Management or eInvoicing technology in place than Purchase to Pay or eSourcing?  Maybe it is a question of definition here, but the findings in this area certainly challenge my prior assumptions.

But all in all, the report and in particular the very good Executive Summary and Conclusions in the document are well worth reading. Here are a couple of quotes - and you can download the whole report  here.

"Subsequently, many procurement people seem to be following the innovation charge rather than leading it. It’s unclear whether they really want to be the ones driving decisions or just part of a collaborative team that makes it happen"?

 "Attitude, business relationships, soft skills and technology are all critical guiding factors on procurement’s innovation journey. While great progress has been made it’s not without issue. While procurement clearly wants to change the way they do things there’s a suggestion that they don’t want to step fully out of the old world either".

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