Last month, I had the opportunity to share trends I’m seeing in Procurement at ISM2015 in Phoenix. For those who weren’t able to join this leading supply management conference, below are the highlights.
In the last five years, Chief Procurement Officer priorities have undergone a major shift. Cost savings, spend analysis and corporate social responsibility related metrics remain important, but they have become table stakes. On the top of the agenda now are streamlining processes and driving innovation through technology.
The megatrends of social, mobile, cloud and big data are fundamentally changing how business is conducted across the organization, and especially in Procurement. These megatrends have caused a major shift in CPO priorities. The CPOs job is now harder – he/she has to deliver on an expanding slate of objectives that improve business engagement.
Process binders with flow charts and swim lanes are not safe for end user consumption. These flows should be built into user-friendly apps that “make the right thing the easy thing to do”. I borrowed this great line from my friend Duncan Jones at Forrester back in 2012, and haven’t stopped using it since. He is absolutely correct in ensuring that the right approach is also the path of least resistance. No amount of strategic sourcing success (cost savings, better terms, reduced risk, etc.) will buy you enough goodwill with your business customers if your transaction process causes friction. As the CPO, it is your job to reduce process pain. And that’s where innovation through technology comes in.
Many companies have tons of technology and applications for procurement and frequently fall into the all-too-human trap of sunk-cost thinking. I recommend you start with your biggest pain-point(s) and see how you would solve it in a green-field model – thinking through both the best process and best available technology – to deliver the best possible customer/partner/supplier/employee experience and result. Even if it takes you significant time to get the new process or technology funded and implemented, it will provide a great reference point for solving your most immediate problems in the most efficient way. And the exercise will reveal what’s most important in the solution: Is speed your biggest issue or is it cost? Or is it NIGO reduction? Once you have your top objective, really drill into this with your vendors. Ask them for use cases, references, customer data – whatever you need to address your top objective(s).
What trends are you seeing and how are they impacting your objectives? How are you tackling these opportunities and challenges? I welcome your thoughts.