Design by Sejal
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Design by Sejal

Design thinking to explore blockchain in procurement

I recently co-facilitated a design thinking workshop on how blockchain might be used in procurement at an Australian bank.

Wait, what?

Design Thinking. Blockchain. Procurement. An unusually strange combination of buzzwords.

The first thoughts that probably come to your mind…

Design Thinking = fluffy talk and post-it-notes

Blockchain = bitcoin, investing and overly sophisticated technology

Procurement = contracts and transactions, tedious and unglamorous

These perceptions are probably true, but the value of integrating a creative approach, a novel technology and a traditional business function is still not widely understood nor applied.

  1. Design thinking is a method and framework that helps teams understand opportunities in their day-to-day work and explore how technology might uplift or transform the organisation.
  2. Blockchain, and its constituent products like smart contracts, enable increased transparency and trust in transactions between parties.
  3. Procurement is an organisation’s critical function which manage such transactions and ideally cultivate supplier relationships via strategic sourcing and contract compliance.

A method, a technology and a business function. An opportunity waiting to be unlocked.

Our goal was simple…but not easy. How might we simplify procurement for this bank without using technology?

Human-centred design to frame the future of procurement

It was essential we understood the problem before diving into a feasibility study and proposing a long-term implementation plan for smart contracts in procurement. We needed to look beyond “our processes suck” or “there’s too many duplicate entries” to understand the root cause of day-to-day pain points. We needed the team to dream what their future work and future of procurement should look, feel and sound like.

To help understand the purpose of the activities in the workshop, we used the ‘double-diamond’ analogy to frame divergent and convergent thinking.

In this particular workshop, we had 28 procurement professionals split into 3 groups. We categorised the design thinking methods into three key areas – understand, explore and converge.

  1. Understand the procurement landscape we work in – people, processes, places, technology and things. Methods: Concept mapping & affininity clustering.
  2. Explore wild possibilities in procurement – how might we improve, simplify, eliminate or create something entirely new. Method: Statement starters and round robbin
  3. Converge on the problems that matter most to us in procurement and imagine possible solutions. Method: Concept poster

Story-telling to set the scene and invite playful imagination

Procurement is one of those traditional business functions which is viewed as largely transaction-based – often using outdated legacy systems, consolidating disparate and inaccurate data, chasing up approvals and getting the business to follow a standard process. In short, procurement is not glamorous.

So how will a procurement professional, who manages contracts and approvals all day, going to see the possibilities of smart contracts (underpinned by blockchain) in procurement?

We used storytelling.

(1) We put ourselves in the shoes of a procurement professional and had a mini rant about daily procurement struggles – approvals, contract variations, back and forth communication.

(2) Then, we switched to an entirely different scene. We imagined a world where procurement was slightly more glamorous – because we believe it can and should exist.

Here’s what our introductory story to the workshop sounded like:

Today, I want you all to imagine a world where you stop receiving 100 emails a day – for different PSRs, contract variations, renewals, SOWs and supplier queries – constantly going back and forth between vendors, colleagues and management to get a single transaction or agreement across the line. I’ve been there myself, so I can totally relate.

Now, what would that world even look like? What would it feel like?

What if, as a procurement professional, you could have a lot more impact on your organisation – time to develop yourself, your team, new strategies and cultivate relationships with internal stakeholders and suppliers.

Wouldn’t it feel liberating?

This afternoon, I invite you to explore the wildest possibilities – maybe its as simple as having the right information available to you at the right time; Having everything you need to know about supplier identities, contractual data, approvals and reporting available on single platform. A platform that allows transparency – a platform that you can trust – and ultimately, a framework which allows you to focus on the things that matter to you.

This is where blockchain represents tremendous untapped value. We’re going to explore all these possibilities in our groups today, so I ask you to have an open mind, creative spirit, and most importantly – have fun!

Translating pain points into opportunities and a business case for smart contracts

Insights from the workshop’s explorative activities revealed that data integrity, simplification of the process and enhanced communication and engagement were the group’s most important priorities.

In particular, each of the team’s converged on the following 3 problem statements:

It was important to show a clear link between existing issues in procurement and the opportunity for smart contracts to transform the processes. We drew upon the issues which were important to the team.

For example:

  • We can improve customer experience by speeding up the drafting and execution of agreements.
  • We might help our stakeholders better understand the processes when disputes or missing information from parties can be referred from the blockchain stored contract.
  • We will maintain and build effective processes when smart contracts allow for automated enforcement, permissions, rules and analytics.

The value in using design thinking methods largely came down to the procurement teams being invested into the potential solution from Day 1. We didn’t guess what their problems were or the nuances of complex relationships with internal stakeholders and suppliers. We didn’t plant a cookie-cutter smart contract solution and hope the teams would understand how this might affect them on a day-to-day basis. In short, we didn’t guess. Instead, we allowed the procurement team to co-create their ideal future world.

The journey going forward

The next steps are to continue ideating and socialising possible solutions with stakeholders, evaluate the complexity of existing agreements and conceptualise the processes using a smart contracts platform.

Like approaching an novel idea or using new methods of working, there will be ambiguity and there will be resistance with the ‘human-centred’ mindset. The challenge, especially with design thinking, is to:

  • Continuously draw links between outputs and sustaining outcomes. I.e. How might a concept map of the day in the life of procurement professional couple with deep-dive interviews, stakeholder maps and existing business processes?
  • Re-iterate non-tangible outcomes into value-drivers or criteria for decision making. I.e. Now that procurement teams can articulate the systems, people, processes, and identify commonalities in priorities, we can drive commitment for the vision and ownership of key processes.

Already, we’ve seen a procurement department come together to share their experiences for the first time – whether its challenges with getting sign-off from the legal department or wasting unnecessary time doing manual reports, they’ve mapped their landscape together and had a taste of a slightly more glamorous procurement world. Blockchain is no longer a daunting phenomenon for the elitist technology companies. Smart contracts, in particular, will quite simply, instil trust and transparency between procurement and suppliers in a single source of truth.

A bizarre blog where art meets science, business and technology.

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Sejal Jamnadas

Sejal Jamnadas

Writing what piques my interest or when I need to pique my interest

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