03.2 / Procurement is dying… Part II.

by Bertrand Maltaverne


In part I, I presented several highlights taken from Procurement at a crossroads, a book by Jon Hansen and Kelly Barner.

The message was, in short, that Procurement must evolve or it would disappear. No breaking news that a function has to evolve to survive but the message of Hansen and Barner is more dramatic than that. Procurement may be on the verge of extinction, like the dinosaurs! “The day of the dinosaurs has come!”

So, what to do to not end up like a dinosaur and to , ultimately, survive.

Yes, what to do?


What to not do!

Well, Hansen and Barner, make a strong point that one thing to NOT do is to rely on technology. I agree. This may sound surprising considering the authors’ experience and career path. Kelly Barner has worked at a Procurement technology provider). Myself, well, sort of the same: switched from a Procurement organization to a provider to work as a consultant.

So, why people who seem heavily interested by Procurement technology and are actually making a living of it, do believe that technology is not the savior?

Well, simple answer.

Experience!

Anyone who has lived (either on the Procurement side or on the provider side) a project related to implementing Procurement technologies knows that technology alone cannot fix / improve a broken organization or broken processes. Do not misunderstand my point. Technology is great as a performance booster or as an enabler. But, it has to be built on top of strong foundations, and this is why the primary focus should not be on technology!


What to do!

As in any situation where change is needed, there are many factors and approaches to be taken into account.

It is not the intent of this article to be thorough; I just want to emphasize some of them, especially the ones presented in Procurement at a crossroads.

All starts with awareness

Being aware of the need to change is the 1st step. This relates to the model “four stages of competence”.

Source: Wikipedia

Based on that awareness can you start to work on the journey.

Source: Alberto L. Sangiovanni-Vincentelli on What your Supply Chain is Missing

Procurement must, first and foremost, define its “raison d’être”, that is what value it can deliver to the organization.

And there is much more to it than just reducing prices!

Once done, it is time to work on the enabler of the value delivery. And, as stated earlier, people come first. New skills are required. Skills that are a bit less domain-related (negotiation for example) and more related to influencing and collaborating.

Natural selection

In the last chapter of Procurement at a crossroads, Hansen and Barner elaborates on the natural selection that will happen among Procurement practitioners.

The people entering the workforce will bring with them a fresh air that will naturally, we all hope, push the Procurement function towards its future. These are people who have been nourished and inspired by influencers who preach for a New Procurement.

In addition, they will bring the characteristics and traits of their entire generation, the Millennials. They will be much better equipped than the older / more experienced generations (who only have known the Old Procurement) to pitch and sell Procurement vertically and horizontally. No wonder and surprise then that influence is a key word in Procurement at a crossroads.


So, to conclude these series of 2 articles, Procurement is not dead… yet! But, this could happen. Procurement at a crossroads is right by saying that a deep transformation is needed and the book is instrumental in building the case for change. Like this book and that book, it contributes to defining the way to go.

Procurement must evolve!


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