A new mindset for a new technology — Why procurement needs to think differently in the digital age

Richard Holmes, a Senior SAP Ariba Consultant who works as an advisor for Sourcing Solved, and I recently had a chance to share a coffee and to reminisce about our years of experience in the procurement world. Specifically, how during our time working together, we provided Ariba advisory services, including supplying consultants to implement Ariba P2P solutions successfully. When I say years, I am talking about the days long before there was “the cloud”, back when Ariba came on a CD (on-premise).

My focus was on talent acquisition and consulting utilisation to ensure ongoing SOW alignment with desired outcomes, while Richard spent most of his time helping organisations get their procurement initiatives back on track for countless global enterprises. If you check his LinkedIn profile, you will see a lengthy ‘who’s who’ of recognisable industry giants.

Given the breadth and length of our combined people/technical experiences, we took particular notice of the results of a recent Deloitte survey of CPOs. According to the survey, a majority of executives have a high level of dissatisfaction with the results of their digital procurement initiatives. 

As we settled into our second cup, the same thought crossed both our minds; wasn’t the digital age supposed to make things easier? After all, the common catchphrase for the new digital era is that today’s technology can get you up and operational within months and weeks versus years.

Hindsight is more than 20/20

Looking back, both Richard and I agreed that while our challenges were different, the initiatives that struggle all seem to share similar characteristics or traits.

For example, many fail to look beyond the “siloed” interests of their departments and systems. In other words, they do not adopt a holistic approach that enables them to envision the entire, end-to-end enterprise landscape to understand, not only the individual, but collective impact of an eProcurement strategy.

Another factor is the belief that technology in and of itself will be sufficient to create success even when key practice elements such as data governance and the existence of sound procurement policy and performance metrics are absent.

However, perhaps the most telling characteristic of struggling initiatives are cultural issues. Specifically, does the organisation have the proper mindset and internal cultural stability to ensure that it is ready to assume the driver’s seat of its “own” digital procurement strategy?

Far too often, organisations assume a temporary chameleon mindset that reflects and echoes the verbiage of the service provider’s mantra. When it is time for the provider to move on, which is inevitable, the organisation does not have a voice and therefore an identity of its own. Because of this, many companies have a “twisting in the wind” feeling with an accompanying sense of ‘What do we do next?’     

Even though we are now in the cloud and operating at the edge, the same problems persist. What is encouraging is that the same approach we took to turn around a struggling eProcurement initiative in the past will also work today, starting with organisations placing as much emphasis on people transformation as they do technology transformation.  

Of course, the starting point for people transformation begins at the top.    

“Owning” your success

Both Richard and I share the belief that the digital transformation of a business (including its supply chain) has “great promise”, providing that business leaders carry the banner and become the champions for digital reinvention.

However, to become their organisation’s digital champions, senior leadership must first facilitate a “cultural transformation” in which they look beyond technology. What it means when we say “look beyond the technology” is having the right people with the right mindset and experience firmly in place to deliver tangible outcomes.

In this context, the ultimate success or distress of any initiative begins and ends with an organisation’s leadership.

Given the important role that procurement leaders such as CPOs and Procurement Directors play in the digital transformation of their organisation’s supply chain, it is not surprising that many companies are having difficulty in finding qualified candidates to fill these roles. But that is the subject of another article.