The Role of Software in the Modern World
When procurement looks out into the enterprise to see how its brand is perceived internally, in most cases we discover that procurement is equal to our software in the minds of distributed buyers and stakeholders. This means that if procurement wants to transform what we are capable of, our people, process and technology must be re-engineered in parallel.
When procurement was first established as a strategic function, its first step was usually to make an investment in talent, followed by redesigned processes as a close second. Once the company’s leadership realized that procurement’s savings impact and spend management potential were being constrained by the limited functionality of email and spreadsheets, they would go out and find a software package to implement.
As natural as this evolution seemed at the time, there was a problem inherent with taking a staged approach to putting a holistic procurement program in place. Solution providers would say, “Our technology is process-agnostic” and procurement leaders would say, “Our process is technology-agnostic.” What this really meant—on both sides of the equation—was that the tolerance for misalignment was far too high for long-term success using that particular combination of people, process and technology.
Although a gap between process and technology may have been tolerable in early days, procurement teams became more strategic and our projects grew increasingly complex. Today, for many organizations, that gap has widened into an un-crossable chasm. Although the function soldiers on, performance is impacted as are usability and adoption in procurement and beyond.
Procurement people, process and technology are all likely due for re-engineering. Fortunately, the tools available to us today to support the re-engineering effort have the potential be highly transformative. Procurement has enough experience to recognize what we need on all three fronts and how we want to be perceived by the C-suite as well as by internal decision makers on order to achieve our full value potential. We are in a better position than ever to lead our own transformation.
Software is on the critical path of forward progress.
User interface used to be the appearance of technology, and plenty has already been written about the shortcomings of legacy procurement UIs. Today, however, software plays a much broader role in delivering results and enabling communications. Historically, the use cases for software were to: 1) store, 2) share, and 3) process data—all transactional areas of focus that aligned with procurement’s priorities at the time.
As procurement expands into collaboration, innovation, risk management, increased management of services and automation, the software we use must be able to support such considerations and the mindset that derives value from them. Software must be the environment or habitat where all of our interactions—not just our transactions—take place with internal stakeholders and external supply partners. Usability and design are now on the critical path of procurement’s progress, forming the backdrop for everything we hope to accomplish.
There is no room for daylight between process and technology.
There is no such thing as a successful corporate process (procurement or otherwise) that operates independent of technology. “Digital procurement” has become a buzzword in the last year, and the best way to determine whether an organization is succeeding in this area is to identify when and how often it has to change the format of information in order to move it forward through a process. If the fit between process and technology is so poor that information is being re-entered or even imported, the risk increases that information will be lost or degraded.
There is no sense in implementing a process that doesn’t achieve what the organization needs, and since process and technology must be in agreement, technology must also make a direct contribution to stated objectives. When a procurement team implemented its first technology, it was considered a best practice to re-examine the process first so that the company was not automating a flawed workflow. In too many cases, process was redesigned to align better with the technology to be implemented, although there was no guarantee that “software knew best.” By determining the best process and the best software in tandem, and ensuring they are compatible, procurement avoids the pain of anchoring its processes to software that may not stand the test of time.
Our thought paradigms are driven by pervasive technology.
Our very thought processes have been changed by the technology we use, in both the consumer and commercial spheres. We “search” rather than “look for” information. We expect to be able to share from within the software we use. Graphics have replaced lengthy text. We rarely leverage instructional materials, instead assuming that if software is well designed, it will be intuitive enough to use without training.
When software is cumbersome, many users will assume that it is poorly designed. And if this is the case, the inseparability of procurement people, process and technology in the minds of internal users means, for them, that procurement does not have the talent or workflows in place to meet their supply needs. If, on the other hand, procurement technology is able to exceed user experience expectations, procurement is immediately elevated. This may not seem fair, but it is the reality of how people accustomed to interacting with technology view the world.
By accepting that procurement software represents procurement in the minds of internal users, we open the door to much wider-scale commercial impact. Not all of the details of aligning procurement’s people, process and technology will have an impact on all stakeholders, but their combination will be undeniable across the board. By refusing to sacrifice on any one of the three elements in order to accommodate the others, procurement reduces the friction that is otherwise created, perhaps not overnight, but without question in the medium to long term.
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