Your people are increasingly digitally-aware. Some of them are even digitally savvy. You’ve structured your team for the digital era, with roles carved out for a new breed of digital-era specialists.
And yet, there’s a nagging sense of digital opportunities being missed. Transformation possibilities left untapped. Digital initiatives proceeding at a snail’s pace – stuck in the slow lane. Better, faster, digitally-enabled ways of doing things exist – but your team still seems wedded to spreadsheets, paper and their old, familiar ways of working.
“Procurement organisations are often technology laggards,” says Wendy Tate, professor of supply chain management at the University of Tennessee, and co‑editor in chief of the Journal of Purchasing and Supply Management. “As a function, we still have all those big legacy systems and ways of working hanging around. Buyers are still using spreadsheets to manage spend, especially in indirect spend. Procurement talks about getting 100% of spend under management, and yet is reluctant to embrace the technology that will help this happen.”
How best to break the log-jam? Given that procurement functions have a reputation for being ‘technology averse’, and slow adopters of digital ways of working, what can managers do to encourage their teams to be more open to embracing digitally-enabled ways of doing things?
First, get the basics right, advises Soroosh Saghiri, senior lecturer at Cranfield School of Management’s centre for strategic procurement and supply chain management.
“Education is important and differs from ‘training’: people need to know the art of the possible and the bigger picture. In particular, you need to communicate the benefits of technology to them and explain it’s not just about cost savings, but also about developing better, faster, and more accurate procurement processes. It’s about building a better and more capable procurement function – one that can work in ways that today’s procurement organisation cannot.”
Second, ‘build out’ from instances where technology has already delivered credible benefits, in order to create convincing use cases, recommends supply chain technology analyst Julie Fraser, principal at Iyno Advisors.
“The best pathway to finding use cases that will be accepted is to identify the places where technology has already worked, and where people couldn’t live without it, and then build out from that,” she notes. “Take something good, proven and accepted, and extend it.”
Third, recognise your own limitations as a digital ambassador, urges David Food, an associate principal lecturer in procurement at the University of London’s Royal Holloway College.
“As a manager, you don’t have to be a digital expert, but you do need to have someone alongside you who is knowledgeable,” he says. “One option is to consider someone from the ‘Google’ generation: someone who is young and bright, asks awkward questions, and says: ‘Why can’t this be done this way?’ Their role isn’t so much about pushing technology through and overcoming resistance, but making the case for it in the first place, and showing where it can be used.”
Fourth, be realistic about what technology can actually deliver. Much depends on the maturity of the procurement organisation, warns Alejandro Alvarez, a partner in procurement transformation consultants Ayming. If the organisation is still addressing basic challenges, technology might be able to help, but the actual barrier to progress is not necessarily a lack of technology. In such circumstances, there’s a risk of technology being unfairly painted as a failure, which may jeopardise the adoption of future technology rollouts.
Finally, it’s important to recognise the elephant in the room: technology’s impact on employment.
“The bottom line is technology is supposed to make employees more productive, which ultimately begs the question: if that is so, then do you need as many employees?” says Bill McBeath, chief research officer at supply chain analyst firm ChainLink Research.
Granted, he adds, technology creates new jobs and roles within procurement organisations: data analysts, e-auction specialists and so on. But that doesn’t mean a procurement organisation’s existing employees won’t be affected.
“As a society, we’re generally conflicted about this,” he notes. “Are jobs going to be lost? Yes. Will new jobs be created? Yes. But do the people whose jobs are being replaced actually have the skills to transition to those new jobs, and are there re-skilling programmes in place to enable them to do so? The answer, unfortunately, is probably not.”
His answer? Be honest and open about what might happen to jobs. The march of progress is in one direction only – and trying to hold it back risks everyone’s jobs.
This article is a piece of independent journalism, written by an experienced journalist and commissioned exclusively by Procurement Leaders.