It is easy to get behind the idea of investing in agile procurement. It sounds cool for one thing. Not supporting agility, however, implies a preference for the alternative – calling to mind words such as inactive, lethargic, and rigid. No one is going to campaign on that platform – not if they want to win, anyway. Yet reaching consensus about the desirability of agile procurement is only the beginning.
Moving from concept to practice requires clarity around what agile is and what it looks like in action. We recently asked our network: “What is ‘agile’ procurement?
What benefits does it offer and what do procurement professionals need to think about before they can adopt agility as their standard mode of operation?”
The community’s responses covered a broad range of perspectives and ideals. They also reflected a shared sense the function is capable of more: multi-faceted, cross-functional, responsive and proactive. There were a few comments about not being ’traditional’ or falling back on old ways and technologies but, for the most part, the idea was procurement can align with the bigger picture and strategically manage new spend and suppliers without getting hung up on the details or the ’different’ nature of the work.
If we go back to the idea of defining agile by identifying what it is not, procurement can start by looking at the most common scenarios in which we say ’no’ or ’can’t’ in response to a request or opportunity.
No, you can’t just sign a contract with that supplier. We need to run a full sourcing process first.
We can’t help you with this negotiation; you went too far down the road without getting us involved.
No, procurement has never done that before. We don’t have an established framework for trying that approach. You’re on your own.
It is much easier to break a bad habit by replacing it with a good one. If the objective of agile procurement is to enable the business to make smarter and faster decisions, there are some practices procurement teams can adopt without discarding established processes or implementing any additional technology.
Lean, fast and outcome-oriented
NEGOTIATE THE CONTRACT DURING THE SOURCING PROCESS
When procurement manages supplier selection as though each step is a prerequisite to the next, it elongates the process and sometimes requires the team to double back. Why select a supplier through sourcing and then start hashing out the contract? There is no law that says buyers can only discuss terms and conditions with suppliers they will definitely contract – that is a legacy practice that emphasises caution over speed. Keep as many suppliers on the table as long as possible, and prevent surprises and delays by getting down to business from the outset.
ELIMINATE ANYTHING THAT WILL NOT AFFECT THE OUTCOME
Doing things ’because’ is the antithesis of agile. Look at RFX questions and supplier-screening forms. It is most likely the team only reviews a few responses that are of interest. Get rid of the others. Agility requires a high level of context sensitivity. The big picture is important, but if it is allowed to sit at the centre of the function’s efforts, its work becomes too unwieldy to manoeuvre. Less is more – ’lean’ and ’fast’ are more aligned with agility than ’comprehensive’ and ’standardised’.
Agility defines procurement success
“The procurement teams that adeptly connect their tools, resources, and expertise to support the evolving needs of the business will succeed above all others. Agility will define the next wave of procurement success,” Ardent Partners wrote in its CPO Rising 2015 report.
This suggests procurement’s efforts and approaches need to be flexible. We don’t need to replace our current methodologies and frameworks with ’agile’ methodologies and frameworks. Instead, we need to know when to apply a framework and when to push into uncharted waters.
As the conditions around companies and their supply chains change, procurement teams must be ready and willing to respond and move in kind – at least if they are interested in ’winning’.
Kevin Turner is SVP of customer success at Determine
This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.