Every CPO worth their salt wants to be agile. They want both themselves and their functions to work faster, better and smarter because that usually leads to savings and the uncovering of new innovations.
Those who are truly agile possess a few similar traits, which if followed and implemented could see you too reaping the rewards on offer.
As a concept agility has been around for some time. It was set out nearly two decades ago in the Manifesto for Agile Software Development, but was started by Japanese car manufacturers in the 1980s.
The Manifesto itself says:
“We are uncovering better ways of developing
software by doing it and helping others do it.
Through this work we have come to value:
Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan
That is, while there is value in the items on
the right, we value the items on the left more.”
Over the last few years, you will have heard lots of talk in business circles about ‘scrums’, ‘sprints’ and ‘hack weeks’. These are all variations on a theme. Essentially, they see cross-functional or multiskilled teams coming together over a short period of time to look at and solve a problem.
While these methods are considered agile ways of working, if taken only at face value they won’t be as effective as they can and should be.
CPOs need to be comfortable with the concept of agility and understand the benefits it can bring. As an example, thought should be given to how you could bring together key internal and external stakeholders to figure out how to introduce a new process or product innovation.
Beyond this you need to ensure you get buy-in across the organisation and outside of it for such an approach. Without it, success will be almost impossible.
New technologies such as 3D-printing, big data, artificial intelligence (AI) and the internet of things (IoT) have the potential to help procurement become more agile.
Big data, as an example, will allow the function to understand more about how and when it purchases goods and services, helping it to understand demand in much greater detail. This, in turn, will help them make more strategic purchasing decisions.
AI and IoT offer similar benefits. IoT, with its connected devices, promises functions the opportunity to know when to carry out maintenance and where they can make improvements in terms of productivity. AI meanwhile, with its ability to take administrative tasks out of the hands of the function in terms of raising purchase orders or matching up invoices, will allow buyers to spend their time on more value-adding exercises, such as supplier relationship management or trying to find new product or process innovations.
But, while these technologies all have promise in terms of instilling agility in a function, a CPO has to be open to implementing the right technologies where they are appropriate for the business and then finding the right areas to let them prove their success.
If they are implemented and ignored or are rolled out too quickly they will not be as effective as they could be, making agility harder to instil in a function.
A team can only be agile if everyone buys into the concept and has the right skills to adapt to that different working environment.
The skills required for this are softer than those a traditional buyer would have had. In place of a nose for a deal, and a tough negotiation stance, procurement executives today need to be able to collaborate with internal and external stakeholders, talk the language of the business, utilise the latest technologies and adapt quickly to changes as needed.
Those CPOs who are able to embrace these three traits will be the ones able to truly embed agility into their functions, supply chains and ultimately businesses. With that, they will enjoy the benefits that speed and responsiveness can give a procurement function.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.