David L. Loseby, Director of Procurement (Group CPO), Rolls-Royce [LON:RR]
Setting the scene currently, there doesn’t seem to be a week that goes by without discovering or being bombarded by yet another pitch for a utopian platform that will solve all the professions' problems in an instant! The current spend in this market place is worth about $6 Billion annually, and so is a serious market place to be in, and of course, set to increase and expand further. More recently we saw the acquisition of Llamasoft by Coupa and part of a growing trend by the bigger players to get closer to broad-based proposition for customers and improve their “stickiness” as well as satisfy the investor community by growing revenue and share of wallet. The platforms are a far cry from the very early days of setting up e-auctions in the mid-1990’s (platforms designed to set up packages for suppliers to bid upon in a real-time auction successively bidding lower until the end of the auction timed out either through a fixed time, timed extensions or no further bids).
Over the last two to three decades, the progression has been ever steady and, in some ways, very linear at times, moving through the end to end process of procurement (sometimes called sourcing, buying, contracting, etc.). Further, there have been parallel advances in logistics, demand planning, supply chain management, supplier identifiers, sustainability credentials. Additionally, the need to create generic interfaces to the finance backbone systems, supplier portals, and so forth are a given, as well as the need to reinvest anything from 30-40 percent or more of sales back into their R&D pipelines. Lastly, the “entry tickets” of having a SaaS proposition, SSO for users, minimum standards of cybersecurity encryption, and of course, the ease of use for those that need to use the platform.
Perhaps some key features that start to make the difference begin to link dynamic data sets, contract enabling software embedded in the platform, point of use learning to ensure accuracy and consistency of use and data integrity as a result and bubbling under blockchain (better suited to materials, commodities, and products). There are, of course, some things in the system and process paradigm that continue to challenge us all data integrity, the stability of the networks, cyber-attacks, and all the rest!
The use of behavioural sciences is ever more critical when we consider the current environment into which we are deploying either new platforms, extensions to them, or complementary systems as traditional approaches will not be sufficient
The use of behavioural sciences is ever more critical when we consider the current environment into which we are deploying either new platforms, extensions to them, or complementary systems as traditional approaches will not be sufficient. The harsh reality is with remote working comes remote project teams, virtual war rooms, collaboration software to work through those architectural setups, and so much more. Predicated by a work population that is currently cognitively loaded as a consequence of demands beyond the work/technical/professional/business environment dominated by the social dimension of a worsening pandemic, personal finances, family & relatives, political overtones, adapting to diminished social interaction, loneliness, and declining mental health and well being for some and of course because we are all individuals the configuration of the cognitive load will be unique to each.
The current socio-economic environment has been described as VUCA (an acronym derived in 1987 from leadership theories of Warren Bennis and Burt Nanus reflecting the Italicize Volatility, Uncertainty, Complexity and Ambiguity of general conditions and situations and in the US as well as the US military to reflect the end of the cold war). Therefore, our new and unfamiliar context demands a different approach to all that has preceded, and for those that succeed will see the real benefits of not just system adoption but recognition from an engaged business population. Re-setting the way we design, deliver, and reconnect behaviourally has been a necessity, and we see the benefits through not just the fiscal attributes set out by the finance community inherent in the business case, but moreover, an aligned set of industry recognised standards that are awarded to the individual. Delivering the essential WIFM factor—What’s In it For Me. Hence the future and vanguard for procurement technology will be a conscious and explicit collaboration between skilled procurement professionals, enterprise architects, data scientists (pulling static and real-time data), and behavioural scientists.