This guest blog has been written for Market Dojo by Jon Hansen of Procurement Insights.
A few years ago, I remember having breakfast with Duncan Jones at a Virginia conference in which he shared an interesting story with me.
Early in his career – pre-Forrester, I believe, he was working on a project to upgrade a company’s tech capability that would drive greater efficiency and increased savings.
There was – generally speaking, a positive attitude of acceptance on the part of employees, except for one individual. Forever working at his desk, hidden behind a skyscraper of files, this one person was anything but receptive to the idea of automation.
When Duncan asked him why he was reluctant to embrace what would be a significant advancement in automating his work process, pointing to his stack of files, the man said that as long as they were piled high, he knew he would always have a job.
No amount of reassurance that there would be new and more productive things he would be able to do calmed his fears. In the man versus machine “war,” the machine was up by one.
Not An Isolated Case
I am sure that we all have stories to share about a reluctance on the part of someone to embrace new and exciting technologies. For example, many years ago, I “automated” the procurement of MRO parts for the Canadian military’s technology infrastructure. The system I developed and introduced was a web-based platform that streamlined the process so that just three buyers could handle the work. One of the buyers lamented that the system was so intuitive that they could probably get a monkey to do it and thus replace him.
I know that he was exaggerating, but it struck a chord with me that no matter how much we improve the technology or the value it can deliver, total success would continue to be an elusive outcome without buy-in from people. My December 2019 Procurement Insights post on the Deloitte CPO Global Survey results supports that assessment.
The Results Are Real and Significant
What does total success look like – how do you calculate it?
A more recent Deloitte CPO survey reports that 76.01% of those responding indicated that digital transformation is now a top priority. This number represents a 20% increase from 2019. That’s right, despite the challenges of pursuing a digital strategy, CPOs can no longer sit on the sidelines waiting for digital transformation to happen – they have to make it happen.
This growing enthusiasm is because knowledge sources such as Ardent partners report that “best-in-class” procurement teams were “51% more likely to use strategic sourcing technology.” In short, the benefits of the digital transformation of procurement are significant.
The big question is this: what are the fears and barriers to introducing and adopting new technologies and processes?
Not What We Expected
A Procurement Insights poll that asked industry professionals, “what is the most significant risk that procurement faces in the coming year” didn’t exactly deliver the answers we were expecting.
According to the results, 39% of those responding indicated that digital strategy implementation was the biggest risk procurement would face over the next twelve-month period. Next was economic/political instability at 26%, followed by supplier reliability at 16%. Now here is the surprise, only 5.8% of procurement pros said that “job security” was their biggest concern.
What does this tell you?
Not The Why or The When, But the How
For many reasons – something that I will get into in a future post, the fear of job loss or being “replaced” by technology is no longer the obstacle to adoption it once was.
This revelation means that the question (and urgency) of digitally transforming the procurement process is a “how to do it” versus “how to avoid it” issue. In this regard, the why or the when has been replaced by the how.
This shift to the “how” is why the Policy-Process-Systems concept is gaining traction. Even though we don’t need more acronyms, the PPS approach is potentially the difference-maker.
So, what is this PPS approach?
Not long ago, I had the opportunity to moderate a Market Dojo panel discussion which included a top exec from an organization that had successfully employed the model to achieve some incredible outcomes. A good place to end this post is by providing you with the link to that session. Have a watch, and we will talk again.