I think we can all agree that purchasing has come a long way from its days as the obscure department nobody was quite certain of. From internal business requirements to external legislation – agility is now one of the top requirements of a productive procurement organism.
The problem with this swift evolution and its historic silo-ed characteristics however is a fragmented view of what an agile purchasing department should look like. As business evolves and shifts towards an ever more digitised and data driven environment, four key steps must be taken by an agile business and they must involve ALL relevant stakeholders. We call it ASAP.
Let me come right out and say it – an alarming amount of companies do NOT have a strategy when it comes to evolving their 1980s and 90s historic processes to a digitised work flow. Hell, some even think the historic process is still working!
The lack of company wide process assessments is a concerning pattern. Sticking to existing processes just because they are already in place is a real drain on each and every resource and it’s an attitude that promotes business laziness. Assessing what’s working and what isn’t is the first step to take towards making it better. Keep (and improve) the good, out with the bad. The main excuse I get from companies not looking at internal processes is lack of time. But you will be forever lacking time and resources if you perpetuate detrimental habits through fear of change or ignorant immobility…
Again, let me be blunt: Keeping your head in the sand and doing the same thing you’ve been doing for 10 years doesn’t cut it anymore. The “copy and paste” strategy cannot survive in today’s fast paced world, no matter what industry you’re in. Evolving and ensuring the entire engine of the company is improved through planning, analysis and smart tech implementation is what truly agile and strategic procurement is all about.
For a lot of companies, digitisation still only means to “removing paper”. My experience over the last two years has shown me that even the most modern and “tech-ed up” companies on the surface are hiding monstrously paper heavy secrets in their purchasing and finance. It’s a horror story out there.
Digitisation also means finding an online solution that will not just “slot in” to one particular department’s needs. It means a solution that will go through the entire company top to bottom and left to right. Reducing errors and optimising workflows goes way beyond an OCR invoice processing product or an online PO piece. It is a solution that empowers and maximises the natural talents and skills of procurement and finance staff.
Applying or implementing a strategy is the key final step to success. The main two ingredients to this step must be: internal stakeholder buy-in and a consolidated and comprehensive tool (set of tools) and measurements. When the foundation is laid out as solidly as possible across the entire company surface, it will produce growth. It will breed growth because each piece will be working towards the same goal. When all stakeholders, no matter what level they are at, work in unison, business can truly thrive.
Once a strategy has been implemented, regular reviews will keep it from going stale. With technology constantly evolving, you must ensure you are agile enough to make small adjustments and improvements as you go. Don’t wait until your system is 30 years old and only works on Internet Explorer. Your purchasing and finance staff will end up being mere overpaid data entry clerks and they will either leave or they performance levels will drop. Either way, it will cost you money.
Have you got a digital strategy in place?