Procurement is suffering from Paralysis by Analysis.
Is your Procurement Team experiencing Paralysis from Analysis?
“17% percent of procurement leaders do not have a digital procurement strategy, and of those that do, less than one-third believe that their strategy will enable procurement to deliver significantly on its objectives and improve enterprise value” (Deloitte CPO Survey 2018).
There are 2 big takeaways from this statistic:
1) There’s a high number of procurement teams that have a clear digital roadmap. That’s the positive takeaway from Deloitte’s 2018 CPO Survey.
2) The negative takeaway: very few procurement leaders that do have a digital roadmap laid out feel as it will be a value adder for their organizations.
When will procurement leaders stop seeing their role as risk managers, price cutters and cost savers, and start seeing themselves as innovators and value-adders?
Planning a digital procurement strategy is important, but waiting too long for change may just bite your procurement team in the behind. Don’t fall into the trap of paralysis by analysis. Procurement professionals are hardwired to be risk-averse, but digitalization requires change. And change requires taking calculated risks. Taking risk goes against the very fibers of a procurement professionals’ DNA, but you’re a value adder now, remember?
Don’t wait for your ERP implementation. Don’t wait to ‘find the perfect end-to-end solution’. It probably doesn’t exist.
Utilize your digital roadmap & strategy, run gap analyses, request demos with solution providers and choose shortlists of top providers. Be transparent and put your challenges in front of innovative solution providers after you’ve qualified their ability to deliver value. There’s a good chance solution providers will have some answers to the headaches your excel sheets & homegrown solutions are causing, and/or they’ll be willing to work with you in an agile framework to create a solution. Take a chance (not a risk) on startups and growth ventures in the space of procurement tech to run POCs and see what kind of value they can deliver.
What do you have to lose?
Procurement Leaders’ research has shown that “for workflow assignment and supplier relationship management (SRM), more than 60% have no tools or rely primarily on improvised systems using Microsoft Office. For risk management, stakeholder management, category management, and information sharing, that figure rises to more than 70%. Unlike cloud-based technologies, traditional Microsoft Office tools don’t allow real-time collaboration” (Bain & Company 2018).
Don’t allow yourself to get bogged down in excel hell just because ‘that’s the way we’ve always done it’. Beating the paralysis from analysis requires you to adopt & innovate, early & often.
Boston Consulting Group reported in a study of innovative organizations that 83% partner with other companies to drive innovation (BCG). Other studies have suggested that 65% of innovations are sourced through external suppliers & partners (ISM).
Partnering with strong suppliers and collaborators shouldn’t be limited to those suppliers that will directly impact your services and product offerings. Indirect partners that can help your procurement team to be a smarter, more efficient & more sustainable workforce should be taken equally as serious as any suppliers that will directly impact your bottom line. Yes, I’m talking about digital procurement providers. And yes, these collaborators might offer up an alternative framework for working that may differ from your existing processes, or operations. But whoever said that your way was perfect in the first place…? Breaking free from the paralysis by analysis can also require deviation from the existing plan.
We talk about this topic all the time at Kodiak Rating with our team, customers, Kommunity and prospects. The trends point towards one thing, and one thing only:
It’s procurement’s time to shine.
But, procurement organizations need to see the shift themselves and ensure they’re partnering with strong collaborators that can drive innovation within the function. Procurement is going through a transition from a function focused on watching the bottom-line to impacting top-line. That needs to reflect within the organization’s demeanor, leaders, messaging, talent, technology and partners.
You need to be the biggest proponent of the change you want to see in your world. And yes, change requires management in the form of planning and strategy, implementing initiatives, forming task forces, performing due diligence, and all that good stuff. However, change also requires action. The ultimate goal: change before external change forces you to do so.
You’re gonna get push back from internal stakeholders, and likely members of your team as well. Deloitte’s CPO Survey reported that 30% of senior stakeholders don’t prioritize or support a push for the application of digital procurement technology (Deloitte 2018).
To those stakeholders who would rather allow skepticism to overcome change initiatives, I have one simple question…
“What was the #1, best-selling, iPhone app in 2007?”
Answer: the iPhone was released in 2008.
Big change happens quickly, and you don’t want to be sitting around waiting & analyzing. Be bold, think big, but act agile.