Do you need to STOP to get to Procurement X.0?

It's 2023… You've just been listening to someone impossibly glamorous talk about “Procurement 4.0” in some AI enabled future and then the reality hits like a damp flannel because you’d just like people to stop calling you purchasing. Your spend data is a mess, in fact, your data lake is more of a muddy puddle (and it's in good company because the rest of the business's data is a mess too). You've probably bought tools that your team don't use, or they don't work as you expected them to (fingers crossed no one asks about your business case that was at the high end of the optimistic spectrum). Meanwhile the whole macroeconomics of the world have gone to pot and you've just had an email asking you to prepare for the next company reorganisation which came straight after the emails about why your hard won savings are actually cost avoidance and another one about some new (yet unmeasurable) ESG targets.

Sound familiar?

So what do you do? Do you just carry on juggling the balls or spinning the plates and trying to push water uphill?

No. You should just stop and ask whether you need to change direction.

Why?

Well, if you are spending time and money on tools and people while your data is still a muddy puddle then you are completely wasting that time and money because none of it will work.

and

Even if you’ve made a decent effort at sorting your data, if you're making that investment into tools and people without first asking yourself that good old 80/20 question about where you should be putting your resources then the chances are you’re still wasting that time and money

So here's a thought about how to change direction and maybe start to get towards procurement X.0…

1.   Invest, invest and invest again in your data. Change the muddy puddle for structured internal and external market data from which AI tools can give you true insights. I am serious, even if you’re mid implementation, stop and sort the data first because, if you don’t, the tool won’t work.

2.   Use Kraljic (yes Kraljic) to pareto your categories – you can do this in a one day workshop with the team

3.   Invest in the right approach for the 80/20:

- For the non-strategic 80% get it out of your hands and into maximum automation. Even better, don’t waste time and effort re-inventing the wheel, get it done by a BPO partner (there are lots)

- For the strategic 20%, the categories that truly contribute to the delivery of value in your business, equip the team with the skills, tools and data insights to execute complex problem solving and deliver value in a collaborative way with stakeholders and suppliers.

Your thoughts?

Credit for the boot puddle Icon made by Smashicons from @flaticon