… asks Jonathan Dutton FCIPS for Supply Clusters members.
The lessons of the pandemic for procurement
Procurement has had a good pandemic. A new level of engagement with stakeholders, better business alignment and a real sense of urgency developed following the much higher profile for the supply side during the crisis – both publicly (toilet roil shortages, etc) and corporately (business continuity dramas).
The SIX key challenges facing procurement in 2022
So, what does this mean for the future of procurement? Starting now in 2022? And, particularly, how can procurement leverage our PROCUREMENT success this year? The last article, to start 2022, suggested that first, SIX core challenges have to be overcome by CPOs this year:
- Rebalancing cost v risk in overseas sourcing options
- Saving small suppliers
- Managing inflationary times again
- Realigning to new stakeholder needs
- Digitalising procurement properly
- Managing our teams in a new way
New stakeholder needs
A key one of these SIX key challenges facing us in 2022 is that of realigning to new stakeholder needs. Much of our success during the pandemic was the building of stronger stakeholder relations. These were nurtured upon a much greater alignment with their core business needs (speed, a sense of urgency, process short-cuts, enablement not obstruction).
Leveraging this new relationship strength will be key to determining new business priorities in 2022 and, subsequently, new business approaches such as:
- How can we utilise agile procurement approaches to speed up the sourcing (or re-sourcing) process?
- How can we determine which of our sustainable procurement strategies is more important, or more brand-relevant, and therefore more worthy of resources (time, money and effort) than others?
- How can we agree which supply lines are high risk and threaten greater impact than others – so that we can re-source more assuredly?
You might say that ‘stakeholder relations’ are not a ‘new’ challenge for procurement. But stakeholders saw procurement largely in a different light during the (early stages) of the pandemic – urgency, alignment, proactivity. This enlightenment has created the opportunity for stronger relationships which can work more proactively – and this is what is new.
But how can we sustain this progress? How do we keep impatient stakeholders onside? Especially when business returns to a “new normal” and stakeholders facing 9 month go-to-market sourcing exercises say pointedly, “but you did it in days during the crisis!”
Can Agile Procurement form part of the solution?
Stakeholders are immediately attracted to the idea of ‘Agile Procurement’ – it tantalises SPEED.
In other words, it promises accelerated procurement. But agile procurement does more. It is not just about speed. Done well, it offers actually FOUR critical business benefits:
- Responsiveness to changing needs – the procurement process is a journey towards a purchase decision. Needs change, often quickly. Agile helps react to these changes better.
- A voice for the customer – agile prioritises the voice of the customer. Which is often the preoccupation of customer-facing stakeholders.
- Speed of purchase – is much quicker with agile, as it prioritises the project, concertinas process, but does not cut corners.
- Earlier business benefit – the business benefits of any purchase, often outlined in detail in the written business case, are brought into your organisation much earlier than otherwise through AGILE.
Together these four key benefits make a compelling business case for an investment in AGILE PROCUREMENT approaches in themselves.
Yet, for Procurement, the benefit can be huge as well. Simply, these benefits address directly the long-standing angst of many procurement stakeholders – why does take so long? Is it the failure to combat this hard perception that has held procurement back from the C Suite? Can agile procurement approaches break the glass ceiling holding procurement back, and is now the time to grasp the opportunity that the pandemic has given us?
So, agile is not so much just about speed, as many people often think. Nor is it a short-cut, as many people assume – cutting red-tape, compliance, process and due-diligence to save time.
Simply, it fuses the principles of ‘AGILE’ with the procurement process. It brings the key players together for one-time. It defines needs much more closely through collaboration. It concentrates effort and then iterates solutions cross-functionally. It is genuinely customer focused. It ‘tries ‘n’ buys vendors. It works transparently. It decides openly and quickly. And captures early business benefits for doing so.
In this way, AGILE PROCUREMENT is, in fact, a new way to maximise responsiveness to your organisation’s true needs, and how they frequently change, and to react to them in real-time. And, in this way, has the potential to address those long-standing procurement problems – just not on every project; only the right ones.
Agile procurement training OFFER
This year, PASA has a range of expanded offerings to support procurement practitioners who might be keen to explore more about AGILE PROCUREMENT. The foundation Lean Agile Procurement workshop (LAP1) takes just three mornings online with PASA’s agile Coach and explains agile interactively and in a way that is applied directly to your own circumstances in your organisation. The FREE white paper which accompanies the course ‘Agile Procurement Explained’ can be downloaded here
LAP1 course dates run throughout 2022, and have now been successfully run thirteen times in ANZ so far. In addition, the new LAP2 programme covering agile negotiations and agile agreements is set for later in the year, for graduates of LAP1.
Two additional supplementary courses will also be available this year – The BIG ROOM Simulation Workshop and, later in the year, SCRUM for PROCUREMENT™ – a first step on the way to becoming a certified agile SCRUM-MASTER. More details on all these courses are on the PASA AGILE website
SUPPLY CLUSTERS members can now claim the -20% discount reserved for PASA members on the retail cost of these AGILE PROCUREMENT course during 2022 – simply quote “Supply Clusters offer” when booking.
Would your organisation benefit from more agile procurement or, at least, from better stakeholder relations? Can this be the year that Procurement smashes through that glass-ceiling to the C Suite?
Jonathan Dutton FCIPS is the CEO of PASA and an experienced procurement practitioner, manager, consultant and trainer, including for agile procurement, and is also a non-executive at SUPPLY CLUSTERS.
JD Feb 2022