Romain Rousseau, Director of Axbility Consulting and Pierre Laprée, CEO of Per Angusta, had a unique opportunity to engage with the experts Eric Germa, former CPO of Macys and Jordan Jansen, Brand Ambassador with Market Dojo to talk about the value Procurement can bring to an organization.
In this webinar, they discussed best practices for managing procurement in the new normal, and how best to align the three pillars of procurement to help support business goals.
The three pillars of procurement are people, processes, and technology. Together, this trifecta needs to achieve harmony in order to provide optimal value to organizations. However, there isn’t a tried-and-true formula for achieving the right balance. So, how can you determine which pillar needs to adapt and which needs to be overhauled? Eric, Jordan, Romain and Pierre weigh in with some knowledgeable advice.
Developing a roadmap for your procurement transformation
Any organization that wants to adopt a business transformation strategy must be prepared for change management. As a necessary first step, you need to evaluate and benchmark current metrics. Jordan Jansen, Brand Ambassador with Market Dojo, identifies the initial analysis as a strategic and necessary step. “You have to identify the phases of adoption and you can’t do everything at once. You need to prioritize,” he says. It’s very difficult to change an organization without the essential support and a roadmap to get you from start to finish.
Once you get the necessary assent and participation, you have to evaluate how to achieve the right symmetry.
- Do you upskill people or bring in new talent?
- Do you change processes to fit your technology?
- Do you implement new technology to align with your processes?
Unfortunately, there is no perfect answer to this question. The decisions have to align with each individual organization and business problem. Eric Germa, ex CPO for Macy’s, comments that you need “the right blend of talent, business partnering, and value creation.”
Before you can determine if you need to overhaul your team, it’s essential to see if your people will support your overall vision. “You need to identify your vision and then make sure you have the talent to support that vision,” says Eric. But, that doesn’t mean you should rush to overturn your teams. Eric warns, “talent in procurement in really at a premium and hard to find.”
There is a benefit to modern technology, with options for a best-in-class approach. “It’s interesting. We see a major change in the procurement technology market, the number of independent solutions have exploded. This is interesting because these solutions are a lot more interconnected. It doesn’t require the same process to integrate them,” says Pierre.
Process can be a very challenging element to change in an organization. Once you have achieved adoption of a process, it’s nearly ingrained and difficult to change. But, process offers you an opportunity to optimize at very little cost. Think of Toyota and lean manufacturing and you can see the benefits of a change in process. However, resistance can cost you in the loss of efficiency.
The Right Balance
Determining how to adapt each pillar to achieve better procurement success is a tricky problem. Pierre suggests that having “the ability to assemble both great prerequisites and tools to ensure that you will adapt to the situation will make you look like…an actual business partner.” It’s a delicate balance, but one that can be attainable with the right roadmap.
Be Strategic With Your Approach to Procurement
If recent times have taught us anything, it’s the value of a strategic approach. Whether it involves crisis management or dealing with a new normal, procurement professionals need to be tactical in execution.
Procurement and urgency
If you’re dealing with a crisis, it’s essential that you show immediate value and manage your Procurement Performance. Lags and delays can deplete your value quickly when faced with a time-sensitive situation. Eric offers some advice for managing procurement in a crisis.
- Reduce tailspend.
- Renegotiate large contracts.
- Drive new revenue.
The combined power of these steps will set procurement up for long-term success. But beyond attending to these details, it’s important that you prepare for them in advance. Jordan advises that organizations engage in active forecasting and anticipate problems before their arrival.
When time is of the essence, it’s important to also move beyond the “red tape.” Pierre suggests doing the 80 to show value and then inching your way toward the rest of the 20, while also moving on to the next initiative. “Often, we try to get the 20 percent and we’re beating a dead horse,” he says. “Once you get to 80 percent of value, go on to the next initiative and only worry about getting the remaining 20 percent over time.”
Embracing Procurement Success
Ultimately, the approach you take will define any initiative as a win or a loss. You need to ask the strategic questions, but execute them quickly. Ask yourself these questions about any procurement project.
- How much does it cost?
- How long will it take?
- What is the return I can expect in the short term?
“It’s all about engagement with the business,” says Eric. If you can detail a business impact, you’re more likely to succeed.
Are you intrigued? Click here to download the full replay.
Wish to learn more about our Procurement Performance Management Software? Schedule a free demo with our experts