In my last two articles (here and here) I’ve been talking about the need for Procurement to think about how we can move beyond our historical transactional role and embrace approaches to help drive competitive advantage and real value for our organisations.
With the start of the Formula 1 motor racing season recently, my thoughts turned to speed. I’m not a “petrolhead” (my wife has always been more interested in F1 than me), but the constant cycle of improvement and innovation in the sport is fascinating, all designed to make the cars go faster and improve the chances of winning.
It’s not just the cars themselves either. The ability of the pit teams to change a tyre now in under 2 seconds is just ridiculous! Not long ago, 4 seconds was seen as pretty rapid – now that would be a major failure. What is also particularly interesting given the topic of our last article is that much of the innovation which led to this improvement came from close collaboration between the teams and their supply chains.
So, what should “speed” mean for Procurement leaders, and why is it so important for us today, as well as for Ferrari and McLaren?
I’d suggest that “speed” has both internal and external dimensions. Internally, we have to make sure we are not a bottleneck or a blocker to our own business and our colleagues. The days of taking days or weeks for the purchasing team to process a requisition or purchase order are long-gone in most organisations, thank goodness. But our users want faster and faster routes by which they can obtain what they need from third parties to meet their goals. And when they need help, they want an instant response – hence the growth in Procurement “chatbots” and AI-driven digital assistants we’re seeing coming into the Procurement technology world.
While we’re talking technology, speed is also an issue when we are talking new systems or platforms. Again, the days of year-long implementations should be just a memory. Our younger colleagues, familiar with the world of instant apps, don’t understand why technology shouldn’t be available now – and without any need for training, of course, as it should all be completely intuitive! While that might be too much to ask for a full source-to-pay platform, for example, it’s worth considering the speed angle here as well.
Just this month, Ivalua announced a new package that allows customers to fully deploy their highly regarded procure-to-pay solution in 8-12 weeks. It offers the full capabilities and extensibility of the Ivalua platform and should release a rapid ROI for customers. That’s a great example of how Procurement solution providers are supporting Procurement teams to be faster and more effective, without sacrificing robust capabilities or the flexibility to grow over time.
Our users and indeed our own teams also want speed in terms of rapid access to data and information. The Formula 1 team can see in real time, second by second, exactly how the tyres are gripping the track and what that means to lap times. But in business, too often we’re still having to build new spreadsheets or models to answer predictable questions. We shouldn’t have to wait months to get the latest business unit spend data or have to work for days when the CFO asks us to produce a report on supplier performance in one of our key categories.
Then we come to the “need for speed” when we interface with suppliers. Starting at the beginning, we need to consider this when we’re identifying new suppliers, carrying out due diligence on those firms, engaging, onboarding and contracting with them. Our internal stakeholders care about this too, as these new suppliers may well be critical to revenue growth or other important initiatives. It was interesting to see this aspect highlighted too in the Ivalua rapid deployment announcement, which stressed how easy and flexible (and free!) the platform is for suppliers.
Whether a supplier is new or not, if they come into the “strategic” classification for us, then we are also likely to want to work with them at pace when it comes to collaborative activities. We talked about this issue in our last article in terms of driving revenue growth, and speed certainly comes into play here.
If we are working with a supplier to improve an existing or launch a new product, then speed is of the essence. Our competitors may well be thinking in similar ways, so speed to market for our products is often a vital differentiator. Being able to manage the activities between suppliers and our own organisation in a structured project management sense is key, as is the ability to share information, documents or plans easily and securely.
Having decided to feature this “speed” theme, and started writing this article, I then discovered that coincidentally Ivalua recently held a roundtable with Mark Gallagher, who worked in and around Formula 1 for many years. Great minds etc… You can read more about that session here. And don’t forget that the Ivalua NOW event is coming soon to the Louvre in Paris. The themes we’ve been discussing around Procurement’s role in driving value, including collaboration, innovation and speed, will be at the heart of that event, and you can still register here.
Author: Peter Smith, Managing Director at Procurement Excellence Ltd. Until recently also Managing Editor, Spend Matters UK/Europe.
©Peter Smith 2019