Simona Pop shares her Big Idea on why procurement technology needs to promote – not obstruct – trust, transparency and common goals.
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We know that many organisations are still mired in decades-old procurement processes. Besides the inherent inefficiency of paper-based workflows, spreadsheets and other manual tools, the real concern lies in their opacity.
One of the things I’ve learned working with various businesses and multiple stakeholders within supply chain and finance is that there is no real B2C/B2B divide. It’s all H2H: human to human. The concept was coined by Bryan Kramer and is the real foundation for every single business relationship we cultivate, internal or external.
Now, human beings are complex creatures, but for all their complexity, they greatly appreciate simplicity. Finding, understanding and communicating the complex in its most simplistic form is the recipe for success when it comes to relationships.
And a more recent way of translating the very complex into simple formats is technology. For many however, the subject of technology is a double-edged sword to be approached with extreme caution. It is seen as both a huge challenge and an opportunity depending on the maturity of the business and its stakeholders. Zooming in on procurement departments in particular, distinct feelings of inertia and unease prevail when it comes to tech.
So many procurement professionals I have sat down with continue to apply traditional tools to the purchase-to-pay process even though better, more efficient alternatives are available to them. The reasons? That mighty focus on cost savings is undermining the VOI (value on investment) and the temptation to keep things as they are because “if it’s not broke, don’t fix it or risk it” is holding organisations in a “vintage” status quo that’s affecting their competitive edge on a daily basis.
The current climate is very much a head in the sand affair. Procurement processes that have been around for the past 10, 20, 30 years are characterised by a great degree of opacity. The reason for this is the historic dependence on paper, manual work and fragmented software systems. This opacity means the relationships between departments/stakeholders within a business are not exactly what you would call fully functional. There was a time when things had to be this way because that was the best there was. That is no longer the case and pretending nothing has changed is far more dangerous than “risking” change.
Always reacting to situations as opposed to being proactive towards challenges is a symptom of traditional process that needs upgrading. The ability to stimulate internal collaboration and valuable relationships is affected by the permanent race against time. There isn’t one finance professional I’ve met who isn’t completely incapacitated by “month end” as a result of delayed purchase approvals or lack of a PO system. Incomplete or delayed information passing between departments opens the door to fraud and perpetuates false data. These draining complexities can be simplified by shining a light on proceedings. That light? Technology.
Technology is an agent of empowerment, not a antagonistic nuisance that must be adopted just because everyone else is doing it, with no real merit of itself. The key advantages technology brings are speed and transparency. Moving the information processed from paper/desktop to cloud/mobile and delivering it in real time as opposed to post-fact is all about simplicity. Eliminating the need for 100 spreadsheets, lengthy manual approval chains and data entry clerks will empower people from the bottom up, the top down and across the board. Accessing objective information and using it in real time will ensure each task is performed to the best standard and in full compliance.
A move towards value-based relationships is already happening as businesses are acknowledging that well-functioning relations are worth as much as good prices or good bonuses. Trust, common values and clear, real-time communication are all hallmarks of good service. Something every business needs to achieve to stay competitive, right?
In conclusion, using technology to empower the talented people across the P2P process is the key to better relationships and ultimately, better business. Accessing data in real time and performing tasks on the go will not only make people better practitioners but better collaborators too. The human-to-human foundation of successful business is based on trust, transparency and common goals. Given the goal of procurement is to make a business successful, promoting trust, efficiency and transparency should be a natural move.
This article was first published on Spend Matters.
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