When procurement goes digital: Day 2 - People
In this five-part series of articles, we’re looking at the often neglected key enablers of a procurement digitalisation journey in the South African context.
Yesterday, we looked at ‘purpose’ as the first neglected enabler. Today, we’re discussing forgotten enabler number two: People.
Neglected enabler of the day: People
At first glance this may not seem correct: implementing a digital procurement solution will surely make the lives of our procurement team a lot easier. Or will it?
Making someone’s life easier implies that one removes some hardships and struggles related to specific areas of their lives. Yet, somehow, it often happens that key hurdles experienced prior to digitalisation don’t find their way into the design of the solution. From a practical point of view, it’s understandable that not all procurement resources will be able to spend all their time in solution-related workshops to provide input, and so the pool of procurement resources are often represented by a group of senior team members who can relay the issues experienced, and who are able to make related decisions in designing the future state of procurement.
The danger with this approach is that we often miss the key step of pre-workshop preparation. Senior team members who represent the procurement department during design phases of software implementations are often no longer involved in the daily grind, and, as a result, it’s highly likely that they aren’t aware of the daily operational problems. Even if they are, they do not prioritise these problems, as the problems don’t directly represent their strategic drivers. Subsequently, the daily operational issues aren’t highlighted and hence not planned or designed for. The net effect? After digitalisation, most of the actual operations are still manual, as the operations are workarounds related to pre-digitalisation, non-optimal processes and systems with the same shortcomings as before. It is therefore critical that resources assigned to a project spend enough time understanding the issues experienced from the operational to strategic level in the procurement function to ensure that they are able to accurately and comprehensively contribute to designing a best-fit solution for their organisation.
Secondly, it is often assumed that the skills and knowledge of the procurement team is at the level it should be and that the only remaining element to making procurement great, is a new system. If this assumption is incorrect, as is often the case, then digitalisation may turn out to be a very expensive disappointment, as systems are there to facilitate helping people apply their knowledge and effort in value-adding activities, instead of spending time on mundane or repetitive tasks. If there are no relevant upskilling activities for procurement team members, there will be no knowledge to generate relevant value. The real danger is that digitalisation merely ends up being makeup on a weathered face.
Another myth about ‘making people’s lives easier’ is that it will mean less work for the procurement department. This may not be the case at all. Depending on the maturity of a procurement environment, digitalisation of a procurement function may bring with it a set of controls and processes not currently adhered to and, as a result, more work than before. The more correct version of the myth? Digitalisation assists to enforce more control and better practices, thereby making it easier for Procurement to effectively perform the specialist activities that it is meant for as opposed to spending most of its efforts performing administrative-related tasks.
Lastly, where people are involved, there is always the monster in the room … change management! Closely linked to upskilling and education of procurement resources, is behavioural change that most likely needs to happen. A system can never fix bad behaviour. This is very much like an old water pipe: a system may plug the existing leaks by applying better controls in processes, but that little bit of additional pressure on people who are used to getting away with bad behaviour will just lead to leaks somewhere else in the process. To embed behavioural improvement and related system adoption in a digitalisation project, change management should take as high a priority as functional design.
Include the correct people with the correct knowledge and understanding in digitalisation project teams.
Don’t just upgrade a system; upgrade the team’s knowledge and capabilities.
Ensure that people change along with new technology. This is crucial to successful digital transformation, so afford it the required attention and effort.
Emile Olckers is a principal consultant at Supply Chain Partner. He applies his time enabling customer procurement and sourcing optimisation and visibility using market leading digital platforms. Able to analyse customer challenges and provide suitable solutions using a combination of technology and process enablers, he is passionate about partnering with customers to deliver on their procurement digitalisation vision .Emile has spent his 18-years in business providing customers with insight and visibility into their inbound supply chain operations and leading the development of pre-populated business intelligence tools for SAP to enable customer visibility in very condensed periods of time. He has been involved with customers spanning multiple sectors: manufacturing, mining, petroleum and chemicals, transportation and airlines.