Procurement in a Post-Pandemic World
When early reports of the spread of Covid-19 started to migrate from the backwaters of the local news streams to the front page of global news and pride of place on our multiple screens. It would be fair to assume that most people’s initial reaction took a more personal perspective. Firstly, an understandable sense of anxiety and basic survival: ‘Will this affect me?’ ‘Are my family at risk’? Then the questions changed to: ‘How long will it last?’ ‘Will I be able to keep working?” “Will my company survive?” etc.
Here in Australia, we have been most fortunate, in as much as the death rate (compared to many other countries) is thankfully much lower than it could have been. However, the long-term effects of unemployment, shrinking markets, reduced opportunities and the potential limitations imposed by the differing status of various trading partners around the world are only just being modelled and analysed, let alone fully understood.
The transformation stage of lock-down means that the ‘new-normal’ hasn’t truly arrived yet. We are still in a state of flux and those businesses who did not have a global pandemic risk mitigation strategy (the majority of us?) are still working through the options and variables. That being said, now would seem to be the perfect time to look at what the role of procurement could or perhaps more importantly should be in the revised future we will find ourselves in.
Perhaps first, it might be useful to evaluate where procurement was prior to the outbreak. Well, that in itself is not an easy question to answer. Not least because procurement has evolved in different directions and at differing speeds. The original purchasing and purely transactional procurement function still exist in many businesses – particularly those where the function resides in the misty depths of the finance department.
More adept and advanced businesses (or perhaps more importantly the more adept and advanced managers) have migrated to a more integrated procurement model. One that embraces the broader concepts and technologies available, whilst still being potentially perceived as a sideshow to the main event.
It would be fair to say that only a few procurement operations are fully absorbed into businesses or organisations at a truly senior strategic level. Enabling them to be able to demonstrate the true width, breadth & depth of value and realisable potential that procurement can bring.
The age-old perception of procurement as either the ‘Sales Prevention Dept’, the ‘Cost-Cutters/Hatchet Gang’, the ‘Negotiators’ or a tetra-headed amalgam of all three has prevented procurement from being able to contribute on a far more holistic level – at least up until now!
However, whilst fully recognising that this could sound trite given the life-changing impact of this (hopefully) unique occurrence. The new-normal should enable us to at least be able to view life and therefore business through a new and improved lens. Behaviours may well be different going forward, not least demonstrated by the relative ease with which people shifted to working from home. This has proved to be a blessing for some (not all, I grant you). Businesses have seen the potential to reduce office overheads by reducing the office space required (as opposed to having to reduce overheads in the more conventional way – i.e. redundancy). Many workers have shown a ready willingness to avoid the early morning commute and who is to say that this won’t become something that procurement talent will demand (i.e. the option to home-office) when being pursued by businesses for new roles in the future.
Procurement can be done anywhere, the critical components required for a highly functional team reside within the individuals and not necessarily within the office space they inhabit. That being said, a disparate and disconnected team can make a mess of any situation, be it at home or in the office. Therefore, the calibre of procurement management talent must be addressed.
It is not enough to be a ‘tough negotiator’, that is a limited and limiting position – unless you only have to do a one-off deal where a win-lose position is completely and utterly acceptable with no potential negative impact. Which in itself is as rare as a marketing team’s ability to stick to budget! Therefore, procurement teams, managers, CPO’s, as well as their CFO’s & CEO’s must seek a more unified and realistic way of working.
So, what must be done? There needs to be a significant re-evaluation of the procurement function and the relative competencies required to deliver long-lasting and significant benefits to companies and organisations as a whole. The skills required by procurement need to expand far beyond negotiation 101. Communication, empathy, strategy, productivity and influence are key areas which need to be adopted and/or expanded upon.
Those business leaders in the vanguard that welcome a more holistic role for procurement will be responsible for their companies being best placed to create new value in a new environment. The quality of supply chain relationships and not the one-dimensional clunkiness of the merely transactional will make a big difference when the new-normal genuinely settles into place.
In summary, the last few months have been remarkable, disturbing, challenging and in almost everyone’s case life-changing or even sadly life ending. The future is of course, unpredictable and no doubt there will be many more twists and turns. The only constant in our lives is perpetual change, irrespective of how much we try and cling to routine and rigid process.
Therefore, it can only be hoped that when the clouds of doubt lift, we will have found an enhanced set of perspectives which will enable us to recognise and cherish that which we hold dear. In addition, from a commercial and professional position, we will be armed with a refreshed and upgraded mindset that will empower us (and our teams, colleagues, clients & suppliers) to make better decisions, more frequently, generating greater value from a far more holistic vantage point.
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