We recently published my twelfth annual CPO-themed report. Today’s article is part of an ongoing series focused on the report’s key findings. You can get the report here (registration required).
Bridging The Technology Gap
Major technological change does not simply pervade the modern world, it has come to define it. Today’s blistering pace of innovation makes it difficult to predict how citizens and businesses will communicate, collaborate, and transact twenty years from now, much less the tools that they will use to do so. Many find that future, one with uncapped opportunities, to be exciting and compelling. Others are more attuned to the level of uncertainty that exists when looking ahead and the level of fear and trepidation that is generates.
Technology, has always played a pivotal role in advancing society. What has changed over time are the tools, machines, and instruments that come to be defined as “technology.” For example, bridges are not usually at the top of the list when discussing modern technology. Certainly many have complex and intricate construction and engineering requirements; but despite the impressive designs of the Brooklyn and Golden Gates Bridges, there are no TED-talks about them (or any other bridges for that matter).
Today, most bridges only make news when they open or when they fail. But at one point in history, bridges were viewed as a new and innovative technology. Bridges were once a cutting-edge technology and civilization has advanced in no small part because of them. And while this example may be a bridge too far, the overall point is that new technologies are always emerging; and the most successful ones over time are universally adopted and become part of a regular routine, no longer even considered a technology.
Supply management technologies have been successful, but they are not yet routine and they are certainly not universally adopted. During the heady days of the late-1990s to early- 2000s B2B internet craze, supply management technology frequently topped the list of popular, modern technologies and a global revolution seemed imminent. The reality is that most new technology trends fall short of initial expectations and predictions on growth and adoption, and this market was no different. To start, new technology segments are usually created by a group of visionaries who have identified an opportunity or problem and a way for new technology to address it.
Twenty years ago, the lag between the introduction of a compelling new idea or vision and the release of the technology product that enabled it was lengthy. And, there is almost always a gap between what can be imagined and sold and what can actually be built and delivered. Supply management technology fell into this same trap. An amazing vision and opportunity for procurement was not matched by the earliest solutions in the market and the first wave of this industry crashed. It took time, but the solution providers that survived and the new ones that emerged have been able to get the industry back on course.
Although far from perfect, the supply management solutions today have advanced significantly since the early days and come much closer to modeling procurement’s common processes and supporting their desired outcomes. To be sure, the supply management technology industry as a whole has been successful, as evidenced by the large number of procurement transformations that have been heavily enabled, if not driven, by the solutions. This upstart revolution may have faded, but it did not fail. More than any other factor, this industry contributed to the rebirth of the procurement function and helped set it on a new path forward.
The advances of the procurement profession and the rise of the Chief Procurement Officer are among the most notable business achievements of the early 21st Century. And yet, the lack of process automation tools in place at the average procurement organization today represents an organizational blind spot that leaves many procurement departments unnecessarily exposed to problems lurking around the corner with an inability to shift gears in response to new information or demands. It is incumbent upon CPOs to “adjust the mirrors” and pull all the levers that drive productivity and results. They must foster the organizational innovation that is needed to bridge the current technology gap and build agile organizations that are responsive to the changing needs of the business and shifts in supply markets.