[Editor’s note: I will be attending IBM Empower 2015 in San Diego this week, hosting a similar CPO panel as the one below, among other activities. If you are at the conference and want to connect, drop me a note.]
Over the past several months, Ardent Partners and IBM-Emptoris have worked to bring together several best-in-class chief procurement officers around specific themes with the express aim of garnering the best ideas, strategies, and practices that these industry-renowned experts use to drive top-flight results at their respective enterprises. Each roundtable is conducted via phone, recorded, and provided as a podcast for listeners to take advantage of the insights.
The second roundtable in the series of three focused on how procurement can best tie into the enterprise’s business results and included Chris Shanahan, vice president of procurement and Becton, Dickinson, and Company, who has been responsible for global procurement operations since 2005; Bill McNally, assistant administrator for procurement and deputy chief acquisition officer at NASA, who directs procurement across the entire space agency; and, lastly, Dan Carrell, vice president of integrated supply chain, global operations, and client service procurement at IBM, who manages contracts across the company totaling $20 billion of spend.
One of the topics the panelists touched on was the need for agility and innovation in procurement operations. Ardent over the past few years has found this same reality, noting that high-performing procurement teams increasingly find themselves needing to make quick decisions as well as constantly innovate in order to stay ahead of the competition.
IBM’s Global Agility and Supplier Network
For IBM’s Carrell, one way the focus on agility has taken shape is a position called “Procurement Brand Manager” that works with the various business groups inside the company. These brand managers attend the staff meetings of the business unit they are assigned to, as well as strategy sessions, and act as the representative of procurement in those meetings. This allows Carrell’s team to more effectively align procurement with enterprise objectives through getting interjected into the discussion much earlier than procurement normally would be.
On the innovation front, Carrell and IBM hosted several different “Supplier Think Tank” sessions around the world; Carrell said they brought in key suppliers in several major countries and discussed how best to partner—suppliers and IBM stakeholders— to drive growth in major company objectives. In this way, Carrell is able to leverage IBM’s supplier community in an agile fashion to drive greater internal innovation from external stakeholders that are invested in IBM’s continued success.
Becton, Dickinson and Innovative Agility
Shanahan, of Becton, Dickinson, emphasizes agility in the realm of ensuring that their parent company can integrate well with new acquisition CareFusion in such a way that systems are user friendly across the board. This also includes looking into process changes that allow procurement to mesh with enterprise objectives, as well as continue having the capability required to do its job in the first place. This blend of technology and process focus is what, for Shanahan, will allow the procurement team to remain of strategic importance to the enterprise at large.
Like IBM’s Carrell, Shanahan also takes a hard look at what suppliers can offer on the innovation front. At Becton, Dickinson, Shanahan said that he has had a few key suppliers come in and work with internal research and development to look at how they can drive improvement in products. Shanahan also plans, as the integration with CareFusion moves along, to stand up a dedicated team for supplier development and supplier innovation.
NASA and the Final Agility Frontier
Given the way NASA operates, McNally says that much of the agility in the space agency comes from process simplification in the way contracts are awarded. This process has been much simplified in recent years, and McNally and his team are constantly looking for new ways to make the contracting process even more streamlined. For that matter, they have also tried to leverage small business innovation in the research program, which has resulted in NASA providing inroads for suppliers that have never done business with the federal government before. This has resulted in an agile supplier base that nevertheless fuels many of the innovative programs NASA is responsible for.
Final Thoughts
An agile procurement organization is, in the modern business environment, a more effective one. Agility in this context means the procurement department is able to react quickly to market forces and leverage the supplier base to drive higher business results. In point of fact, agile procurement functions also focus more on innovation from all corners—not just the systems developed internally, but also the ones brought in via interaction with suppliers and other external stakeholders. That is truly what will drive high performance for procurement departments both large and small.
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