Editor’s Note: Today’s article is a sample from Ardent Partners’ latest research report, CPO Rising 2018: The Age of Intelligence (click to register and download). Readers can access all of this year’s insights and analysis by clicking here.
Since the dawn of humanity, the debate over whether humans were created or have evolved from less intelligent animals has raged. But melding science, religion, and business can be a risky endeavor, which is perhaps why science and religion make better metaphors for business; and in this particular case, the modern procurement organization. Indeed, the 2016 installment of the CPO Rising report discussed the distinctions and similarities between the art and science of procurement. It sought, among other things, to bridge the gap between the two rather than divide the procurement profession into something that is “either” an art or a science. The truth, the Veritas, is that the modern procurement profession is a little of both. Likewise, in order for a procurement organization to become “intelligent,” which is to say, to digitally transform into an agile, collaborative, predictive, and responsive business unit that is driven by data, it needs to draw on the strengths of both arguments: that Man was created and that Man has evolved.
There are deep distinctions, yes, but also – and importantly– similarities to draw between the Creation / Evolution debate and the debate over how a modern, intelligent procurement department becomes operational. On the one extreme, there are Chief Procurement Officers (CPOs) and other supply management leaders that, after having an epiphany with their executive team regarding the future of their organization, look to intelligent people, processes, and technologies to get them there. They believe that in order to become “intelligent,” they need only to hire tech-savvy Millennials, institute best practices, and adopt and deploy cognitive or intelligent procurement solutions, and fairly quickly they will become a truly intelligent and high-performing procurement organization.
But other CPOs and procurement leaders have a very different perspective. They believe that becoming intelligent does not happen after a single moment of clarity, and especially not overnight; it happens over many months and years of investing in capital resources (including people), relationships, process reengineering and alignment, and business alignment. It is the product of regular performance management (of suppliers as well as practitioners), and knowledge management to ensure that the team has access to the latest and greatest information to help them do as best of a job as they can.
The truth is that CPOs and other business leaders that subscribe to either theory of procurement transformation actually draw from both theories. They may come to the realization of the need to change after a single event or after a series of events. They may hire strategically, and hire to achieve the right mix of skillsets, including data analysts and scientists, liberal arts majors, and those with MBAs. But, they may also invest in continuous training and long-term professional development for their staff in order to achieve that mix. These CPOs are keen to align business processes to existing technology solutions; they also envision how investing in automated and intelligent procurement solutions would enable them to reengineer and streamline existing processes for faster, more
efficient workflows.
Creationists and evolutionists / Darwinists would probably look upon knowledge management and performance management in an equally favorable light. No one likes disorganization, inefficiency, and poor performance, whether they believe that the best business teams are built or evolve. Someone somewhere knows how things work and what the best practices are for executing upon a task, interacting with a supplier, or wielding a business tool. Logically, data and information have to be created before they can evolve. And data and information that do not evolve become obsolete very quickly. And so, in an almost poetic way, the existence and utility of knowledge are co-dependent on creationism and evolutionism. It is not a binary choice. And this knowledge becomes increasingly valuable as time passes, appreciating in lessons learned (by experience or observation) and changing as needed. Thus, it is in everyone’s best interests to ensure that knowledge created and knowledge evolved is knowledge retained; and that it is scalable so that it becomes Gospel across an organization.
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