Publisher’s Note: In 2019, Ardent Partners is celebrating 10 years of delivering “Research with Results” to Chief Procurement Officers (CPOs) and other readers of this site, including published reports, eBooks, presentations, insights, articles and events. To commemorate the occasion, we are going to reflect on the firm’s first decade by presenting this weekly “throwback” series that will include a blend of top articles from our earlier days on this site. Despite procurement’s recent advances, we believe these articles are as topical and relevant as the day they were published. Enjoy!
Does corporate culture impact user adoption of technology? If so, how?
In a webinar focused on Procurement Technology Adoption held earlier this week (I will post the archived webinar when it becomes available), I was prepared to answer the above question by comparing and contrasting the cultures of two different companies to determine what impact the culture had on technology deployment strategies and results. Given the overall flow and timing of the webinar, we did not get to this question so, I will now share what I had been prepared to discuss.
In the course of my career, I’ve had the great opportunity to advise and consult to some of the largest and most sophisticated procurement departments in the world. Early on, my work was focused on strategic sourcing which then gave way to process design and technology deployment work. These days when my firm does take on a consulting engagement (we’re analysts first), it tends to focus on providing solution selection support (helping companies identify the best-fit technologies) and either strategy consulting or benchmarking projects.
In the early and middle part of the 2000s, I worked very closely with two companies in helping each automate their strategic sourcing processes. These companies were and are the fiercest of industry rivals and have been for a long-time.
Company #1
Large, successful, and disciplined would be the first words that come to mind when thinking about this company that thrives in leveraging new technologies to maintain its competitive advantage. It is the leader in its industry – market share, profits, and profit margins – by a significant margin and it has the reputation for being very aggressive; somewhat paradoxically, the company is also very private and often appears understated in what it says and what it tries to project in the marketplace. Executive management and the company approach, in general, would be described as top-down and authoritative. Investment, which are made frequently, are also made very deliberately; results are process-driven, and strategies and decisions are driven almost solely from the inside.
The corporate culture at this market leader is very strong and the corporate ethic really pervades the company, which has many, many ‘lifers’ (employees who have made and spent their careers at the company)
One such ‘lifer’ is the Chief Procurement Officer, who leads a highly-centralized procurement organization that numbers in the thousands and manages spend in the tens of billions. Because this very well-educated CPO climbed the corporate ladder and rose by merit to the helm of this large team, it was natural for this CPO to adopt the corporate principles and deliberate approach to management and operations. This CPO is also very hands on and fully-engaged.
For members of this procurement team, if something, anything, needs to be done, there is a defined process that already exists and there are training manuals and classes to support that process; there are also designated process experts that can be tapped for support and offer it freely. At this company, the process is what the process is – you follow the process because that is what people do, that is how things are done here; that is how everything is done in procurement and how everything is done across the company as a whole.
The process focus is not a surprise for internal people transferring into procurement, because other groups in the company have the same discipline and orientation. For the staffs at acquired companies, it is made very clear from the outset: get on board or jump ship.
The overall success of the company and its ability and willingness to invest in improving its people and operations to attain or, as in procurement’s case, maintain “Best-in-Class” performance levels has created a level of confidence and/or arrogance. The company is loath to rely on third parties for advice and consulting.
When it comes to technology, across the entire company, there is a strong appetite for investment and usage – this is part of the company’s willingness to make investments that help it maintain its competitive advantage. But, this organization does not shoot from the hip, there is a very deliberate way that they approach new technologies (a defined process!) and there are very stringent functional and technical requirements that in many instances require heavy, heavy customizations – plain vanilla is not the flavor of choice. In some cases, this will mean that their technology providers will have to develop new and unplanned capabilities and sometimes even new products.
This is Company #1.
This article originally published on CPO Rising on September 1, 2011.
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Corporate Culture and its Impact on Technology Adoption (1)
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Corporate Culture and its Impact on Technology Adoption – Results
