There is no profession where a true master tradesman intentionally lays aside the core tools and equipment of their craft – skill, creativity, and dedication cannot replace them.
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.” 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.
Procurement 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-five 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. Procurement 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 procurement solutions today have advanced significantly since the early days and come much closer to modeling procurement’s common processes and supporting their desired outcomes.
It is important to consider the organizational mindset for action and investment (i.e. risk) because procurement organizations, as a whole, and Chief Procurement Officers, in particular, frequently find themselves in the challenging position of having to improve their performance without an ability to increase their current stable of resources. The ability to scale processes and expertise across a growing spend portfolio is valuable, if not critical, to the procurement teams seeking to expand their influence and impact. Technology, when it is well-deployed and used proficiently, offers a multiplier effect on a procurement team’s efforts and remains a key factor in optimizing operations and performance. Over the last decade, supply management tools have become more user-friendly, accessible, and easily integrated with the enterprise’s technology infrastructure. As a result, their level of usage is increasing, albeit slowly. In turn, users are driving more volume and ultimately more value from them. Digital, automated tools have enabled fewer hands to transact greater volumes of tactical work, which has allowed CPOs and teams to shift their focus to the strategic parts of the business, like relationship-building and long-term planning. They have also helped practitioners and leaders to extract more value out of their processes by capturing and managing procurement data and converting it into intelligence; and then leveraging that intelligence to make faster, more informed decisions across the source-to-settle process.
The successful users of procurement solutions prove year-in and year-out the value that technology can play in helping scale a procurement operation and maximize its impact and performance. Yet, 25 years after the first procurement automation solutions were brought to market, a fully-automated procurement department remains the exception and not the rule. But, that has started to change. That is going to change. It is inevitable!
RELATED RESEARCH AND ONLINE EVENTS
WEBINAR – Proactive Procurement: The CPO’s Five Keys to Success
WEBINAR – A P2P Technology Buyer’s Guide
MUST READ eBOOK – The AP Metrics that Matter in 2021
Tagged in: Chief Procurement Officer, CPO, CPO Shop Talk, Technology
