Plenty organisations talk about creating an agile procurement team. However, few actually put the qualities in place to increase their agility.
I recently attended The Hackett Group’s 2016 ‘European Best Practices Conference’ in London, where Nic Walden, Senior Procurement Advisor, led a Procurement workshop on creating agility.
Speaking to the 40 or so procurement leaders in the room, Nic noted that increasingly agility is the defining trait of world-class procurement teams, both today and in future.
“More agile functions will be better positioned to respond to complex business problems. They can make and implement important decisions quickly, respond rapidly to changes in business demands or priorities, and maintain or improve cost under volatile business conditions”, explained Nic.
But how do you go about developing your team, improve efficiency and move from low to high agility?
Using The Hackett Group’s model, Nic divided the qualities that contribute to agility into three categories:
- Adaptive Organisation
- Information Centricity
- Agile Service Execution
1) Is Your Team Adaptive?
Perhaps most importantly, an agile team must be an adaptive one. There are several ways to achieve this within your organisation:
With mobility, cloud, artificial intelligence, and supplier networks accelerating at an unprecedented rate, Nic urged workshop participants: “Even if you are not a technologist, it is never too late to become one.”
For example, what are these new technologies? And how might we apply them to create value for our teams and business?
Are you continuously transforming your team’s capabilities to ensure they’re keeping pace with the evolution of the business? To be sustainable, change management should be embedded in your team with the opportunities to continuously upgrade, learn new skills and employ new capabilities.
Change your Strategies
Top management looks to procurement teams to help the business execute purchasing strategies more successfully. In turn, this enables the business to become more agile and innovative.
There is no need to stick to traditional approaches when considering how best to include fresh thinking and new idea generation in your supply base. Leadership teams should make quick decisions, be calculated when it comes to risk taking, and seize opportunities to think and act differently.
Adapt to your Talent
The Millennial Generation represents one of the greatest potential challenges to managing and adapting to talent in the next year or two.
Surveys tell us Millennials are likely to remain in a job for three years or fewer. Training strategies need to be modernised to reflect this accelerated reality, as well as changing learning styles and preferences. Strategies like 70-20-10 that get people up to speed faster and the use of more interactive, workshop and team based formats should be preferred.
The pace at which open positions can be filled affects operational agility, as does the efficiency of your organisation’s on-boarding process.
Given that staff turnover can be high, as in the case of Millennials, it’s crucial to save time here in order to maximise the contributions employees can make to the business.
2) Is information, knowledge and intelligence centric to all your team does?
Perhaps the greatest opportunity remains for many organisations to leverage information to enhance decision making. This opportunity can be looked at much broader than only historic spend data.
Is your team able to navigate information effectively? Do you have the insight to take necessary decisions quickly?
Invest in the right technology
Nic highlighted how “world-class procurement organisations spend 23 per cent more on technology per FTE, and invest a greater proportion of their budget than the peer group on systems and tools to enable analytics capability.”
The right technology, implemented correctly and consistently across teams, is worth the investment.
Know your stakeholders
Make it a priority to engage with and meet your key stakeholders in order to understand their needs, the problems they face and therefore the data needed to solve these problems.
Decision-making should be based on actual information and KPIs tracking value delivery mutually aligned across your team and stakeholders.
Harness the Value of Big Data
It all starts at quality data. Big Data has the potential to transform analytics with real-time intelligence. Procurement leaders are realising that higher-quality information can help them drive greater business value.
Big Data has been a game changer when it comes to customer analytics, offering an unprecedented ability to quickly model massive volumes of structured and unstructured data from multiple sources.
Enhanced and more granular demand sensing and forecast accuracy are obvious examples for procurement and supply chain teams.
Automate Your Reporting
Adopting automated reporting and dashboards helps to streamline information, saves your team time and significantly reduces human error.
Real time reporting allows for speedier, pro-active decision making which will help your organisation to quickly achieve strategic alignment. What’s not to love?
3) Does your team execute service in a responsive, customer centric and agile way?
In an agile team, Nic notes that talent is “empowered, accountable and incentivised to focus single-mindedly on the customer – the internal stakeholder.”
Use Focus Groups To Prioritise
Set up focus groups to provide “voice of the customer” recommendations into what really matters. Your team’s product and service offerings should be designed from the outside in, beginning with the customer experience.
What outcomes or challenges will deliver optimum value? New innovations that your team seeks to implement should be driven as a result of customer and stakeholder feedback.
Try to create an end-to-end customer experience that cuts across multiple procurement (and sometimes other function) processes.
From the beginning, engage and involve the key players (ex. legal, finance, R&D, etc) in the processes that affect the customer experience.