Why Procurement needs stone-age skills to survive in the Digital Age
The last time I really thought about ‘digital’ within procurement was when I was leading the transformation at Centrica. I still smile at the memory of singing “Let’s get Digital” to the tune of Olivia Newton-John’s “Physical” as I recall the excitement of seeing some new tech that could help us create a virtual cross-borders movement, which would accelerate our change and bring people together. It was that perspective – one of “What can digital do for procurement?” – that I took into Henley Business School’s Master Class “Championing Humanity in the Digital Age” last week, as opposed to “the robots are coming” which up until then had felt to me like a bad 80’s sci-fi. Ade McCormack, the first speaker, opened my mind within the first 60 seconds of his presentation and I’ve been thinking ever since.
Ade spoke about the four human business models of all time: Hunter-Gatherers, Domestication of Animals, Industrialisation, and the one we’re just stepping into which he referred to as “The Digital Age” (rather than Industry 4.0). He talked us through these eras from an anthropological view; in other words, how they related to us as humans. For example, as hunter-gatherers we needed our wits about us if we were to find food and stay alive; so to thrive we were mobile and social with work integrated into our lives, and we relied heavily on our innate capability to be creative and aware of a myriad of things going on around us in order to make real-time decisions. Our productivity was output based: if we found food for our family and stayed alive it equalled a good day at the office. Interestingly, despite that being some 12,000 years ago, we haven’t evolved to thrive in the eras that followed.
Today’s corporate world can be the antithesis of the environment we need for many but, in my experience, not so where great procurement is happening. In these environments we align perfectly; our teams are mobile, they engage with stakeholders and suppliers on a daily basis, and work in cross-functional teams fulfilling our need for social interaction. They encourage creativity; allow us to bring our full selves to work, and the autonomy to make real-time decisions. Okay, even in the most advanced teams the latter can be difficult, yet we can –and do – influence them.
What does the Digital Age mean for the future of procurement?
The robots aren’t coming; they’re already here. As are robotic automation, augmentation, virtual reality, drones, driverless cars, block chain, the list goes on. We already have the digital solutions to make the operational and tactical work easier and, with automated negotiation a serious field of research, and Google Duplex able to make dynamic telephone calls, how long will it be until it stretches into the strategic?
Technological advancement is not the only theme of the Digital Age. The rise of the Gig Economy is forecasted. Trust is breaking down, causing some companies to die quickly and a cry for greater transparency in others. Millennials aren’t so focussed on earning wads of cash; they’re more thoughtful and considerate of big issues in the world and are choosing roles that help fulfil a greater sense of purpose in their lives. These themes were echoed by a number of business leaders from different sectors: Jacqueline Davies talked to us about the development of the both Trust Economy and Organisational Consciousness; Mark Cuddigan introduced B Corps who aim to make the triple bottom line a reality as a success measure across the world – a movement that Ella's Kitchen are proud to be a part of; and Will Butler-Adams OBE shared his passion, saying “the world is becoming transparent” and “every CEO should protect the customer experience” rather than focus on the numbers.
As I listened to the speakers at the three-day event, I could easily see the convergence of functions as we know them. If you think about who owns digital strategy, the delineation between the silos are already starting to blur. Will we need a CPO, CIO, and CHRO in the future, or will be a Chief Strategic Resourcing Director whose role is to make the best use of scarce resources in the form of artisan gig workers, robots, and ethical partners? How far off is this strange new world? 10 – 20 years depending on to whom you listen. What we do know for sure is the iPhone was only launched in 2007, and the smartphone is integral to everyone’s daily lives today. Change is upon us and it’s faster than ever.
Imagine a world where the RfP is dead, having been replaced with complex algorithms, a rise in transparency has led to simpler terms of business that are the same for everyone, and block supply chains are the norm. In the Digital Age the lines between work and home are blurred, the majority of any corporate purchasing is carried out at the click of a button on someone’s smart phone, and complex deals are at the heart of businesses following an in-sourcing frenzy; but even here decision-making is automated. There is a call for a more human touch where actual people are providing the services, and cognitive or creative work is key; in the dynamic, maybe even real-time, development of sourcing and relationship management strategies for example. In this fast-paced, ever-changing world where those with highly-developed skills are in demand as part of the gig economy, who do you think will be responsible for this work? Who will be ready to take it on? Business Leaders? Procurement? Androids, maybe? And how would the working environment have changed? Are you physically mobile in your role, or have you been augmented so you can liaise with stakeholders and suppliers using virtual reality from wherever you are? Or perhaps you co-locate near your home in a creative commercial space. Do you need a computer or do your Google lenses present whatever data you need? I don’t know the answers but, as a mother, I do know realities like these are not far away and feel a responsibility to prepare both myself, and the generations to follow.
So what can we do to prepare?
Clearly keeping up to speed with what’s going on across these themes and identifying the new ones to emerge is key, as is developing our soon to be in even more demand soft or human skills. My call to you all is to think about the unique selling point of procurement. What is it we do that adds value and how is that likely to change over time? Whether procurement remains a function or becomes a business process let us become its artisans. Hone your strengths and be sure to develop them in the right environments to enable you to explore your potential. Understand how technology can create value within those organisations, be curious and if you haven’t already, unleash your creativity or learn how to, and finally, focus on refining your ability to build, develop and enhance your relationships with people.
My thanks go out to all of the speakers and attendees that made this event so insightful. And my key take-away? The Digital Age offers us all a chance to thrive, but only if we step up, tune in to, and lead with, our humanity.