2021 was the year of the experience: user experience (UX), customer experience (CX), and supplier experience (SX). Each of them has something different to offer procurement as we strive to strengthen our relationships and partnerships.
Procurement isn’t completely new to the idea that experience is important. We know that we have to examine experiences from the perspective of internal stakeholders and suppliers, and work to make improvements where we can. The problem with the approach we have taken until now is that we look at our existing technologies and processes and try to understand how they contribute to a good or bad experience. Then we tweak individual pain points in the hopes that we will incrementally improve the overall experience.
Procurement typically thinks of experience as a byproduct of everything we do, not the central deliverable. Savings is usually first, or maybe risk mitigation… we don’t consider the overall experience until after many decisions have already been made.
This article was originally released to our AOP Insiders. To subscribe, click here.
What if we were to flip that on its head and invent something entirely new: experiential procurement. Procurement would no longer be a process, a team, or a function – it would be a distinct type of corporate experience. Experiential procurement would create the desired experience for stakeholders and suppliers FIRST and then address objectives like savings, risk mitigation, ESG, etc.
The hardest part of making the switch from experience second to experience first is how procurement approaches our overall strategy and planning. This is a thought process transformation rather than a digital transformation – and it starts with setting a baseline for the current procurement experience.
Baselining the Procurement Experience
Before we can understand the current procurement experience, we have to gather input and feedback from a number of groups – AND YET… experience transformation can not be solely based on fixing existing problems. Doing so will ultimately block us from making the necessary changes at the heart of procurement, and allow too many things to be left ‘as is.’
In other words, if we fix procurement’s most obvious problems, we are probably pouring our energy into symptoms rather than root causes.
The source of any experience lies where leadership priorities meet objectives. Both play a strong role in determining the ‘why’ of the team. Experiential procurement has to be driven by a ‘why’ that ensures all stakeholders (collectively) get what they need in a way that makes them want to come back and do it all again.
However, this does not mean that stakeholders get everything they want… Let’s use Target as an example. I think Target offers a positive customer experience. Their stores are attractive, clean, and conveniently located. They have what I need at a reasonable price (and usually a few things I didn’t have on my list as well!) They are arranged to encourage browsing, and combine brick and mortar with digital very well – making returns, loyalty-based discounts, and self checkout easy for customers.
But consider this – If everyone got everything they wanted from Target, the experience would be worse. Why? Well, first of all, everything would be free. Free is better than reasonably priced, right? Maybe, but it isn’t sustainable. Target would go out of business very quickly.
A closed Target offers a terrible customer experience.
Target’s leadership team and store-level employees manage to balance the customer experience with the natural desire to maximize revenue every day. They know that customers are willing to pay a fair price for goods, and they work to ensure that they give enough goods and services in return that the experience as a whole is a positive one.
It is this kind of balance that will allow procurement to provide an exceptional experience without giving up on savings, or compliance, or supplier performance. If Target can provide a good customer experience while making a profit, procurement can create an exceptional experience while also delivering savings. We just have to alter our thinking to make that experience a priority – and ensure that our customers know we have done it.
The Connection Between Experience and Brand Identity
The first part of creating an experience is establishing a brand – and this is as true for procurement as it is for Target, Chick-fil-A, Starbucks, or Amazon. People enter each engagement or interaction with a certain expectation. The question is are they looking forward to the experience or are they dreading it but moving ahead out of necessity?
Attributes like quality and efficiency don’t count as brand values in the experience paradigm – at least not on their own. There has to be a more personal, or emotional, appeal as well. I recognize that making the case for ‘emotionally appealing’ procurement seems like a stretch, but it is definitely not out of the realm of possibility. For instance, gratitude is an emotion. A procurement organization that is consistently recognized for going the extra mile to help colleagues or support suppliers is offering a good experience. A procurement team that cares more about compliance than convenience is not.
This is where we come back to our priorities… being customer service oriented FIRST and then helping the business or suppliers see the way to savings, lower risk, etc. That is experiential procurement. It shows that procurement’s brand identity and team culture are aligned with the experience they want to create. Having one or two procurement team members that are known for being helpful DESPITE being part of procurement does contribute to a positive brand identity. Unfortunately, it also demonstrates to our stakeholders that these friendly few are outliers. Consistency is the key to experiential procurement.
Who will be the face of the procurement experience?
I’ve already made the point that a good experience has to be personal, but leaving it at that might give the impression that it is just personal for the people having the experience. This is a two-way effort. Someone with the right influence, personality, and/or relationships has to be the face of the procurement experience.
Ideally, this will start with the CPO, but it isn’t a requirement. If someone on the team wants to get out there and evangelize procurement in a way that brings people together willingly, that is the right person for the job. They can serve as a go-between, carrying honest opinions and ideas back and forth from procurement to the business, and always reminding their team that the experience has to come first.
In some cases, the procurement experience will be much longer and more involved than a quick trip to Target. Strong relationships and evangelism can preserve a quality experience even through challenging times. After all, an experience is often a journey, with different phases and focuses.
Mapping the Experiential Procurement Journey
Let’s take the idea of mapping the journey and compare it to a ‘traditional’ procurement journey: strategic sourcing. Picture in your mind your team’s multi-step sourcing process. It probably has process phases, tasks, approval thresholds, and reporting requirements. For the most part, it is focused on action – not experience.
How might you redesign the strategic sourcing process to be experience-first? Well, for one thing, none of the phases would be named after what procurement does or the output. Instead of Project Kick-off, you might have Discovery – and that would include examining how effective incumbent suppliers are to potential value creation opportunities around specifications and requirements.
When we start looking at individual processes from the perspective of the experience or feelings they create, we improve the experience, and we also put our customers’ needs at the center of what we do. You can’t reimagine a process from their perspective without looking at procurement through their eyes – a valuable process in and of itself.
Tactics are the Enemy of Experience
Once procurement starts thinking in terms of experience, we’re always going to have to be on guard to avoid slipping back into our old ways. We can’t emphasize experience in meetings with the business and then return to the status quo once the meeting is over.
Procurement has to keep the customer in mind always. When we start a sourcing project, how does the business see the effort? Who are we doing this work for? How will they react when we share the information we gather? Is there some other offering of value we can add without being asked?
Experiential procurement requires a thought process transformation, and that is true, but ‘muscle memory’ is strong. It may take some time before experiential procurement comes naturally, but we should keep at it – after all, as the experience we provide to the business improves, our experience will change as well, definitely for the better.