“When you have the ability to connect data and collaborate with teams, that collective intelligence you’re able to surface at different places is what causes generational change.” – Shachi Rai Gupta, Vice President of Strategy at ORO Labs
In early 2024, Art of Procurement and ORO Labs partnered to conduct a study into the factors – both within and outside of the business – that are making procurement orchestration a top, even urgent, priority for many teams. In a recent podcast episode, my co-host Kelly Barner and I discussed the learnings from that study with Shachi Rai Gupta, Vice President of Strategy at ORO Labs, and Martin Ward, Digital Procurement Transformation at Roche.
Shachi and Martin shared their points of view about the key takeaways from the survey, and explained how procurement can approach orchestration in a way that will set themselves up for long-term success and buy-in from the rest of the business.
Here, in Shachi and Martin’s own words, are some highlights from our conversation:
On how to change negative perceptions about procurement within the business
Shachi:
“There has been a changing mindset that is progressing, but there is more that needs to happen where procurement really needs to see its role as a net positive experience generator. You are not inside the jar looking out; you are outside looking in, and you are looking at it from a customer experience perspective.
All around us in the world, the experience we are having is everything is customized to us. It is easy. It is intuitive. They have visibility. Are we really providing that to our stakeholders? Are we providing that to our business users? Are we providing that to our end users? Because we are life sciences or people buying it off the shelves. Even to our suppliers, I think of our suppliers as our stakeholders as well.”
How to cope with shrinking resources & budget
Shachi:
“All along, procurement has thought that my job is to do landgrab – like I want to have increased influence over spend, increased areas where I am actually touching things – but what we are realizing is that, as our budgets are decreasing, most of my friends, colleagues, and people that I know who are in any industry, their budgets are reducing massively in terms of what kind of operating models they can have.
Your resource base is decreasing, so you really need to look at how to optimize your resources. At the same time, how do you offer a differentiated service model or support model to your different stakeholders? That is where you really get into that self-service – that low-touch, high-touch kind of pathway which is the experience that you are offering to different people.”
Balancing technology and automation with hands-on procurement
Martin:
“It takes multiple dimensions. There’s the tech side. It’s different from the business partnering side and the effectiveness of that. I think one can offset the other. If you are very weak on the tech side, a really good procurement team can make up for that; vice versa as well.
In terms of that balance of control and enablement, I’m with you. I think that we’re moving towards a time where we need to have influence over the entirety of the value chain as opposed to start and stop a specific point and pinch points within there – like the contract or sourcing process, for example.
Part of bringing in orchestration is that it can enable a more seamless journey, from start to finish, where it does not need to be high-touch; where the content is already there.”
Why “pre-work” is key for successful orchestration
Shachi:
“That end-to-end visibility is really on us to create that interconnectivity. That requires a lot of pre-thinking before that. Then, you start segmenting your categories and saying, “What are the places where we really don’t need to intervene but need to lay down the tracks for people to come?”
It doesn’t mean that procurement is letting go of control completely, but there is a sophisticated strategy and prework behind it from a process workflow perspective, from a buying channel perspective. What systems are you leveraging and how are you leveraging? How are you passing information where things are not siloed but they are interconnected?”
You can start orchestration at any maturity level
Shachi:
“Whenever people think about ‘do I need to do orchestration?’ or ‘should I go down that path?’ people have this misconception that you need to be very mature and very innovative to go into that. But, no, it’s a journey.
You can start simple. If you are relying on spreadsheets and emails and all that, that actually is the reason why you should do this pre-exercise. I always say, “Do this pre-exercise of simplifying it and then orchestrating it so that it becomes iterative and the norm, basically.”
How the strategic use of technology enhances orchestration
Martin:
“Orchestration in procurement with the latest tech is relatively recent. It is an emerging technology. Everyone will approach it from different angles.
It is quite important to ask yourself, ‘What are those tools being used for?’
If they are being used for getting requests in, high throughput, really big amounts of data, stuff that is auditable and critical and that needs to be really heavily integrated, it is probably not a great thing to be on those longer term, but if it is to do an evaluation model of our own RFP that is already hosted online, then we shouldn’t stop the procurement manager from using that if they are more comfortable and can get more out of the tools.”
In orchestration, don’t expect to create a B2C experience in a B2B world
Martin:
“We are in a B2B world. It’s never going to be like a B2C experience. I think we are fooling ourselves if we think we can replicate that, but we can try and aim for that, and try to minimize some of the more difficult bits. For example, policy adherence which changes all the time. No one knows what the latest one is available. Is it the right one? It shouldn’t be your job if you are in the business to know that.”
Shachi:
“I am so glad you said that. Every time somebody says, ‘We need an Amazon-like experience,’ I am like, ‘No, we don’t need that.’ We are in a B2B world. We want to aim towards that.
We cannot create an Amazon-like experience because we need to pull in policy and guardrails. It has to be orchestrated. It cannot be free-for-all – ‘Let’s go and buy whatever you feel like.’ That’s why the Amazon-like line doesn’t work for me too much. There are nuances to it. That is how I look at it.”
3 Layers to Procurement Orchestration
Shachi:
“Orchestration is generally misperceived. People think of it as a user experience layer, but that is not what it is. It has got three aspects to it – it has a user experience layer, it has an AI layer or data layer, and it has an API layer.
What it does is it takes your fragmented tech landscape, your different processes, your different teams, and it is able to connect all of them. Again, the word “orchestration” is orchestra. The conductor conducts. At the right time, he will point to the person who needs to play the flute or the person who needs to play the guitar. You are not going to replace the guitarist or the flute player and all that. You are just bringing them in at the right moment.”
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