This Week in Procurement

TWIP: Perspective, What is it Good For?

Written by Philip Ideson

 

The Economist is not just for business nerds; it is for us procurement nerds, too! Like fellow digitalist and procurement progressive Bertrand Maltaverne, I’ve been reading and reflecting on the most recent special report on Artificial Intelligence (AI). (GrAIt expectations)

What struck me about this collection of pieces is how it forced me to consider tough questions regarding the future of procurement and our role in our enterprises.

Making Choices

Do I blindly celebrate the arrival of these technologies? Do I bury my head in the sand and “just do my job”? Do I shift my perspective and own the inevitable (with “all its perfect imperfections”)?

General news coverage and discussion of AI paints it as the start of the future we’ve all been waiting for. I am sure there is much to be excited about. I am equally confident that there is just as much to be apprehensive or at least a bit wary about.

How much do I want to learn about the technical or operational details of AI? I think a bunch.

The proliferation of cloud delivery models; an increased reliance on supply partners for the fulfillment of products; and workforce related capabilities have lured procurement into a false sense of security. What I see as, at best short-sighted, at worst an abdication of responsibility, is reinforced by an increased focus on simple collaboration with suppliers to achieve objectives. Instead, I think it critical that procurement dance with its suppliers, designing strategies and prescribing tactics in a robust partnership.

“Why worry how the supplier is going to deliver? As long as they are successful, they have done their job and we have done ours.”

This is the skipper’s attitude in the clip I shared at the top of this letter. Full steam ahead… doing his job (arrogantly and self-satisfied)…no sense of context…a willfully narrow view that blinds him the broader, comprehensive picture (and the deadly rocks).

The value of AI is in reasoning, analysis, and decision making – not execution. Procurement is wanting a greater understanding of the logic underlying AI technology if we are to fulfill our responsibility to the long term health of our enterprises. We are the lighthouse…protecting the sailor from doom…we are the stalwart, constant steward of our organization’s mission…relaxed and almost offhandedly illuminating the safest path around the dangerous shoals.

For years now, procurement has been the guardian of process in most categories, often foregoing category expertise and decision making to internal stakeholders. If we own the inevitable and level up our knowledge relative to AI, it will have a corresponding effect on our role in the decision making processes. This transition will be easier in some categories (and with some stakeholders) than others. I have no doubt that it will be a rocky road. And we are catalysts: we persevere. We forge ahead ever mindful of our mission and our centrality of our efforts to success of our firms.

Leaving a Mark

Focusing on something new – like AI for instance – may change how we see something that has been an assumed part of our world for a long time.

The Economist’s AI special report includes one piece that ends with a challenge (and a warning?):

“Janus, the Roman god, contained both beginnings and endings within him. That duality characterizes AI, too. It will put an end to traditional ways of doing things and start a new era for business and for the world at large. It will be pervasive, devastating and exhilarating all at the same time. Look ahead.”

For everything we gain, something must be given up. In some cases this will be a deliberate trade-off. For example, in order to appreciate the full benefits of AI, all non-digital processes and transactions must be eradicated. In other cases, the end of an era may be more of a fading away than an abrupt disappearance. In either event, the future is here and “I’ve a feeling we’re not in Kansas anymore.”

I imagine we will all notice the shifts, marking them in our own way – some with sadness, some with joy. Whatever my relationship to the transforming environment, I will be conscious not to let my emotional attachments alter my commitment to the evolution of our profession nor my enthusiastic embrace of the unknown (at least to me).

Generating Fulfillment

Some questions to ponder:

  • Is my role going to exist in five years? In ten years?
  • How am I moving with AI?
  • What part of procurement’s (and my) role or processes would NOT be worth trading in for an AI app? Why?
  • Do I see the world as Captain Hancock or the tender of the Lighthouse?
  • Do I move as the captain or the lighthouse guy? Is that consistent with how I see the world?

Being a Catalyst

If you come across an article, whitepaper, video or podcast that you would like to share with your fellow catalysts, please send a quick email with the details. I read every email and am eager to read yours.

This Week in Procurement

The Five Factors That Shape How We Buy | Jonathan O’Brien, Positive Purchasing

CIPS Top 10 Procurement Strategies | Supply Chain Digital

Supplier Relationship & Value Management: The Five Programme Killers, and How to Overcome Them | David Atkinson, Four Pillars Consulting

Supplier Incentives are a Great Procurement Tool but Beware of “Backfiring Bonuses!” | Kate Vitasek, University of Tennessee & Vested

This Week @ AOP

This week’s AOP podcast was recorded at the SIG Spring Summit in Washington DC, and features Danny Ertel, founding partner at Vantage Partners. Danny’s practice focuses on helping buyers and providers of services enter into, manage, and when necessary, remediate their relationships.

Danny is a lawyer by training. Prior to founding Vantage Partners, he served in a number of high profile roles including as a law clerk to Justice Blackmun on the U.S. Supreme Court and as a Senior Researcher at the Harvard Negotiation Project. Danny has co-authored four books, including “Getting Ready to Negotiate – The Getting to Yes Workbook” with Roger Fisher, and he is frequently cited in publications such as The Economist and Harvard Business Review.

I have followed Danny’s work for a long time.  He first came to my attention as a thought leader and subject matter expert when while I was a Category Manager for Outsourcing & Offshoring, and I am delighted to welcome him to the show. We focused our conversation on ways to turn around difficult relationships, both with suppliers and internal stakeholders.

Listen in to the show, here.

Also playing this week on the AOP Network:

About the author

Philip Ideson

Philip Ideson is passionate about the role that procurement professionals and leaders can plan in creating competitive advantage for their organizations in ways that go beyond the traditional value proposition.

Philip founded Art of Procurement as a way for the procurement community to learn from each other, increasing the impact they have on their organizations. In 2017, he co-founded Palambridge, a virtual platform of procurement experts, technology, and intelligence. Palambridge provides a broad range of flexible procurement solutions, available on-demand.

Prior to Art of Procurement and Palambridge, Philip enjoyed a career that spanned the procurement value chain, working across three continents for organizations such as Accenture, Procurian, Ally Financial, Pfizer and Ford Motor Company.