On October 4, 2013, Proxima and Investigo gathered various experts in Procurement to discuss the topic: “How does Procurement drive innovation with regards to emerging technologies?”.
Interestingly, the discussion very quickly became more about understanding what the role of a Procurement function should be. Proxima’s Guy Stafford recently wrote an article which asks whether the word procurement is “toxic”, and this became an early theme. Victor Henken, an independent consultant, agrees that “procurement suggests a cost saving mode and doesn’t give the right impression. It also doesn’t go hand in hand with innovation”. So how can Procurement change this perception even though the name is here to stay? Faye Chandler, Head of IT Procurement at the Post Office commented that “procurement needs to be open to innovation in the first place. If we are going to put everything through the sausage machine then nothing will progress”.
It became very clear that procurement’s ability to react is crucial in making innovation a success. Mark Robinson of O2 agrees that “innovation often doesn’t see the light of day because procurement don’t always support new or ‘agile’ approaches”. A clear distinction needs to be made between a commercial decision or running a process, and therefore the route to market that procurement takes.
Giles Clifford of Proxima probed “what is the appropriate stage to become involved?”. Having the time to drive innovation will always be a challenge to most within a procurement organisation. However Ghazala Ilyas stresses “innovative projects are more than being reactive. It’s about business intelligence and taking on an advisory role, having real time market information and taking this to the business.” As with every successful procurement professional, the relationships you have with the right people determine the outcome of this kind of approach. Sean Pepper agrees that it’s about “the right relationships and about listening”. There is no set approach to delivering innovation but without senior relationships and the opportunity to get involved in strategy it is near-on impossible.
So what does innovation mean? “It’s about credibility. The reason procurement is not often involved at the right time is because they are seen as a hurdle: build the credibility and have something useful to say”. Here Kevin Keith of Agrega refers to being the experts, procurement should be the people “in the know and who challenge”. It became evident that procurement needs to understand what the real end customer wants in terms of technology.
Joe Pitman, highlighted that “innovation doesn’t happen all the time”, it has to be the right thing for the business. Thomas Concaig, an independent contractor, suggests that “innovation lies in smaller suppliers”, however engaging these suppliers with larger organisations is often impossible. Fay Chandler rightly suggests that the “public sector is a step ahead of the private sector and has implemented G-Cloud. This enables organisations to take advantage of new technologies”.
A range of ideas were discussed by the group, such as changing traditional category methodologies or incentivising a procurement function in different ways. Sarah English of Proxima commented that “procurement have to be good” to encourage innovation and on this theme the round table remained.
As a function, procurement needs to mature, to be proud of what they do, and build credibility to be able to deliver any kind of innovation effectively.