The makeup of the procurement workforce is changing.
Part of this is demographic. As Baby Boomers retire, they are being replaced by Millenials and, soon, Gen Z. The intergenerational friction associated with this transition is no different in purchasing than it is anywhere else.
There is also the phenomenon in which people from different functional backgrounds are joining procurement departments.
“Instead, the challenge of managing the new procurement workforce lie in the assimilation of functions now called on to support my efforts in managing the global supply chain. The individuals and groups that join procurement may include planning, transportation and logistics, customer service, operations, and other functions directly or indirectly supporting supply chain operations.”
This is complicated further by the fact that much of procurement ends up decentralized, as divisions and units take acquisition into their own hands, either as part of corporate strategy or just organically.
How do you integrate people with different backgrounds and levels of experience into a culture of procurement? How do you ensure that people behave ethically if they don’t know the ethical issues associated with buying? How do you train them on best practices? What if they don’t like the systems you use?
All of this is taking place against a backdrop of technological disruption. Legacy systems and ERP installations are migrating to the cloud, often with different tools.
Perhaps, the best way to think of this is as a grand opportunity to revisit the business process itself, especially for the cumbersome Request for Proposal process.
The intention of the RFP process, as with all of the business processes in procurement across the acquisition spectrum, is to put in place a protocol that raises the likelihood of obtaining value-for-money in the purchasing decision. By surfacing competition on price and service, buyers can get the best solution for their problems, at the best price, from the right vendors (typically those with the least risk).
However, the process has become so difficult that purchasing departments run this as a pro forma exercise, genuflecting to the compliance department, even as their actions discourage competition on price and service and potentially put their companies at risk.
EdgeworthBox takes tools from financial markets and grafts them on to the traditional RFP, ensuring a compliant approach that surfaces more proposals from suppliers by lowering the frictions that keep them from bidding. Our “network-based sourcing™” approach enables buyers and suppliers to update the way they do business with one another, with a 21st century data-intensive user experience. Reach out to us for a consultation. Or, better yet, sign up for a free trial.
