At Ariba LIVE we have been asking the attendees if they see Procurement as an Art or a Science. So far the answers are somewhat divided. Some of the responses give us insights into the way procurement people see their jobs, and the changing nature of procurement.
It's science: you do an experiment, see what works and then learn from it. This was one response, which reminded me of Isaac Newton chasing down the laws of the universe by running controlled experiments (including once sticking pins into his eyes). What is the optimal number of suppliers to invite to an RFP? Should a start price be included in an auction? The feeling of this delegate was that procurement runs according to observable rules. Discipline, repeatability and learning form your mistakes are the order of the day.
It's all about data : was a sentiment expressed by two attendees who also leaned towards the science side. They said that getting good usage data for hard-to-manage categories was crucial. Sometimes procurement professionals have to be sleuths at tracking down actual usage metrics from obscure systems. For example, when putting together an RFP for security services, just how many call-outs a month is typical? What is the square footage of the buildings in scope? The better the data we can give suppliers, the better they can respond to us.
It's like Einstein, breaking all the rules: Sometimes in procurement we have to go against accepted thinking. What worked in the past isn't a reliable indicator of the future in a world of changing demographics, technology, geopolitics and even climate. That's why evergreen contracts are so dangerous. Maybe, like Einstein, you need to say that although the existing framework has worked for a long, long time, its time to change it. Let's not buy this, let's outsource it, buy it on consignment, eliminate the distributor. Do we even need it at all any more?
The uncertainty principle Just as Heisenberg proclaimed that some aspects of a particle are unknowable, one attendee characterised her buying efforts as often incorporating "known uncertainty". There is a temptation to overdo the research and delay, sometimes acknowledging that you can not know everything is a viable approach. Just press "Launch" on that RFP!
The other half of our sample leaned towards the artistic side.
Procurement is all about people The outcome of a procurement processes might well be a change in supplier. How will you communicate that, and deal with leakage. How will people react? Will there be cultural issues to overcome. Science won't solve these problems.
"We have to learn to cook together" This was how one delegate put it: "you have to know your suppliers' business, how they make money, get into their kitchen and learn to cook together" The key insight here is that only by understanding how the suppliers' business actually works can you come up with a win-win for you both.
"Sometimes it just feels like Finger Painting" Great art takes many forms, the photographic likenesses of Florentine portraiture are very different from a Jackson Pollock, or the breathless enthusiasm of your four-year-old presenting you with a card with stuck-on pasta shapes. Not all procurement activities are going to go through the same process, and there is a danger of "over-templating" and ending up with a process that doesn't fit; or over complicating when the correct approach is to just get the quote off your desk.
All about the power of persuasion Procurement is about change, and persuading people to adopt change. Whether that is done through incentives, threats, eloquence or passion: what could me more artistic than that?