Where do you start: technology or organizational change?
I come across companies who think they need to improve their technology (and most often do) but discount the fact that no matter how good the technology they buy, it won't do much good until they change their organization - 'upgrade' their culture/processes/structure/skills/etc.
On the other hand, I see some who use technology to drive the organizational changes.
How do you approach this internally, externally, and with client/vendor settings?
Hi Katalin, as others have said, this is a big question. Great wisdom and advice in the responses so far. I've worked with multiple businesses who've had to answer this question for themselves and seen various approaches. Some observations:
- Start with your business process, not with technology, but be generally aware of the relevant technology. No point working to design a new business process that assumes the availability of enabling technology that isn't (yet) available.
- Some businesses do have to start with a tactical technology investment, eg to be able to properly understand and analyse their spend.
- Be aware of the "hard landscape" eg emerging regulations with which you'll need to comply, or changes in your supply chain that you'll need or want to embrace, eg introduction of blockchain
- Do factor in the DNA of your business: do you have a good track record in selecting best of breed apps and connecting them together to enable your business processes, or are your most successful working with a single vendor / suite approach.
You all have nailed it on the head! As a certified change master focusing on procurement, technology is the proverbial bow on the package. Define your goals and metrics, build processes and governance rules, build your teams to execute the plan and then provide the "tools" to make them efficient and strategic. I understand that there are issues with sunsetting software, in house made data bases and poorly implemented software that is adding to inefficiencies but, if you address the strategy first, maximize your most important assets (PEOPLE) then, the rest will follow suit.
Hi Katalin - The intent to change the organizational structure always has an underlying behavior aspect to it. Most organizations want to introduce in a culture of new behavior that should make it simple for the workforce to hop on the technology bandwagon. Author and Futurist Jacob Morgan wrote in one of this articles - "The real answer is somewhere in the middle--in order to truly be successful and adopt lasting change and efficiency, organizations need to focus on changing behavior and technology at the same time. You may want to change your employees' behavior so they collaborate more, but if you don't have the tools in place for them to actually collaborate, you can't drive that behavior. On the flip side, just giving your employees collaboration tools and software without any instruction or guidance won't be successful either."
Huge question. Everyone in the UK public sector is 'digitally transforming' right now. The test for me is whether the IT function is leading, or whether the business is leading the change. Technology must be an enabler, not the reason for change. The two are so intertwined that this is often a difficult differentiation, but IT is not there to serve IT, it is there to enable the business to deliver. In that sense, procurement and IT are very similar, neither function can exist without a business reason - so focus on that, not tech.
That's a good question Katalin Brennan. I have seen people using both methods; some changes organisational factors and others changes the technology that they are using. But I think it will be great to redress and streamline business processes first and then to choose suitable technologies in-order to properly assist those business processes. We should first deal with internal settings.
Start with objectives, then business process, then organization, then technology in that order.
This is a great question. While technology often looks like the easiest avenue to a transformation, that kind of thinking tends to leave organizations struggling with ill-prepared teams and inefficient processes. Enthusiasm and capabilities don't always go hand-in-hand.
Every company's priorities will differ, but I think the cultural change you allude to is almost always a necessary first step. Leaders need to get their teams accustomed to the idea of transformation before they can count on them to deliver. Oftentimes, this means clearing up misconceptions around the term itself. Transformation, leaders should emphasize, is never as simple as updating a process or implementing a tool. Rather, it's about internalizing a thirst for continuous change and tirelessly pursuing Procurement's full potential.
Our team recently explored this idea in our whitepaper on Procurement Transformation (http://bit.ly/ProcurementTransformation) and the question of prioritization is a popular one on our blog (https://www.strategicsourceror.com/)
Start with the organizational change in procurement. What do you want to be known for across the organization? What are better goals for you? What would you need to support those goals? Do you have the right resources and structure to achieve those goals? Changes are you may not. With your house in order or at least planned to be in order, then the selection of technology to meet specific needs can be addressed and yes the technology acquisition itself can drive significant changes across the organization if the toolsets are filling a previously agreed on need.