Managing Procurement Change In The Digital Age

As technology becomes an ever-more present force in procurement, how do you manage the change process? We talk to leading CPO and procurement consultant Bina Panchal who gives us the lowdown on procurement change in the digital era

Five years from now, procurement will be very different. Clerical tasks will be automated, reducing the administrative burden on busy departments, freeing execs to concentrate on the important stuff. AI and data will offer a strategic advantage to those who have embraced them, bringing insight and clarity over spend. Value will be the name of the game.

Reaching that point will be a big challenge strategically and an all-together different one culturally. Gaining C-suite buy-in, collaborating with stakeholders and helping execs and middle management to adapt to new rules and processes will define the success of any transformation process, no more so than in the digital age. 

Bina Panchal is a London-based Senior Procurement Professional who has dealt extensively with that change. Having wide sector experience that spans across retail, finance and media (most recently Conde Nast), she has a track record of developing and embedding procurement best practices to drive governance and compliance, streamline processes to deliver efficiency and generate P&L savings. 

We spoke to Bina to get her thoughts on how to manage the change process in the digital era.

“Attitudes at board level have changed towards procurement. The C-suite has had to shift its mindset to keep up with its competition”

Tech is clearly changing every profession. To what extent is it changing procurement?

Technology is becoming the go-to for procurement. A lot of companies are having to think about how they’re getting their name and their brand out and how they are going to serve the consumers through a more digitised approach. With that comes a big shift and change in procurement approach. What do we need to change in our infrastructure to continue engaging with the audience, customers and consumers? That goes for any industry I have worked in.

Along with that are the environmental changes that mean companies have to think differently. Companies have to think how they deliver to their customers, bearing in mind these environmental changes as well.

Do you think this has forced procurement up the agenda?

Attitudes at board level have changed towards procurement. The C-suite has had to shift its mindset to keep up with its competition. Conde Nast has thrived upon its popularity and its brand. Conde relied on the popularity of it’s brand and printed magazine, however they realised that competitors were going digital, consumers were prefering the ease of digital print and so had to develop their digital strategy to accommodate this shift consumer attitude.

Although that was taken on board and the company moved to an online model, after 18 months of making that change, the paper magazines were still as popular. Their digital footprint was growing, and that wasn’t at a cost of people buying magazine.

So, that has been because the C-suite had to change their mindset and the popularity of the use of technology. We have gone from using desktops to having everything on our phones. That’s the biggest shift I’ve seen. We as procurement people have changed the way we work to that end. We used to find a company, buy from them after lengthy negotiations. Now it’s possible to get a quotation ready to go within days or a week, if you wanted. 

How important is procurement culture in the digital age?

That ties in with what sort of person makes a good procurement professional in the current age. For the execs, it’s not just about good negotiations, or being good at sourcing, it’s also about having good knowledge and understanding of technology and the ability to use it. The CV of the procurement exec is changing – they’re now required to have even deeper knowledge of tech and how it can be utilised. The culture is changing. If you look at education models and how they’re being taught, it encompasses a lot of technology. 

Will most of procurement activities be automated? Yes. It is a good shift because procurement people can get on with strategic work, and be part of something that is more meaningful. It makes the career path more appealing, it’s a much more empowering role.

“It’s just so important that organisations have technology embedded in the fabric of their culture”

What should be the main priorities for managers and CPOs that are implementing digital transformation?

CPOs should be looking at where the money is being spent, and where can they bring in more efficiencies. But they need to take that a step further and also work closely with their technology function. What can they utilise that is already in place that can make procurement more efficient? Any of the activities a CPO will be looking at to refine their procurement function is all going to relate back to some form of technology to help them. Any CPO going into an organisation to start a transformation process is going to be working very closely with the finance function, who should be able to provide clear spend data in order to make some informed decisions to bring in savings and efficiency.

When I went into Conde Nast, the first question I asked was what are you spending and where? I had 11 different spend reports from 11 different countries, who operate on 11 different platforms. It was a nightmare. At that point they were reviewing their technology stack – the argument for having the same tech across 11 markets was clear. That was going to provide consistent and clear data, which could be used to make informed decisions.

 It’s critical for the CPO to demonstrate and show current state vs future states and the value adds. You need to have measurements and KPIs to show how well procurement performed and where it has added value. 

How do you manage change within the organisation with the minimum of disruption to the people and processes?

Any change has to happen incrementally, especially in some industries that are slower to accept change. Some industries are receptive to change, whereas others aren’t – in the latter it tends to be the case that not a lot of change happens. In those sorts of cases, there are things that are fundamental if you want to engage in transformation. Number one, you have to make sure that the C-Suite are signed up and on board with the change – and when they say they want to make it, they do. A couple of industries I’ve worked in have expressed the desire to change, but haven’t been receptive to the actual change itself. C-Suite sign up is fundamental.

Making the changes in small bites is essential too. That way it doesn’t disrupt your daily operation and people aren’t worried about their jobs and how the process is going to work; small incremental changes are important to keep the business running smoothly. One thing I have found really useful is having focus group meetings in small business areas to talk about how they do their activities on daily basis; to understand what their pain points are, working on those and providing help and support so that you can bring the whole business along the journey with you. Otherwise you end up working in a business that’s against you. Communication is so important too – you need to keep everyone in the business informed of what’s happening. 

How will Procurement look in 10 years? How do you prepare?

There will obviously be a wider use of technology. The next generation will be far more savvy than this generation in terms of technology that’s available. They will be more results orientated, very much so because of the fast moving and ultra intelligent technology that’s available. These are all positive steps. It’s just so important that organisations have technology embedded in the fabric of their culture, because the individuals doing the jobs will only be as good as the tech that enables them to do their jobs.

Bina Panchal
Procurement Consultant

A London-based Senior Procurement professional, Bina has experience of developing and embedding procurement best practices to drive governance and compliance, streamline processes to deliver efficiency and generate P&L savings. She has wide sector experience that include online travel, retail, finance, telecoms, legal practice, media, broadcasting and publishing.