Switching away from the pressure cooker that has become procurement’s impact on the UK general election, the one leading topic in the news that caught my eye which should be of interest to any procurement professional looking to stay centre stage in the procurement world was “crowd sourcing”.
Organisations such as IBM, Volkswagen, Unilever and the Conservative party have all made the news recently with crowd sourcing – essentially outsourcing a task to a large group of people through an open call for answers.
Crowd sourcing, cloud sourcing, open innovation - call it what you want. But it represents both a threat and an opportunity to procurement professionals everywhere. The threat comes from those who believe they can do better than the procurement department, beat contract prices, and that companies should open up their procurement to the wisdom of the crowd. CPOs must be aware of this challenge and lead the agenda to ensure change takes place within an overall procurement strategy framework. The opportunity lies within “innovation-centred procurement”.
Increasingly major organisations such as Apple and Procter & Gamble are looking externally for innovation, effectively outsourcing part of their innovation to third parties. Most procurement leaders are not used to leading on innovation, which is usually conducted elsewhere within the organisation. However, the opportunity for procurement to play a leading role in their company’s innovation programme is a significant one. Procurement already has existing core competencies that support delivering innovation such as experience in outsourcing and supplier management. CPOs must lead in defining the competencies to provide the process, skill sets and guidance necessary to manage innovation sourcing before it is controlled elsewhere within the organisation and the opportunity is lost.
It is not just about new tools, but about mindsets and behaviour, monitoring developments in the external environment that have an impact on the organisation’s ability to compete and, therefore, procurement’s ability to contribute strategically. It calls for a new and emerging breed of procurement professional: the “procurement entrepreneur”.
If procurement is to reach the pinnacle to which it aspires it must demonstrate entrepreneurial behaviour which enables their organisations to capitalise on market opportunities and to manage the associated risk. In the future powerful ideas will be generated from almost anywhere. Achieving innovation-centre procurement will become a key competency necessary to keep pace with change and innovation in an increasingly diversified and differentiated world. Procurement must be ready to deliver - disrupt or be disrupted.