I recently attended a startup conference that focused on citizen engagement technology designed for cities. I’ve been to hundreds of technology startup conferences over the years but this was the first that had a full-day track on the complexities of getting early-stage technologies past the procurement police.
Granted, most startups don’t have to deal with bureaucracies similar to state and municipal governments to get their product to market. But then again we’ve all had our horrifying experiences with the infamous “Purchasing Officer.”
I recall the days when major international firms started having the procurement department evaluate the selection of advertising agencies because of the lack of trust the CFO had for the CMO. On Monday procurement was evaluating Xerox machines and auto fleets and on Tuesday they were suddenly experts in the client/advertising agency relationship. In some organizations Wednesday and Thursday are the days procurement sequences in new startup technologies among their other vertical industry evaluations.
OK, I know I’m probably grossly oversimplifying, but let’s just say that one of the biggest complaints among the technologists at this startup conference was the inability of procurement to keep up with fast-pasted technology. After all, it’s hard enough for enterprise IT to separate the technology hype from the game-changers, no less for a multi-faceted buying group with little experience in implementation.
In all fairness, one of the areas getting the greatest attention is in the area of “procurement innovation.” It has become apparent that in order for procurement to understand innovation, they must experience it within their own service organization and ironically evaluate the quality of their relationships with “the businesses” in exactly the same way IT needs to do with their internal customers.
What was more interesting was a well-researched CPO report from IBM entitled The journey to value: Transforming procurement to drive the enterprise agenda that shows that Chief Procurement Officers are quite fond of themselves when it comes to driving innovation in the enterprise. About 62% of what the report calls Role Models claim that they “brokered new relationships with suppliers that introduced new ideas and innovative thinking.”
Clearly there’s quite a bit of wiggle room in parts of that last sentence that many CIOs and tech vendors would probably dispute. But to give the benefit of the doubt to the CPO, they realize they must bring more to the table than simply watching the purse strings. Not unlike CMOs, some CPOs might have already hired embedded or shadow IT in the procurement group in order to promote double-deep skills to the businesses. Others may still be operating under the model where their people know everything from staples to cybersecurity.
Regardless of whether procurement is a true innovation partner or an impediment, the quality of the relationship will be dependent on one key factor: CONTENT.
If technology startups or their surrogates in IT departments want to drive innovation in CPO-intensive enterprises, they must have a portfolio of content tailored to procurement’s level of sophistication.
This may sound quite obvious, but we’ve all read research that shows that CIOs and enterprise IT are not known for being great communicators, especially when it comes to complex technology issues. Hoping that the vendor’s marketing materials will by design be appropriate for the CFO and CPO suite is a recipe for disaster.
I had the opportunity to work on aspects of the launch of the international versions of the Dummies books during an early part of my career. While the books by definition are quite simple, actually creating compelling content at a dummies level is a very specific skill. Making things overly technical is not hard. Making them easy is, well, not easy.
CIOs need to work closely with skilled content developers to create materials (and storytelling) that match the level of sophistication of their procurement counterparts. They must encourage their vendors to help build cases that avoid innovation to be DOA at the procurement level.
How does your enterprise interact with procurement on complex technology initiatives?