- Features, functions, and benefits
- Proprietary Technology
- Leading Edge Technology
- Plug and Play
- SaaS, e.g., on-demand, by-the-drink tech
- Artificial Intelligence
- End-to-End Solution Suites
- Luggable, Transportable, Mobile, and Handheld Tech
- 286, 386, 486 Processing Power
- Kilobytes, Megabytes, Gigabytes, and Zettabytes ad infinitum
- CPM, DOS, Windows
- Dot Matrix, Continuous Tone, 3D
Did I miss anything?
I was 23 when I entered the high-tech world. I am now 64. Believe it or not, I was as excited about the technology back then as I am about it today.
Over the years with each amazing breakthrough – and yes, spreadsheets and amber or green monochrome monitor graphics were amazing in their time, I was asked what I think about the “evergreen” evolution of high-tech computing. My answer has always been the same – it’s not about the technology but the problems the technology solves. In other words, as great as the tech may be, it means nothing if it doesn’t come after people and process understanding.
When organizations make the mistake of leading with technology, they are bending their people and processes around an equation-based model approach in which the tech is the driver for success.
When you lead with people and process understanding – an agent-based model, technology moves from a functional driver to a problem-solving tool that streamlines and delivers efficiencies and tangible results.
Walking The Talk
When I talk about agent-based problem-solving technology versus equation-based technology-led functionality, it isn’t a vague or high-level conceptual musing. It is an on-the-ground, in-the-trenches reality.
In many previous posts, I shared the following results of an agent-based approach to technology creation and implementation:
“In August 2003, the new technology successfully went live in a production environment for the DND. In this test case, the public sector organization realized a year-over-year 23% cost of goods savings for seven consecutive years while simultaneously reducing the number of buyers required to manage the contract to 3 from an original 23. Delivery performance and product quality also improved dramatically.”
If you haven’t already read the posts, please do as it is worth the 5-minute investment.
The Nuts & Bolts
Beyond a detailed three-step overview, what I did not provide in the above posts were the nuts and bolts details of how, before we even introduced the technology, enabled the end client to:
- Improve SLA performance from 51% to 97.3% in 3-months
- Consistently reduce their MRO cost-of-goods by 23% year-over-year
- How we reduced their FTE from 23 down to 3 in eighteen months
I want to re-emphasize this one point: the groundwork for what we accomplished occurred before the technology was introduced.
One of the first things I did was understand what role the other stakeholders or “agents” played in procurement’s success.
For example, the field service technicians had their “own” processes, performance targets, and technology. How did this impact procurement’s ability to procure and ensure timely “next-day” delivery of a quality component at the best cost?
What about suppliers? What impact did geographic location and Time-Of-Day (TOD) have on product cost, quality, and delivery performance?
In the past – and unfortunately, present day, most organizations never looked outside the department when deciding on a solution to improve the procurement process and performance. This siloed thinking meant that no matter how well the technology worked, technology underperformance and failure were inevitable outcomes.
Stepping Out From Behind The Technology
I have often talked about the importance of service provider leadership stepping out from behind their company’s logo. What I emphasize is that the critical play is not the tech but the expertise behind the tech – the market expertise and experience to leverage tech to solve a problem.
In the case of the DND initiative, I started by researching how the service tech department worked. Here is what I discovered:
- Field service technicians all carried with them laptops to update calls and order parts through the procurement department.
- The technicians’ performance was measured by how many service calls they could attend in a day.
- While there was a policy that they order a required part after each service call, because of the number of calls per day metric, they “sandbagged” all the orders until the end of the day. In short, procurement would not receive the bulk of the orders until late afternoon – early evening.
I then researched how the suppliers were operating. Here is what I discovered:
- 85% of all suppliers were based in the United States, meaning we had to deal with Canadian customs, another stakeholder, e.g., agent, in the procurement process.
- Because we were dealing with Dynamic Flux (MRO) versus Historic Flatline commodities, the later in the day a part was ordered the higher the cost.
- Besides higher costs, there was a significant impact on delivery performance.
The likelihood that we could change technician or supplier behavior, e.g., “agents” for parts that were required the next day, was virtually impossible.
The Fork In The Road
When we were initially engaged, the client was looking to address the above challenges by implementing a technology solution. But ask yourself this question; how would using technology to improve performance within the procurement department address the above challenges? It wouldn’t – which is why – without understanding internal and external stakeholder (agent) people and processes “leading with technology” no matter how amazing will never work – Deloitte CPO Survey!
Unfortunately, the vast majority of initiatives are siloed and ultimately dependent on a change management approach that is difficult if not impossible to achieve. For example, what is the likelihood that field service technician behavior will change regarding the number of service calls they have to complete in a day?
What about getting lower prices from suppliers who know that they are likely the only source later in the day and let’s not forget about clearing customs.
Even the most robust technology will not overcome these factors. Again, I can’t count the number of times that end-user clients bought the features, functions, and benefits of how tech would work without even considering the way other stakeholders operate.
Next Installments:
Part 2 – A New Road, A New Day
Part 3 – A Proven Approach, A New Technology
Stepping Out From Behind My Logo: https://procureinsights.com/seminars-and-conferences-with-jon-hansen/
30
Procurement Insights
Are you chasing solutions or solving problems? (Part 1 of 3)
Posted on October 23, 2023
0
Did I miss anything?
I was 23 when I entered the high-tech world. I am now 64. Believe it or not, I was as excited about the technology back then as I am about it today.
Over the years with each amazing breakthrough – and yes, spreadsheets and amber or green monochrome monitor graphics were amazing in their time, I was asked what I think about the “evergreen” evolution of high-tech computing. My answer has always been the same – it’s not about the technology but the problems the technology solves. In other words, as great as the tech may be, it means nothing if it doesn’t come after people and process understanding.
When organizations make the mistake of leading with technology, they are bending their people and processes around an equation-based model approach in which the tech is the driver for success.
When you lead with people and process understanding – an agent-based model, technology moves from a functional driver to a problem-solving tool that streamlines and delivers efficiencies and tangible results.
Walking The Talk
When I talk about agent-based problem-solving technology versus equation-based technology-led functionality, it isn’t a vague or high-level conceptual musing. It is an on-the-ground, in-the-trenches reality.
In many previous posts, I shared the following results of an agent-based approach to technology creation and implementation:
“In August 2003, the new technology successfully went live in a production environment for the DND. In this test case, the public sector organization realized a year-over-year 23% cost of goods savings for seven consecutive years while simultaneously reducing the number of buyers required to manage the contract to 3 from an original 23. Delivery performance and product quality also improved dramatically.”
If you haven’t already read the posts, please do as it is worth the 5-minute investment.
The Nuts & Bolts
Beyond a detailed three-step overview, what I did not provide in the above posts were the nuts and bolts details of how, before we even introduced the technology, enabled the end client to:
I want to re-emphasize this one point: the groundwork for what we accomplished occurred before the technology was introduced.
One of the first things I did was understand what role the other stakeholders or “agents” played in procurement’s success.
For example, the field service technicians had their “own” processes, performance targets, and technology. How did this impact procurement’s ability to procure and ensure timely “next-day” delivery of a quality component at the best cost?
What about suppliers? What impact did geographic location and Time-Of-Day (TOD) have on product cost, quality, and delivery performance?
In the past – and unfortunately, present day, most organizations never looked outside the department when deciding on a solution to improve the procurement process and performance. This siloed thinking meant that no matter how well the technology worked, technology underperformance and failure were inevitable outcomes.
Stepping Out From Behind The Technology
I have often talked about the importance of service provider leadership stepping out from behind their company’s logo. What I emphasize is that the critical play is not the tech but the expertise behind the tech – the market expertise and experience to leverage tech to solve a problem.
In the case of the DND initiative, I started by researching how the service tech department worked. Here is what I discovered:
I then researched how the suppliers were operating. Here is what I discovered:
The likelihood that we could change technician or supplier behavior, e.g., “agents” for parts that were required the next day, was virtually impossible.
The Fork In The Road
When we were initially engaged, the client was looking to address the above challenges by implementing a technology solution. But ask yourself this question; how would using technology to improve performance within the procurement department address the above challenges? It wouldn’t – which is why – without understanding internal and external stakeholder (agent) people and processes “leading with technology” no matter how amazing will never work – Deloitte CPO Survey!
Unfortunately, the vast majority of initiatives are siloed and ultimately dependent on a change management approach that is difficult if not impossible to achieve. For example, what is the likelihood that field service technician behavior will change regarding the number of service calls they have to complete in a day?
What about getting lower prices from suppliers who know that they are likely the only source later in the day and let’s not forget about clearing customs.
Even the most robust technology will not overcome these factors. Again, I can’t count the number of times that end-user clients bought the features, functions, and benefits of how tech would work without even considering the way other stakeholders operate.
Next Installments:
Part 2 – A New Road, A New Day
Part 3 – A Proven Approach, A New Technology
Stepping Out From Behind My Logo: https://procureinsights.com/seminars-and-conferences-with-jon-hansen/
30
Share this:
Related