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 it is, it will never work. Deloitte CPO Survey! – Part 1 in the Series
Let’s get to the heart of the matter: what’s up with the “fork in the road” metaphor? What does it have to do with procurement and technology?
Simply put, the fork in the road is where you, as a procurement professional, must decide if you will solve problems using an agent-based model approach or implement technology using an equation-based model approach.
Agent Versus Equation
An agent-based approach requires you to identify and understand the unique operating attributes of all stakeholders, both within and external to your enterprise. I provided a perfect example of this approach in part 1, discussing the link between field service technician processes and procurement processes.
Alternatively, with an equation-based model, a procurement organization takes a “siloed” approach by using technology to address its specific needs without considering stakeholder interests beyond the department. Once again, refer to part 1, e.g., “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.”
SOA Off-Ramp
What is the SOA off-ramp?
To start, SOA stands for Service-Oriented Architecture. It is the “loose coupling” of disparate systems or processes electronically without understanding the operational implications for all stakeholders beyond the connectivity of different technologies.
In this “in for a penny in for a pound” approach, clients having trouble implementing a service provider solution recognize that third-party stakeholders are critical to success but still continue to seek a technology answer through expanded connectivity. The problem is that connectivity is not the same as communicating and collaborating with key internal and external stakeholders.
Despite the tremendous technological advances through the introduction of AI digital solutions, the continuing focus on technology as THE solution has failed to improve initiative outcomes. Refer to the 2019 Deloitte CPO Survey!
The takeaway from today’s post: Connectivity is the beginning of realizing the importance of stakeholder involvement, e.g., other departments and suppliers. But focusing on said connectivity as a technology issue alone will not work.
In the third and final part of this three-part series, “A Proven Approach, A New Technology,” I will discuss the agent-based approach and demonstrate how it has been and will always be the pathway for the effective digital transformation of the global procurement and supply chain practice.
By the way, here I am, 16 years after entering the industry, when, at 39, I first recognized the difference between an agent-based and equation-based approach to procurement’s transformation through the use of AI-learning algorithms. Not quite as fresh-faced as I was in the previous Part 1 post. Certainly, a lot less hair. 😉
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Procurement Insights
Are you chasing solutions or solving problems? (Part 2 of 3)
Posted on November 9, 2023
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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 it is, it will never work. Deloitte CPO Survey! – Part 1 in the Series
Let’s get to the heart of the matter: what’s up with the “fork in the road” metaphor? What does it have to do with procurement and technology?
Simply put, the fork in the road is where you, as a procurement professional, must decide if you will solve problems using an agent-based model approach or implement technology using an equation-based model approach.
Agent Versus Equation
An agent-based approach requires you to identify and understand the unique operating attributes of all stakeholders, both within and external to your enterprise. I provided a perfect example of this approach in part 1, discussing the link between field service technician processes and procurement processes.
Alternatively, with an equation-based model, a procurement organization takes a “siloed” approach by using technology to address its specific needs without considering stakeholder interests beyond the department. Once again, refer to part 1, e.g., “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.”
SOA Off-Ramp
What is the SOA off-ramp?
To start, SOA stands for Service-Oriented Architecture. It is the “loose coupling” of disparate systems or processes electronically without understanding the operational implications for all stakeholders beyond the connectivity of different technologies.
In this “in for a penny in for a pound” approach, clients having trouble implementing a service provider solution recognize that third-party stakeholders are critical to success but still continue to seek a technology answer through expanded connectivity. The problem is that connectivity is not the same as communicating and collaborating with key internal and external stakeholders.
Despite the tremendous technological advances through the introduction of AI digital solutions, the continuing focus on technology as THE solution has failed to improve initiative outcomes. Refer to the 2019 Deloitte CPO Survey!
The takeaway from today’s post: Connectivity is the beginning of realizing the importance of stakeholder involvement, e.g., other departments and suppliers. But focusing on said connectivity as a technology issue alone will not work.
In the third and final part of this three-part series, “A Proven Approach, A New Technology,” I will discuss the agent-based approach and demonstrate how it has been and will always be the pathway for the effective digital transformation of the global procurement and supply chain practice.
By the way, here I am, 16 years after entering the industry, when, at 39, I first recognized the difference between an agent-based and equation-based approach to procurement’s transformation through the use of AI-learning algorithms. Not quite as fresh-faced as I was in the previous Part 1 post. Certainly, a lot less hair. 😉
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