How do technologies impact the relationships between customers and suppliers?
Information technology plays a significant role in supporting relationships between the customer and the supplier using electronic data interchange to share data between both sides, this technology provides fast, accurate information and business efficiency to the firm (Mulligan and Gordon, 2002). – ResearchGate (March 2002)
AND
Rates of technology adoption are low.
Survey results indicate that many core supplier management functions, including risk management, relationship management, performance management, innovation management, and CSR/Sustainability management, are still supported by generic applications such as Excel, SharePoint, and Teams or by no system at all. – S&P Global Market Intelligence (January 2023)
What is the main difference between the two article excerpts above – besides 21 years between publication?
Perception and Perspective
Regarding the perception of technology, you would be hard-pressed to argue with its potential to dramatically improve the way we work with our partners. But perception is not, nor has it ever been, the reality. That is why the 2002 article is one of perception.
The 2023 excerpt is one of perspective because it is not based on expected results or technology’s promise but on real-life experience.
Just as a personal sidenote, people who say or believe that perception is reality are in a fast lane to disappointment and failure. But that is a discussion for another day.
The Inspiration For This Post
I recently read a post on LinkedIn talking about “the power of trust” between buyer and supplier. Like the 2002 technology example above, I would be hard-pressed to argue against the merits of this statement. Yes, trust between stakeholders is critically important, and yes, technology can fuel communication and collaboration between buyer and supplier to achieve a collective positive outcome. So, why would the recent LinkedIn post be one of perception and not perspective?
A 2005 Keynote
About 20 years ago, I delivered a keynote to 300 executives from the Power Transmission Distributors Association (PTDA). Note that they represented the supplier side interests.
The following Q&A excerpt from the video of that presentation will clearly demonstrate the lack of trust between suppliers and buyers when it comes to the latter’s introduction of a self-teaching algorithm-driven technology platform. That’s right, while there have been some improvements, the use of advanced algorithms and AI in the procurement world is nothing new.
A 2023 Update
In all this time, where are we today regarding technology adoption?
According to an August 2022 Supply Chain Dive article, these are the current overall user adoption statistics (it isn’t just a procurement department problem):
Six in 10 IT leaders are concerned end users are not adopting new tech quickly enough, endangering the return on investment for digital projects, according to an annual digital adoption report by WalkMe.
On average, organizations waste more than one-third of transformation investments on projects that fail to meet goals, which surveyed nearly 1,500 senior business leaders across the globe.
Companies invest in new technologies to solve a problem – optimize operations, reduce time or minimize costs. But, when end users do not adopt a piece of technology, this results in wasted resources and frustration among staff and stakeholders, according to the report.
Note that the date of the above report is 2022, not 2005, 2007, or 2013. We are talking about the digital transformation era and the emergence of AI. (In other words, the post’s core point, while valid, is more unrealized perception than reality.) – Procurement Insights (October 2023)
Changing Perception (Promise) To Perspective (Reality)
“Despite the low rates of technology adoption in some areas of the supplier management lifecycle, companies recognise the value that technology brings to their operations. While desktop tools have played an integral role in helping companies manage supplier management data, dedicated systems offer custom features that make them more usable, auditable, and secure, and the industry recognises the importance of these advantages.” – – S&P Global Market Intelligence (January 2023)
As it stands today, when it comes to technology in supplier management, the following are the rates of adoption in six key areas:
LOWEST ADOPTION LEVELS
HIGHEST ADOPTION LEVELS
Innovation management – 7%
Contract management – 64%
CSR/Sustainability management – 14%
Supplier onboarding/Master data* – 63%
Relationship management – 14%
Risk management – 33%
Source: S&P Global Market Intelligence (January 2023)
*Master data is also defined as the central register by some supplier management functions.
Recognizing where we are regarding technology adoption by both internal and external stakeholders is how we gain the perspective to address the challenge. That’s what we need now – perspective, not perception because we already know that technology is a game-changer – we have known it since 2002.
What we need to do now is look beyond the technology and foster the right partnerships between the right practitioners and the right solution providers to finally move out of the land of perception.
Procurement Insights
The Difference Between Supplier Relationship Perception And Perspective – ADOPTION!
Posted on November 23, 2023
0
How do technologies impact the relationships between customers and suppliers?
Information technology plays a significant role in supporting relationships between the customer and the supplier using electronic data interchange to share data between both sides, this technology provides fast, accurate information and business efficiency to the firm (Mulligan and Gordon, 2002). – ResearchGate (March 2002)
AND
Rates of technology adoption are low.
Survey results indicate that many core supplier management functions, including risk management, relationship management, performance management, innovation management, and CSR/Sustainability management, are still supported by generic applications such as Excel, SharePoint, and Teams or by no system at all. – S&P Global Market Intelligence (January 2023)
What is the main difference between the two article excerpts above – besides 21 years between publication?
Perception and Perspective
Regarding the perception of technology, you would be hard-pressed to argue with its potential to dramatically improve the way we work with our partners. But perception is not, nor has it ever been, the reality. That is why the 2002 article is one of perception.
The 2023 excerpt is one of perspective because it is not based on expected results or technology’s promise but on real-life experience.
Just as a personal sidenote, people who say or believe that perception is reality are in a fast lane to disappointment and failure. But that is a discussion for another day.
The Inspiration For This Post
I recently read a post on LinkedIn talking about “the power of trust” between buyer and supplier. Like the 2002 technology example above, I would be hard-pressed to argue against the merits of this statement. Yes, trust between stakeholders is critically important, and yes, technology can fuel communication and collaboration between buyer and supplier to achieve a collective positive outcome. So, why would the recent LinkedIn post be one of perception and not perspective?
A 2005 Keynote
About 20 years ago, I delivered a keynote to 300 executives from the Power Transmission Distributors Association (PTDA). Note that they represented the supplier side interests.
The following Q&A excerpt from the video of that presentation will clearly demonstrate the lack of trust between suppliers and buyers when it comes to the latter’s introduction of a self-teaching algorithm-driven technology platform. That’s right, while there have been some improvements, the use of advanced algorithms and AI in the procurement world is nothing new.
A 2023 Update
In all this time, where are we today regarding technology adoption?
According to an August 2022 Supply Chain Dive article, these are the current overall user adoption statistics (it isn’t just a procurement department problem):
Note that the date of the above report is 2022, not 2005, 2007, or 2013. We are talking about the digital transformation era and the emergence of AI. (In other words, the post’s core point, while valid, is more unrealized perception than reality.) – Procurement Insights (October 2023)
Changing Perception (Promise) To Perspective (Reality)
“Despite the low rates of technology adoption in some areas of the supplier management lifecycle, companies recognise the value that technology brings to their operations. While desktop tools have played an integral role in helping companies manage supplier management data, dedicated systems offer custom features that make them more usable, auditable, and secure, and the industry recognises the importance of these advantages.” – – S&P Global Market Intelligence (January 2023)
As it stands today, when it comes to technology in supplier management, the following are the rates of adoption in six key areas:
*Master data is also defined as the central register by some supplier management functions.
Recognizing where we are regarding technology adoption by both internal and external stakeholders is how we gain the perspective to address the challenge. That’s what we need now – perspective, not perception because we already know that technology is a game-changer – we have known it since 2002.
What we need to do now is look beyond the technology and foster the right partnerships between the right practitioners and the right solution providers to finally move out of the land of perception.
30
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