In my article last week (HR’s role in transforming the global procurement practice), I talked about the role that HR will play in transforming the procurement practice through the introduction of the market-oriented ecosystem or “MOE.”
For those who have not yet had the opportunity to read the article, you can access it through the above link. However, and for the sake of convenience, the following excerpt provides a quick overview of the MOE model.
Under the MOE model, organisations are no longer “structured” as divisions within a “chain of command.” Instead, they become independent teams aligned with specific market opportunities in which said units are similar to holding companies. The big difference is that through this new structure, MOE connects the “independent teams in an “information, resource, and expertise” ecosystem.
The belief from an HR standpoint is that with the introduction of the MOE “ecosystem” there will be a better focus on innovation and an improved agility to respond to changing market conditions.
I then closed the article asking if HR’s perception of procurement and its needs on a go-forward basis was a surprise to procurement professionals and if it was in alignment with their view of transformation.
Uniting in Efforts and Outcomes
The response to the above questions were enlightening but not necessarily surprising.
For example, Clive Heal, FCIPS wrote the following;
“Procurement & HR MUST become joint partners for Business success” by focusing on critical areas such as pro-active recruitment, developing geographically dispersed teams, defining new relationship performance metrics while managing workforce reduction.
However, and while recognising that procurement and HR, by and large, do share a similar vision for transformation, Mark Holyoake cautions that “there remains a chronic lack of communication between them, which most often leads to poor results and a culture of blaming.” He then goes on to say that “honesty, transparency and true partnership” are the keys to a successful collaboration.
Based on the above as well as similar comments, it appears that the functional silos are coming down. It is also good to see that the concept of “Getting To We” about which Kate Vitasek wrote in her book of the same name is as applicable for internal relationships as it is for external ones.
But – and there always seems to be a “but,” something or someone is missing.
The “IT” Factor
As we move towards a digital reality in which every area or division of an enterprise will be experiencing their version of transformation, IT is an important touchpoint. However, their role is not going to be the same in each instance.
For example, and according to an article on the Long View Systems’ blog referencing a Gartner report, over the next couple of years, CMOs will spend more money than CIOs on technology.
While this is a notable shift in which the department is taking the lead in procuring technology with IT playing more of a supporting or advisory role, it does speak directly to the Vitasek “We” precept. In other words, IT has an important albeit changing contribution to make in enterprise transformation, including how procurement will deliver maximum value in its new and expanding role.
In an upcoming article, I will examine in greater detail ITs vital area of impact and how it intersects with HR’s and Procurement’s vision of enterprise transformation and success.
In the meantime, what are your thoughts on IT’s role and influence when it comes to procurement’s success?