"Procurement leaders reported that they have adopted and are using technology robustly, across all aspects of procurement processes," Alvendia notes. "And they are now beginning to apply collaboration technologies to establish communities of interest around categories, supplier issues and projects, including active outreach to design and engineering departments. Collaborative workspaces are intended to be self-service and user-configurable online areas where users in the sourcing and procurement communities can organize their work, find stakeholders and develop deeper supplier relationships." The benefits could include the ability to support and enable more, better and faster engagement across business units, locations, geographies and functions.
One example of the types of collaboration tools that procurement leaders are adopting is electronic product data management and product lifecycle management (ePDM/ePLM) solutions that enable procurement to actively engage with the engineering and design communities within the enterprise. Within leading procurement organizations identified in A.T. Kearney's AEP Study, 59 percent said that the procurement organization has direct electronic access to engineering and design data or that they will soon, and 36 percent of leaders said that they have specifications data integrated with spend data to enable analytics. "Leaders know the importance of having procurement linked to the manufacturing and product development functions, where the bulk of cost is designed into products from the start," Alvendia says.
From a sourcing perspective, Web 2.0 technologies can help a company's procurement staff collaborate across geographies on the sourcing of a various commodities, leveraging the commodity-specific expertise or procurement practices that staff in one region might bring to the table. Supply management staff is better able to share knowledge of a company's relationships with particular suppliers, as well as the histories of those relationships over time, to craft better negotiating strategies. Yes, that information and institutional knowledge is available without Web 2.0, but the new technologies make it faster and easier to share that information across silos, and make it easier for staff in one function to find colleagues in another department who can provide intelligence or perspective on a particular issue.
Challenges to Broader Adoption
Alvendia acknowledges that while leading organizations have made great strides in implementing technology across a range of processes, very few companies have deployed the full range of Web 2.0 technologies. Even leading organizations are likely to encounter a number of challenges to the broader deployment of these technologies. Recent surveys have shown, for example, that senior IT leaders often are suspicious of Web 2.0 technologies, and only a minority of CIOs have made Web 2.0 a priority. In addition, typically these sorts of significant technology initiatives require senior-level sponsorship. The employees who are most likely to see value in the new tools are those Millennials who are just entering the workforce and are therefore least likely to have any significant voice within the enterprise. This also means that companies accustomed to a top-down flow of information must reorient themselves to take advantage of the bottom-up, or grassroots, nature of content creation in a Web 2.0 collaboration environment.
A.T. Kearney Procurement & Analytic Solutions has established a "collaboration team" to help companies overcome these challenges and move more quickly to incorporate Web 2.0 into their processes. The team has developed a methodology to incorporate collaboration tools for the enterprise space, including the development of customized platforms for companies' program/project management offices (PMOs) and management of their supply chain processes, PLM, knowledge management/enablement and procurement transformation initiatives, among other uses.
"The next frontier for procurement and supply chain leaders is changing how people work. The adoption of Web services and SOA, along with collaboration platforms, is rolling through many organizations and is forming the next wave of change, with the leaders on the bleeding edge," Alvendia concludes.