To be honest, I haven’t totally figured out all of the details of the inner workings of the blockchain technology. And, I do not think I will ever try to as some of it is very technical. I also do not believe that Procurement professionals should do it either. However, it is important to understand the implications of the blockchain technology. Because of the way the blockchain works, it has unique characteristics that represent a breakthrough with tremendous value for Procurement.
Anyone with a little bit of experience in business has heard of the Pareto (or 80/20) “rule.” And this principle drives how organizations are targeting their efforts towards areas that would maximize results. With limited (finite) resources, it is logical to focus them on activities that have the highest impact/value.
Procurement is no stranger to this approach. Focusing on the 20% of the supply-base that makes 80% of an organization’s spend is a strategy and method that is very common, and that also makes sense from a pure “economical” standpoint.
At a function level, what Procurement does (buying goods or services from external sources) hasn’t changed much and will not. What does change is the world that Procurement operates in? Procurement does not operate in a vacuum so how it does the job has to reflect his times (and continuously do so). Also, it has to take into account with/for whom it does it. It is about addressing expectations, serving stakeholders, attracting talent, and much more.
Part 2 — Who is accountable?
Part 1 — Who is control?
There is an important issue in the world of Procurement. While the future of the function is at stake, too many CPOs and Procurement organisations are looking at the future of Procurement solely through a technological prism and consider technology as the end (when it is the means to an end).
It is no surprise then that the questions that are at the top of their agenda are centered around what technology (RPA, blockchain, big data, AI,…) they should focus on and implement. It is as if this or that piece of technology would magically fix all of their problems.
“Bringing the changes to life”
You’ve managed to get yourself into a good strong position by having defined the change impacts to understand what it means, you’ve built a solid change plan and mapped it to the various stakeholder groups and you’ve built your change networks and established control rooms to regularly measure feedback.