Consider some data from Gartner’s recent research:
Indeed, it hasn’t been smooth sailing for a lot of organisations. Some sectors or roles don’t lend themselves to the remote model (e.g. frontline staff, construction workers). Some organisations are not ready to roll out the model in such a short time frame due to limited resources.
Procurement and supply chain professionals who are knowledge workers may already find themselves having to adapt to this new normal. But at what cost?
With so many paper-based or manual processes still in place, procurement departments within organisations that are less advanced in their digitisation journeys are facing added challenges during these social distancing periods.
In pre-crisis times, legacy tools such as Excel has been prevalent among half of surveyed procurement organisations. We have noted some inherent shortcomings of this corporate classic tool in a previous blog post. That is not to mention the sheer size and number of spreadsheets, often located in silos. When managing multiple projects with a lot of dependencies, this can multiply the risk of errors exponentially.
Imagine managing sourcing projects in 50 tabs and 200 columns with up to 1,000 rows of data in each one of those tabs!
Email, although an electronic means of communication, has not got a good reputation for visibility and efficiency either.
How about paper-based processes? A PASA benchmarking report noted 42% of procurement leaders considered “reducing paper-based processes” as a key future performance measurement. This means the inefficient manual work involved in processing paperwork and transactions is still common.
Note that the issues outlined below have already existed pre-crisis. They are only exacerbated with COVID-19 forcing people to work from home on a mass scale.
This is a typical procurement and supply lifecycle (stage 1 and 2 can swap with each other depending on organisations’ requirements). Within each stage, there are multiple processes involved.
Procurement & supply lifecycle
Let’s dive into the potential challenges when people conduct manual procurement processes while working from home.
Where supplier data is siloed, and sourcing events are managed via email or phone calls:
If there was no way to quickly engage preferred suppliers without consulting the central procurement team, there will be multiple back-and-forths via email. Information could be lost, delayed and critical supply needs not addressed timely enough.
Organisations that run sourcing events via email blasts and spreadsheets may find that the time spent copying and pasting information would be much better spent elsewhere, e.g. working with suppliers on alternative arrangements during the crisis.
Manual processes inhibit the ability to onboard new vendors to fulfil needs, and present risk around monitoring vendor compliance:
A more dangerous issue is a lack of key alerts around vendor compliance.
Where information such as insurance expiry dates have previously been monitored in spreadsheets, this is now very hard to track for teams in the remote work environment. Expired compliance documents may not be picked up while a vendor is completing works, opening the organisation up to a significant level of risk.
The approval process can take place during any stage of the procurement and supply lifecycle above. It is also where potential bottlenecks happen.
The heightened need to stay connected during these times presents some challenges for both Internal and external communication.
“Out of sight out of mind.” For some employers, allowing remote work may trigger a fear of reduced productivity due to a lack of physical supervision.
The better approach would be to have trust and empower staff through implementing progressive policies and technology.
“When the dust settles, we’ll likely see that our remotely working employees were just as productive during this crisis — if not more so.”
Ideally, before sending workers home, organisations should already have rolled out or updated their procurement procedures, which would help:
Now more than ever, procurement digitisation is critical to enable professionals to access the necessary information and continue performing value-adding tasks, while technology creates efficiency and removes the risk of human error.
In the absence of adequate technology, organisations can leverage this opportunity to measure the impact on employee performance and productivity to build a business case for software investment in the long run.
The future of work is already here, even though it is sooner than expected. Those who can adapt will survive and come out stronger.
Stay tuned for the next article in this series, where we explore ways to get your IT game strong throughout and beyond the COVID-19 crisis. Or book an online demo to learn more about how Felix helps procurement teams in the remote work environment.
You may be interested in our recent webinar on risk mitigation with Bank of Queensland's former Chief Risk Officer. Check it out here.
Procurement governance has never been a particularly exciting topic. Given increasing compliance requirements, procurement has given and been given a host of policies and guidelines to follow. But is it enough to mitigate procurement risks and ensure compliance?
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