Procurement – Page 6 – Procurement Transformation

Communication, Leadership, Procurement, Relationships, Transformation

The 3 Resources for which you should ask funding early in a Transformation Initiative

by Lourdes Coss, MPA, CPPO

The 3 Resources for which you should ask funding early in a Transformation Initiative

I spent about 75% of my 27-year public service career leading transformations. I enjoyed seeing progress in the organization and the people’s development and how it positioned the procurement function within the entity. That growth brought positioned Procurement well within the entity. Having a voice and a seat at the table made the journey worth traveling. One can attribute the success of the transformation to the collective efforts of the team. The team lived the daily struggle of getting out of their comfort zones. They also experienced individual rewards with the changes. Each individual’s standards measured personal and professional growth.

“Change is the law of life, and those who look only to the past or present are certain to miss the future.” —John F. Kennedy

My team and I learned many lessons. Some were less painful than others. Those painful lessons help us build strength; even though some may have been unnecessary. Those situations help build grace and courage. There was higher awareness that everyone reacts differently to change, and despite their desire for things to remain the same, the organization no longer provides the value that it once did. It also gave us courage to continue down the transformation path despite the opposition.

“We cannot solve our problems with the same thinking we used when we created them.” – Albert Einstein

The process of transformation requires a lot from people, particularly procurement professionals already overloaded with work. Perhaps stamina is a valuable ally for anyone going through a transformation process. Often, the leadership of organizations doesn’t fully understand the energy and effort required to go through a transformation process. There is usually a long list of demands and a brief timeframe to accomplish them. Paradoxically, the group expected to produce under a new definition of value has not benefited from new tools or resources to create such value.

Whenever I went to a new agency, I faced similar circumstances to those I had seen before. In most cases, upper management assumed that the procurement personnel were not working as hard as they should have or were not fit for the job. Rarely did upper management acknowledge the lack of investment made on the procurement group. It was not uncommon that those who wanted the procurement organization to transform did not understand that they needed to think about the function differently. The changes that come with transformation have an impact both internally and externally.

“There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success than to take the lead in the introduction of a new order of things.” – Niccolo Machiavelli

I learned the hard way to ask for resources upfront, even when I did not know with certainty what I needed. Why? Because there is a very narrow window after the transformation announcement to obtain approval for the resources required. If you wait too long after that, it is much more challenging. Prioritizing the request for enablers that required financial investment and budget dollars is essential. There are three areas that I focused my attention on right away. These were training, staffing, and technology.

Training – I found that securing a budget for training in a transformation initiative is not as tricky if requested upfront. In many instances, upper management recognizes that the current staff will require some type of training at a minimum since, in most cases, there had been little to no offered. If personnel are not up to speed with best practices in the field or have a network of colleagues they can reach out to, it’s hard for them to develop. Membership to relevant professional organizations like NIGP and the local chapter can be part of their educational experience and network development.

Staffing – Organizations tend to be unwilling to recognize “understaffing” as one reason for the slow procurement process speed. The end-user and upper management do not fully understand the time impact of specific regulations on the procurement function. There is a disconnect between the expectations of the time that procurement should take and the effort required to meet the expectations. While it may be acceptable to guestimate the original request for staffing budget, the leader must make an effort to justify the number of positions requested or the redesign of the existing job descriptions if they no longer serve the organization well. Staffing is a hard sell and requires sufficient analysis and justification. Ensuring that salaries are competitive and positions offer growth opportunities will increase the chances of attracting talented individuals to the organization.

Technology – Many organizations already have some type of technology primarily related to the financial aspect of procurement. However, the procurement team often does not have the features necessary in existing systems to ensure their success. The need for new technology or the optimization of existing technology will become evident once the leader has had a chance to evaluate daily tasks’ efficiency and determine whether there is a need for automation or the need for additional technology. Depending on the situation, this might be the most significant investment. Therefore, it is crucial to plan the functional requirements well to maximize the benefits to the operation.

“If you want to make enemies, try to change something.” —Woodrow Wilson

I should note that upper management support is a critical component of a transformation initiative. Once changes start rolling out, end-users and stakeholders will experience the discomfort of change. It is then that upper management support will become critical to the success of the transformation. The Human Resources Director and the Technology Director’s support and commitment are crucial as the early request for funding are to these areas. Any strategy associated with personnel and technology depends significantly on the support received by the people responsible for these two areas in the entity.

Change is not easy, and those who advocate for change generally expect someone else to make the changes. When the tables change, those advocates will feel the discomfort of adjusting to changes as anyone interacting with the procurement function will need to make adjustments. The best way that I found to handle this challenge is through communication. Communicating change should be done with as much transparency as possible. A well-developed communication plan should include a strategy that considers each layer within the organization and adjusts the communication accordingly.

“To improve is to change, so to be perfect is to have changed often” – Winston Churchill

In summary, some enablers do not require additional budget but are necessary for a transformation. When the organization makes a high investment, particularly in staffing and technology, it will expect a high return. Those enabling resources that require an investment of money should be requested upfront while the initiative is still fresh in everyone’s mind. Early requests will increase the likelihood of obtaining the resources needed to effectively make the necessary changes and elevate the procurement team’s performance.

About the Author: Lourdes Coss is a former Chief Procurement Officer living her purpose. She’s the author of “Procurement Methods: Effective Techniques” and uses the lessons of her 27 years career in government procurement and transformation to coach, train, and provide consulting to leaders and aspiring leaders in the profession. Post-Pandemic, you may find her in a café writing her next book.

Leadership, Procurement, Relationships, Transformation

Procurement Month: Reflect, Act, and Celebrate

by Lourdes Coss, MPA, CPPO

Happy Procurement Month! During the month of March, procurement professionals celebrate each other and the procurement profession. This year, we celebrate the leadership and ingenuity of many procurement professionals. Procurement has been at the forefront of the pandemic, and its value became more apparent to those who considered procurement a back-office function.

“Money is of no value; it cannot spend itself. All depends on the skill of the spender.” — Ralph Waldo Emerson

After a year of Zoom calls, pivots, and remote work, not yet over, we reflect on many procurement professionals’ actions, leadership, and resilience. Many quickly adapted to new circumstances and fulfilled their mission in their respective organizations. While the experience may have brought a higher level of stress and uncertainty, it also presented opportunities to add value and provide solutions to those on the frontlines.

In some organizations, procurement suddenly emerged from the “back office” to do what it does best, provide solutions that enable the organization to deliver the necessary services to the community. Many of those that stepped up to the occasion will see the reward through a more active role in their organization.

Procurement professionals should seize the opportunity to step forward and be part of the solution. Those that see the opportunity are probably working on strategies to minimize the effect of a future crisis in the organizations that they serve. Some procurement professionals are already collaborating to establish contracts that can help reduce the impact of an emergency or unexpected condition. One such group is the Continuity of Supply Initiative (CoSi). CoSi is a collaborative effort seeking to encourage the implementation of resilient contracts for the benefit of government organizations.

As many ponder how to build resiliency in the process and the supply chain, procurement professionals are called to take action. There isn’t a single solution. The answer is going to take the collaborative effort of all parties involved. This task is not one that procurement professionals can solve alone. The collaboration of technical experts, finance, legal, and suppliers will be necessary to implement feasible, transparent strategies and provide a competitive environment.

“In today’s era of volatility, there is no other way but to re-invent. The only sustainable advantage you can have over others is agility; that’s it. Because nothing else is sustainable, everything else you create, somebody else will replicate it.” – Jeff Bezos, CEO, and president of Amazon

I see this as an opportunity to re-think the way we have done things. Yes, it may be time to re-invent the wheel! It is a matter of staying agile to respond to the ever-changing environment while fulfilling procurement’s core objective. The mission has not changed, in my opinion. How the services are delivered may be different. How can procurement perform under other circumstances? Many procurement professionals demonstrated their ability to adapt to the conditions, particularly those equipped with the tools to do so. Those organizations that did not offer procurement the tools to quickly pivot to a remote environment undoubtedly learn the lesson. I’d like to think that we are leaving this pandemic behind us, but we should not forget that this is not the last crisis. Mother nature has a way of reminding us that from time to time.

“You will not find difficult to prove that battles, campaigns, and even wars have been won or lost primarily because of logistics.” – Dwight D. Eisenhower

I believe that it will take a holistic approach to achieve the resiliency to which many in the field are referring. Public and private sectors felt the impact of the supply chain disruption. A challenge that procurement has been dealing with is the absence of adequate technical specifications or explicit scopes to procure the goods or services more effectively. Some procurement professionals’ challenges include inefficient processes, lack of sufficient data, decentralized procurement efforts, maverick spend, and minimal market research and analysis. Besides, some organizations cannot attract the right talent or develop the talent they already have. Combining all of these old problems makes it even more challenging to take on the task of creating a more resilient supply chain and procurement process that can withstand the type of crisis that we have been experiencing since last year.

Some organizations take an ad hoc approach to improvements. This strategy is rarely successful due to other unresolved problems. It is better than doing nothing, but it doesn’t guard the process against the vulnerability seen very early in the pandemic. The procurement issues will not be resolved at once but considered in any initiative undertaken to prevent more surprises in the next crisis.

“Put a good person in a bad system, and the bad system wins, no contest.” ~ W. Edwards Deming

Several experts and procurement associations advise on the adoption of best practices like (1) centralizing the procurement function to more effectively leverage effort and resources; (2) establishing a center for excellence where intelligence gathered through market research, spend analysis, and historical information maintained systematically;(3) implement category management to develop expertise within the procurement group; and, (4) developing the procurement team by equipping them with the tools necessary to offer solutions. Procurement professionals are much more than gatekeepers. They can be the resident procurement consultant that help deliver results to the organization.

In summary, the pandemic highlighted the relevance of the procurement function. It is an opportunity to become the organization’s strategic partner and be well-positioned in the organization with a seat at the table. It is up to each procurement executive to take advantage of the opportunity.

Leadership, Procurement, Transformation

The Six Most Common KPIs for Procurement

by Lourdes Coss, MPA, CPPO

An important aspect of transformation is setting and achieving goals. Whenever an organization establishes a goal, it should also implement a process to manage it. That means that you need to measure progress towards the target. Transformation is not a pre-requisite to establishing and achieving goals. Organizations do this as a matter of practice, particularly those that want to continue to improve.

Goals should be supported by a process that informs leadership of the progress towards goal achievement. It is necessary to establish a way to measure the gap between the current situation and the desired state for a specific objective. Keeping track of the progress is essential because it is hard to achieve what you don’t track or don’t measure.

To track progress towards goals, organizations establish Key Performance Indicators (KPIs). KPIs are quantifiable measurements that help procurement leaders determine how well their organization achieves strategic and operational goals. These measurements are specific to areas relevant to the overall quality of a procurement’s operation. Each KPI requires the collection of appropriate data pertinent to the KPI that supports the goal. In some organizations, KPIs’ reporting has been institutionalized across the entity to measure the overall performance and determine alignment with its operational and the strategic objectives established by the governing body or top executive.

When establishing KPIs, the leader must take into consideration the availability of data. If data is not available, the leader should delineate the method or process for making the data available in the future. When information is not accessible to establish clear targets, the leader’s experience can help him, or her make educated guesses. As data becomes available, the leader can adjust the goals.

The KPIs’ objective is to track the progress made by the organization towards the achievement of established goals. KPIs are also an essential aspect of managing change. Developing indicators that help identify the gap between the current and desired states helps provide a clear picture of any strategic efforts.

In procurement, there are some KPIs that are most common across many organizations. These consist of speed, cost, quality, competition, compliance, and customer service. Some organizations may consider compliance, competition, and customer service as part of quality. But all of these are relevant in one way or another to each procurement organization. If you are embarking on a journey to measuring performance, here are some key performance indicators that I found worthwhile capturing.

Speed. Speed generally refers to the cycle times for the different procurement methods. Cycle time is an important one because it is the one about which most end users complain. If we look objectively at speed, we can understand why it is one of the most common end-users’ complaints. When procurement can provide more predictability on the cycle time of the procurement process, the conversation changes. Predictability implies that there is some consistency, and consistency inspires a level of trust. For planning purposes, it is vital to understand how much time the procurement process will take. This term needs to be built into the project’s timeline so that the end-user can manage expectations and implementation. Part of the end-users frustration is the inability to anticipate the timeframe that it must allow for the procurement process. I acknowledge that sometimes the issue is a break in communication. One thing to also consider under this KPI is whether the procurement was planned or unplanned. It would be hard to meet a goal when you react to procurements that you didn’t know were coming. It helps to have a procurement plan and have open lines of communication with your end-users.
Cost. Cost savings and cost avoidance is a measure that procurement generally track. In entities where the procurement department reports up to finance, keeping track of cost savings and cost avoidance becomes necessary. Some organizations keep track of savings to determine the return on the investment of having a procurement team. This KPI is a good one to use when seeking funding for training, personnel, technology, and other resources. When the story is favorable, it provides for great marketing.
Quality. I associate quality with the solicitation document and the process. The data collected seems more indirect. There may not be a piece of data that will indicate quality. Instead, there are a couple of factors that have an impact on quality. Personnel professional development and training is one of them. The better-trained personnel is, the higher the quality of the documents should be. The quality of solicitation documents can be valuable data. The number of addenda issued to correct a solicitation document after it is made available to the public indicates poorly constructed solicitation documents. There are exceptions to every rule, and there are projects that present unique circumstances. If there is an excessive number of addenda, it is a sign of a quality issue.
Competition. The level of competition may indicate a quality issue, but it is also an indicator of other problems. If your agency’s goal is to receive at least three bids, proposals, or responses on average and your KPI shows a lower number, it might be an indication of some issues that need to be analyzed.
Compliance. Compliance may relate to individual policies specific to the agency. If your agency wants to measure compliance with specific regional goals, you can establish KPIs under this category.
Customer Service. This one is generally measured based on customer service surveys. It may not be a monthly KPI. Instead, reports can be quarterly, semi-annually, or annually. The regular KPI report may not include this particular one.

Whenever the organization goes through the exercise of establishing KPIs, collecting data, and reporting on it periodically, it is crucial not to lose sight of these KPIs’ purpose. You should review and analyze the information so that you can adjust the strategies and tactics if necessary. The goal is to help you achieve operational or strategic objectives.

To conclude, KPIs are a helpful tool to help manage change and achieve goals. Being disciplined about interpreting the KPIs will also help you stay on track and determine the effectiveness of strategies and tactics. If your procurement organization is new to establishing KPIs, the ones provided in this article are an excellent place to start.

Leadership, Procurement

The 3 Things You Can do to Become More Adaptable

by Lourdes Coss, MPA, CPPO

Good leaders are adaptable. Being adaptable in a time when there is so much uncertainty has been beneficial to many. People that have developed this skill can pivot and adjust to whatever life throws at them. There’s been no time like the present when this skill has been more valuable. In the last several months, the value of being adaptable has been revealed to us in all of our environments, work, home, social, and even health and spiritual life.

The Pandemic forced us to pivot in many different aspects of our lives. It has also, to an extent, sparked our creativity in even our most routine activities and the ones we took for granted. Grocery shopping, dining out, a stroll in the park, and family time have taken a new meaning in many lives. We learned to appreciate the goodness of life, as we have seen its fragility flash in front of us. It has made us realize how quickly our lives can change.

We are more aware of the value of the little things in life. The little things that we have discovered are not so small or insignificant. We have come to realize that what we often refer to as “little things of life” are, in fact, the essential things that bring so much meaning to our lives, like moments with family and friends. Many crave the in-person interaction when, in the past, we probably skipped an event because of the human interaction overload. I think that we have reached the other extreme. We now crave human interaction.

Despite the isolation and distancing, we immediately found a way to stay even more connected. I think that I talk more with family, friends, and colleagues now than I had in the past. Perhaps it is the fear of isolation and the need for human connection. Thanks to the different platforms that rapidly scaled up, many of us were able to pivot quickly. We found ways to stay connected and even develop friendships with people across the country that perhaps we would not have otherwise formed.

On the procurement front, my colleagues have found creative ways to continue to deliver the level of service that their resources permit. In doing so, many have discovered that physical presence in a specific site is not a determining factor to effectiveness or productivity. It’s interesting how we can adapt when the situation forces us to. The thought of telecommuting would have been rejected by most of the government organizations immediately. It would have been one of those “dead on arrival” ideas that an ingenious person would have brought up in a meeting and immediately rejected by many. Every argument has its time. The difference is that absent the current Pandemic; the idea would have been a “nice to have” pie in the sky. It would have taken much effort to get buy-in and get used to the concept of telecommuting.

On the other hand, the power of choice is one of the most precious things that we have. It is what makes us individuals. Sometimes the power of choice works against us. Because it allows us to remain stubborn to the current circumstances or the changing environment, it provides the easy out for our fear of change and the unknown. As long as we can choose, we can choose to do nothing. Choice and adaptability may seem to be on opposite sides, but I don’t see it that way. You have the option to adapt to the demands of the environment.

What makes people adaptable? Let’s start with the fact that we are all different, and some adapt to change better than others. Whether in a crisis or a situation with a less critical change, the fear of the unknown affects some people more than others. We all have some of that fear. So, what can we do to become more adaptable? I have some thoughts about that.

Adaptability requires awareness and intentional action. It requires us to recognize that we can learn new things. We can succeed under unique circumstances if we are willing and open to new and different thoughts about “how” we approach life and the events that it presents. I believe that there are at least three things that people can do to become more adaptable

Elevate your awareness. Increase your awareness level to bring your thoughts from autopilot to the conscious level. Sometimes we create patterns and habits that are reinforced by our environment. We get comfortable and prefer to stay in that comfort zone. Let’s take a moment to think and challenge our resistance to change. We may see the situation differently, not through the eyes of what’s comfortable but as an opportunity to expand our range of knowledge. It will, of course, require the discomfort that comes with learning something new.
Embrace the learning opportunity. When we are open to new experiences and learning, there is a discomfort that comes with growth. If we embrace learning, we will identify the feelings associated with the learning process. As we become familiar with those feelings, we may be better able to cope knowing that those feelings are temporary.
Become an advocate for change. Advocating for change will help you be more open to taking risks. Taking some risk will open you to the opportunity to explore new ways of doing things. When you encourage others to change, it helps you be more open to taking risks in unfamiliar areas. The ability to take detours in your journey may bring you more opportunities, but you must be willing to take the risk.

To sum up, adaptability is a necessary quality of a leader. We can plan for the future, but we cannot predict it. We should remain flexible to the detours that we encounter in our journey in life, whatever that might be. The one sure thing is change. To the extent that we remain flexible and adaptable to whatever comes our way, we will be able to overcome any adversity or challenge. We should see new circumstances as opportunities for the future.

Leadership, Procurement, Teamwork, Transformation

The Principles of Growth and Procurement Transformation

By Lourdes Coss, MPA, CPPO

Transformation and growth go together, and awareness is a prerequisite for development. I found this to be true throughout my career in public service. Both personal and organizational development requires the understanding that there is the potential to expand our capabilities and perform at a higher level. We may have a natural talent in some areas. But talent alone does not determine the level of performance or success. It is necessary to cultivate and develop those talents. We all have high potential to become more and do more, but we each choose to use that potential. I read in several sources that we use anywhere between 10% to 40% of our potential. I can only imagine how much more we would accomplish it we use another 20% of our capabilities. It is a daily choice that we make to set our priorities and determine how we spend our time. It is easier to go about life underperforming than elevate our game and take a more challenging path, a path that can lead us to achieve extraordinary things.

Some of us may have lofty goals of making a mark in the world by leaving our leadership legacy for our family, colleagues, and our profession. Some of us want our existence to matter by making the contributions that future generations can enjoy. If our goal is to leave a mark in the world, we need to stay relevant, and to remain relevant, we must continue to evolve into the best possible version of ourselves. But growth is change, and change is uncomfortable.

“Insanity is doing the same thing over and over and expecting different results.” — Albert Einstein

I led a mastermind with a group of procurement professionals. A mastermind is a group of like-minded people who come together to share and discuss ideas and concepts. The book that we studied was “The 15 Invaluable Laws of Growth” by Dr. John C. Maxwell. As I gathered with colleagues and friends, it is refreshing to learn that many want to continue to learn, grow, and make a difference. We all struggle with the day-to-day and perhaps mundane tasks that often get in the way of our growth. Sometimes we wonder why we’re not further along in our career or other aspects of life. I think the answer to that is in our daily schedule, our habits, and routines. The choices that we make today reveal the results tomorrow.

The reason these are laws is that they apply in every situation. I am now putting this book in the context of team transformation, and I believe that these laws are applicable based on my experience. There is a reason why they are considered laws. The awareness step always preceded any transformation plan, at least, those I led. It was necessary to assess and take inventory of the conditions and circumstances that led the team to the present state. Reflecting on the past helped take stock of the present conditions of the team and their performance. This reflection and observations helped identify the gap between the vision for the future and the current state. Understanding the gap helped me develop a path forward. The purpose of the goals for growth was to help the team become people who could achieve the vision. Change, of course, was necessary.

In my opinion, John Maxwell’s laws of reflection, intentionality, and awareness are present in the initial assessment exercise. If we want to grow, it is necessary to take inventory of where you are, determine where you want to be, and be intentional about taking steps that move us towards the desired state. The law of the mirror comes into play when the organization decides to invest in the procurement team’s transformation. From the organizational perspective, those making the decision see sufficient value in the procurement function to invest in it.

Interestingly, these laws apply both at the group level and the individual level. Each individual in the organization needs to self-assess where they are and where they want to go. Once they identify the gap, they can design their growth journey. Individual awareness goes beyond professional goals. Taking a hard look at themselves in every aspect of their lives is ideal. Understanding where we are is vital because we cannot change what we don’t know is broken or no longer serves us. Having awareness is the first step, but we must also take action. Action has to be very intentional to move us in the direction of our vision for the future.

Another law that I found revealing was the law of the environment. I can relate this law to the culture of the organization. The atmosphere within the team may or may not be conducive to growth and development. In an organization, everyone influences everyone else. When each member of the organization is at a higher level of awareness and has the right leadership in promoting an environment of collaboration, that environment will be conducive to growth. This particular law says that “growth thrives in conducive environments.” We don’t select our co-workers, but a team environment can make change possible. If the people around us are on a growth journey, the chances for the team’s collective growth are more significant.

We see the law of the rubber band in the tension created by growth. Change is difficult, and development requires change. This tension between the comfort zone and the unknown translates into growth both individually and collectively. When we stretch our abilities, we are essentially learning and growing. Challenging situations offer us tremendous growth opportunities. Being in that tension stage is very challenging, particularly for the most tenured staff. Imagine going from the most knowledgeable in the room to having to re-learn your job! Although you are always the most knowledgeable in the group, there is no tension and, therefore, not growth. This tension stage is uncomfortable, but as the rubber band, individuals add the most value to the organization. This tension is a good thing even though there’s plenty of frustration. To stay relevant, one must continue to grow and change. This tension benefits everyone both individually and collectively.

Growth tension can be maintained when each team member remains curious about the continuous improvement of processes and finding ways to bring best practices to the operation. Staying curious is an asset that will help keep the individuals in the team growing. An environment that enables individuals to explore that curiosity will benefit the entire organization.

We can observe on the back end of the transformation process, the laws of expansion and contribution. The result of the growing tension is the increased capabilities of the team and each individual. As the group expands its capabilities in an environment conducive to growth, team members will want to share knowledge, particularly with new team members. This mindset of sharing information, helping those around you, and contributing to others’ growth also helps individuals get a more in-depth understanding of what they have learned. An environment of collaboration is beneficial when it comes to change.

To conclude, I think that all of the laws discussed in the book are important and very relevant both on an individual basis or a group basis. I only mentioned a few of the 15 laws of growth. These are present in the transformation process, starting with awareness, reflection, intentionality, and worth (law of the mirror) at the very beginning. Growth comes from the tension caused by a change in an environment that supports collaboration and the continued curiosity for continuous improvement. Finally, when team members can teach each other, their knowledge is elevated and helps create a culture of collaboration, growth, and development.

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