More of a hope than a prediction, this episode of ThrowForward Thursday has a rant warning attached, as we imagine a future where companies have stopped outsourcing their supplier management to procurement services that make it incredibly difficult to sign contracts, send invoices and get paid for the products and services rendered. Stopped because – maybe – it has been made illegal to outsource procurement!
The cost savings companies make by outsourcing procurement services are completely outweighed by the brand and reputation damage they incur as suppliers are made to jump through time-consuming and costly hoops just to get paid.
Let’s imagine a future where companies are driven more by creating a great environment in which to do business than they are by cost-cutting efficiencies.
TRANSCRIPT
Welcome to ThrowForward Thursday, my name is Graeme Codrington, and every week we jump in the future and see what’s going on there and if it means anything for us today.
And today, I present to you a dream, a vision of the death of procurement and the end of Outsourcing. A little bit of a warning here, this is a little bit of a rant episode as well.
You see, for the last 10 to 15 years, many large companies have outsourced quite a few of the functions that a big corporate requires. One of those being specifically how these companies manage their suppliers. If you’re supplying products or services to a large corporate, you are probably stuck somewhere in procurement hell. This is one of the things that big companies have outsourced. They have asked some specialist company off to the side to manage all of their supplies, onboard them, get their invoices, and make their payments. And I think that they have given direct instructions to make all of our lives a misery.
In our small little consulting company at TomorrowToday, we literally employ somebody full-time just to manage our proposal and invoicing processes. The amount of red tape that you have to go through is insane. It is well beyond the benefit that any system will be getting, and it is a massive compliance tick-box exercise that is now, in the last few years, been automated in ways that are horrifying.
You get given a link, you’ve got to sign into a system like SAP or something like that, or Oracle system, and then you’ve got to fill in all details and if you get one tiny little thing wrong, the whole system is cleared. Even when you’ve done it once and you submit it, there’s always a query, and then you’ve got to start again. Nobody in the parent company can actually assist you with it because they’ve outsourced it all. In fact, they often apologise in advance, telling you, “We know how difficult this is. We know this is such a pain. We know it’s going to take hours of your time”, and then they do it anyway.
If any of my clients are watching this, I don’t blame you personally because I know you’re as stuck in that system as the rest of us are. But I do blame your companies for making the dumbest decision when it comes to the experience that your suppliers have of engaging with you.
It is really brand destroying. We go through this procurement process and we don’t come out the other end thinking that you’re a lovely company to work with and we really like you and your brand has been well built. So what do you think we tell people about your company when they ask us, oh, what’s it like to work for this company or that company? Normally we tell them this story, and we tell them how horrible it is to work with them, even though your customers might have a really good experience.
So, I have a… It’s not a prediction, but I have a hope for the future, that sometime in the future, a company, an industry, maybe even a country that is taking its business environment seriously and wants to build an economy that is built on as seamless and as frictionless a process as possible. That’s a good economy to work in that doesn’t add extra pressure and onerous burdens on especially small and medium-sized enterprises, which are overly impacted by this procurement nightmare.
I really hope that sometime in the future, we would have companies, industries, and countries making it illegal to outsource the procurement process, putting rules in place about how difficult or easy it is to issue an invoice for products and services rendered and to get paid and that there would be some level of expectation, not just of customer service, but on supplier service as well.
Thank you for being part of my rant, thank you for listening to what was more of a complaint than a prediction. But really, the companies that get their procurement right in the future are going to have the best suppliers lining up to deliver for them and are going to have those of us who are suppliers talking up their brands and building their reputations in the marketplace rather than the opposite. The death of procurement, the end of outsourcing, it’s not a prediction, but it’s a really, really big and bold dream for the future.
Something different this week, but as always, thank you for joining me in the future and finding out at least what we hope might happen there. I’ll see you again next week in the future.
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Graeme Codrington, is an internationally recognised futurist, specialising in the future of work. He helps organisations understand the forces that will shape our lives in the next ten years, and how we can respond in order to confidently stay ahead of change. Chat to us about booking Graeme to help you Re-Imagine and upgrade your thinking to identify the emerging opportunities in your industry.
For the past two decades, Graeme has worked with some of the world’s most recognised brands, travelling to over 80 countries in total, and speaking to around 100,000 people every year. He is the author of 5 best-selling books, and on faculty at 5 top global business schools.