Change isn’t for everyone.
Humans are naturally creatures of habit, but businesses can’t afford to remain stagnant and not evolve.
In recent times, the procurement function has been through quite an evolution. Embracing change has been a necessity rather than something optional. Given the backdrop of geopolitical challenges and with the world still reeling from the aftermath of the COVID-19 pandemic, being agile and lean to the latest innovations in digital transformation and ESG has been critical to a CPO. “The reputation of procurement continues to increase year on year,” says Jack Holmes, Procurement and Fleet Director at OCS. “During Covid, procurement moved from a word that nobody outside of business even understood to a headline on the news. Suddenly it’s in everybody’s head and slowly it’s becoming more of a standard word within our vocabulary but also through an organisation and business it’s become more strategic.”
OCS expansion
Having started his career purchasing in New Zealand, upon moving back to the UK in 2007 Holmes set about a career in procurement. After moving from an FMCG organisation to procure valves and fittings, he quickly realised procurement in engineering wasn’t for him. “It was an interesting move because it definitely opened my eyes to strategic sourcing rather than materials requirement planning,” explains Holmes. “After that, I moved to facility services and found my way to OCS where I also completed my CIPS qualification. Since then, it’s been a bit of a whirlwind.”
That it has.
Over the past few years, OCS have been through several mergers and Holmes returned to the UK & Ireland team in 2021 after working in the USA for two years. There he integrated four acquired entities across the states and centralised their procurement function. The pace has been fast but it’s one that Holmes has relished.
“It’s a real area for competitive advantage,” he explains. “This is especially true in facility services. No day is ever the same. Facility services versus other organisations in terms of category spend is extremely vast. You can imagine the number of indirect and direct spends we have, and the number of stakeholders which in procurement is a big challenge. It is larger than any other organisation where you’ve got a factory downstairs where you can see everybody. There is more of a challenge and such an acquisitive organisation does bring challenges, but procurement people should love merges and acquisitions (M&A) activity. It brings new opportunities, new leverage, and also new opportunities for procurement to shine. It’s really exciting to work for a company like OCS.”
Procurement’s transformation
Holmes believes procurement’s challenges don’t seem to decrease but become increasingly prominent. “They just seem to evolve and grow legs, but procurement is growing in strategic importance, and it’s being seen as a differentiator in the industry,” explains Holmes. “We’re now looked upon to find solutions, create value, reduce risk, but increasingly we are also seeing procurement have a seat at the table and part of the core business strategy. It’s a really exciting time to be a procurement professional and I don’t think it’ll get any easier over the next few years, but it will just change and become different.”
As companies race to adopt digitalisation into their processes in a bid to scale efficiency, Holmes explains that within the OCS, it is a time of opportunity where transformation and procurement digitalisation must integrate across other areas of the business. “I think getting that part right is really key and extremely challenging,” he discusses. “A lot of Project Management Office (PMO) support is about making sure that we’re running in conjunction with where the organisation wants to go with our digitalisation which is really important. It’s not just jumping headfirst into new technologies or new advancements. We have to have a technology strategy that we follow that needs to be agile and we need to blend it with any kind of change in the macro environment or any change in the business space.”
Embracing change
However, transformation must deliver value. Companies who leverage and introduce digital processes without a strategy or purpose and do it simply because their competitors are doing it are unlikely to be successful long-term. “Technology is a way of value creation, but we should be seeing it as an opportunity to leverage the benefit of procurement, the business and the industry rather than keeping up with our competitors,” says Holmes. “I think we talk about sustainable procurement and normally that’s through our inputs or our supply chain, but transformation needs to be sustainable too. It doesn’t always need to be overnight or because our rivals are doing it.
“I think it’s important at the outset to understand why we’re trying to implement this new technology and following that throughout the whole process that we are still aligning to those goals and objectives. Then at the end of implementation, as we continue to review the lessons learned from that transformation, it’s about asking if it delivered what we were trying to achieve. If we’re not future-proofing any kind of transformation, then suddenly what you’ve got is old tech a year down the line.”
Procuretech boom
The latest buzz in procurement is generative AI. Chatbots such as ChatGPT are causing quite the stir – promising cost savings and efficiency – music to a procurement practitioner’s ears. On the other side of the coin, there is a fear from some sections of the workforce that robots could one day replace jobs. However, Holmes is adamant about welcoming change with open arms and finding the best ways to leverage technology that works for the end user.
“It’s just another form of change and procurement always needs to be at the forefront of being changemakers and delivering change management to improve efficiency,” says Holmes. “I think we need to understand where it fits into the organisation, what’s suitable from it and what isn’t suitable. It’s not just about utilising every bit of AI and machine learning that we can find, but it should be seen as exciting. It is an opportunity to improve our analytics, reduce processing times, streamline eSourcing, and allow us as procurement professionals time for relationship enhancements. I’m a really strong believer that long-term productive procurement supply relationships are built on relationship building. This is where a procurement leader can really differentiate itself. AI and machine learning can’t go for a coffee with you.”
But change isn’t easy for everyone. There are changemakers like Holmes who like to empower others to take up more efficient ways of working and there are those who like legacy systems and familiar operations. Holmes explains that in order to effectively deliver a change management strategy it is important that all the different stakeholders are considered.
“OCS has a huge number of stakeholders and there are other organisations as large as ours, but perhaps have fewer stakeholders that they have to deal with in terms of that change management,” he reveals. “But I think it is crucial to begin taking people on that journey. And I think that’s the internal team and stakeholders. It all starts at home in terms of the procurement department. You’re never going to deliver change or get buy-in if the department doesn’t believe in it. I really believe in allowing my team members to be that champion of change, ensuring that we are actually developing procurement professionals to know how to deliver change, be it through training or through sharing experiences within the organisation or from outside.”
Future-proof
Looking ahead, Holmes is anticipating continued growth and development of Environmental, Social and Governance (ESG) and digitalisation. In his mind, creating a robust ESG strategy will act as a company’s competitive advantage particularly in today’s disruptive and tumultuous world.
“I think it will continue to become more strategic with a greater influence board level,” he says. “I believe that digitalisation acceleration does support ESG initiatives. It’s about enhancing visibility in our supply chain which is incredibly key in risk reduction. With procurement generally, I think we will continue to be leaders for innovation in our supply chain. We are the main touch point for our suppliers who are the experts in their areas and it is about ensuring that we realise that collaboration with those suppliers is seen as such a significant opportunity. It’s an exciting area for professionals to get into and is gaining in popularity. While we still certainly have a skill shortage in procurement, it’ll be really exciting to bring more people into our world.”
