The Sustainability of Cross Functional Collaboration
An article in the Harvard Business Review (HBR, Nov-Dec2019), ‘Cracking the Code of Sustained Collaboration’ by Francesca Gino articulated the problem on sustaining collaboration in organizations.
‘“No change seems to stick or to produce what we expected,” an executive at a large pharmaceutical company told the author. Most of the dozens of leaders she interviewed on the subject report similar feelings of frustration: so much hope and effort, so little to show for it.’
The same may be said for a lot of collaboration between procurement, finance and operations. In a meeting some years ago a senior procurement executive of a large SA organization told me that, if his operational colleagues chose not to use the (excellent) contracts that he and his team had put in place, then that was their affair! The issue of realizing savings opportunities didn’t appear to be upper-mind in the manager’s priorities (or, presumably, part of his KPIs).
Many executives like making decisions as to how to spend the organization’s money and have a particular priority in mind when they choose suppliers, as the picture below shows:
Procurement has a responsibility to take into account all these concerns and requirements in implementing strategic sourcing and category management plans. But the sustainability of these procurement strategies, we believe, requires the bedrock of a single source of truth for use by all the parties.
Visual, real-time analysis tools present all the involved functions with a view of what is happening, where and by whom and what corrective action is required to maintain delivery of the agreed goals. It can measure savings achieved. It should also be instrumental in doing ‘what-if’ analysis and helping to plan for the future.
Real-time analysis is an essential lubricant in all interactions between procurement and its internal customers and managers; it provides empiric information for all the parties and reduces the emotion and politics that is often involved in spending the organization’s funds.
Without the tools to measure sustainability most procurement initiatives will continue to emulate the waves.
Governance, Risk and Compliance
4 年Morning Alan, some quick thoughts. Third party’s such as suppliers and sub-contractors as listed here form part of the stakeholders identified as part of establishing the ‘context’ in the risk cycle. Risks often hide in these relationships as organisations tend to exclude them as they view them as a risk outside of their organisation or something not under their control. Not so unfortunately. Every supplier or third party action or decision or omissions could have a negative impact on the organisation achieving their strategic goals and objectives and so therefore they form part of the risk universe and landscape of an organisation and these relationships should be well managed. Managing these relationships could be key in ensuring smooth operations, delivering service and products timeously, quickly and effectively and efficiently while still maintaining the agreed product quality which keep the customers happy and smiling. Harnassing information correctly to monitor the service of these third parties or suppliers and utilising that information to identify shortcomings and correct them and enhance the output could be hugely beneficial in the long run. But this requires collaboration between all stakeholders.