Managing Procurement Change – What Gets Measured…

In his fourth blog of the series, Peter Smith discusses how best to go about managing successful procurement change. Read on to learn why having the appropriate governance structure in place helps define the formal reporting that is needed for a successful procurement digital transformation.

Procurement change and the key enablers

In this series, we’ve looked at why procurement change of any sort is often difficult and described the benefits of having a clear long-term vision allied with a focus on quick wins and early deliverable improvements. In the last article, we focused on the people aspects, and why you really must take your key stakeholders with you on the journey. Now, let’s look at some of the key enablers of successful change management – the activities and processes around governance, measurement, and reporting.

Now that doesn’t sound like the most exciting range of topics, I confess. At one extreme, talking about governance can cause some eye-rolling and “do we really need to worry about that” comments.  Many of us have had a boss who told us “just get on with the project”, then of course complained like mad when the results arising from lack of planning or governance came home to roost.

Equally, we must beware the over-managed program (or project) that becomes hollowed out, to the point where nothing much actually happens in real delivery terms, but an army of risk managers, administrators, project management office staff, and the like keep the whole edifice in place despite the lack of real progress. It can take months before the CEO realises that nothing is actually moving forwards.

Get the right project governance

I have seen projects in government organisations where non-productive team members significantly outnumbered those actually delivering progress, but the answer lies as it often does in the concept of appropriateness.  We need to make sure governance and associated processes are suitable and correlate to the size, risk, and importance of the change project or program.

Looking at it in basic terms, governance means knowing who is in charge (the “senior responsible officer” as some put it), establishing how decisions will be made and how progress will be assessed. Without appropriate governance, the first time you hit a problem, you can find that change is derailed, as the route to escalate and resolve issues at a senior level is missing. 

Indeed, having the right steering group or program board in place really is a critical success factor for change programs. It can be an existing group that plays the role – maybe an operational board or similar. But the danger then is that the discussion about your program becomes a quick chat tacked on to the end of a lengthy meeting with many other agenda items. So certainly for major programs, I like to see a dedicated steering group or similar body put in place.

It is also a very good way of getting key stakeholders on board, perhaps even including some who you feel could be “blockers” to the change. (Yes, it is the old “inside the tent rather than outside” analogy). A good group can remove barriers, make sure the right people in their own areas are contributing to the program, offer their knowledge and experience, and provide a sounding board to the program team.

Defining the right reporting

Having the appropriate governance structure in place also helps define the formal reporting that is needed around the change program. If you are a Dilbert cartoon lover, you will know that many of Scott Adams’ strips cover the vicissitudes of project management. My favorite in terms of progress reporting is when the pointy-haired manager asks, “How’s the project coming along, Dilbert”? Dilbert replies, “It’s under-funded and doomed, but I’ve got some good inertia going and I’m setting up the marketing department to take the blame.” 

That can be how reporting is regarded; but in real (successful) life, it needs to cover a range of more useful topics.  Actual progress concerning the program is obviously fundamental, tracking actual delivery against plans.  We should also monitor resources used to achieve that progress, and significant programs will generally also report on risks. On top of that, we have the more PR-type communication of progress and success (hopefully) that can keep the wider stakeholder groups on board and enthusiastic.

Benefits tracking

Benefits tracking is a particularly important element of reporting, as it in effect justifies the effort being undertaken. Every project and program is different in terms of exactly how it should be executed, but there is one important general point here. If you are tracking and measuring benefits flowing from the “change”, you must know where you started.

That seems obvious, yet I have seen many projects where initial baselining was not done properly. If you implement a purchase-to-pay project that means 95% of invoices are now handled without manual intervention, that’s great – but what was the number before the project?  If 90% of internal users love the new catalog ordering system, well done – but did you measure “user satisfaction” before you started?

That’s not important just so you can boast about your success, although it does of course help to justify the project and the cost. It is about having a clear focus on real progress and success and being able to spot areas that are ripe for further improvement, or that need remedial action. So do ensure that you get a clear view of the initial situation. Even if your instincts are to get going and drive that change, some up-front measurement and data collection tend to prove very useful later.

Read the whole series!

Feel free to revisit each one and take note of their wealth of useful information and insights.

Managing Editor, Spend Matters After graduating from Cambridge University, Peter started his procurement career at Mars Confectionery, then was Procurement Director for Dun & Bradstreet Europe, the Department of Social Security, and the NatWest Group. He is a Fellow and was 2003 President of the Chartered Institute of Purchasing and Supply, and has served as a non-executive director of two large public sector organisations and a growing private firm.  His second book, “A Procurement Compendium” was published in 2019, and Penguin Business is publishing his latest book in autumn 2020. From 2010-18 he was Managing Editor of the Spend Matters Europe website, read by thousands of procurement professionals every day. ​