Unless you are living under a rock, you will have noticed that many teams and businesses are going Agile. Originally created as a new approach to software development, Agile has spread across other disciplines and business functions, and is now impacting procurement teams.
Even if you feel your procurement team isn’t ready for an Agile transformation, it’s important to be aware that the business functions you work with (your stakeholders) and particularly your suppliers may have gone agile. If procurement doesn’t have the willingness or capability to work with Agile teams, the function will quickly become irrelevant.
The Agile Manifesto is comprised of four foundation values and 12 principles which together create the Agile approach. In this article, we discuss how the four values (originally designed for software development teams) relate to procurement.
1. Individuals and interactions over processes and tools
Put simply, this value means you will gain more benefit from human interactions and prioritising relationships than you would from focusing on process. Following this value leads to less rigidity, better communication and higher responsiveness to change.
In procurement, this means putting a focus on developing supplier relationships to a point where you can explain your needs according to the outcome you require, then let your suppliers come up with a solution without the burden of complex scoping and product specification. Applied successfully, this value will drive supplier innovation.
2. Working software over comprehensive documentation
Agile isn’t about the elimination of documentation, but it is about streamlining documentation and processes to avoid project delays or getting bogged down in the detail. Mirko Kleiner, the founder of Lean-Agile Procurement and facilitator at PASA’s upcoming Lean-Agile Procurement workshop in September 2019, advocates reducing proposals to just one page in a predefined structure.
In software development this value refers to the importance of delivering (and refining) working software rather than spending valuable time on extensive documentation. But in procurement, “working software” could refer to the many end-to-end e-procurement packages available in the market, all of which promise to make procurement simpler, cheaper and faster.
3. Customer Collaboration
Traditionally, procurement’s internal customers (business stakeholders) are involved only at the beginning and very end of the process. Requirements are discussed (often in great detail) prior to any work starting, but the customer is typically not a part of the process itself.
The third Agile value means actively involving customers all the way through the process, with high-level engagement and collaboration throughout. This makes it easier to understand and meet the customer’s needs and respond to change if required (see Value Four). In practice this may involve having cross-functional teams, or having the customer attend regular meetings to ensure their needs are being met.
4. Responding to Change Over Following a Plan
Responsiveness lies at the heart of Agile. In software development, the problem was that specification change was regarded as an expense and seen as something to avoid. The reality is, however, that business needs do change, and may have diverged by the time the final product was eventually delivered.
Agile instead favours an iterative process where priorities can be shifted from iteration to iteration. Change is welcomed as something that will improve a project and provide additional value.
In procurement, this means encouraging and responding to feedback from your internal stakeholders, and being willing to make a change instead of continually having to say “no” because a change request doesn’t align with the original plan. Along with improving responsiveness and alignment to ever-changing business needs, taking this approach will remove one of the enduring frustrations in working with procurement teams.
Join PASA’s Competitive Advantage Via Lean-Agile Procurement workshop, a two-day certification workshop (LAP1) taking place from 18-19 September 2019 in the Sydney CBD.
The workshop will be facilitated by Lean-Agile Procurement’s Mirko Kleiner, Thought Leader in Lean-Agile Procurement, CIPS Award Winner 2018, international Speaker, Author, President of LAP Alliance, co-founder Flowdays, Agile Enterprise Coach, Certified Scrum@Scale Trainer. Register here.