1.
PROCUREMENT IN 2021 & BEYOND
PEOPLE, PROCESS, AND TECHNOLOGY
JON HANSEN
Editor & Lead Writer,
Procurement Insights
DR. JOHN GATTORNA
Supply Chain Thought Leader, Author,
Advisor Gattorna Alignment
PETER WOON
Global Procurement,
Supply Chain & Sustainability Leader
KORU Greentech

2.
CONTENTS
1. Introduction
2. Traditional procurement operating models no longer feasible
3. People
4. Process
5. Technology
6. Conclusion
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02
03
08
11
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3.
ccording to a Supply Chain May 2020 article, prior to the recent pandemic “the financial crisis of 2008
was the last trigger for drastic changes in procurement operating models.”
Today, there is a “shift towards automation and AI” to enable companies “to survive during uncertainty and
ensure business continuity.” However, is it technology alone that fuels this latest
transformation?
While technology obviously has an important role to play in laying the foundation
for procurement’s transformation over the next year and beyond, it is one part of a
trifecta for future success that also includes the evolution of talent (people) and
operating models (process).
To explore this further, Jon Hansen caught up with seasoned procurement and
supply chain experts Dr. John Gattorna and Peter Woon on Zycus’ Expert Talk
Series.
We’ve taken down the best bits from their engaging discussion and
created this action-packed eBook for you.
01
INTRODUCTION
A

4.
02
Traditional procurement operating models no longer feasible
Procurement needs to be seen as an
integral part of the end-to-end
supply chain
- Dr. John Gattorna
According to a Supply Chain article, traditional procurement operating models
have been proven to no longer be feasible. How much of it was brought about by
COVID-19? How much of it was accelerated, given that we were moving in that
direction anyway?
Jon Hansen
I don’t think the traditional way of working was ever feasible. In my experience of
working with global organizations and consultants, I have found organizations to
be spending a lot of time analyzing back-end activities, while completely
neglecting the front-end (customers). This has been my criticism of organizations
that don’t bring procurement under the purview of a supply chain executive.
Modern organizations have procurement, manufacturing, and logistics reporting
to the EVP of supply chain, thus ensuring tighter integration. Whereas in
traditional organizations, procurement reports to the CFO, who is primarily
interested in numbers.
The good thing with COVID-19 is that it exposed this problem, and
also overcame the resistance for change, forcing organizations
to rethink their strategies in terms of the procurement side of
their business.
Dr. John Gattorna

5.
People
Organizations are looking at people who can
make their supply chain & procurement
more strategic
- Peter Woon
Are procurement people ready to take the next leap and step into this new
world?
Jon Hansen
To some extent yes, and COVID-19 did help accelerate some of the
transformation. Since the last 10-15 years, organizations have been moving in
the direction of leveraging technology in the procurement and supply chain
world, thereby pushing resource readiness. Organizations are now thinking that
they do not only need buyers that can process PO’s – that can be done via an
automated system, rather they are looking for people who have different
skillsets & who can help make their supply chain and procurement more
strategic.
Procurement professionals who haven’t made the transition in the last 2-3 years
now find themselves on the brink of being replaced by people who bring a more
strategic outlook.
Peter Woon
03
According to our survey, almost 65%
procurement professionals think that
PEOPLE have the greatest influence on
procurement performance
People Process Technology

6.
04
Technology is designed to free people from the mundane tasks so they become
more strategic in their thinking. Is this a symbiotic progression not just in terms
of technology but in terms of people?
Jon Hansen
It is. Most of the change initiatives in the last decade are transactional or
transitional, and with either type what happens is that when the pressure comes
off, people flip back to earlier ways of working. It doesn’t make any fundamental
change. We got to go a lot deeper and recognize that if you want to transform
your procurement and supply chain, you are actually transforming your whole
business.
If you look at traditional manufacturing businesses, 85% of capital investment is
in supply chain and about 65%-70% is in working capital. Therefore, most
businesses actually are supply chain businesses, and they don’t even
recognize it!
I think we are at a stage where we have a wonderful opportunity, if we
can find a way for our people to embrace change and lock that in with
really good technology, such as the one provided by Zycus, it will help present a
real-time view for the supply chain people, who can make quick decisions
on the go, enabling better customer satisfaction.
Dr. John Gattorna
Most businesses actually are supply chain
businesses, and they don't even recognize it!
- Dr John Gattorna

7.
05
Is technology and process going to trigger the ability in people or is it the other
way around? To what degree? Who has that responsibility to be the driving
influence? What role do people have?
Jon Hansen
The role of people is still very much important, though the expectations have
changed overtime. Technology is there and will always be, but is just an enabler
and not ‘THE’ solution. Technology will only help you do things in a more efficient
way. You still need the people element to compliment the technology and the
processes to deliver the optimal solution you want.
As Dr. John mentioned, most forward thinking organizations now look at supply
chain not just as a support function but as part of the solution, in turn delivering
products and services to their target customers.
If you look at the broader picture, your supply chain is linking the supplier
base to the customer base and providing everything in between.
Peter Woon
You still need the people element to
compliment the technology and the processes
to deliver the optimal solution you want
- Peter Woon

8.
All of us must embrace the horizontal supply
chain philosophy!
- Dr. John Gattorna
Gartner used the term purpose-driven organizations. When you think about the
term, what comes to mind? Is it just a term or does it have a substantial meaning
behind it?
Jon Hansen
The best organizations have leaders with vision who know where they want to go
but are also cognizant of where they are currently- their structure, processes,
technology needs. You can’t have successful change unless you know where you
are starting from and where you are going.
The other fascinating thing is that 60%-70% of what goes on in an end-to-end
supply chain is people related, and their behaviour. Yet, no university in the
world integrates the knowledge of people behaviour with the technical aspects of
supply chain.
What I do believe is that if we start simple and get our people to understand that
philosophically the supply chain runs horizontally, and that their work isn’t
limited only to the function they are a part of, we will succeed in delivering a
better end product.
Dr. John Gattorna
06

9.
07
When it comes to extending beyond the organization, do we take our vendors’
business model and financial well being into account?
Jon Hansen
Definitely. You have to look at suppliers as a key part of your end-to-end supply
chain. All three areas i.e the suppliers, the incumbent, and the customers should
be strong across all the areas of people, process, and technology.
Peter Woon

10.
08
Process
If we look at the business model from a process standpoint, what was the biggest
difference between organizations who could respond better to orders than those
who couldn’t?
Jon Hansen
The pandemic now, and the ongoing trade tussles in the last couple of years
leading up to the pandemic have forced organizations to rethink their strategies.
Those who were depending on outsourcing their non-core processes are now
looking at alternatives and ensuring that they have enough local support and
processes in place to encounter any challenges to the supply chain.
The change in the design of the supply chain will require a lot of process
changes, which shouldn’t be limited to silos but should involve a holistic
approach of taking into consideration the suppliers , customers and their end
objectives.
Peter Woon
What if your suppliers are not up to the process changes that you want to
incorporate in your supply chain?
Jon Hansen
What you need to do is look at the portfolio of suppliers and select the ones
that you think are critical to your business, and if still there are a lot of
backyard vendors left then you need to invest, especially in digitizing your
backyard vendors with the help of the internet and cloud-based solutions.
Dr. John Gattorna

11.
09
The processes have to extend to include everybody, both internal and external to
the organization. Is that correct? Has technology made that a viable option?
Jon Hansen
Yes technology in its current form has made it viable. You don’t need to actually
buy the hardware or software, what you need to buy is the use of the hardware
or the software. Today everything is on the cloud in the SaaS model, which
provides an affordable way of adopting the technology.
On the process front, unless you want to have custom-made processes in place,
most of the SaaS organizations will take care of at least 80% of your process
needs as well while implementing the technology.
Peter Woon
It depends on how critical a supplier is. Organizations in the past have gone on
and bought some of their most critical suppliers to ensure there’s no break-up of
the supply chain.
Dr. John Gattorna

12.
10
To what degree do you engage in a collaborative effort when it comes process
harmonization before implementing a technology?
Jon Hansen
You can’t work on it in a silo. You need to understand what is mission critical to
you and at the same time look at your suppliers and understand their current
situation. If you are trying to implement a high-tech technology against a low-
tech supply base then you are setting yourself up for failure.
Segmenting your suppliers based on their technology maturity and
implementing different SRM (supplier relationship management) programs can
help you achieve your end goal.
Peter Woon
Without clean data, digital transformation is
impossible
- Rob Handfield

13.
Technology
65% of all data captured is considered as dark data. Is this where cognitive
procurement comes in?
Jon Hansen
The technology- be it cognitive, AI, RPA etc. cannot be used as a standalone
component in itself. The inclusion of people with knowledge and experience and
augmenting that with technology is going to make the difference. You need
people to tell the technology what to do.
Peter Woon
11
With people expected to do more with less, will AI help?
Jon Hansen
The answer is Yes. But no on its own. The way we can do more with less is by
being cleverer in aligning with our customers’ expectations. In the world of one-
size fits all- the last 5 decades- we’ve been over servicing some customers and
under servicing others. With AI, you’ll be able to see patterns and distinguish the
needs of customers and suppliers and share appropriate response to customers
and give them what they expect- no more, no less.
Dr. John Gattorna
According to our survey, almost 60%
procurement professionals think that
AI will have the maximum impact in
Supplier Management
Supplier
Management
Procure
to
Pay
Source
to
Contract

14.
In which area will AI have the most impact?
Jon Hansen
I would be looking at supplier management as the key area as that brings in the
ability to understand the capabilities of your suppliers and choosing to ask your
supplier for no more, no less. Understanding and managing the supplier base,
their expectations etc. is the key.
Dr. John Gattorna
I would also like to go with supplier management as that is where I believe the
crux of the supply chain management lies. However, there’s another point that I
would like to add here, which is that most discussions today around
procurement and supply chain happening while keeping in mind the MNCs
across the globe, whereas every country has 80%-90% SMEs. The big question is,
what is being done to bring in the SME perspective, both as a customer and as a
supplier? Not a lot of discussions today around procurement and supply chain
take into account the smaller players, which needs to change, and the question
that we need to ask ourselves is that how do we bring in technology to enable
that shift?
Peter Woon
12

15.
IN CONCLUSION
COVID-19 has taught us the importance of supply chain and supplier
relationships, and while we can have strong internal processes, until
they extend and reach out to the suppliers, we are not going to be
successful.
In times of uncertainty, building long-term relationships with suppliers,
even if it comes at a premium is the key.
On the people, process, and technology front, organizations should
look at transforming them in the exact order, with priority given to
people- who drive change, processes that extend beyond their own
organization, and adopting technology keeping all stakeholders in
mind.
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