William Hefley’s 15 lessons learned from dealing with client organizations talk on “Identifying Issues in Sourcing: Informing Development of Best Practices” that was delivered at the 2006 Informs Annual meeting aren’t the only lessons that should have been learned 20 years ago that still haven’t been learned by the majority of Procurement organizations today. So we continue the series!
16. Process Change Requires Mapping, Desired State Definition, Gap Analysis, and Change Management
Any time the C-Suite decides a process needs to be updated, a department outsourced, or a solution replaced, they jump right to bringing in a Big X consultancy to tell them what to do without understanding exactly what they are doing now, what they need to do in order to improve, and what the gap is. They give the consultancy a big picture objective, desired outcomes, and tell them to go, go, go. The consultancy feeds the company profile, the company requests, and their standard advice and decks into an LLM and has it produce a 200 slide strategy deck. Then they hand it to the new interns, fresh faced graduates with no real world experience, to review and touch up and draft a “killer executive summary”. The interns shunt it up to the project lead, who spends an hour customizing it to his story telling style, books the delivery meeting, presents it, makes exaggerated promises, and everyone cheers.
A project with little thought goes ahead, gets delivered, and then crashes and burns. And the cycle repeats.
17. Major Technology Implementations/Replacement and Supply Chain Network Redesign are Mega-Projects
Every organization treats these as simple sourcing and simple one-and-done projects when nothing could be further from the truth. Technology project (partial) failure rates are past 88% and AI project failure rates are 94%. The odds of you succeeding are insanely bad! The reason is that every one pretends they are simple projects, unrealistic timelines can be easily met, and adoption will automatically happen when the implementation is complete. We all know nothing could be further from the truth. But even worse, buyers continually reward vendors who underpay the effort, present the shortest project schedules no matter how unrealistic they are, and give many assurances that their incredible ease of use will make users want to use the solution.
18. If An Engagement Doesn’t End At Least As Much As it Starts, It’s A Lost Cause!
Companies love to add new processes, new SaaS solutions, new technologies, new product lines, new service lines, new support partners, and new GPOs to “keep costs down”. But very few ever completely end processes, decommission SaaS (especially if the licenses can be put on P-Cards / personal credit cards), retire old product lines, block user preferred services, etc. It’s uncountable how many times organizations have brought in vertical experts to optimize telco costs, streamline SaaS costs, consolidate janitorial and suppliers and MRO, etc. only to see half the promised savings never materialize as some offices refuse to change carriers, give up their preferred SaaS app (which is why some enterprises have over 1,000), still buy what they need as-needed from the local distributor, etc. Without the resolve to end things, new engagements don’t deliver because anything they “save” or “improve” gets “lost” or “degraded” because the organization just diverts focus even further.
19. A Needs Assessment Must Precede Any Services Selection and Engagement
Right now, most consultancy based projects start as a result of a balance sheet exercise, a consultancy push, or a technology hype cycle. In the latter case, right now the vast majority of organizations are engaging Big X consultancies to help them with their “Gen-AI” initiative — even though they have no idea how it works, what it does, or where it should be applied. The same thing happens every time a new consultancy craze (outsourcing, rightsizing, DEI, etc.) comes along. And any time the CFO decides a cost is too high and the CEO mentions it to a consultancy CEO, suddenly there’s a new demand for a transformation project to cut costs. All without any analysis of what the organization actually needs, what opportunities there are for real process improvements and cost reductions, and what the organization actually needs to achieve success.
20. There’s No Success Without Project Assurance
And, of course, every organization believes that once the project is done, the new process will be adopted, the new system will be used, and results will magically materialize. The reality is that without a proper change management and training plan, stage based implementation, work alongside training and monitoring, and general project assurance, the new process will be ignored, the new system bypassed, and nothing will change. And in two and a half decades in this space, I’ve never seen a system implementation or process transformation plan with proper project assurance.