Saturday, 4 August 2012

Thoughts on reshaping the procurement paradigm and 'The Elastic Enterprise' (Book review)

It's not often I come across a book which really makes me wonder are we looking at the early signs of a new procurement paradigm - well The Elastic Enterprise does.  However, before I get to the procurement implications ...

The book would sit comfortably beside Porter's 'Competitive Strategy',  Lamming's 'Beyond Partnership' and Sandel's 'Justice' as saying something worth dipping into and mulling over, time and time again.

Strangely, I can't remember how I came to receive this book but I'm fairly sure it was through responding to a social media invitation. I'm not going to name the organisation, but thanks RA and LM for the book, yes, it was excellent.  As a one sentence summary, The Elastic Enterprise is a descriptive account of how organisations such as Apple and Amazon have been successful based on five dynamics, namely, Sapient Leadership, Business Ecosystems, The Cloud, Universal Connectors, and Business Platforms.

I actually read the book out of sequence, starting with Chapter 3, 'Creating the elastic enterprise'.  I thought this was one of the clearest explanations of digital strategy I have come across - the section on Cloud was particularly good but perhaps more could have been said about the implications of BYOD and social media.

Having said that, it was Chapter 4, 'People Unlimited' stirred my imagination.  Yes, I recognise and have long argued for supplier integration and co-production to deliver innovations through procurement.  I have also been advocating social media and recognised the role of ecosystems for some time - indeed spent two years working on a social media as a tool for efficiency improvement. However, prior to reading the book I hadn't made the connection between the two or how firms, like Apple and Amazon, lead an ecosystem in which suppliers provide, at a cost to themselves.  To me the ecosystem represents a new procurement paradigm: many small innovative providers working individually within a structure orchestrated by a leader. SCM thinking needs refreshed. The traditional idea of competing for contracts needs refreshed. The traditional model of contracting needs refreshed. Procurement's approach to M&A needs refreshed. That's quite a shift.

My imagination has been stimulated - how could that approach be more widely transferred to procurement? Now, have I done something stupid and prompted someone else to research the wider procurement implications?

This book is really only 150 pages, so I don't want to over-egg it, but another useful contribution was to the change management debate - those interested in change management within their organisations will be interested as will those interested in how to deliver significant change beyond their organisational boundaries - again, ecosystems.

But step beyond that and ask how can the lessons of The Elastic Enterprise be transferred to public sector reform. Now that's something worth debating!

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