Sunday, 17 March 2013

Social Media: Embracing Digital Procurement Strategy

One of they key aspects of being sociable is the ability to hold a meaningful conversation. In a nutshell that's what social media provides to procurement - the ability to carry on a meaningful conversation. Of course that assumes that procurement has recognised the strategic advantages of 'talking with' as opposed to 'talking to'.

Think of the last time you had to deal with a point of clarification with a RFP - would it be easier and less open to challenge if you had that conversation with the market through micro-blooging sites such as Twitter or Yammer?

Now think of the benefits you've gained through private conversations. Is it fair to assume that sometimes someone has made a suggestion that has saved you a lot of money? Is it fair to assume that someone has triggered an idea for a better of way of solving a problem you've been struggling with? Is it fair to assume that someone has helped you avoid a crisis? I hope you have benefited from others suggestions in the past on how to reduce costs, creativity and innovation, and risk mitigation. Just visualise the benefits procurement could gain from conversations with the supply market, existing suppliers and potential suppliers, product and service users - social media makes that opportunity a reality, and your procurement strategy should set out how you will make use of the opportunity.

Having said that, social media changes the market place dynamics. The buyer may not shape the conversations but become the subject of the conversations. The potential for the buyer to be 'named and shamed as a bad payer' and also for the market to make comparative assessments of buyers is very real. Those conversations about the buyer are beyond the buyers control but have introduced new risks which need to be recognised and reflected in procurement strategy.

While there are a plethora of social media sites which can be accessed and have their place in a digital procurement strategy (such as, Yammer, Twitter, YouTube, Facebook, LInkedIn, Slideshare), starting from the perspective of available channels is an easily made mistake. Instead the starting position should be who are the audience you want to converse with and what is the outcome you want to achieve.

However, by way of suggestions, here are some potential uses of social media in procurement:

  • Internal consultation on potential specifications to clarify the problem to be solved;
  • External consultation on the outcomes to be achieved;
  • Business case development and critique;
  • Widening the scope of potential options to be appraised;
  • Co-production of specifications;
  • Internal collaboration on category management including demand management and scope for aggregation;
  • Soft market testing;
  • Dynamic publication of forward procurement plans;
  • Issue of procurement 'challenges';
  • Consulting on evaluation criteria and weighting;
  • Publicising evaluation criteria and weighting;
  • Supply market research;
  • Reverse marketing;
  • KPI consultation and reporting;
  • Identifying opportunities of 'piggy backing' contracts;
  • Use of expert delphi panels;
  • Risk identification, assessment and management;
  • Internal and external customer insight and feedback;
  • Supplier references and appraisal;
  • 'Closed sites' of approved suppliers;
  • Posting RFPs and ITTs;
  • Cross-function bid evaluations;
  • Contract management including feedback from users;
  • Supplier feedback on buyer performance;
  • 'Whistle blowing';
  • Soliciting suggestions for cost reductions and quality improvement;
  • Collecting lessons learnt;
  • Collecting benefits realised;
  • Supplier tier dating agency;
  • Supplier briefings;
  • Procurement training;
  • ...
You may first need to lobby and negotiate to ensure that your organisation has a social media policy which will let you access social media resources - for many procurement practitioners gaining access to blogs, twitter, etc. is yet to be achieved. That means the organisation doesn't even know what is being said about it. Sadly, it also provides some indication of how far some organisations have yet to travel.

In summary Digital Procurement Strategy needs to:
  1. Set out how the organisation will use social media as a means of conversation, problem-solving, innovation, risk reduction and learning, both internally and externally;
  2. Set out how social media will be used to achieve procurement objectives;
  3. Set out how the organisation will manage the risks of the market conversing about 'procurement';
  4. Set out the target audience to be conversed with;
  5. Evaluate and set out the social media 'development challenges' to be used.

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