Procurement Expert Alan Dunning on Digital Transformation

Transcript from Alan Dunning Podcast Episode

1. How Procurement has Changed over the Years:

• Alan first started doing procurement in the era of the telephone and telex— faxes were a big breakthrough technology. Cutting edge computer systems for the time were often out of synch with the actual inventory.
• Procurement has gotten a lot more complicated— we need to find ways to simplify.
• It’s both good and bad that we can communicate with vast numbers of people very quickly. The downside is that we’re inundated with messages we don’t always need. As a result, our workloads have gone up exponentially.
• The one thing that shouldn’t change is the emphasis on talking to people, and really communicating, ideally face to face. That’s how strong relationships are built.

2. On Introducing New Systems:

• It’s natural for people to wonder what it means to them when new systems are introduced. Of course they’re going to ask if the new system will impact their ability to do their work, or even cost them their job.
• Most of the procurement systems Alan has seen introduced to along his journey are not very user friendly, take too long to learn, and don’t always justify the input with effective output. In other words, they don’t actually give procurement managers what you need to do your job.
• In the procurement arena, most of the ERP systems are a financial tool with a procurement bolt-on. They just don’t suit the way that project-based procurement works.
• One system Alan used just said “wrong” if you made a mistake while entering information. You had to go back to the beginning, and figure out what the problem was yourself through trial and error.
• If a lot of the procurement systems we use were put into the consumer world, they wouldn’t last five minutes, because people can’t get what they want intuitively and quickly.
• One of the best things about the digital era is that the customer has truly become king, as we’ve learned from the success of B to C companies like Amazon, eBay, and Uber.
• Digitization is supposed to make life easier! We should be using technology to eliminate grunt work like cutting and pasting, or filling in forms. Buyers should be able to use their brains for complex decision making.
• In the project procurement world, there are a lot of victims of bad technology. The reaction to something new is generally, “oh no, not another system.”
• Alan really enjoys the experience of converting jaded people, and seeing that negativity change to positivity. In Alan’s experience, when you can show someone that technology will make their lives easier, there’s no one who doesn’t embrace it. This is because most people are asked to do more than they can realistically cope with.
• Alan has seen a lot of cycles go round. With experience, he says, you see the need for simplification, because you know what does and doesn’t work.

3. How Digitization Will Transform Procurement in the Next Five Years:

• We have to be careful to manage expectations around how much work people can do, even when they have the right systems helping them.
• We’ll see the “super user” disappear. Today, procurement job ads include the systems candidates need expertise with— those companies are looking for a transactional person. Instead, what we really need in procurement is people with commercial acumen, people who can benefit the company in greater ways. This includes building better relationships with customers and suppliers.
• With better systems, we’ll have more visibility into what our colleagues around the world are doing. This will help us all share information more effectively. Some of the technologies that might potentially make us feel over-connected outside of work are actually very helpful for effective communication at work.
• Relationships with suppliers will transform, the result being that suppliers who provide good value will get ahead, and the suppliers who don’t will drop off. Alan sees closer relationships with suppliers in the future, in which they understand what he needs and he understands what they need. Negotiations may involve margins more than actual prices.
• Quick, direct communication allows us to talk more to the direct providers, and not necessarily with intermediaries who don’t add value.

4. Using Technology to Integrate Procurement with the Whole Asset Lifecycle:

• Technology can now better connect to warehousing systems and disposition systems.
• Systems should provide better visibility into assets that are just sitting around in a warehouse, so they can either be sold off or used elsewhere within the business.
• Connecting procurement to marketplaces of existing assets will mean we won’t necessarily have to buy new. We’ll be making better use of the circular economy.

5. Advice to New Procurement Professionals:

• Increase your skill set. Go beyond the basic business degree.
• Get digitally transformed— and continue to think about how you can do things better.
• Develop your communication skills and negotiation skills. These will help you move the technology forward in your organization.
• Treat your organization’s or your client’s money like it was your own, and you won’t go wrong.
• Think beyond the transactional level— think about how you can manage your whole supply chain.
• One of the best pieces of advice Alan ever received was, “look for ways to put yourself out of a job”. It sounds negative, but if you’re thinking transformationally, you’ll always be employable.
• Look for ways to add value in every interaction.

6. Advice for Anyone Starting Their Digitization Journey:

• Understand what’s available in the marketplace. There are lots of publications talking about what’s going to happen, but really most of supply chain is still just trying to make something happen.
• Find people who have actually done it or are in the process of doing it.
• Look at ways to really make people’s tasks easier.
• Connect with like-minded people outside the everyday working environment.

Technology should make people happier. When technology responds to people they can concentrate on other areas that they should be focusing on. That’s why Alan is really positive about the future.

Listen to the Whole Podcast >

About Alan Dunning

In a time when most people were not being directed to go into business, Alan had a keen interest in procurement as a first career choice. Interestingly, the reason why he chose procurement was that he liked dealing with people. His enthusiasm attracted the attention of Westland Helicopters in the UK, who decided to sponsor Alan’s tertiary education.

After his studies were complete, his first job in procurement was for Westland, where he spent six rewarding and educational years. His next role was in the energy sector (specifically oil and gas), where he spent ten years. When petrochemicals experienced a downturn in the 1980s, he went to British Airways.

He was still doing major equipment procurement and contracts primarily for construction projects— Alan notes that it was very interesting to work on hangar and runway projects while the planes kept landing and taking off!

For the last 23 years Alan been at Worley in Perth, working at a senior level on primarily oil and gas projects but also on a number of mining projects. He is a fellow of the Chartered Institute of Procurement and Supply.

Connect with Alan Dunning on LinkedIn >