In the current world, procurement complexity is still rising owing to global disruptions, regulatory requirements, and the need for digital transformation. According to Gartner’s latest report, To Crack Procurement Complexity, Make Processes Simple by Design, procurement leaders must change the approach from the optimization of processes to the integration of simplicity into every process.
This article discusses how organizations including Trinity Health and Bayer are effectively adopting designed simplicity, what other efficiency measures do not deliver, and how procurement teams can design more efficient and more sustainable processes.
What Is the Current Problem with Procurement Complexity?
For many years, procurement leaders have sought to address complexity through simplification, automation, or by resorting to third parties. However, Gartner warns that these strategies only work around the problem rather than solving it. The problem with reducing the number of steps in a workflow is that it often leads to an increase in complexity rather than the reverse.
“Procurement leaders must understand that streamlining is not the same as simplification,” the report notes.
Key Complexity Drivers in Procurement
- Competing Priorities: Leaders must balance among cost, quality, speed, sustainability, supplier diversity, and risk management.
- Workforce Challenges: Offloading complex tasks to specialists leads to burnout and talent shortages.
- Transformation Overload: The average procurement professional is involved in nearly seven transformations between 2018 and 2023, which leads to confusion and inefficiency.
These challenges highlight the need for a new approach that focuses on user-centric design.
The Failings of Traditional Efficiency Measures
Most procurement functions think that removing steps or removing inefficiencies will make the workflow simpler. But, according to Gartner’s research, this is not the case. It has been proven that overzealous process simplification often strips the task of valuable context, leaving employees baffled.
Rather than concentrating on the reduction of steps, organizations should concentrate on the simplification of the experience. Gartner’s Designed Simplicity framework ensures that workflows are easy to understand, easy to use, and easy to manage for users.
What is Designed Simplicity?
Gartner defines Designed Simplicity as a methodology that incorporates UX principles into the design of procurement processes. The objective is to make workflows:
– Easy to understand
– Comprehensive yet intuitive
– Designed for all possible scenarios
– Less dependent on specialists to run effectively
Five Key Principles of Designed Simplicity:
– Integrated Leadership: The leaders, managers, and staff work as one unit.
– Proactive Delegation: The leaders stay involved but do not want to add more complexity for the employees.
– Guided Learning: Training and development are part of the daily work.
– User-Centered Design: Processes are designed based on the feedback of real users.
– Recognition of Change Adoption: Employees are encouraged to contribute to the process improvement.
How Companies Are Applying Designed Simplicity
Trinity Health: Continuous, User-Driven Improvements
Trinity Health, a U.S.-based healthcare organization, realized that the involvement of employees in process design was crucial for the simplification of procurement. Nevertheless, the challenge was how to cope with the number and the quality of the ideas.
Their Approach:
– Required all procurement employees to submit at least one process improvement idea per year.
– Provided curated ideation tools to help employees develop high-value ideas.
– Used Kaizen methodology to train staff and refine ideas through multiple review stages.
“If you’re having these conversations with them, telling them you want to hear their ideas, giving them feedback, they’re going to apply that same engagement to all the other tasks that they do,” said Lill Rothermel, Executive Director of Procure-to-Pay at Trinity Health.
Results:
– Procurement improvements yielded over $1 million in annual cost savings.
– Enhanced employee engagement and a sustainable process enhancement pipeline.
Bayer: A User Perspective on Analyzing Procurement Workflows
Bayer, the German pharmaceuticals company, generates more than 1.4 million purchase orders every year. The procurement leaders understood that without user insight, it would be impossible to simplify the processes.
Their Approach:
– Map how different users navigate through the procurement workflows.
– Find out where are the friction points and design the processes to solve them before they become a big problem.
– Analyse 170,000 purchase orders in real-time to identify where there is room for improvement.
“Our UX project is more than just a new workflow design – it’s a journey of understanding, empathy, and user delight,” said Diana Laffert, Head of LH End2End Optimization at Bayer.
Results:
– Enhanced the user experience and efficiency of the procurement processes.
– Enhanced capacity to spot and fix issues before they become big problems.
– Why Designed Simplicity is More Effective Than Traditional Approaches
Gartner’s research compared Designed Simplicity with traditional process redesign strategies. The results were quite revealing:
Organizations that implemented the Designed Simplicity approach were 42% more effective in their procurement transformations.
The success of companies that applied the traditional approach increased by only 5%.
Traditional redesign methods actually increased complexity by 26% while Designed Simplicity reduced complexity by 21%.
“The report concludes that when CPOs follow the conventional method, their transformations make complexity worse while designed simplicity solves it.”
Steps That Can Be Taken Today to Implement Designed Simplicity in Your Procurement Function
- User Participation in the Decision-Making Process
Employees should co-create process changes, they should not just give their feedback.
Keep the teams engaged in the continuous ideation programs similar to the Trinity Health model. - The Focus on the User Experience Rather Than the Effectiveness
Every workflow should be tested for clarity and usability.
Use real-world scenarios to determine if processes are effective.
I really loved this article! It opens up a new perspective on procurement. The idea of simplifying processes instead of just streamlining is groundbreaking. I can’t wait to see how more companies adopt designed simplicity!
Honestly, I don’t understand why we even need to discuss this. Procurement teams should already know that complexity leads to inefficiency. It’s common sense! Why are we wasting time on something so obvious?
This post presents some interesting points, but it also lacks depth in explaining the consequences of over-simplification. Simply saying that complexity is bad doesn’t provide a solution for the real issues many procurement teams face.
I agree with Gautam, the article oversimplifies the challenges and doesn’t take into account the varying contexts of different organizations when it comes to implementing these principles.
‘Designed Simplicity’? What a fancy term for what we’ve been doing forever! People just love jargon! Maybe if we cut down on these buzzwords, we can really get to simplifying things instead.
‘Continuous improvements’ sounds like buzzword bingo to me. Are we seriously going to pretend that following these principles will magically solve everything? I bet there are people out there still struggling!
‘Magically solving things’? That’s an interesting view Nelson! But maybe some organizations just need a little push in the right direction instead of relying on outdated methods.
‘Buzzword bingo’ is right! If only companies spent more time actually listening to their employees instead of trying out all these shiny new ideas without context!