Creativity suffers as companies grapple with outdated procurement practices across the Atlantic, says blur Group’s CEO, Philip Letts
The concept of boredom came about in the 19th century, when the Oxford Dictionary first used the phrase ‘to bore’. Born out of the industrial revolution, you could say our desire to achieve meaning in our existence comes from mankind’s advances. And in the world of procurement, with all the advances of the 21st century, there can be nothing quite as boring as being stuck in a contractual relationship day in and day out, churning out stale ideas. The creativity rut is exhausting to say the least.
When blur Group commissioned research to dig into procurement peeves in UK business, we were surprised at how outdated services procurement practices impacted those bright new ideas we all look forward to exploiting during our life at work.
The study, by Exposure Research, found a ‘jobs for the boys culture’ prevalent in British business: 89% of procurement decision makers believed that there were better service providers out there than those within their existing network and 93% revealed they would like to find new services providers with fresh and innovative approaches. However, three quarters also admitted that ‘peer group pressure’ inside their organisations prevented them from working with providers outside existing networks. It was clear British business wanted to liberate itself from neolithic systems for contracting tail-end procurement.
In order to find out if this is purely a British malaise, blur commissioned a similar study in the USA where freedom and equality are quite rightly prized above all. Surprisingly, our finding was that a whopping 87% of decision makers (CEOs and procurement heads) agreed that they would like to partner with new service providers. A view confounded by this stat – business services relationships last, on average, as long as 10.5 years! The findings reveal that some decision makers (43%) stayed with their partners and agencies due to “outside factors”, such as personal ties and preferred supplier lists. 71 percent felt they had little freedom to partner with new service providers, just like in the UK.
As companies grapple with outdated procurement practices, such as relying on contacts and personal relationships, it’s the creativity curve that takes a dip. In the US, 65% feel that maintaining long-term relationships results in fewer creative solutions.
In my last post, I discussed the need for more businesses to use the internet for tendering and sharing resources. There are boundless opportunities made possible by cloud computing and frankly, businesses looking to make efficiencies are missing a trick by sticking to old patterns of working. I look forward to a day when business is not about who-you-know, rather what-you-know. It’s time to think global and determine a new blueprint for services procurement, because the best of ideas exist online, not with your old boss, your ex-roommate or your partner’s friend.
Philip Letts is founder and CEO of technology company blur Group.
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