About the Digital Transformation of Procurement – interview with Pierre Bourgoin
“The more a company focuses on the digitalisation of its procurement function, the more this company focuses on its procurement function as a vector of economic performance and risk regulation.”
Patrick Chabannes: Hello Pierre, you are the Procurement and Logistics Director. What does the digital transformation of procurement mean to you?
Pierre Bourgoin: The first point that comes to mind is the link between the level of digitalisation and the positioning of procurement within the company. It seems obvious to me that the maturity of the digital transformation of Procurement and the resources invested in this digitalisation mechanically reflect, on the one hand, the confidence that the company places in Procurement to create value and, on the other hand, the attention paid to its risk management and compliance with the various regulations.
The second topic is the automation of tasks. Digitalisation allows the industrialisation of low or even very low added value tasks that monopolise teams without creating value. Well-thought-out and well-implemented tools – not an easy task, I admit – can free up time. That’s the key word! Free up time to do our real job.
“Our job is to create value by being as close as possible to our strategic suppliers and to contribute to developing a strategy for using data.
Patrick Chabannes: The idea of value creation seems to be at the heart of your subject. Could you elaborate on this subject?
Pierre Bourgoin: Value creation is easily defined: it is the real contribution, the contribution to the P&L of the company. For example, it may involve finding innovative products, securing the company on risky subjects, particularly on the production tool, or having a global cost approach… Procurement is an exciting job in which you have to be curious and agile to serve the company’s strategy. Without this understanding, a buyer will do procurement, but only procurement. They will negotiate and secure, but will this be in the direction the company wants? To contribute to value creation, procurement must be aligned with the company’s strategy.
Patrick Chabannes: I hear you, Pierre. But the company’s strategy is not always clearly expressed. How can we align ourselves with poorly defined strategies?
Pierre Bourgoin: Of course! The answers are not offered on a plate! As a Procurement Director, you have to be connected to your company, collect elements to understand the real issues and propose a Procurement Policy aligned with the company’s strategy, whether it is expressed, tacit or logical. This is why the Procurement Function is a unifying force and exists beyond itself. When Procurement takes on a subject, it brings together internal and external resources to provide a global, comprehensive and relevant solution.
“If, out of weakness, we allow AI to think for us, we will no longer be able to choose, act and lead, unable to assume our mistakes and doubts. Let’s have confidence in ourselves.
Patrick Chabannes: You told us that you needed to save time to do your real job. Can you elaborate on this?
Pierre Bourgoin: Our job is to create value by being as close as possible to our strategic Suppliers and to help develop a strategy for using data.
Your suppliers give you access to innovations, co-development and benchmarking with your competitors; thanks to them, you obtain information on your market position and on opportunities or threats of disruption. But in order to exchange with them in this way, you must also provide them with value: simplify their lives, reduce payment times, the cost of processing their invoices, their go to market with indicators for managing the relationship in a rigorous, transparent framework on matters of trust, both financial, administrative (compliance) and business.
The strategy for using data is the other major issue. Indeed, more than any other function in the company, the procurement organisation is the function at the heart of the crossroads of data and information flows. Being at the crossroads of these flows is an opportunity that must be seized by becoming the guardian of data to extract value from this gold of the digital age. We have integrated procurement management controllers, let’s integrate procurement data scientists!
“Building ROI is the test of questioning, of questioning, of analysing motivations and reasons for action without leaving the power to consultants, however talented they may be. In the end, it means giving yourself the means to decide, to choose and to lead.
Patrick Chabannes: I often hear that building your ROI is difficult. The Barometer indicator with its 47% of respondents indicating their difficulty in defining it raises questions. What do you think about this?
Pierre Bourgoin: I’m sorry, but I’m going to be a little rough around the edges, as we say in our country. Difficulty in defining a King means that the project is poorly conceived or that the assumption on which the project is based is poorly determined. If you are wrong in your ROI, why not, but if you have trouble evaluating it, no. Building the ROI is the test of questioning, of questioning, of analysing the motivations and reasons for the action without leaving the power to consultants, however talented they may be. In the end, it means giving oneself the means to decide, to choose and to lead.
Patrick Chabannes: And the classic question. What will the buyer of tomorrow be like with the technologies resulting from AI?
Pierre Bourgoin: I hear the announcements. Artificial intelligence will make recommendations. The machine works faster and without rest. We will be replaced. But we are human beings. We create value through interactions and the ability to make choices. If, out of weakness, we let AI think for us, we will no longer be able to choose, act and lead, unable to assume our mistakes and doubts. Let’s have confidence in ourselves.
– Pierre Bourgoin is Director of Procurement and Logistics, VINCI Construction France
– The comments were collected by Patrick Chabannes, Cyrenac Conseil, as part of the Barometer on the Success of the Digital Transformation of Procurement