The Benefits of Process Orchestration

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Hi readers,

📰 In this week’s edition:

• 5 procurement jobs that caught my eye

• The start of a series on Process Orchestration tools for procurement

  • Part 1: The benefits of process orchestration

  • Part 2: The process orchestration trap

  • Part 3: How to deploy process orchestration tools

Ultimately, I want you to understand the nuances required to be successful when implementing Process Orchestration tools, if you choose to do so.

I could have crammed these 3 parts into a single newsletter but I’m running a little experiment with shorter emails. My thinking is that if it’s easier to consume, you’ll get more out of it.

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ICYMI 👀: Here was my most popular LinkedIn post of the week:
Procurement systems are NOT a substitute for good supplier relationships.

🌙 Sunday Night Note

The best way to explain the benefits of using Procurement Process Orchestration tools is through a little exercise… Let’s imagine a procurement department.

It is supported by a given set of applications. The actual applications aren’t the point… The validity of this setup depends on the business context which is a whole other topic. For now, let’s assume it’s does the trick for this particular business.

Here are the applications supporting our imaginary procurement team:

Now, given these are all discrete applications that aren’t connected to each other, the members of our procurement team are stuck “filling in the gaps” between the applications with manual tasks, processes and files.

They use their office productivity suite of choice to get work done (I’ll use MS Office here because I’m square).

With this method, they support their “sunny day” sequential procurement process (Spend Cube → Category Management → Sourcing → Contracting → Procure-to-Pay in ERP → Spend data to Spend Cube).

However, the team also supports all the inevitable ad-hoc requests (arrows in the middle of this next illustration) and purchase requests (new manual task block) that come in from a number of communication channels (conversations, emails, MS Teams messages, etc.).

Then, our fictional team tells us (management) that the manual tasks are getting ridiculous… We also look at our staffing plans and pain points start to emerge…

1. “We’re copying information from our sourcing projects into our contracting tool with 50% of our time!”

2. “When contracts are signed, it takes forever for Master Data to create the pricing data in our ERP System!”

3. “Extracting spend data from the ERP System and uploading into our Spend Cube is ridiculous… Can’t we automate this?”

So, we reach out to IT and set up automated, formal interfaces between systems for the problems above (1, 2 & 3). If we’re lucky, the software vendors for our applications provide “out-of-the-box” connectors to minimize the effort and budget needed to optimize our tasks.

This helps optimize specific “system-to-system tasks” but we still largely rely on our people and their office productivity suites to get the work done…

Furthermore:

• Work/Process quality is highly variable from one person to the next

• It’s really hard to get a picture of the overall work being accomplished unless we ask everyone to report this individually in yet another file/tool

• We constantly need to train everyone on the processes/applications to use and this knowledge is constantly eroding over time

• It’s only a matter of time until we need a new formal interface developed

• None of this helps requesters give higher quality requirements

• A general sense of chaos reigns even when things are under control

This is where Process Orchestration tools come in…

What if instead of optimizing at the task level (e.g. formalizing an interface to convert sourcing events into contracts), we started optimizing at the End-to-End process level?

Instead of stitching applications together to end up with a process, why not start with a process and add the applications into their appropriate spot within that process?

This is the paradigm shift proposed by Procurement Process Orchestration tools.

The Process Orchestration tool/platform is where you design your End-to-End business processes.

Then, you connect your task-specific applications at the right spots in that process (assuming you implemented “open” applications that provide robust APIs which can be used to pass/retrieve data easily). Parts of the process that don’t have a task-specific application can be supported directly in the Process Orchestration tool.

Doing this has a few main benefits:

• Everyone can see the end-to-end process instances being executed in real time (with all the operational benefits this affords the business)

• Collaboration can happen directly in the tool instead of having to rely on our office productivity suite (read: get out of my inbox!). You can also add ad-hoc tasks to processes in execution according to a specific process instance’s context

• New business processes can be designed and integrated with the proper task-level applications, tested and deployed very quickly (vs traditional software configuration/development methods)

This give you the benefits associated to Procurement Process Orchestration: visibility, flexibility, agility that ultimately lead to higher productivity, performance and business impact for your team.

One of the images I like to use to tie this all together is that of a quilt…

Instead of having discrete squares of fabric (applications) to attempt to keep warm without ever quite succeeding, you can finally use a thread and needle (process orchestration) to end up with the full quilt you’ve been looking for!

Stupendous!

However, while this is all warm and cozy on paper, you have to beware of what I call the “Process Orchestration Trap…” Process Orchestration isn’t a “set it and forget it” silver bullet.

Here’s the link to Part 2 : Avoiding the Process Orchestration Trap

💭 Quote of the Week

That’s it for today.

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Till next time,

— Joël Collin-Demers

P.S. I’d love your feedback. Tap the poll below and leave a comment. Reading your responses is the highlight of my week.