We entered 2020 with our IACCM theme 2020 Time for a Connected Vision: Purpose and Relationships in an era of Servitization that seems to have morphed into the era of COVID-19.
But has this era truly morphed? Or are we surviving this current health and economic crisis – albeit slowly -- and doing it very well?
I’m seeing resilience and recovery many of us didn’t know we had when this pandemic first broke. In Australia, throughout the 2019-20 summer, we suffered bushfires and we remember the tragedies, but also the stories of survival, heroism, public service, and now the accounts of triumph -- not just survival!
And, who will we remember from this COVID-19 era? I’d suggest health care workers, health officer spokespeople, teachers, and our political leaders who have made tough decisions in ‘war-time’ cabinets to balance the health, economic and social impacts.
And as well, how will we benefit? We will have a better appreciation of the challenges and more opportunities of work-from-home as we use more webinars as-a-service (WAAS) that allow us to connect to achieve our work purpose and sustain our business (and personal) relationships.
Moreover, we will have a better appreciation of the value of technology and automation in first world countries. Plus, across the world, we will appreciate the value of our human connections – in the office, at the negotiating table, and in our homes and communities.
It is humbling to see the roles that our IACCM members are now playing as part of COVID-19 response teams -- especially in the public sector, regardless of function -- whether they are federal agencies collaborating with strategic suppliers; or state health departments securing their domestic supply chains; or local councils paying small and medium-sized enterprises (SMEs) faster to support their viability; or all levels of government cutting out the red tape and taking appropriate risks.
Woodside Petroleum and QANTAS (Australian airline) chairman, Richard Goyder in an article titled Red tape strangling progress, lamented that the regulatory burden has sparked a fear of risk-taking in the boardroom. “We’ve got to encourage appropriate risk-taking. We have long lamented that our procurement, contract and commercial management function was not valued and we did not have a ‘seat at the board table’, but now we do as we respond to the risks of COVID-19 with third-party assessments which help the Board and Executive to make informed decisions.”
One organization did what Goyder was saying about taking risks, circumventing the red tape, and going the extra mile. When the rapid global spread of the coronavirus had been identified as a risk in January 2020, the South Australian Government provided personal protective equipment (PPE) -- specifically surgical face masks -- for its health workers. The Procurement and Supplier Relationship Management (SRM) team of South Australian Health (SA Health) likewise responded quickly to identify a local supplier for these masks.
SA’s effort to future-proof their employees began with their search of about 10 suppliers. They soon identified a potential local manufacturer, the Detmold Group,2 an Australian family-owned and operated business, supplying some of the world’s largest and most iconic food and retail brands.
Detmold did not make masks, but they did manufacture quality controlled, layered food packaging materials. In their initial work with Detmold the SA Health team discovered the need for the level of cleanliness, quality and the likely level of testing that would be required by the Therapeutic Goods Administration (TGA), the regulatory body for therapeutic goods in Australia.
So, Detmold and SA Health partnered to obtain the required type of masks they would need. Then they worked with the freight organizations and Austrade, Inc.3 to get the masks shipped to South Australia.
SA Health brought all the parties together to share information, solve short-term problems and work with the South Australian government to supply PPE to health workers. In taking these precautions, they created a connected vision through this extended ecosystem which is our IACCM theme for 2020.
In the process of building capacity to produce 145 million masks, Detmold invested more than $1 million in creating domestic capability to de-risk and future-proof this critical supply item – all for a competitive price. In the process, Detmold also created 160 new jobs and increased domestic supply lines for raw materials.
These trends are encouraging, but there is a flip side. Perhaps we need to adjust and maybe readjust our thinking and be ready for challenges coming our way. IACCM’s research report titled, Into the Future: Contract and Commercial Management: Role and Direction,4 Tim Cummins, President of IACCM, observed that “Contract and commercial managers stand at a crossroads. Many traditional tasks will erode and disappear, be outsourced or automated. But that does not mean a route to nowhere; new technologies elevate these roles from largely operational to increasingly strategic, from jobs that have limited influence to jobs that drive substantial business value.”
The COVID-19 crisis has accelerated the move to remote working and automation to focus on the important rather than the urgent; to make appropriate risk decisions; and to be more strategic in our roles.
We are now people of influence and we need to make this our new normal. Various reviews have noted current deficiencies and lack of readiness for the big changes and challenges that the public sector will face between now and 2030. Rapid and profound changes have occurred in technology and connectivity.
We’ve seen a decline of trust in traditional institutions, and a push to solutions that are more local and personalized in design and delivery. We are also seeing changes to work and career paths, accelerated by enhanced use of data, automation and artificial intelligence (AI)5. The public sector is expected to deliver ambitious service-wide performance outcomes and targets to meet the public need as well as to act as a focal point for transformation and a means to be held accountable.6
As people of influence, we have a vital role to play in this transformation. We must have a connected vision around strong purpose and relationships which IACCM is calling for in 2020 -- whether in the era of servitization or the era of COVID-19.
So, about the current crisis? We can say it too shall pass; however, we should not miss the opportunity it brings us to lead transformation and to drive significant business and social value.
As the South Australian Productivity Commission (SAPC)7 is doing, we too must “examine the existing procurement framework and consider insights from other jurisdictions to identify reform options that improve procurement practices to positively impact on business and employment.”
Find out more about our global theme of 2020 Time for a Connected Vision: Purpose and Relationships in an era of Servitization and our responses to COVID-19 at http://www.iaccm.com/.
- The Australian, 14 November, 2019, page 19
- The Detmold Group
- Austrade, Inc.
- Into the Future: Contract and Commercial Management: Role and Direction 24 July 2019
- The APS Review noted that approximately 40 per cent of the time spent on tasks performed by the APS today involves highly automatable data collection and processing” (Exhibit 3: The future of work).
- Independent Review of the Australian Public Service https://www.apsreview.gov.au/
- See SAPC article titled Government procurement Inquiry Stage 1 November 2018 to May 2019 and the final report May 2019
ABOUT THE AUTHOR
Bruce Everett, an expert in the design and delivery of complex strategic projects aimed at driving step changes in organizational performance -- particularly where these require operating model and behavioral change -- has been a regular speaker at conferences on outsourcing, offshoring, and good governance. He has written white papers including Ethical Outsourcing: An Oxymoron or an Obligation, Crowdsourcing, and Outsourcing for Productivity: More for Less.
Having taught Corporate Governance and Ethics at Melbourne Business School, he is among the strongest supporters of IACCM’s primary mission, adding “I believe that clients want to know how much you care before they care how much you know. At IACCM, we have been working to uplift the capability and business value of contract and commercial managers for 20 years, through member networking, conferences, research and advisory services.” He holds a Master of Business Administration (MBA), Sydney University and Australian Graduate School of Management.