“The business cannot wait.” That’s an excuse I have been given by enthusiastic project managers on many occasions in the past as to why procurement wasn’t consulted, was actively excluded from a vendor selection or why a sole source was a justifiable course of action. My response has typically been a raised eyebrow and a knowing smirk. Heard it all before, mate. However, I am seeing this excuse for procurement avoidance now become a reality.
Last month, Tesla announced that they would be producing a driverless semi truck from 2019. They announced some performance information that they expected (are hoping for). That is all. This is a product that does yet exist. The most minimal of a “minimum viable product”. In exchange for putting your name on a list for wanting one, Tesla were asking $5000 registration -of-interest fee. This has since gone up to $20 000. This from a company that doesn’t have the greatest of track records in delivery in full or on time, nor the greatest skill with handling its financial affairs.
And yet. The business cannot wait. A day after the truck announcement, Wal-Mart put their name down for 15, citing sustainability reasons (but also likely to the spectre of Amazon looming over them) and a US trucking firm did the same. Now PepsiCo have also announced that they are jumping on the Tesla b(r)andwagon by reserving 100.
In the desire to be early adopters of disruptive technologies, business decision-makers are falling over each other to be front of the line. In the triple constraint triangle, cost and quality are taking a back seat to time. It’s a race to the moon. And I will bet no procurement person was anywhere near these decisions or the commitments made to Tesla. Maybe I’m wrong. But you could see why this might not be deemed a job for procurement: we are the handbrake to speedy acquisitions. First movers need to be, well, first. No time to waste following a process!
But it’s worth considering, as a procurement person, whether this style of acquisition is a new normal. If so, it may also be worth considering:
- do you understand the role of technology and impact of technology changes in your category (in this case, freight/fleet/logistics)
- do you understand your role and what the business expects you to do in these types of time-prioritised acquisitions. If nothing, is that a problem
- do you understand your business’s ambition in terms of new technology adoption
- do you have a relationship with your key decision-makers for these types of technologies
The answers to these questions will quickly show you whether you’re on same road as your stakeholders.