…and why is everyone talking about it?
Every so often, a term comes into our world and takes it by storm. This year, we will speak about ‘orchestration,’ ‘democratization,’ and ‘intake’ in particular. We will throw those terms around casually as if we all know what they mean. The secret is not all of us do. We all hear these and other terms for the first time, and we may hear them in different contexts, leading to different understandings.
Sometimes, it’s people like me who come up with new terms. We do it to create a distinction between the legacy world and a new one. We do it to make things seem more significant, more evolved, more exciting, and, or more worthwhile solving. I recall perhaps a decade ago when Proxima tried to rebrand “indirect” as “enabling” spend to make it sound more important. For some strange reason, we failed on that occasion (!), but since then, we’ve seen numerous new terms sneak into our profession. We’ve even debated what procurement itself should be called, a debate that has raged on year after year (Never mind the logic, it would undoubtedly be fun, causing some serious rebranding issues for many).
These last months, the number of searches behind ‘Intake,’ ‘Orchestration,’ and ‘Democratization’ have increased hugely. We will be faced with three terms everywhere we look when trying to understand the digital marketplace better. So, it’s good to take a moment to get a shared understanding and certainty because, no doubt, soon we will start talking about ‘Generative Procurement’ (I have personally dropped this term into a couple of articles and conversations in the last months).
The cynic might say that ‘Intake’ and ‘Democratization’ are just posh new terms for guided requisitioning/ buying and self-service. Cynics, beware: while there is some truth in that view, the reality is that barriers are being broken down, tech is being improved, and solutions are being redefined. The bleeding edge won’t be right for everyone right now, but it’s good to recognize that what is happening at the edge is very much new and improved. So, let’s play along and embrace the distinction in name to reflect the progress being made (where it actually is) and categories being redefined (where they actually are).
But what of ‘Orchestration’?
To play on the word, there are around 80-120 musicians in a full symphony orchestra, playing about 50-60 instruments grouped into four types: woodwinds, brass, percussion, and strings. Suppose all those instruments are playing at once, freestyle; that’ll make quite a din. Nobody is coming back to watch that show.
If they are almost in sync but still a little out, it’ll still sound off. But when they work in harmony, even the most ambivalent cannot fail to be impressed by the skill and power of those musicians and their instruments. Very different tools working together in harmony to create something special that no one can achieve solo or with a smaller cohort. I suppose you could say that the underpinning strategy is a piece of music, and the orchestrator is the conductor.
In simple terms, this is more or less applied to a business context. Orchestration is making (lots) of things work together in a way that makes them brilliant, or at least better. In procurement land, that would basically apply to everything we have and do; processes, tools, data, interactions, partnerships, etc. These evolving tools, new models, and hybrid approaches are seeing our CPOs (and teams) moving from Operator to Orchestrator.
Where can we orchestrate? Three examples
Fig 1: Building on a traditional procurement architecture.
The obvious place to start is tech
Firms like Zip and Oro Labs are the current darlings of orchestration. It is core to their messaging, and they are making great inroads. At the risk of oversimplifying their solutions, they bring a modern, easy-to-understand, and easy-to-use approach to creating, managing, and optimizing processes and workflows. This means that customer and supplier activities can flow around your operating model in the way that they should. This is where intake, democratization, and orchestration may all meet.
It’s about making things simple, transparent, and manageable. Remember the days of waiting for change controls to be enacted or having to lean on super users? Those days are gone. Procurement becomes easier than doing it myself as processes are perfectly orchestrated.
The second is still in tech
…but up a level, focussing on how ‘best-of-breed’ technologies can truly be deployed without adding friction. ‘Best of breed’ was the simple and exciting antidote to a platform world, and yet, in that respect, it has become a parody of itself. The market is now complex, hard to navigate, and, at times, really hard to get under the skin of specific solutions and the viability of the companies that sit behind them. Orchestrations here really focus on how we can make that app layer and data layer make sense and how we can drive connectivity of experience and data (rather than systems).
This creation of digital workspaces and data layers is fundamental to being able to scale best of breed. One must question whether vendor maps help or hinder this process. Do they really inform beyond “there are lots of solutions,” or do they just make the author look clever? Again, I am going to land on the positive here; they, and that of Elouise Epstein, in particular, do point to all the specific opportunities and optimization points. Practically, very few firms today have gone beyond adding two- or three-point solutions into their estate. But the modern-day orchestrator will have greater ambitions.
This brings us to the final of our three examples (more are available).
Modern-day CPOs do not just have tech at their disposal. There is a myriad of specialist service providers and, indeed, a resurgence in areas like GPOs and BPOs, offering the CPO a truly hybrid operating model that combines ‘best-of-breed’ tech, skills, and knowledge. This may even extend internally into how the CPO works with internal resources to get things done. Making all this work in harmony is an enormous opportunity.
From ‘Operator’ to ‘Orchestrator’
Whatever you think of the term, Orchestration is important because it offers simplicity and better outcomes by firmly engaging with a more capable but ultimately more complex world. It takes self-service, best-of-breed, and hybrid operating models out of the too-difficult pile and puts them firmly in the hands of the orchestrator. We can break down barriers and make procurement a simpler and better team to work with.
Open up your cheat code
At any time during the past decade, there have been two surefire ways of spotting the trends in procurement tech. The first was to look at where VCs were investing; the second was to look at where the tech and finance as a service market were, as they were typically more mature than procurement. It makes sense. Why would anyone want to sell tech to procurement over the last decade? Often hard to sell to, often not the custodians or the budget, and often not a slam dunk, cost-led business case.
The truth is that the ‘Operator’ to ‘Orchestrator’ phrase was neatly coined by HFS research some years ago. ‘Orchestration’ has been around in Finance and IT for some time. Now it’s our time. I believe that now is the time for procurement and supply chain tech. It’s important to businesses now in a way that it hasn’t been before, making selling it easier and thus investing in it smarter. Soon, the instruments will be all around us, and our organizations expect to hear a great tune.
