In the March/April Harvard Business Review there is a fantastic article on Operational Transparency by Ryan W. Buell. His research shows that when customers don’t have a clear understanding of the effort and expertise required to complete a task, they assign less value to it and customer satisfaction suffers.
Buell illustrates his point with the adoption of ATMs. When first introduced in the late 1960s, ATMs were successful beyond banks’ wildest expectations. Customers loved the 24/7 access to funds and banks loved the decrease in staffing costs. But the news wasn’t all good. As Buell writes:
“When customers use ATMs more and tellers less, their overall level of satisfaction with their bank goes down. It turns out that when consumers can’t see the work that’s being done to serve them, their perception is that less effort went into delivering the service, so they don’t appreciate or value it as much.”
I believe this offers a critical consideration for procurement organizations pushing full steam ahead with digital transformation. Transformation almost always implies automation, with overall accuracy and improved buyer empowerment being the goals. But perceptions can be hard to control, regardless of the intent. Buell’s research serves as a counterweight to digital optimism, and reminds us that as automation lifts the weight of any given effort, we have to ensure the user understanding required to ensure the same level of value assignment and satisfaction.
So how will procurement ensure that our value assignment (something that we might already say is in question) survives digital transformation?
Option #1: Increase visibility and understanding through face to face effort and proactive involvement in stakeholder projects. Like the tellers that remain in banks, procurement has the opportunity to engage on a strategic basis to address complex needs and high risk supply chains.
Option #2: Emphasize the collection, validation and COMMUNICATION of performance metrics. If procurement is able to increase measured performance, then we can show value. The catch is that if colleagues don’t trust the numbers, or even worse, don’t know about the metrics, they won’t do us any good.
Digital transformation presents a huge opportunity for procurement to increase value, efficiency and performance, but we must be aware of perceived value loss. Any transformation planning effort must address this risk and outline steps to mitigate it.
By Kelly Barner
Keywords: Customer Experience, Digital Transformation, Procurement