Digital Transformation Powered by People-Driven Change

By Andy Beth Miller

The way Patrick Foelck, Head of Strategy and Transformation Global Procurement at F. Hoffman-La Roche, describes it, his passion for procurement was not necessarily a love at first sight kind of thing. But, it does appear that it was destined to become the stuff of fairy tales: a true, committed, and ever-evolving love.

Once upon a time, after spending 13 years as a veteran consultant, Foelck was wooed to the procurement arena after consulting and leading Roche in what he calls their “procurement transformation.” Now, as he fulfills his role as Roche’s Head of Strategy and Transformation, Foelck has a dream.

“I am keen to move procurement out of procurement,” he says with a light laugh. I smile at his clever play on words, while also leaning in, intrigued to know what he will say next.

Then, as Foelck unravels his seeming riddle, I instantly realize that this concept of his is much more than a dream. It is a goal.

What makes me say this? Far beyond a nice sounding concept or exciting flight of fancy, Foelck follows his ideation with a distinct vision. Also following? Action points and next steps.

That’s right. Foelck has a vision with feet. Allow me (via Foelck’s expert insight) to explain. But first, we have to go back to the beginning. When Foelck was first starting out, he quickly realized that procurement was a function that was grossly underrated in terms of what it could do and the impact it can deliver. He backs up this assertion explaining, “They speak to all the business functions; they have a relationship with all the suppliers. All of the money technically goes through either procurement systems or processes, or is managed by procurement to some extent.”

Hence, the influencing power of procurement cannot be denied. That is, if we do it right. And how would “doing it right” look in real life procurement? This is the portion of the interview where Foelck gets right to the crux of his vision: Moving procurement out of procurement via digital transformation, with a twist. The twist comes as this transformation is “a people-driven change,” using Foelck’s exact words, and also requires us to broaden our perspective of procurement.

If we continue as a profession to keeping solely doing the things that we have been good at in the past — sourcing, negotiating, purely buying — we will become redundant very, very soon.

–Foelck

Foelck is a proponent of shifting the focus to spending smarter rather than simply spending less, redefining the bottom line to include the bigger picture. This greater procurement perspective focuses on value-adding solutions that account for successfully addressing business needs, while managing key facets like speed to market, cost, compliance, risk and sustainability. According to Foelck, procurement is the only entity in an ideal position to be right there to enact all of the great things that can be done in these realms in the most efficient and wise way possible. Such astute and intuitive work simply cannot be accomplished without people who are constantly innovating and executing creative solutions and ideas for best outcomes.

Seeing this opportunity for innovation in procurement versus it being relegated solely to purchasing, Foelck parlayed his passion for the subject into his work, since which he has spent the past 10 years focusing much of his professional energies on delivering procurement restructuring and transformation programs, his main focus being the pharma industry.

This fascinating background brings us to today, where Foelck is divulging details about the exciting new endeavor that he and Roche are embarking upon, introducing revolutionary digital transformation, all of which will be fueled by people and aided by technology and data. Regarding the pigeonholing of procurement into the realm of mere purchasing, Foelck bemoans the plight with a harsh reality: “Procurement does it to itself. We are coming from a background where they say, ‘Hey we need to buy X. Secure this for us, negotiate the price, and ensure the quality, then get out of our way.’ So, we are coming from a sole focus on the measure of our success being how much savings we have generated.” Over time, according to Foelck, the more this ideology was allowed to persist, purchasing became seen as procurement’s only purpose.

Foelck then shares a cautionary insight regarding the future, should we allow this to continue: “If we continue as a profession to keeping solely doing the things that we have been good at in the past — sourcing, negotiating, purely buying — we will become redundant very, very soon.” But Foelck seeks to change all of this and reposition procurement.

As this procurement expert explains to me how his company is taking steps to enact procurement change via digital transformation, he is clearly fired up about the possibilities that their unique approach opens up for this vital niche. Foelck first shares about how he is determined to realize the promises that digital transformation is making. According to Foelck, the bar is set quite high, as “digital transformation is promising the world.” He then poses the question: “Digital transformation has promised to revolutionize everything, but has it yet?” The unuttered answer is clearly no. Or at least not much.

Again, Foelck seeks to change all of that, sharing how, “In the past, with procurement technology accelerating and many companies investing in [it], everyone thought that this was going to be the biggest thing on earth.” In their minds, Foelck surmises, “They were thinking, ‘We have the data! We’ll automate everything! Everything will be fantastic, and procurement will finally have the opportunity to move on to do many other great things because we get out of the manual, repetitive tasks, and downstream activities and administrative burdens etc. because data and technology is so wonderful and will take all that away.”

I am keen to move procurement out of procurement.

–Foelck

Fast forward to today, and clearly, expectations were greater than what has yet been achieved. Why? Foelck explains: “We believed big software solutions can do everything and that significant customization will help us to address all our needs, but this hasn’t really worked.” There are several reasons for this, the biggest of which is the incompatibility that arises from such “one size fits all, big and heavily customized end-to-end solutions that— on paper— can do everything” mindsets versus a portfolio of more tailored solutions.

Enter Foelck’s current work with Roche. “Our Operating Model is enabled by our Digital Strategy, which involves complementing core procurement technology with digital assets,” Foelck explains. “When I think about digital and how it should apply to procurement, it’s an ecosystem. The base, the core stuff, the must-haves are covered with cloud based procurement technology. But I need to be mindful of how I can complement this with the other huge breadth of opportunities I have now at my disposal (e.g. RPA, AI, Startups, BPO), because not all core problems can be handled by simply digitizing or using technology.”

Enter people and innovation. “That sort of agility and consciousness is often overlooked, and people think technology is a solution. To me, technology is never a solution, but is rather an enabler. Also, as much as end-to-end integration sounds perfect, sometimes it just doesn’t work.”

Adopting this model, with this specific base, will enable Foelck to self-service many of the things that procurement does today. Specifically, according to him, it will “generate efficiencies in terms of sourcing, enable the business to buy in a more self-service manner, and free up capacity to do much more value adding and strategic procurement activities.”

Using his niche of the pharma industry as an example, he shares, “In pharma, we very much focus on speed and patient impact. The faster we get something to market, the more patients we can impact and ultimately cure, which is our purpose.” He then reveals how this vital need for speed shifts the focus. “As a company, we are focusing on speed in order to impact and cure more people. So, from a procurement perspective, it becomes not so much about only saving money, but more about spending money wisely.”

He adds, “The driver to get this thing right is to think differently.” This includes opening the door for automation and answering the age-old question: “How can I make this super easy for people to buy and equally easy for procurement to operate?” Essentially, Foelck focuses on “making procurement faster and for the business to buy ‘better.’”

“If I finally get out of the pigeon-holed view of procurement as only for purchasing mentality, we can finally move to many other things,” he says, the excitement of a bright future for procurement evident in his voice. Roche and Foelck are adopting out of the box thinking in order to “get there,” among which include an inventive three-pronged, progressive approach, starting with brainstorming a plethora of procurement ideas via outlets like a procurement hackathon, a leadership forum, a procurement summit, and more. Foelck calls this stage Roche’s “Ideation” stage. The company then takes those ideas and sends them to an “Incubation” stage, ruminating on real-world ways that they can work. The final “scaling” stage is where actual pilots and experiments are conducted based on the results of these ruminations.

To me, technology is never a solution, but is rather an enabler.

–Foelck

Clearly, it is an exciting day to be in the procurement arena, with digital transformation daily evolving and people being placed at the forefront fueling that forward motion. And as we trudge forward following the ascent of technology, with fearless leaders like Foelck navigating as we climb, we’ll not die upon this mountain.