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The LAP Approach - Overview


The LAP Approach

Complex sourcing made simple

 

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The LAP Approach - Overview


The LAP Approach

Complex sourcing made simple

 

Overview

Agility is well known, there are even agile contracts to manage agile cooperations. However, the way how we get there today  (RfI > RfP > LoI) can't really handle the complexity in an appropriate way. Furthermore it's not agile nor lean unfortunately. Lean-Agile Procurement is a new, exciting simple approach for procurement, that makes fun. It's based on agile and lean principles and focus to the business value and the people involved. The results will surprise you!-Lead time of sourcing a new partner is reduced to days, most important customer problems are solved first and the risk -to evaluate the wrong partner- is minimized.

Why lean-agile Procurement

The advantages of lean and agile business modeling and agile delivery became evident. So it was no surprise that even agile contracts are in place more and more. However the procurement process didn't became agile yet. This is painful because:

  • Evaluations are very expensive for the company and the partner/vendor
  • Time to market is slowed down and in the meanwhile the initial vision becomes obsolete
  • Comparison of multiple n-pages proposals is complex
  • Focus lays on products/services and paperwork only
  • The people, that work on the proposal are not the same, as for service delivery
  • Agile teams tend to form different
  • An extra step of translation is needed: From a proposal into an agile contract

WHat is Lean-agile procurement

Lean-agile procurement is an agile approach for complex procurements, where collaboration between people is a key success factor. An example might be an. international sourcing, where considering other cultures usually becomes very important. It's totally new and breaks the existing rules in a disruptive way. The initial 5 goals of LAP were:

  1. Reduce preparation efforts as much as possible (reduce waste)
  2. Time to market should be improved dramatically (days instead of months), so that delivering business outcome starts earlier
  3. No custom proposals any more,  just ONE page in a predefined structure, so that creation and comparison of multiple proposals becomes as easy as possible
  4. Focus lays on evaluation of partner too (Soft- & hard skills)
  5. No additional translation step via Legal, lean procurement canvas is an agile contract
Complex Procurement made simple
— Philipp Engstler, agile Coach, co-founder of flowdays

For whom is lean-agile Procurement suitable

Any executives, procurement managers at customer or vendor side, that are interested in a new option for procurement. If your organisation is already agile or in transition to lean-agile procurement is a perfect tool to include your agile delivery organisation from the beginning.

Lean-agile Procurement might be also useful for

  • Procurement managers, or other responsible persons like delivery heads, scrum master, etc to make management of existing partnerships more transparent
  • Human Ressource Manager, or any other responsible persons doing HR-Tasks such as extending current agile teams, etc

Please note: Lean-agile procurement is currently tested just in private sector. However, there are options feasible for public tendering too.

I will definitely use LAP for my next procurement
— Jan Lundak, Head of Parter Data Management, Swiss Accident Insurance Institution (SUVA)

If you're newby with Agile feel free to schedule an inspiring talk.

lean-procurement-canvas


lean-procurement-canvas


THE LEAN PROCUREMENT CANVAS

Inspired by the lean canvas of Ash Maurya and the Business Model Canvas from Alexander Osterwalder a new adapted version was designed.

We have on the right hand side all about the company, that is evaluating a new partner (left hand side). Main question is, can they both together achieve the main goals in the middle?

The lean procurement canvas is easy and gives the evaluation a comparable structure, that follow’s the highest risks first. 

The lean Procurement Canvas is an agile Contract
— Ursula Sury, Lawyer lic. iur, Vice Director Lucerne University of Applied Sciences & Arts

IS ONE PAGE REALLY ENOUGH?

Lean-agile Procurement could be used without any attachments nor requires specific tools. However, there might be good reasons e.g. to break down complexity or make things to the potential partner more transparent to refer from the lean procurement canvas to further attachements.

Potential appendix’ to the Lean Procurement Canvas might be (numbers are equal to the sections in the canvas):

  1. Epic/user story pattern, Business Model Canvas, Lean Canvas to describe problems and it’s business value
  2. Linking the current strategic pillars on True north to e.g. a strategy map, balanced score card, x for y analogies, etc
  3. Factsheets per service/product/etc, that describes the oppertiunities, unique selling proposition. Furthermore the awards of the offered team won in the past
  4. Go product roadmap to break down problems into goals, features incl. KPI’s how to measure success
  5. CV’s of the offered team members to match with the profiles needed
  6. Customer journey, high-level architecture, culture manifesto, general terms and conditions to describe the frame conditions
  7. Daily rate and profile description per team member, service, product, etc offered

LAP Approach - Step-by-step


LAP Approach - Step-by-step


The LAP Approach Step-by-Step

1. Initialization:

Setup an agile x-functional procurement team, that contains the people that will cooperate with the new partner, extended by other stakeholders needed. The x-functional procurement team (xPT) has to have the competences to decide.

2. Customer Needs Desing

Based a the Business Model Canvas define the high-level needs your own within the x-functional procurement team. Focus to the main Sections of the lean procurement canvas first and prepare all appendix’ you think are needed. Invite then potential partners/vendors, that you think could do the job and provide them your prepared informations in advance. Based on that, they should show up with all resources of the potential delivery team and other stakeholders. So that the vendor has a x-functional procurement team in the room, that is able to decide as well. Btw. this xPT by the vendor is also including the potential delivery team members.

3. Big Room Evaluation Days + 4. Peer-Feedback/Decision

With each of the potential partner a big room evaluation day is organized, where the Lean Procurement Canvas is worked out together. This will be done  in an agile approach in several iterations of e.g. planing, break out sessions, hack-rooms, reviews, demo’s, etc. The Lean Procurement Canvas is evolving section by section. Where needed appropriate appendix’, such as a e.g. a go product roadmap, are developed together. The goal of the day is to complete the lean Procurement Canvas and gather peer-feedback/-decision.

check the interview about the success story of CSS, a Swiss insurance

4. Start agile Delivery

If there is still uncertainty, it might be an option to choose e.g.the best two potential partners and start agile delivery with both (initial proof-of-partnership). This will be even cheaper, than switching a partner in a later state (similar to a late bug detection the costs increases exponentially). The lean procurement canvas will be updated with any new stage and is the key instrument in partner management.

Lead-time of LAP

Depending at complexity of business case and availability of needed people an optimal lead time could be only 4 days!