Procurement Process

I've been working with e-procurement in a wide variety of guises and in many different organizations for nearly 20 years. Before the widespread use of the internet there were some proprietary on-line purchasing systems that were, by and large, the same as a modern incarnation of a web based e-procurement system. And they all have one thing in common - they don't work. To be fair, they're getting better but still, most implementations are an expensive set of broken promises. It's not always the technology that's at fault - sometimes it's the promises that are wrong - expectations are set unrealistically. Or its the functional design that's wrong - business requirements ignored or misunderstood. And it's such a shame because e-procurement was such a good idea. So what's gone wrong?

Over the years I’ve had some great ideas. I’ve had some pretty dumb ideas too. I’ve followed through on some – both the good ones and the dumb ones but most, I have to admit, have been left as just ideas. But it still gives me great satisfaction when I get to see one of my great ideas executed perfection – by someone else. A number of years ago, I had the great idea that smart phones could be used as purchase to pay tools. I wrote about it here. The problem of process compliance in some situations like construction sites it that it has, historically at least, been difficult to put IT solutions in place. Purchasing Cards have been tried but rather than helping to support a robust purchase to pay process they tend to remove the process entirely – the “Nuke” option. But now, everyone carries a smart phone and it’s perfectly feasible to put purchasing software in the hands of everyone, regardless of their working environment. It’s not just possible – it’s delivered, and a few weeks ago, I had the great pleasure to speak to Patrick Hopkins, CPO at Coca Cola Bottling Company to understand how they’ve implemented a Coupa solution to do just that.

I don't think of myself, much, as a grumpy old man but I seem to have spent a lot of time recently reading blogs, LinkedIn, tweets and press releases, scratching my head and wondering "is it just me"? There is a saying of which my old boss used to be fond: things that are 'well known' are rarely known well.  These well known things tend to form our basic day to day operating assumptions. It is sensible to haul these assumptions into the sunlight every so often to give them a good dust down and re-examination.  I am going to mention five of them today:

There are few that would disagree that Ariba sits firmly amongst the best in class procurement vendors. Its heritage goes back to the pioneering days of e-procurement and it has continued to innovate successfully ever since, diversifying its portfolio of solutions across the P2P spectrum. But while its procurement credentials are impeccable - the first P - how credible is Ariba at addressing the second P at the payment end of the spectrum?

I despair sometimes. There's been a couple of threads in the purchasing and supply chain media recently that seek to justify the role of procurement. There was Peter Smith's recent spirited defence, (here), of the procurement profession in response to David Cameron's naive attack calling purchasing professionals the "enemies of enterprise". And then there was the article in Supply Management "CFO focus on savings ‘does procurement a huge disservice" which high-lighted some research by Ardent Partners revealing a misperception of the role of procurement by most CFOs: