e-wheels on my wagon – why the e-procurement debate is at least ten years behind the curve

e-wheels on my wagon – why the e-procurement debate is at least ten years behind the curve

Posted by Ian Burdon in e-Procurement 26 Jun 2012

At the recent PEPPOL conference in Rome I tweeted, in a fit of mischief and ennui, that the discussion seemed to me to be at least 10 years behind the curve. All it needed was a blinding flash of light and Michael J Fox climbing out of a DeLorean to prove that we really were going back to the future.

Purchasing Insight logoOn one level my view is influenced by the fact that at the beginning of the PEPPOL process there were two successful (pre-existing) e-procurement programmes in European Governments, in Norway and Scotland.  At the end of the process there are still only the same two successful e-procurement programmes in European Government as well as the e-invoicing model introduced in Denmark and the growth of Value Wales

The issues at the conference were addressed by Scotland and Norway 10 years ago and I was depressed that the same issues dominated the agenda and presentations. A lot of good work has been done. Yet PEPPOL seems to me to be a species of wheel reinvention by technologists which has resulted in the rims being hexagonal instead of round – but, hey, they’re e-wheels, right?

There is more to this than a mischievous impulse to utter a snarky tweet.

It has always seemed to me that if you take a text which is riddled with “e” this and “e” that, the first thing to do is to strip out all of the “e”s.  If it then looks like nonsense, it will not be improved by putting the “e”s back. More than a decade after the dot.com boom one hopes people would be less credulous but, alas, marketing budgets are long and memories are short.

Turning this around, e-business is really about business, e-government is really about government and e-procurement is really about procurement.

Discussion of e-business repeatedly comes back to the “e” at the expense of the “business” and generally neither are well understood by policymakers. The debates around procurement in the public sector seem always to come back to sourcing and transactional purchasing. The discussions in e-procurement seem interminably to revolve around e-sourcing, P2P and e-invoicing and remain focused on “savings” rather than transformational benefits.

The fundamental issue avoided is the proper definition of “Procurement” as something more than merely buying things.  Procurement is too important to be left to buyers. Procurement is, or should be, at the heart of delivery of corporate strategy and encompasses everything from corporate planning and market analysis to understanding and working with the whole supply chain. This may include ensuring that there is sufficient liquidity in the supply chain to create and maintain sufficient capability to deliver strategic outcomes.

e-procurement is about the tools required to support and enhance the conduct of all aspects of procurement activity. For at least 10 years this activity and the commercial relationships between the participants, including the banks, have had the capability of being richly enhanced by the ubiquitous interconnectivity of the internet.

Endless debates about structured electronic documents entirely miss the scale and nature of the transformational opportunities available.

And that is why the current debate is at least ten years behind the curve.

Ian can be found on twitter @IanBurdon

  • Christian Lanng (CEO Tradeshift) June 26, 2012 at 4:20 pm /

    I don’t disagree, but one distinction, PEPPOL is a set of open standards, a platform for interoperability in Europe – not a procurement program, I know of at least 7 EU countries that are deploying PEPPOL gateways, thereby making it possible for any technology vendor in those countries to create interoperable e-business services towards the government. This has already forced a change in perspective amongst many buyers we are talking to, as they want to align them selves with the same standards. I think that’s the true success of PEPPOL.

    Procument is a seperate (but strongly related) topic in my book, in the ideal world PEPPOL deployments would be followed by strong procurement programmes, but I don’t think it’s fair to say that PEPPOL has failed simply because governments still suck at procurement.

  • Ian Burdon June 26, 2012 at 6:09 pm /

    Christian, thanks for the comment. Some elements of what you say are covered in a further short article so I’ll leave them be for now. On your final point, I disagree. I think that there is a correlation between Procurement capability and eProcurement success. Successful eProcurement, in my view, is *much* more contingent on having a good grasp of your procurement and business need than on agreeing standards. My underlying point is that PEPPOL has concentrated on technical standards without coming to grips with the underlying business need. The market is quite capable of sorting out interoperability and does so all the time. Ian

  • Iain Wicking June 27, 2012 at 12:48 am /

    I agree with Ian Burdon. It is business design and strategic intent that drive effective procurement transformation. Technology comes a distant second. The only issue with technology is that it can be a block if it is not flexible enough to support the desired business model. For instance political decisions made in the past to devolve Agencies and from the centre means that in general government approaches to procurement are in the majority highly fragmented and certainly not ‘whole-of-government’ or ‘centre-led’. This locks in considerable cost, favours vendors as they can sell on an Agency-by-Agency basis, lacks cross government standards and suppliers have to deal with multiple touch points’. Trying to put humpty back together is very challenging.

  • Iain Wicking June 27, 2012 at 1:44 am /

    Gateways simply maintain the levels of fragmentation, the status quo and lock in high levels of ICT cost as the integration OH rises rapidly. What should be built is a ‘utility’. In effect a ‘Big Fat Web Server’ that contains the procurement value chain’. A utility would be multi tenanted, multi language, currency, etc and could be deployed across a single government or even multiple governments and contain ‘the one best way’ in terms of processes.

  • Alain Deckers June 27, 2012 at 6:45 pm /

    I don’t disagree with Ian’s point that e-procurement is a means – although a very powerful one – to an end, i.e. more effective procurement. So yes, “e-procurement is really about procurement.” But this misses an important dimension, as Christian Lange points out. The key objective of a project such as PEPPOL is to break down barriers to cross-border procurement. That is also the essential objective of the procurement directives, even if not the only one. And breaking down barriers implies developing inter-operability, which often involves (hopefully not literally) “endless debates” in order to reach agreement about standards, structured electronic documents, etc.

    Yes, we should also have a debate about how to “enhance the conduct of all aspects of procurement activity.” But criticising PEPPOL for not focusing on broader procurement reform – which is what Ian seems to be doing – misses the point: the project wasn’t designed for that purpose. That doesn’t mean that trying to bring about inter-operability is not worthwhile. As Ian Wicking points-out, fragmentation increases the cost of doing business for suppliers. I wouldn’t go as far as advocating a “utility” approach to e-procurement, but we can certainly do more to bring down the cost of doing business in e-procurement and PEPPOL is part of that.

    Finally, I don’t want to offend Ian, but I find his statement that “the market is quite capable of sorting out interoperability and does so all the time” in relation to *public* procurement more than a bit naive. Buyers in public procurement are not profit-maximising agents and they are guided by all kinds of strategic objectives, some laudable – others less so.

  • ian Burdon June 27, 2012 at 9:19 pm /

    Alain, thanks for the comments. re barriers to small business, there is another article in the works which looks at that.

    My criticism of PEPPOL in this article is that it has consistently taken a technical approach rather than a business approach. I made that comment at Pre-PEPPOL meetings in Copenhagen in 2006, in Paris in 2007 and Oslo in 2008 and what I generally found was that many people were happy to agree with me in private but rarely volunteered so to do in public. I had exactly the same experience in Rome last month, interestingly enough.

    Fragmentation does indeed cause problems for suppliers – that is one of the reasons for the design of eProcurement Scotland in 2000/2001 (which was explicitly put together as a “utility” approach by the way). However we did not spend time in detailed technical design of interoperability, we simply interacted with suppliers as we found them – from cXML punchout to structured eMail to secure PDF or Fax. For interoperability with Finance systems we generally used the APIs of those systems. Now, at Elcom, we are building interfaces in the cloud.

    Finally, re my naivety, I have been in the eProcurement field now, in *public* procurement, for 12 years on both sides of the desk and I stand by my comment re the market -technical interoperability is simply not a big issue in most cases (unless someone is using a particularly old legacy system). Of course if you try to interface national eProcurement systems then you may have problems – but who in their right mind would want to do that? Ian

  • Alain Deckers June 27, 2012 at 10:18 pm /


    We are in the business of ensuring that suppliers across Europe can sell to the public sector across Europe at least possible cost and without encountering regulatory obstacles. So yes, in that sense we definitely want to “interface” national eProcurement systems. That’s what creating a European procurement market is all about: making it as easy for Scottish companies to sell to the German, Italian, Spanish, etc. public sectors as it is for them to sell to the Scottish public sector. And vice-versa of course.


  • Ian Burdon June 27, 2012 at 10:23 pm /

    Alain, in that case my next article on this will interest you because I don’t think PEPPOL will address that issue at all 🙂 Ian

  • Graham Colclough July 3, 2012 at 12:35 pm /

    Spot on Ian!
    how does one give Europe the proverbial wake-up call such that they act on this very clear message.
    There are enormous benefits to be had – proven by e.g. Scotland (and formally audited); yet for some reason not even a cash-strapped Europe seems to take the appropriate steps to address this!
    I believe the EC Large Scale Pilots could perhaps help by putting more attention to pragmatic business cases that evidence gains.

  • http://interiordesignupgrades.weebly.com/ January 28, 2013 at 12:22 pm /

    Where exactly did you pick up the recommendations to publish ““e-wheels
    on my wagon – why the e-procurement debate is at least ten years behind the
    curve”? Thanks for your time ,Karen

  • Facebook.com March 18, 2013 at 9:17 pm /

    “e-wheels on my wagon – why the e-procurement debate is at least ten years behind the curve” was indeed a great
    blog post and I was indeed pretty pleased to find it.
    Thanks for your effort-Lino

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