In a paper titled Acres of Diamonds, I referenced the results of our research spanning a 14 year period in which we discovered that all goods can be classified into one of two commodity characteristic types; Dynamic Flux or Historic Flatline. (Note: if you would like to obtain a copy of the Acres paper, let me know and I would be pleased to forward it to you.)Through these findings, organizations reported that they were able to effectively realign their purchasing strategy to minimize their reliance on a change management strategy and thus eliminate compliance issues. This prompts the following questions:
- Do you feel that e-procurement initiatives place too much emphasis on a change management or frontline compliance approach?
- Do you believe that there is too much reliance on technology to drive efficiencies and subsequently savings?
- Do you feel that your current technology platform adequately meets (or easily adapts) to your purchasing department’s operational requirements?
- Do you believe that a better understanding of the processes that define your current procurement practice by key stakeholders will improve or diminish organization-wide compliance?
Once again, these questions are based on the feedback I have received through the many conferences I have held throughout Canada and the U.S. In the majority of cases, both public and private sector organizations of all sizes have indicated that their company has usually modified its operations to accommodate the technology that was being implemented. This they felt was the main reason for the lack of compliance.
Procurement Insights 
chris
May 24, 2007
Right on the money. You are basically summing up the last ten years of my life, all of which are the first ten years of my professional career in procurement, mainly in the public sector. I have been through three different e-initiatives as line staff to implement some kind of automated procurement system – some that were ERP linked and one that was not.
My basic experience has seen a few common issues:
1) A workforce that is not technically savvy enough to understand MIS/IT automation, both at the administration level and at the frontline. (Basically they are both in over their heads at their prospective levels). Adminstration lacks the understanding that ERP is a culture shift, not a turn-key application, which requires intelligent people just as much, maybe more so, than just intelligent software in order to make the “system” function at its peak. At the line level, staff lacks basic computer skills and are not taught to understand “why” their involvement is key to the success of the program. They are only trained “how” to use the software. Type this, click here..etc.
2) The procurement module is an afterthought in an ERP system that mainly focuses on financial aspects, and therefore only supports basic purchasing requirements of requisitioning and purchase orders. This does not truly automate the procurement process. Especially so in public procurement which has a myriad of policies to be adhered. Procurement is too complex for a simplified purchasing module to provide any real significant gains of efficiency in day to day work.
3) Limited to no appreciation for process mapping/improvement prior to automation. There is a false sense of hope that “This software is the solution to all of our problems!” A system is chosen from a slick proposal, then it is implemented. Without proper process mapping to identify basic requirements to separate needs from wants, you are stuffing a square peg into a round hole. Combined with arbitrary deadlines to “go live” by a certain date, a lot of compromises are made to the integrity of the organizations processes in order to serve the software’s implementation needs – minimizing programming changes to the software in order to keep the budget under control. This in turn results in a overwhelming lack of buy-in at the basic levels of the organization.
4) The general feeling that you are sold a bill of goods for one thing in the beginning, but what you end up with in the end is far short of what you thought you were getting. (Related to the false sense of hope noted above). You have traded all of your old problems for new ones – at least hopefully – in some cases you may still be stuck with your old problems too. As more and more issues arise in implementation, the more you feel the software provider losing interest in you at the support level as they move on to their next sale.
procureinsights
May 24, 2007
Thank you for that thoughtful imput from the front lines Chris.
Does anyone have anything to add? Do you agree with Chris’s assessment?