In
previous posts, we started to draw the necessary steps towards a more Scientific Procurement function. First 2
stages are dedicated to analyze the macrophoto allowing us to define a uniqueValue proposition to our business,
associates and vendors. Now it’s time to think how we deliver it.
We should start first with the foundations that are often not there: our Procurement Processes and Systems (P&S). Once we have reasonable P&S in place, we can work on the other dimensions (people, sustainability, supplier collaboration, immediateness) where value is definitely generated.
We should start first with the foundations that are often not there: our Procurement Processes and Systems (P&S). Once we have reasonable P&S in place, we can work on the other dimensions (people, sustainability, supplier collaboration, immediateness) where value is definitely generated.
Good news is that, today, many firms have set up Procurement P&S. Nevertheless, installation and deployment are two different things.
The first one is often linked to bad usage, inefficiency, frustrated buyers as
well as unhappy and reluctant internal customers (often called “users”).
Implementation and appropriate deployment bring different results as it often
means trying to achieve the complicated balance between compliant and efficient
P&S on one side vs friendly-user procedures and tools on the other side. A
high dose of common sense is needed: easy to say so… Let's dream of compliant, efficient, and friendly user Procurement P&S and tools.
We all know that robust implementation is all the more difficult as the whole procurement process is complex. It includes many different activities that can be grouped, for example, into 5 blocs:
We all know that robust implementation is all the more difficult as the whole procurement process is complex. It includes many different activities that can be grouped, for example, into 5 blocs:
1.- Strategy & analysis: Spend analysis,
market intelligence, business needs alignment, strategy creation, planning of
the procurement initiatives also called pipeline mgmt., performance measurement
2.- Suppliers: evaluation, qualification and on-boarding
3.- e sourcing including e auctions
4.- Requisition-to-Pay process including catalogues and Contract Lifecycle Mgmt.
5.- Supplier Performance and Innovation
2.- Suppliers: evaluation, qualification and on-boarding
3.- e sourcing including e auctions
4.- Requisition-to-Pay process including catalogues and Contract Lifecycle Mgmt.
5.- Supplier Performance and Innovation
The
order here is on purpose rather sequential. In real life, it is much more
complex and activities are inter-connected. So the first hard task for any Procurement
leader is to define the right level of priority among those 5 chapters based on
the defined value proposition and functional maturity.
Once we are focused, we can start to analyze, automatize and simplify more the existing back-office tasks.
To do so, we shouldn’t only consider our procurement requirements, we also need to think about our internal customers who do not wake up in the morning thinking first about creating and approving shopping cards. By failing to consider the Internal Customer perspective, our P&S will become unused, useless and/or bottlenecks.
Another key consideration is to pay attention first on Processes and then on Systems by following a lean approach or methodology. In many cases, talking to systems providers or IT people will drive you immediately into a system conversation and mindset which could generate very negative impacts on your process revision and final design. Systems should be there to fulfill a process. Not the contrary. We often end creating 'monsters' in term of processes due to unflexible and complex systems.
Bearing in mind our processes, we need to keep a close eye on the systems and solution providers. Are we truly aware of the so many new options available today? I would like just to mention a few examples:
Once we are focused, we can start to analyze, automatize and simplify more the existing back-office tasks.
To do so, we shouldn’t only consider our procurement requirements, we also need to think about our internal customers who do not wake up in the morning thinking first about creating and approving shopping cards. By failing to consider the Internal Customer perspective, our P&S will become unused, useless and/or bottlenecks.
Another key consideration is to pay attention first on Processes and then on Systems by following a lean approach or methodology. In many cases, talking to systems providers or IT people will drive you immediately into a system conversation and mindset which could generate very negative impacts on your process revision and final design. Systems should be there to fulfill a process. Not the contrary. We often end creating 'monsters' in term of processes due to unflexible and complex systems.
Bearing in mind our processes, we need to keep a close eye on the systems and solution providers. Are we truly aware of the so many new options available today? I would like just to mention a few examples:
1.- Spend analysis can be done now in a fully different way thanks to “semantic” search or similar approaches based on search engines “plugged” into the company information system. This could mean that, soon, categorizing all and each PO won’t be necessary, thus ending forever with an historical and painful task for the requesters (or shopping card creators).
2.- More and more ‘physical’ or on-line companies offer Procurement analytics: supply market and/or supplier analysis, category trends / strategies / reports, best-practices, standard tools, etc…
3.- The number of Supplier evaluation and on-boarding platforms is growing. It is all the more relevant when the platform includes supplier audit functionalities. If one customer of a vendor makes an audit, the results are visible for all the customers of this vendor. Those service providers (through big data) start to offer real-time-benchmark vendor capabilities.
4.- Quite many companies propose us to manage our e-auction events. We do not need to buy the expensive software licenses. No more need for costly and painful internal deployment. We simply buy the service provision on a case by case approach in a flexible and relatively cheap manner.
5.- A few vendors are now working on (real) SRM mobile apps creating an environment of close collaboration.
6.- And finally, we have a large choice of generalist or specialized crowdsourcing platforms.
2.- More and more ‘physical’ or on-line companies offer Procurement analytics: supply market and/or supplier analysis, category trends / strategies / reports, best-practices, standard tools, etc…
3.- The number of Supplier evaluation and on-boarding platforms is growing. It is all the more relevant when the platform includes supplier audit functionalities. If one customer of a vendor makes an audit, the results are visible for all the customers of this vendor. Those service providers (through big data) start to offer real-time-benchmark vendor capabilities.
4.- Quite many companies propose us to manage our e-auction events. We do not need to buy the expensive software licenses. No more need for costly and painful internal deployment. We simply buy the service provision on a case by case approach in a flexible and relatively cheap manner.
5.- A few vendors are now working on (real) SRM mobile apps creating an environment of close collaboration.
6.- And finally, we have a large choice of generalist or specialized crowdsourcing platforms.
There
are certainly even more meaningful examples. Do you know any additional good trends related to Procurement systems and solutions?
How
much time do we spend analyzing, priorizing and simplifying our P&S?
Do
we properly integrate the business point of view when defining and optimizing
our P&S?
Do
we regularly look for new vendor solutions in the market?
How
good are we at presenting a compelling business case to our CFO?
What
are you doing or planning to do with your Procurement Processes and Systems?
