This blog post was originally published on August 22, 2014 by Procurement Professionals.
I am a huge fan of Charles Dickens' instant classic A Christmas Carol. In particular, I love the 3 Ghosts who help Ebenezer Scrooge revisit his past, understand the present, and lay out his options for the future.
If you're a procurement professional in 2014, what would the 3 Ghosts tell you?
Ghost of Procurement Past
It's 1995. The term ERP is just starting to become popular among enterprises. The alternatives are paper/pen or outdated legacy systems that won't even survive Y2K (remember Y2K?). The prevailing software model at this time involves long on-premise installations, massive spend on integration and training, and inflexible, ugly user interfaces (because who cares about the end user when you've already made the sale at the C-suite level?).
It's 1995. How does Procurement fit in with ERP, and more broadly, where does it stand within the enterprise? Sadly, it ends up as a small add-on within the Supply Chain module, largely ignored in favor of modules for HR, Finance, and Manufacturing. Procurement users have no choice but to adopt ERP with the rest of the enterprise, even when it doesn't meet their needs and is often painful to use.
Ghost of Procurement Present
It's 2014. Procurement departments are at an inflection point. Purchasing within enterprises is now more decentralized, which means that Procurement has to manage a rapidly growing list of requests from every other department. And this is on top of ever-growing pressure to realize cost savings, evaluate and improve supplier performance, improve internal processes, and increase overall effectiveness and influence. Current software tools simply are not good enough, and they’re getting worse every day.
It's 2014. Several factors have influenced how software is developed, delivered, and used in the workplace today. Enterprise users now know what user-friendly interfaces look like. They also know that buying new software is no longer just a top-down decision, it's bottom-up and driven by enthusiasm, usability, and ability of the software to meet flexible user needs. The next generation of enterprise software - cloud-based, mobile-optimized, and user-friendly - is already helping every other department. Why not Procurement?
Ghost of Procurement Future
It's 2025. Procurement departments are no longer seen as the bottlenecks. They are in control. They use best-in-class software to help them manage their workflows 10x more effectively than they could a decade ago. Procurement analysts and managers are now true collaborators with their colleagues across the enterprise and with suppliers. Procurement departments have full visibility into all spend that is happening within the enterprise. It is finally possible to collect the vast amounts of data generated every day and use it to predict future trends, resolve issues before they become too big to handle, and save organizations a tremendous amount of money.
Just like in A Christmas Carol, we are at an inflection point in 2014 where the roads ahead of us lead to very different places. Which road will you choose?