e-Procurement on an ERP – Harder than Fetching Groceries in a Battle Tank

Procurement Insight has been tearing up a storm recently. First, they make it clear that “e” does not change the fundamental nature of anything, then they rip the covers off of Supply Chain Leakage, and now, for the triple play, they tell us that you don’t take your tank to the mall, Mrs. Worthington.

In the article, the author, Ian Burdon, described a particularly dispiriting conference where he went to a session on “Re-engineering Government Procurement” where “experts” claimed that the thing to do was to sort out procurement processes then hand it all over to SAP and Oracle. Really? In this situation, I would not have thought about throwing myself out of a high window but, instead, of throwing the experts out of the high window, because anyone who would say such a thing can’t be much of a Procurement expert.

As Ian said, the reason things were often going so badly in government (procurement) despite their having invested in ERPs was precisely because they were using ERPs. ERP stands for Enterprise Resource Planning, not Enterprise Resource Procurement. Failing to even ask what the “P” stood for was the government agency’s first mistake. The next mistake was failing to understand that a “planning” system that told you there would be a need for 5,000 toner cartridges, 10,000 reams of paper, and 500 litres of industrial solvent does not have to tell you how you would go about procuring these items in order to accomplish resource planning. Nor does it have to give you RFX, Auction, or analytics capabilities of any kind as it is not sourcing, nor purchase order management, invoice management, and payment management functionality, as it is not procurement. Trying to use ERP for e-Procurement is like trying to fit a dodecagonal peg in a hexagonal hole. (Good luck with that.)

Just because someone claims to be the Procurement oracle, doesn’t mean that they are. They just might be trying to make a sap out of you. Get an unaffiliated third party to figure out what you need, and get it. Not what a big corporation, or a misguided expert, tells you.