Daily Archives: September 19, 2014

The “Future” of Procurement: Old News Part III

In yesterday’s post we again reiterated that it’s not what the analysts and vendors think the future of Procurement is, it’s what the future needs to be for your organization to be successful (and solvent) and what you need to do to get it there. And these are not one in the same. Furthermore, all of these “Future Trend” talks are getting repetitive because the vast majority of “predictions” in the doctor‘s recently compiled list of of 33 commonly identified “future states” that Procurement is supposedly going to have contains well over two dozen “future states” that Procurement has already had for years (and years) and provides a reader with absolutely no insight on what the future of Procurement is and, more importantly, what it needs to be for your organization. But, unfortunately, just telling you this doesn’t help you. So we have to discuss all 33 of these “future trends” and illustrate how only a small minority are relevant to the conversation while the rest are the same old trends that have been recycled and repackaged by the junket jaunters for the past decade. But having to spend over a week dispelling deceit does not delight the doctor in the least, and, as a result, makes him even more likely to call a duck a duck, a spade a spade, and a well dressed presenter the snake-oil salesman he really is. While he will continue keep the language Safe for Work, unless you mention a trigger word, the doctor‘s not pulling any punches in this series so if you want something more along the lines of cookies and sundaes*, head on over to Spend Matters for about the next week. I’m sure their pieces will continue to be friendlier, or at least more politically correct, than SI’s.

Since we still have 27 to slog through, we’re going to dive back in!

27. Inter-Departmental Collaboration

To be fair, with a lot of effort, one could put forward a decent argument that this belongs in the ongoing blues category because there are still many companies where departments pit themselves against each other like two old-time big-league rivals, often with the throw-downs to match, but the whole point of the enterprise software movement, which has been ongoing for more than three decades, has been to provide organizations the tools with which to increase their collaboration. Furthermore, as soon as the CFO or CEO of any organization sees the financial benefit of collaboration, if collaboration doesn’t happen naturally, it is mandated. C’est l’entreprise.

26. Increased Accuracy in Demand Planning

Before best-of-breed Sourcing, Procurement, and Supply Management systems we had ERP (Enterprise Resource Planning) systems (and, to be fair, most organizations still run on outdated ERP systems). Before ERP systems we had MRP systems. MRP, which is now known as Manufacturing Resource Planning, and which originally stood for Material Requirements Planning, was focussed on production and inventory control, regardless of what you choose to call it. And good inventory control came from … that’s right … good demand planning. So better demand planning has been at the forefront of needs and wants for … wait for it … wait for it … fifty (50) years. That’s right. FIFTY FREAKIN’ YEARS! MRP has been in production since 1964, when it was first implemented by Black & Decker. And 11 years later the founder (who developed MRP in response to TPS — Toyota Manufacturing Program) published the book on MRP, which, coincidentally, was published in the same year that Brooks published the classic tome on Software Engineering and Project Management (The Mythical Man Month). So to say this is new is like saying acrylic paint is new. (It’s not. It’s also 50 years old for those who are interested.)

25. More Stakeholder Collaboration

Thanks to the passage of the Small Business Investment Act of 1958, “Small Business Investment Companies” (SBICs) were licensed to help the financing and management of the small entrepreneurial business and, in the 1960s and 1970s, the first VCs formed and invested in companies like Digital Equipment Corporation (DEC), Apple Inc., and Genentech and struck modern gold. This led to the rapid rise in VC corporations, and VC investment, and these VCs, who were major stakeholders, were interested in protecting their investments and got actively involved. This not only paved the way for stakeholder collaboration across the board but made it an important part of any serious** business discussion for the last three decades. Again, old news (that the VCs might not want you to know if they’ve invested in the competition, but old news).

Do you agree Mr. LOLCat?

* Still no guarantees!

** Yes, the doctor has much higher standards than the average person. Deal with it.