Procurement is Still in the Technology Dark Ages

A recent post over on Deal Architect discussed how, despite claims to the contrary by recent analyst firms, most organizations are still in the technology dark ages, and this goes double for Sourcing and Procurement.

Not only is it the case that most organizations do not have modern e-Sourcing and e-Procurement platforms, but many are still stuck on outdated MRP and ERP systems that actually hinder, instead of help, Supply Management.

Consider the plethora of problems with ERP systems that often make it worse than not having a system at all:

There is generally little requisition management and no sourcing / tender / RFX support. In an ERP the process starts with a purchase order, flips into a goods receipt, and, maybe, just maybe, correlates with an invoice for payment.

There is generally little support for any type of real analysis. There is usually a built-in report library that has a few standard reports on suppliers, products, bills of materials, invoices, and payments.

There is only one schema, and it generally doesn’t lend itself to any particular form of analysis, reporting, or inquiry beyond the built in reports and any sort of global trade analysis, import/export analysis, tax analysis, or tariff analysis is just a pipe dream.

There’s a reason that Sourcing Innovation recently blogged about how hose that still rely on ERP could end up in the supply chain disaster record books and that is because ERP systems are not a supply chain management platform. But it, and maybe a few free web tools, are the best many organizations still have, and that has to change.

Especially when many organizations still pump millions of dollars into these platforms that don’t adequately support Procurement, don’t adequately support Sales, and don’t adequately support modern logistics and inventory management in the age of 3PLs (third party logistics) and VMI (vendor managed inventory).

Investments need to be made in the right products and platforms that serve the core needs of each department, starting with Sourcing and Procurement.  And there are plenty out there.