Daily Archives: March 15, 2017

Procurement is Global. Platforms should be Global. Truly Global.

And, in particular, as previously noted, those platforms should form the foundation for Virtual Procurement Centres of Excellence. But just acquiring a platform is not enough. It has to be adopted — and not just in the center of excellence, but in every local purchasing department around the globe.

This means a global rollout, but not an instantaneous one. Big bang roll-outs usually end up in big blow-ups. The biggest supply chain disasters in history have often been the result of big-bang ERP or technology projects that tried to update the entire system all at once, often in a bet-the-company endeavour. Such a project even brought down a 5B company. (Remember Foxmeyer? Probably not, but that’s because a big bang ERP project resulted in a big bust.)

Now, a global Procurement platform roll out is not replacing the ERP and a failure likely wouldn’t bankrupt the company, but it certainly would be very costly and knock Procurement back into the dark ages it’s trying to crawl out of. So it has to be done right. So how do you do it right?

1. Take it in steps.

Start with just enabling the center of excellence so that the Procurement leaders can get familiar with the platform before the questions start rolling in. After all, they will be the trainers, leaders, barkers, and bugle-men of the solution, and need to be prepared the lead the charge. After that, enable just a few locations at a time until each is up and running.

2. Get the data model right before a single implementation.

Remember, you have to control the information and financial chain with the platforms, and this will require integrating with data from dozens, if not hundreds, of systems and sources. Without a good data model, integrations will be difficult and time consuming.

3. Identify the systems of record for each data component.

The days where the ERP is the system of record are long gone in leading organizations. These days, organizations have a financial system as the system of record for invoices and payables, a supplier management system for supplier (and sometimes catalog) data, local catalog management for products and services that are primarily sourced locally, a CAD/CAM system for product designs, a MRP system for custom product designs, and so on. Make sure the integrations with each of these core platforms is complete and accurate before using the new system for the first Procurement event.

4. Define small test projects that can be used to evaluate the implementation adequately before continuing with the roll-out.

Pick a few representative, but not mission critical, projects that can be completed in weeks (not months or years) that will adequately test the system, define milestones and checkpoints, and evaluate at each stage. Only continue when any issues or bugs are identified and corrected.

5. Make sure you have experienced, expert help for the roll-out.

Each office will have its own particular process needs, regionalization (in terms of language and currency), audit trail requirements, and so on. Expert help can not only help you identify these requirements but appropriate system configuration options for maximum performance and minimal complexity at each location.

In other words, create a reasonable plan, with expert help, and stick to it. Things will generally go smooth if you realize that, like every evolution before, the advancement of the Procurement function is a journey. You can’t always afford to stop and smell the roses, but you can’t afford to run through the thorns either.