Category Archives: Trending

British Businesses Need to Respond to Brexit Now

British businesses can’t afford to wait before they take action and respond to the post-Brexit situation in the UK.

With uncertainty still abounding, and business implications not yet fully understood, two separate reports have confirmed that British businesses need to be taking action to prepare themselves for the Brexit.

Slowing UK Economy

The Markit/CIPS Purchasing Managers’ Indexes for both construction (weakest performance in seven years), and services (lowest growth in just over 3 years) showed that the UK economy was already slowing down before the Referendum took place.

The economic uncertainty following the June 23rd vote is likely to lead to further falls for July. Experts have advised that businesses need to take immediate action to mitigate these falls, particularly in the service sector.

And despite a fall in purchasing associated with these industries, companies also reported on-going supply chain pressures, including lengthening lead times linked to transportation delays, and lower supplier stocks.

Challenges for British Businesses

At the end of last week, the Institute of Directors (IoD) launched a paper outlining a wide-ranging assessment of what the Brexit means for British businesses.

While the IoD suggested that the UK will most likely retain access to the single market for goods, albeit with some concessions, the real concerns raised were also for the service industry.

The report highlighted that 83 per cent of IoD members had a link with Europe, whether via export, import, supply chain, staff or otherwise, and that these businesses needed to begin conversations with EU clients and supply chain to clarify what these changes will mean.

However, the IoD paper also offered the following thoughts:

  • The UK is unlikely to be able to deal with new trade partners whilst re-negotiating with the European Union and amending existing third-party arrangements.
  • Passporting for financial services will be difficult to negotiation, as remaining EU members will see this as an opportunity to shift business to European cities.
  • The IoD expects EU nationals living here to be able to stay once the UK has left the EU, but called on politicians to clarify this status as soon as possible.

In the immediate aftermath of the referendum vote, IoD members considered the key priorities for the Government to be:

  • Take steps to stabilise the economy in the face of any negative reaction in financial markets.
  • Securing a new trade agreement with the European Union.
  • Prioritise new UK trade agreements with high growth markets and ensure preferential market access to third countries (via existing EU trade deals) is maintained
  • Clarifying the status of EU citizens in the UK, and UK citizens elsewhere in the EU.
Coherent Response

Simon Walker, Director General at the Institute of Directors, stated: “In the wake of the EU referendum vote, we now need politicians to respond coherently to provide stability as we work out our future path. We must not lose faith in the ability of British businesses to overcome these challenges. 

“The IoD is resolutely positive about the opportunities that globalisation brings. We were promised an open and outward looking country after Brexit. Whoever ends up in charge must deliver on that pledge – a Britain that continues to play an outsized, global role in a world that is coming together, not moving apart.”

Allie Renison, Head of Europe and Trade Policy at the Institute of Directors and author of the report, added, “In the wake of the referendum, the most pressing concerns for businesses are responding to the short-term consequences stemming from disruption to financial markets, and preparing for longer-term ramifications, and maximising any opportunities that a post-Brexit landscape stands to offer.

 “With such a high degree of integration into EU markets, British businesses need to consider the possible outcomes of negotiations and whether we have access to the single market. There are a number of areas outlined in this report where we can forecast a range of potential changes to policy that firms should take into account when making any adjustment plans in the wake of Brexit, with both short and longer-term perspectives in mind.”

Throwback Thursday – 4 Challenges Procurement Faces & How to Overcome Them

Ask the question, “What are the challenges procurement faces?” and you’ll get the same responses time and again. So how do we overcome the key challenges and move on?

4 challenges procurement faces

We’re looking back at some of Procurious’ most popular content from the past 12 months. First up, we revisit an article on the 4 challenges procurement faces, and how to overcome them.

Why? Well, the nature of these challenges never seems to change, so by shining a spotlight on them again, we aim to start a conversation on how to finally put these challenges to rest!

Challenges Procurement Faces

Results from a newly published study shine a light on an assortment of internal challenges facing the procurement function, as well as its changing role as we enter an uncertain future.

Xchanging has issued the first results from its 2015 Global Procurement Study of more than 800 procurement decision makers. 

These first set of results look at internal challenges and the new role of procurement, covering misaligned KPIs, lack of internal engagement, capacity issues and skills gaps.

Challenge #1: Misaligned KPIs

Despite the now wide ranging responsibilities of procurement decision makers, 47 per cent name ‘cost savings realised’ as their number one KPI. The top four KPIs listed are all cost related. CSR/Sustainability impact, by comparison, is ranked as the least important at just 1 per cent.

Chirag Shah, Executive Director, Xchanging Procurement comments: “These results strongly indicate that there is a problem with the current KPI structure. Procurement teams are responsible for many business critical functions. From risk management to sustainability impact, procurement is engaged in activities that far surpass its cost-cutter legacy.

“The metrics against which organisations track procurement’s performance do not line up with what procurement actually delivers.”

Challenge #2: Lack of Internal Engagement

63 per cent of procurement decision makers globally identify ‘internal stakeholder engagement’ as a challenge, with 14 per cent claiming it is as an extreme challenge.

Shah explains: “Procurement’s strategic capability isn’t being understood and because of that, it isn’t appropriately valued. Not only is this causing problems for procurement performance, it is also restricting business success. By not engaging with the procurement team and fully understanding what it can deliver as a strategic partner, companies are limiting their potential for growth.”

CPOs clearly feel more internally valued than procurement middle management. 60 per cent of CPOs feel that procurement is a C-level priority in their organisations, compared to 37 per cent of procurement middle managers.

Shah makes a number of recommendations based on the findings: “To improve internal engagement, and properly communicate the value of procurement, procurement departments need to consider tactics such as introducing governance boards, using score cards to track deliverables, leveraging analytics and reporting tools to demonstrate results and even re-labelling team members with non-cost centric job titles that relate to their roles, for example ‘Risk Manager’ or ‘International Consultant’”. 

Challenge #3: Capacity Issues

According to Xchanging’s numbers, 80 per cent of procurement decision makers identify ‘procurement team time pressures’ as a challenge, and 20 per cent as a major challenge. This implies that the majority of procurement departments are facing major capacity issues.

Surprisingly, in comparison, ‘talent shortage’ is considered an operational challenge by far fewer respondents, with 59 per cent citing it as a challenge, and only 12 per cent as a major challenge.

The number citing talent shortage as a concern drops to less than half (40 per cent) when asked if it’s a problem for the industry as a whole.

xchanging

Challenge #4: Skills Gap

The skills considered most important for procurement professionals are ‘relationship management’ (88 per cent consider important, 59 per cent very important) and ‘negotiation skills’ (88 per cent and 58 per cent).

Significantly, these are also the areas where procurement decision makers identify the greatest gaps in skill set provision; around a quarter cite ‘relationship management’ (26 per cent) and ‘negotiation skills’ (23 per cent) as areas with the greatest gap in skill set provision. 23 per cent also name ‘project management’.

Want to read more about the challenges procurement faces? You can download the full report here.

The Surprising Truth – Apps Are Not Enough for Enterprise Mobility

Apps are all the rage, and businesses realise the benefits of having one. But many don’t realise that they need to go beyond an app for true enterprise mobility.

This article was first published on the Coupa Blog.

Apps have been closely associated with mobility since they exploded onto the scene with the launch of the Apple iPhone in 2007, followed by its app store in 2008.

Soon “there’s an app for that” became a running joke, denoting that just about anything that you wanted to do could be done on your phone using an app. We hit peak “app for that” when the American Dialect Society voted app the word of the year in 2010.

There are now millions of apps, and while it’s still true that you can do an amazing number of things with them, it’s also become clear that they have their limitations, especially for business.

Enterprise mobility requires more than just apps. So, when I hear companies announcing a new app with great fanfare, and sweeping claims that this innovation makes their product or solution mobile, I want to sit them down for a chat.

Mobility is a work style, not an app

Here’s what I’d tell them. An app is a must have, but enterprise mobility is a work style, not an app. More than sixty percent of workers are now working outside of the office at least part of the time. Apps are just one way of enabling them. True mobility is about letting people do business in the fastest, most efficient way possible, wherever they are, and that’s not always by using an app.

Apps present opportunities and challenges for the enterprise. A really good app, one that transforms a business process and makes it dead simple, can be highly addictive.

For example, I am on the go constantly. I couldn’t live without the Amazon app, because I place an order almost every day. I don’t even have time to even go to a local store for books and scissors for my kids, so I use the app to order wherever I am when I realise I need something.

My friend Lynn is also an Amazon fan, but she works from home or Starbucks, and uses one-click ordering on her laptop. She has never even downloaded the app.

Real challenge of enterprise mobility

It’s the same in the business world. This is the challenge of enabling true enterprise mobility: it’s multi-faceted.

Yes, you have to have a mobile app, and you have to invest in making it awesome, but an app can never match the desktop experience for managing a complex business process end to end.

And, if people still need to log in to the desktop application for all or part of a process, there has to be a really compelling reason for them to also download and use an app. If they can do something in some other way that is easier and faster than installing an app, they will.

On the other hand, for people who have to perform a particular process every day, or multiple times a day, downloading the app will seem like a small price to pay for a big increase in efficiency. They will naturally want to use it, and they’ll be raving fans.

Outside of these power users, the app will be irrelevant and they’ll never even download it. That’s why you have to give them other mobility options, such as mobile responsive design for tablets, smartphones and wearables, and my favourite, actionable email notifications. Yes, email.

Killer apps

What’s so great about email? You’d be hard pressed to find a business person who doesn’t have it on their smartphone and use it every day. So, if you can serve up something in an email and the user can take action without logging into a software system, and without having to set up a new account or go to an app, that’s a great mobility experience for most users.

We see this reflected in platform usage data at Coupa. Approving purchase orders is a common mobile use case. Not requiring approvers to be in the office to approve purchase orders has a huge impact for most companies, cutting PO turnaround time from an average of two or three weeks to 17 hours, the average across all our customers. But our data shows that most approvals are done via email, not by app, even though we offer both choices.

The same holds true for suppliers. The vast majority of suppliers only get a few POs from a customer, and invoice once per month. For these suppliers, downloading an app to turn a PO into an invoice is an exercise that adds to enablement effort without yielding benefit. If you give your supplier an option to get all the data they need, at their fingertips via email, without requiring an app, the vast majority of suppliers will choose this option.

Does that mean the app is no good? No. But why go to another app to do what you could do in the app you’re already in? Most people won’t do it.

Quest for Innovation

But for people who do have dozens of purchase orders to approve every day, or business traveler who have multiple expense items to upload, it’s a different story. They use the app because it’s more convenient, and less error-prone, to have everything in one place and process everything at once.

That’s why for the enterprise, equating an app with mobility is wildly optimistic and naive. Innovation in 2016 is not about having an app. Simply having an app for this or that will never be enough.

In this age of personalisation and consumerisation, innovation means continually thinking about end-user experiences and using the latest technology to make business processes easier through any number of channels. It’s giving people options to work how they want, when they want and with as little friction as possible.

That is true enterprise mobility, and so far there’s no app for that.

The Internet of Things Driving Procurement Change

In the business world, organisations are waking up to the possibilities afforded to them by the Internet of Things, connectivity and Big Data.

The 2015 Gartner CEO and senior business executive survey found that technology-related change was viewed as the primary tool to achieve growth in 2015 and 2016.

37 per cent of respondents to the survey highlighted customer engagement management as a key technology priority, with 32 per cent highlighting digital marketing. Cloud-based business also had high recognition, as CEOs came to realise that the Cloud is where new disruptive industry platforms (think companies like Coupa) get created.

However, on the other side of this were concerns about potentially increasing levels of risk that are seen in line with increased connectivity. 77 per cent of survey respondents agreed that the digital world was creating new risks for businesses. However, 65 per cent also felt that investment in risk management practices was not keeping up with new and higher levels of risk.

Cloud Security – Or a Lack of It

This is a key area for procurement to consider when using Cloud-based technology and Big Data. You’ll all have seen reports and stories in the press about hacking and cyber security problems. This is frequently raised as one of the key issues with moving from traditional systems, to Cloud-based software.

It’s estimated by HP that around 70 million ‘smart’ devices have serious vulnerabilities, including privacy concerns, lack of encryption, inadequate software protection and insecure web interfaces. Worse still is that individuals and organisations either aren’t aware, or don’t have the capability to secure their systems.

The current state of Internet of Things security seems to take all the vulnerabilities from existing spaces, e.g. network security, application security, mobile security, and Internet-connected devices, and combine them into a new (even more insecure) space, which is troubling. 

Internet of Things Driving Change

A number of senior procurement leaders we have spoken to over the past few months have highlighted the potential issues of developing and managing suppliers as we move to operating in an era of the Internet of Things.

The growth of new technology and digitisation of processes mean that traditional procurement methods for managing suppliers need to be changed and updated. While in some cases, long term contracts of 3 years or more may be applicable, but there are certain areas where this cannot be the case.

More than ever, we are actually buying technology more so than the actual product or service. Think about driverless mining trucks – we’re really buying the technology to manage and maintain these vehicles, more so than the trucks themselves.

As technology increasingly becomes the product, we need to keep our options open in order to take advantage of the frenetic pace of change. Our tenders and contracts will need to more broadly define the functionality and utility we require of a product or service, rather than the exacting specifications we know today.

We will also need to ensure we keep our minds, doors and sourcing processes open to engage new suppliers with break-through technologies. Where contracts are 3-5 years long, CPOs will need to build optionality into their contracts to ensure they have the agility and can be opportunistic in adapting and adopting new technologies.

Changing Supplier Engagement

The alternative is to use different supplier engagement processes, potentially dynamic purchasing systems, or supplier panels, or ensuring that you are working closely with the suppliers in order to build innovation into your contracts.

New technologies aren’t necessarily going to be 100 per cent applicable to you, but your suppliers should be able to help with new product development and innovation.

But they will want security in this to know that they are not going to outlay a vast sum of money for development, only for the contract to be taken elsewhere under 3-year procurement processes (where they exist). In this way, Supplier Relationship Management will become even more critical.

Brexit: Reflections of a Procurement Professional

In the cold light of day, and after a weekend’s reflection, a procurement professional reflects on the implications of the Brexit.

Following my pre-referendum thoughts on supply chain trade and the EU, I was looking forward to the event itself.

A severe weather occurrence, disrupted travel during a six hour journey from Guildford to Norwich, and with the Mission Impossible theme tune on repeat in my head – this was my voting experience on the 23rd June.  I made it to Norwich to vote #Remain just in time before the polling station closed.

Storm on the Horizon

The real storm was not the weather. it was the result to come in the dawn with the UK #Brexit result.

My initial, personal, reactions on June 24th were of shock, anger and fear.  The value of the £ tumbled and the FTSE100 index crashed.  The ‘Leave’ campaign ideas, clearly taken by some as Brexit ‘pledges’, are already confirmed as “mistakes” or not “realistic”.

But time, even a few short hours, is a great healer. The £ and the FTSE both recovered a little on the 24th after their initial crashes.  My optimism and positivity is also slowly returning. The UK now has a fantastic opportunity.

Staying United

The first opportunity is to stay united. “IndyRef2” is already on the table, and the Northern Irish might follow suit. I doubt if many voting to leave the EU anticipated the potential break-up of the UK. Is this really an ‘unthinkable’ now?

The focus is now on what happens next. If there’s one thing I’ve heard through all of the interviews and opinions in the past few days, is that no one really knows what the future looks like now.

No state has left the EU before. The process is set out, yet it’s not tried or tested.  We have to find a new Prime Minister, and possibly face a General Election, to appoint the team to lead the UK through this.

Procurement & Strategic Relationships

There are uncharted and uncertain waters ahead. Procurement and Procurement Professionals can shine through and add the value we’ve all talked about for years and now have the opportunity to deliver.

Keeping in close contact with strategic suppliers and working together to build certainty in existing trading relationships might be a crucial first step to steady the ship.

Businesses need to keep focus on their mission, vision and values, and make sure they are still relevant in a post EU, UK. Most will need to adapt, and Procurement needs to ideally provide, or at least proactively source, the help and guidance to do that.

Procurement must not sit back and wait any longer for the invite to the table it has been waiting decades for. At the Big Ideas Summit in April, we heard lots about Procurement being the source of talent within organisations – it’s time to step up.

I expect we’ll all be revisiting our segmentation matrices and risk maps this week for starters! We should rapidly review processes and procedures ready to make ourselves, our teams and our businesses as agile as we can, ready to adapt to the changes as they unfold.

A wiser man than me said “agility is core”.  Let’s make this work team UK.

Turning Point in SE Asia Supply Chain Challenges

A turning point has been reached in the challenges facing the South East Asia supply chain, say global consultancy Crimson & Co.

In the light of economic growth, rising affluence and booming consumer demand, many international businesses are seeking to capitalise on the growth in South East Asia’s developing markets.

The challenges in the South East Asia supply chain have reached a turning point. This is down to the scarcity of supply chain professionals, increased consumer diversity, and fragmented supply chains.

The many layers of suppliers, localised delivery and route to consumer practices, and lack of transparency and consistency in information flows, make it incredibly difficult for businesses to achieve the next wave of global growth.

SE Asia Supply Chain – Huge Promise

There is huge promise but transforming supply chains to reach market potential, handle diversified products, and provide outstanding quality and service to customers is a mammoth task. The businesses best able to overcome these challenges can transform their South East Asian supply chains to become a source of competitive advantage, and drive global growth.

With rising labour costs and the move away from an export-based economy, changes in China are creating opportunities for South East Asia in global manufacturing. This also positions global businesses to capitalise on growing demand in these markets.

For most companies the potential is clear. The challenge is how to address it.

The Time is Now

Richard Smith, Director of Crimson & Co Singapore, argues that the time to transform supply chains is now:

“South East Asia is an incredibly attractive region with rapidly growing markets and low cost operations. The challenge is how to address fractured supply chains and the shortage of supply chain skills.

“As companies move their factories from China to South East Asia, they should grasp the opportunity to carry out a full supply chain review to identify how they should configure their supply chains to better deliver on their current and future business strategies. Due to the significant costs involved in the transformation, businesses need to assess the real benefits and ensure it will deliver against objectives.

“Companies can accelerate their supply chain transformation by bringing best practice from elsewhere in their organisation, other industries and innovative local supply chain practices. Through understanding their businesses’ maturity and readiness to change they can identify where sustainable improvements can be made and how to leverage disruptive technologies to drive business performance.”

Challenges Remain

However Smith warns that a number of challenges remain across the South East Asian supply chain, such as high staff turnover, with employees quick to leave for higher salaries, as well as a lack of experienced professionals with supply chain knowledge across manufacturing, distribution, planning and supply chain management.

In order to ensure successful transformation, Smith also warns that knowledge and awareness of local culture and business landscapes is critical, with a long term focus on developing local supply chain knowledge and people capabilities. This can be done by establishing a physical presence in the region, and developing region-specific leadership and training programmes.

Smith concludes: “Opportunity abounds in the South East Asia region with unrivalled chances for market growth, logistics, sourcing and manufacturing. The time to reinvent networks and processes is now – transforming the South East Asia supply chain into a source of competitive advantage.”

Crimson & Co is a global supply chain consultancy, with a scope spanning supply chain strategy, planning, procurement, manufacturing, logistics and customer channels.

The Three Laws of Robotics Aren’t. So What Now?

The Three Laws of Robotics, as created by Asimov, don’t exist. But, as we move to a more automated world, should robots and AI fall under greater oversight?

Zapp2Photo/Shutterstock.com

Download the latest GEP white paper on the drive to an automated world here

In my previous post on the subject of the coming era of robotic process automation, I mentioned Asimov’s seminal sci-fi work The Caves of Steel. In it Asimov wrote of The City as the dominant force in human lives of the future:

“The City was the acme of efficiency, but it made demands of its inhabitants. It asked them to live in a tight routine and order their lives under a strict and scientific control.”

Asimov’s suggestion that there is a cost to progress might be seen as prophetic, but I think he was just one of a long line of writers who have warned that the future might be a bit ropey if we just pursue change in the name of progress, for its own sake.

But for all his attempts to conjure a dystopian image, Asimov was fundamentally a “technoptimist” with a repeating theme in his stories that progress would ultimately always be positive. In fact, his philosophy of robotics – and his “three laws” – have been so tightly woven into modern culture that it seems we hardly give a thought to the potential threats to our way of life, and perhaps to our lives from the advent of a totally automated future.

An Automated Future

Without labouring the point too much, the Three Laws of Robotics essentially mean that, in Asimov’s world, robots are inherently safe, trustworthy and beneficial. In fact, it is simply impossible to build a robot that does not comply with the three laws, the very architecture of the robotic AI being hard-wired around them.

It is purest fiction, of course, although to speak to some enthusiasts for the subject, Asimov’s Laws really do exist.  But they really don’t, and that could spell trouble.

Life imitating art is all very well, but there is nothing whatsoever to dictate that an automated future can be assured as a “good thing.”

On the same day as I’m writing this piece, there are two news stories on the BBC website. In one, it is announced that robots will be working in two Belgian hospitals as receptionists, guiding visitors to the correct locations.

In the other, we’re told, a researcher at a university in the USA has built a robot that autonomously decides whether to inflict pain and bodily harm on a live human subject.

That the microcode for the two systems could be somehow swapped, or cross-fertilised, is the stuff of real dystopian sci-fi and, whilst highly implausible, it does raise questions about whether some progress is happening without sufficient oversight.

Robotics & Automation in Procurement

There is disquiet in many circles about the use of drones in warfare, and the step from human-operated to robotic drone is really only a matter of systems integration.

There are no Three Laws to guarantee that AI, robots and automation will be to our benefit.  Yet they may very well be.

There are grounds to be hugely optimistic about what technology can do for us, from carbon capture and storage, to non-polluting safe transportation, to dramatically improved health and longevity in the poorest parts of the world.

Even in our little corner of the world we call Procurement, the sky’s the limit if we want to pursue automation. The potential to dramatically transform how we operate is very great indeed, and only a matter of investment and a few person-years of effort out of our reach.

But in all of this, it seems to me, it is we who should direct and dictate how that progress is delivered and what it actually does.   Instead of being passive consumers and falling in line with the next developments, which may substantially change our working lives, the procurement industry has an opportunity to map out what the future could and should look like, and how we want the machines to work. For us.

GEP Banner

Robotics are the future, and the sky’s the limit for automation in Procurement, say GEP. For more on this, download the latest white paper research.

For more information on high-performing procurement software, visit the Smart by GEP website.

The Fear of Technology in Hospitality

Legacy systems and poor past user experiences are creating a fear around technology in the hospitality industry.

Brian A Jackson/Shutterstock.com

“I think it’s difficult for technology to get to the top of the list of things to do next” said Jane Pendlebury, CEO of HOSPA, in our recent roundtable on the topic of technology in hospitality. And with that, she nailed what I had been dealing with ever since InstaSupply started.

There is always something more pressing that needs attention before looking at a tech solution. Even if that tech solution will save you, or make you the money to pay for that other pressing something.

There’s this fear of the unknown that’s keeping a lot of hospitality businesses stuck in the past and relying on tools and systems that for a lot of other industries became obsolete years ago.

Hospitality Lacking Information

Lack of information and education is a key factor here. Peter Hancock, CEO of Pride of Britain Hotels, rightly pointed out that most people involved in the running of a hospitality business aren’t necessarily the “tech-iest” of individuals.

Experience with older systems and their tendency to create rather than solve problems has left a bitter taste in a lot of mouths. Couple that with expensive upgrades that weren’t made clear at the start of the contract and we have an added layer of mistrust.

The result of all this is an industry that’s still heavily reliant on paper, lacking transparency on spending and full of overworked staff. Front of house staff not only have to ensure their guests enjoy a great experience but in many cases handle a lot of finance and procurement tasks that are absolutely outside their job description.

Lightening the Workload

Technology is created to help lighten the workload and improve productivity, not to take away jobs or swindle businesses out of money because they don’t understand what it does.

Just as a washing machine will handle a lot more clothes and get them done a lot better and a lot quicker than you would by hand, so too will the right technology remove manual data entry, managing 145,789 spreadsheets and let you know exactly what you are spending and on what in real time.

Watch our full discussion on the fear of tech here:

InstaSupply is all about working smarter and simplifying business through technology.

InstaTalks are about bringing great minds together and uncovering where the fear of tech comes from when it comes to business operations.

Finding out what the pain points are and then educating people in plain language. No jargon, no small print. It’s time to understand that technology is a revenue generator, not a budget sinkhole. 

Why Requisitioning Must Be Part of ERP Conversations

Requisitioning (or asking for what you need) is a key part of the procurement process. So why is it frequently sidelined in ERP discussions?

This article was first published on the Coupa Blog.

Having either implemented or worked with some of the major ERP systems on the market, I think I’m on safe ground when I say, nobody chooses to do requisitioning through their ERP system. They settle for it.

ERP systems are largely built for finance and the controllership. End users are often not taken into account. Their requisitioning modules are notoriously difficult to use, which is too bad because requisitioning is how most non-finance users — aka. everyone else in the company — will interact with the ERP system.

In fact, people putting in requisitions to get what they need to do their jobs represent a large segment of non-finance users feeding data into the ERP. If you burden them with a system they won’t use, or that they’ll use in a sloppy way, your ERP will have data quality issues. To avoid having to settle for ERP requisitioning, it’s to everyone’s benefit for procurement to be part of the ERP discussion, as a strong advocate for the end user.

Advocating for Procurement

I’m not saying that will be easy. As I’ve written previously, organisations need to think more broadly about their whole finance system, which comprises multiple interconnected processes, from sourcing to the point where something is paid for and entered into the record.

The ERP system addresses the back end, and it’s designed for finance to be able to do what they need to do regardless of how the data gets in there.

So, the discussion doesn’t usually extend to the front end—sourcing, contracts, approvals, requisitioning—which is where a lot of that data comes from, because the thinking doesn’t extend that far. It’s not easy to break down these silos.

In situations where I’ve been the advocate for the needs of procurement, I’ve had to fight pretty hard to get that perspective considered and I’ve often been the lone dissenter in the room.

  • Get Real

You need to be a realist. There are always resource constraints, and there’s a hierarchy of needs within finance, and user-friendly requisitioning is never going to be at the top of the list. But when requisitioning is ranked seventh out of six fundable implementation projects, the potential for settling becomes very real. Hello, heavy ERP requisitioning module.

  • Map it out

One way to avoid that mistake is to map out the whole process, because it’s not completely linear. Data flows from one process into one, or several, others. A lot of times an ERP decision is made before these processes are mapped out. But, when you map it all out, it becomes obvious that quality and consistency of requisitioning is critical for getting finance all the data they need to make the ERP system a single source of truth. 

  • Learn the language

The main requirement for a better-than-ERP experience is that the requisitioning system be user friendly. You can’t push a heavy ERP requisitioning system on a marketing associate fresh out of college, or on a seasonal retail worker.

But usability is one of those subjective, soft terms that may not always resonate with the finance audience. To advocate effectively, understand the needs of finance and speak their language. For example, if you’re talking to a controller who is a worldwide tax authority, framing it in terms of compliance and data quality is a much better approach.

  • Not Amazon-like

You also need to break down what you mean by user friendly. Every ERP vendor is going to say their requisitioning module is user friendly. If no one is looking out for non-finance users, that box just gets checked.

How user friendly does it need to be? You’re probably expecting me to say, “It should be as easy to use as Amazon.” I would personally love it if it could be so, but there are different requirements for business buying that for consumer buying. But, it can be much easier than most ERP requisitioning modules make it.

A good system approaches requisitioning broadly. It’s not just asking people to fill out purchase orders. It should really be a way for an employee to get anything they need to do their job. In fact, I’d rather they didn’t have to even use the words ‘purchase order’ or ‘requisition.’  We’re simply helping them buy things.

Ideally, they should be able to click a bookmark, get to a portal and then get in through a single sign-in. They land on a homepage where they see relevant buying policies and have visibility into all of their transactions

There should be smart search capabilities, tailored towards a user who is probably somewhat resistant to using the system. They can’t get irrelevant results, or come up empty. They have to be able to quickly find what they want, or find out how to get it.

If it’s a catalogue item, the actual policy pops up, which will guide them how to buy it. If they need a new computer monitor, maybe it comes back and says, “OK, you have to log a ticket for IT because they do provisioning.” Or if nothing is there, it will guide them towards making a free form request. But they don’t even need to know these terms. All they need to know is what they want.

Heavy and Cluttered

In contrast, the requisitioning modules of the major ERP systems are often heavy. The home page may be cluttered with lots of finance information that’s not relevant. The email notifications can be complex and confusing.

There are a lot of fields to fill in so finance can get all the codes and data it needs – provided the would-be requisitioner doesn’t take one look at it, decide it would be faster just to run down to their local Staples store, and expense the darn thing. That’s the kind of thing that happens when you settle.

There are good reasons why requisitioning is not the top priority in the ERP discussion, but neither is it right for it to have no presence or priority. The real impact of user-friendly requisitioning is better data and better compliance.

To make sure your company doesn’t settle, somebody needs to advocate for all the people who aren’t in the room, but are going to have to use the system, and convince finance to give it the proper priority.

The ideal situation is that requisitioners don’t have to think about finance at all—or procurement for that matter. The irony is that to accomplish that, the folks in finance have to get together with procurement and think hard about requisitioning.

Resistance is Futile…Or is it?

Is resistance to automation of procurement processes futile? Or are we missing the benefits that automation will ultimately bring to the profession?

You can download the latest GEP white paper on the drive to an automated world, and why resistance is unnecessary, here.

The cannon of science fiction is full of tales of the battle between liberty, exemplified by human free will (including the freedom to screw everything up royally) and tyranny, portrayed as submission to an overwhelming force.

In many cases the “assimilation into the collective” or whatever, is not an unconditionally negative prospect. The promise of an end to suffering and provision of all human needs is often conveyed as the ‘upside’ of the deal to subjugate humanity to forces beyond our understanding.

Automation – The Dark Side?

From Childhood’s End to The Matrix, there’s a definite cost-benefit analysis to be carried out by the protagonists during their struggles to overcome the supposedly overwhelming power of the dark side of the story.

In fact, in the latter, the movie’s clichéd traitor – they even named the character “Cypher” – sells out the heroes on the promise of a return to the simulated ‘real’ world with the words, “Ignorance is bliss.”  And when asked by the agent of evil, “Then we have a deal?”, he replies, “I don’t wanna remember nothing.  Nothing! You understand?”

There is even a branch of anthropic philosophy than contends that our reality is likely to be a simulation run by an advanced post-human intelligence. As coherent and convincing as some of that reasoning appears to be, the fact remains that there is no possible way this hypothesis can be proved or disproved.

Like all matters of faith, this notion is utterly irrelevant when we attempt to construct a set of rules that will let us predict what will happen in (what certainly appears to be) the real world.

Rise of the Machines?

Recently it has been suggested at some of the procurement industry’s leading conferences that business is beginning to enter a phase that will be dominated by artificial intelligence and robotic process automation, and lead to the eventual replacement of the humans in the process.

Dissenting voices are heard to cry “nonsense,” or more colloquial versions of the same, but the arguments are nonetheless compelling. Only this time, they have a certain amount of evidence to back them up.

It is true. The technology exists today, in varying states of maturity, which – if synthesised into a single entity – could effectively do away with human involvement in the supply chain. From AI-run decision making, to automated manufacture and delivery, to fuzzy logic-based distribution of spend across a supply base, the characteristics of today’s procurement activity could, quite readily, be encoded and turned over to a software overlord.

Other sci-fi classics, the likes of the movie ‘Logan’s Run’, and the book ‘The Caves of Steel’, deal with the machine-run production of goods and services in equal measure to the imposing of external force on human freedom. And as life imitates art, there will naturally be greater degrees of this emerging.  Today’s 3D printer is surely tomorrow’s Star Trek Replicator.

The End for Procurement?

But, whatever the generations of the future will accept as everyday technology, the idea that we’re approaching a defining moment, beyond which procurement professionals will be irrelevant, must be viewed with a good degree of scepticism.

There’s no doubt automation works really, really well when it comes to replacing easily mapped and understood processes, from assembling a car from a standard kit of parts, to processing a contract-compliant purchase order through to invoice payment.

But the simple fact is we just don’t understand enough about the world, human behaviour, the markets, the climate, indeed any part of the future, to be able to encapsulate all our business rules into a single algorithm that the machine can follow to manage supply and demand for the rest of time.

The landscape in which our largest corporations operate is truly chaotic, in a mathematical sense, and deriving a simple set of rules to automate demand and supply across such organisations is, I think, beyond us today.

One of the very drivers of modern prosperity is the ability to “make a buck” and any kind of completely automated process necessarily eliminates margin at source. Negotiation between buyer and supplier AIs will not only be mind-bogglingly rapid, but likely to end in stalemate – and the same stalemate as the last time.

If we lose negotiation, then it seems to me that we will lose innovation, motivation and the result will be stagnation.

Resistance is Unnecessary

The future will be radically different to the present.  It always has been and always will be, and all predictions as to what it will look like are inevitably wrong. Including this one.

But with that uncertainty comes opportunity. Automation in procurement will certainly be a big thing in the future, but it will be complex, it will be messy and it will need human brains to make it work, and not just to write the code.

The human brains that work in procurement today are those that will guide the whole world of supply forward into a brave new world. Reports of procurement’s demise have been overstated, naturally, but we can still take control and make the machines work for us.

Resistance isn’t futile. It’s unnecessary.

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Automation doesn’t mean the end for procurement, and the benefits of automating processes vastly outweigh the drawbacks, say GEP. For more on this, download the latest white paper research.

For more information on high-performing procurement software, visit the Smart by GEP website.