We’ll confess. At Spend Matters, we go to Oracle OpenWorld to learn about products and to talk to customers – much like all technology-centric vendor shows. Nearly all the highly pragmatic breakout sessions we attend at these shows focus on solution details, nuances, and plans (and having said this, it’s still often the case that the most useful discussions occur in the demo booths). Within the sessions, however, it’s rare that someone gives a presentation that frames the context and history of the broader procurement market without recycling old materials such as mapping a solution suite to a 7-step sourcing process.
Yet Tom Anthony did just that in a quick ten-minute intro yesterday to the broader state of affairs and planning around the Oracle E-Business Suite solution line. In just a few minutes, he captured the essence of the evolution of procurement without demeaning the past (e.g., not referring to classic purchasing as simply “transactional”), and he hinted at how Oracle was aligning its solutions to map to what was coming next. Tom began by talking about the 1980s, a time that was marked by advances and a focus on direct spend primarily in the areas of PO execution, vendor reduction, Kanban, and total quality control (TQC). These activities, Tom observed, were largely “tactical and manual,” and those carrying them out had minimal information to act on. But they were advancements nonetheless from simply focusing on maintaining stock and keeping the production line running.
As Tom went on to explain, the 1990s ushered in a new era of procurement, one marked by the rise of global sourcing, EDI, contract manufacturing, and vendor managed inventory. Moreover, for the first time procurement was seen in more companies as clearly an “important business function.” ERP came more into play from a direct procurement automation and management perspective (as did early supply chain planning applications), and supply management as a field of study was formally launched. Tom did not talk much about the rise of indirect and services procurement in the 1990s, but I would argue this was also a decade marked by procurement focusing on new opportunities in these areas (both from process and technology perspectives).
What about procurement today and tomorrow, you ask? Check back in a couple of hours as we finish writing up Tom’s quick history lesson and forward view.