A Story About Technology (Or Lack Of …)

At a business dinner a few years ago, with around a dozen people, I was chairing a discussion, talking about how procurement could “get the message across” to top management, communicate the value of our activities at board level and so on – all that usual good stuff. Technology was part of the discussion, not surprisingly as this dinner was hosted by a large tech firm. One of the attendees had recently worked for a very large construction firm in a senior procurement / supply chain role.

“But what you have to realise”, he said, as we talked about communicating with and influencing the Board “is that none of the Executive Board in that firm had a computer in their office!”

What, they use laptops?

“No, they don’t use technology.”

(Remember, this is not in the last century, this is less than 10 years ago.)

But surely they use email?

“Yes, their PAs print off all their emails and give them to their bosses on paper. The bosses write longhand or dictate replies and the PAs type and send the emails.”

We all laughed, and it led to an interesting discussion around how you might use and communicate the benefits of spend analytics, eSourcing, P2P systems and all those other vital procurement tools in an environment that was so technologically backward. No good sending the CEO a huge spreadsheet, for instance …

You might have guessed the punchline already here. The firm was, of course, Carillion, who crashed into receivership last week. I’m sure systems must have improved in recent years, but the story might indicate one of the underlying issues.

Commentators have asked how the firm could go from the positive outlook given at their AGM in May 2017 to a huge profit warning in July and bankruptcy six months later? Well, perhaps lousy systems is one part of that answer. Keeping control of cash flow for instance in a huge, diverse and international business is not easy, and these days relies on good systems to keep track of commitments, payments, revenues and so on.

How did Carillion’s technology stack up on that count, we wonder? We’d love to hear from anyone who has any insight on that front.


Voices (2)

  1. Piyush:

    If you see companies that went bust like say Enron or the eCommerce firms of 2000s – they all had the latest technology. So, just the presence or absence of tech can’t be attributed the reason of firm failure (or success).

    1. Peter Smith:

      Good point and I agree there is not always a correlation. But if you look at Carillion going from the Board putting out pretty positive statements in early 2017 to running out of money by the end of the year, you have to wonder about their financial forecasting and perhaps recording systems, for example. Were the board misleading us or did they not really know what the financial position was until it was too late?

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