Integrated ERP Procurement Myth – unraveling the spaghetti strands

In Pierre Mitchell's remarkable article (and it is most definitely a fully fledged article/come research paper, with opinion, insight, thought-leadership, analysis and recommendations all rolled into one), "Don’t Fall for the Myth of Integrated ERP Procurement" - which you can read here - Pierre takes the lid off the tin of spaghetti that twists and turns around ERP. He talks about its value, integration and relationship with procurement, the major players clouding the water and the good old procurement/IT who-knows-best debate.

Pierre's voice resonates the clearest above this crowded multi-billion-dollar marketplace of integrated ERP solutions and their vendors. He gives an unbiased, deep and multi-faceted review of the playing field and the players and manages to unravel the questions that every procurement professional is asking with his expertly crafted opinion.

This article is an absolute must-read for anyone already using SAP/Ariba, since it outlines the what-comes-next scenario for the largest ERP and, previously largest, best-of-breed vendor. And for those not using it, any organisation purchasing technology will benefit from this frank and informative look at the issues around 'being proactive and not outsourcing your Procurement Information Architecture / strategy.'

He really informs procurement executives about why they need to make their own informed decisions about integrated ERP and not be 'bullied,' for want of a better word, into making decisions that are IT department-led, advising;

"that practitioners can no longer reasonably honor the promise of cross-product integration that 'runs on the PowerPoint platform' to get manifested into actual product at a cadence near what procurement executives should expect (especially given the poor track record of delivering products even close to original promise dates). The days of “pick IBM because it’s safe and all works together” are over."

And points out that:

"Just as a procurement organization can’t save its way to zero, a procurement technology provider can’t acquire its way to integrated solution excellence. You can become a great “mutual fund” (i.e., holding company), but technology buyers don’t want a mutual fund; they want an integrated product company. And if they placidly accept the answer of 'trust me – I’m an integrated ERP vendor and running in the cloud,' then they deserve what they get. The sunk cost fallacy has no room in IT and 'Winner Take All' has no room in procurement. Rather, they need to practice good demand management and supplier engagement for their own technology needs."

He looks beyond the melee of product architecture and endorses the need for IT and Procurement to work together to achieve the higher-level business goals. "If you don’t proactively manage your procurement information supply chain, it will end up managing you, and given the importance of information/knowledge/intelligence to procurement, you can’t let that happen and let IT and its incumbent vendors dictate how you will accomplish your functional/business objectives."

This expert opinion piece offers a level of insight, analysis and forecast that, frankly, if you went to one of the large analyst firms, you'd have to pay for - and even then you wouldn't get the breadth and depth of personal historical knowledge and niche industry expertise that gives Pierre's recommendations and observations such credence and 'usefulness' to anyone who wants  - or needs - to know about IT/Procurement ERP integration.

And a last word - don't forget to read the comments section at the end of the article; it pours some considered, and equally valuable, sauce onto the spaghetti pile -- read it here.

 

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