Sourcing scurvy – Thomas Kase rants about out-dated procurement practices!

We commented here on the results of a recent survey that suggested only 60 percent of ‘leaders’ in procurement used eSourcing. We asked, not surprisingly, whether they could really be ‘leaders’ in that case.

Which made last week’s article from Thomas Kase, our Spend Matters US colleague, very pertinent. “Sourcing scurvy – and how to fix it” is based on his experience at a recent Sourcing Interests Group conference in Nashville (lucky guy). He comments here on the number of firms, even very large ones, that are still using Excel and email as their sourcing technology of choice.

“Companies attending SIG are Global 2000 firms, various consulting companies that work with them, and procurement solution providers that cater to both audiences – and participants from all three categories brought up examples of substantial organizations (Fortune 100 even) that still run their sourcing events via emails and spreadsheets and emailed spreadsheets…”

But, as Thomas points out, things don’t have to be that way.

“If you’ve seen our list of sourcing solution providers to pay attention to you know that you have many good options to choose from.  Price points are quite reasonable – there’s something for every budget.  From $50K per year to a few hundred thousand per year will buy you an impressive set of capabilities driving immediate savings.  Implementations can actually be done in as little as a few days!  You really have no excuses left. None.  Just do something.”

I suspect the situation is broadly similar this side of the Atlantic too. We know that eSourcing adoption varies widely in terms of the government sector across Europe, and I’m sure there may be some differences in the private sector too. But I suspect Europe generally and the US are in broadly similar situations.

Where does the scurvy analogy come from? Well, once upon a time, it was just accepted that sailors got sick. And then someone worked out that there was a way to cure it – after that, there was no excuse for allowing it. And that, I think is the point Thomas is making – there is no excuse these days for not embracing eSourcing.

Voices (3)

  1. Pierre:

    Chris, seriously? Please tell me the name of a $50K ERP that will support even just the procurement needs of a decent G2000 firm – let alone the broader enterprise needs.

  2. Chris C:

    $50K? You can buy a complete ERP package for that… Why spend thousands on a system that may well be inappropriate for your suppliers, extremely limit the potential marketplace open to you and prove cumbersome and potentially unsafe to operate? I think many providers have a naive reverse auction-based view of Procurement.

  3. Take Two:

    I read this article with the expectation that it was a disguised sales pitch for the latest greatest e-procurement innovation. In that respect I wasn’t entirely disappointed. I in fact agree with a lot of what it says. I thought I’d reply with a structured, reasoned response as to why the procurement profession is somewhat sceptical about such systems, since sometimes they’re not all they’re cracked up to be, and while undoubtedly the right system when deployed in the right circumstances – company culture/compatibility of current tech/senior endorsement/operational will-to-change-yet-again, etc., – yields benefits there is practically no-one ‘out there’ who hasn’t been burned by some such ‘revitalisation’. I suspect part of the problem is the sheer diversity of solutions/solution providers themselves making a decision as to which one is suitable difficult in itself.

    But instead of a treatise, perhaps the old adage best illustrates this: When you’re clearing the swamp and up to your derriere in alligators you don’t need new shiny software to help you source a digital alligator retrieval system by reverse e-auction – you just need a bigger gun – now.

    I suspect that even in the heady environment of ‘top Global 2000’ firms this is a daily reality at some part of the coalface, and that’s a hard culture to break into when introducing any change whatsoever.

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