How Clever Procurement Software Can Save You From Reinventing the Rocket

Spend Matters welcomes this guest post from Paul Blake, of GEP.

At the Kennedy Space Center, there is an impressive arrangement of towering launch vehicles in what is known as the Rocket Garden. From the earliest converted Titan missiles to the “glory days” machines of Gemini and Apollo, the exhibits stand as testaments to the human ingenuity that culminated in July 1969 in possibly the greatest of our species’ achievements to date.

Of course, history teaches us that Apollo was as much about an attempt at beggaring the Soviet Union as it was about scientific and technological innovation, and the cold hard reality of the politics behind the project was made perfectly clear when the final three Apollo missions were cancelled. With the space race well and truly won, the appetite to continue to spend simply evaporated.

NASA was forced to reinvent itself and look closer to home with its manned spaceflight programs, and from the mid-1970s until the end of the millennium the focus was on shuttle missions — another program whose scope was dominated by military demands and political considerations despite the much vaunted science and technology spin-offs.

Then the millennium turned and the president made the call that America should plan to head to Mars, leading NASA to dust off plans for heavy launch systems.
As an extreme example of a shelved project, this certainly holds many parallels for us in the everyday world of business and operations. But there is another, more salutary lesson for every organization in this tale.

One of the challenges that NASA faced in the late noughties with its ill-fated Constellation program — indeed a simple home truth the agency had to face — was that all the expertise and genius that built the Apollo hardware and systems had retired or was, frankly, dead. The fact that the army of women and men who enabled 12 individuals to set foot on the moon achieved all they did with just brain power and slide rules meant that, to a large extent, the basic know-how required to even recreate the 60s state-of-the-art, no longer existed. Anywhere.

Thus, when it came to building a new system (with the same capabilities of that of 40 years earlier) it turned out to be monstrously more difficult than the current administration bargained for. Even reinventing the wheel was proving a challenge.

As they say, past performance is no guarantee of future success. This is my way of illustrating that, unless we do something smart, and soon, the same may happen in our more mundane world.

Anyone who has ever participated in more than one tender process will know that time and again the same questions are asked and answered, the same documents are created, recreated and re-recreated for every time we go through the loop. This is just as true for suppliers as it is for buyers. Every buyer asks essentially the same questions in a different way and thus every supplier provides essentially the same answers in a different way, each time starting from scratch. There’s always the dream of a “standard set of responses,” but life is never that straightforward.

The number of times wheels have been reinvented in sourcing doesn’t bear thinking about. And the problem isn’t limited to sourcing. Right across the spectrum of category management and strategic procurement it goes on all the time. Contracts and supplier management processes, strategies for savings management — all of these get rebuilt from scratch every time the wave comes around again or there is a change in leadership.

Look at any of the venerable corporations in the world and if one were to watch the periodic transition from locally-managed to centrally-controlled as a time-lapse movie it would be like watching the breathing of a giant monster. Time and again practices and strategies are reinvented from first principles.

Now, I’m the last to argue for the maintenance of the status quo for its own sake. As markets change and as innovation creates new possibilities any business worth its salt needs to be able to adapt and shift. But that’s a far cry from starting every procurement program from a clean slate.

Procurement, as a professional industry, is a relatively young one. I’d venture to suggest that it is in a similar state as the space exploration industry was in, say 1976. The old guard who saw the birth of procurement from purchasing and operations a couple of decades ago are either at the top of their trees or already into retirement. A couple of generations in and the best practices developed through diligence and creativity are, perhaps, in danger of being lost.

What was NASA’s Achilles heel in this respect could be our advantage. There is an opportunity for us to use the technology that is now available to capture, store and retrieve our ideas and practices in a manner that lets us genuinely reuse past experience as appropriate and reduce our risks of serial wheel-reinventing.

At GEP we work on the basis that in procurement software you should only have to create anything once, and reuse should made as easy as possible. Not just with templates and clause libraries for contracts, but individual RFP questions, specific models for spend analysis and category management strategies can all be created, controlled and accessed for best effect by anyone, anywhere and — and this is the crux of it — tomorrow as well as today.

Utilizing a category workbench approach to knowledge management, specialists can collaborate and learn from the past as well as innovate and bring new tactics, skills and a fresh approach to the business.

Of course the reality is that sometimes we have to change direction and centralize or decentralize or otherwise reinvent the operation as a result of forces outside our control. But that doesn’t mean having to throw best-practice baby out with the bathwater. NASA didn’t know it would be 40 years before it needed those expert skills again and thus lost the opportunity for one generation of skilled pros to pass their experiences on to the next. Perhaps using the right technology we can avoid making that mistake too.

For more inventive thinking on procurement technology, visit the Smart by GEP website.

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First Voice

  1. Marcel Keisers:

    Very nice article and funny to read. Very interesting to compare procurement software with a rocket.

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