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Jon Hansen, editor for the Procurement Insights blog has written the following article alongside Market Dojo.
Jon has written nearly 3,000 articles and papers; as well as five books on subjects as diverse as supply chain practice, public sector policy, emerging business trends and social media. In addition to being a much sought-after speaker and moderator internationally, Jon is also the host of the highly acclaimed PI Window on The World Show on Blog Talk Radio, which has aired more than 800 episodes
“When ERP was in its heyday, CEOs and business executives wanted reliable and integrated solutions, so they seized upon ERP as the way to provide this,” said Mr. Kyte. “Business stakeholders still want these same qualities, but now they assume that these qualities will be present in any software solution, and their requirements have switched to the twin concerns of lowering IT costs and seeking increased flexibility. A system that is not sufficiently flexible to meet changing business demands is an anchor, not a sail, holding the business back, not driving it forward.” – Gartner Says By 2016, the Impact of Cloud and Emergence of Postmodern ERP Will Relegate Highly Customised ERP Systems to “Legacy” Status (January 29th, 2014)
Coming from someone who has been in the high-tech industry since 1983, the evolution of not only technology but software has been both frustrating as well as exciting.
Frustrating in that technological promise or potential has always seemed to exceed its realisation regarding its delivery of expected outcomes – particularly with ERP-based procurement solutions.
Part of the problem that led to the Gartner post-modern ERP era was a lack of what I call intrinsic flexibility. Specifically, what Forrester Research’s Navi Radjou referred to in a 2002 article about the inability of the ERP-driven supply chain to “support the swift resolution of supply chain glitches.” The glitches about which Radjou was talking was the amount of time it took ERP platforms to “collect and synthesise data from multiple sources” in real time. Think of it in the context of closing the barn door after the horses are out. In other words, by the time the critical data became available, it was no longer relevant from the standpoint of either confirming or averting a buying decision.
In making the Radjou point, I am not suggesting that ERP platforms do not have an important role to play in the post-modern global enterprise. As the financial backbone and repository of organisation intelligence, ERP solutions are an important link in a best-of-breed supply chain architecture. However, using an ERP platform to drive the supply chain was the proverbial weak link which led to the creation of flawed strategies such as vendor rationalisation and the corresponding maverick spend problem to name just a few.
Stage 1 – On Demand And As Needed
Now here is the exciting part; today’s cloud-based “by the drink” solutions, provide the needed flexibility to dynamically interface with a robust, global supply chain on a secure basis, and do so in real-time. These new – okay maybe not so new, solutions provide the ideal entry point to uniquely position a strategic procurement practice to engage, quantify, and acquire either goods or services through a broader network of suppliers within the framework of organisational guidelines and objectives with minimal oversight and even less IT involvement. These solutions are for all intent and purposes the equivalent of a non-intrusive, plug and play app that is readily at hand when needed. What is even more exciting is that these solutions deliver immediate benefits both financially as well as from an operational standpoint.
Stage 2 – More Than An App
I have covered the frustrating and exciting elements of technological evolution – by the way; I should start using the proper term being digital transformation.
In this era of digital transformation, the traditional functional boundaries that limited technological possibilities and potential much like the occupational silos that interrupted the seamless collaboration between finance, IT, and procurement have melded into a holistic unity of a shared vision and capability. What this means is that organisations can now move beyond a transactional model to a more strategic integration with their existing ERP platform.
What makes this next level of service delivery possible is the result of providers like Market Dojo successfully positioning their solutions to integrate and further empower a supply chain practice towards the achievement of significantly improved outcomes in the critical areas of risk management, value-based strategic acquisition, and the utilisation of real-time “big data” intelligence.
In an upcoming post, Market Dojo’s Alun Rafique will expand on how today’s cloud-based solutions have transcended the “bolt-on” misperception of the past to become the linchpin of a dynamic and global digital procurement practice.
Jon Hansen is the editor for the Procurement Insights blog and is a recognised industry thought-leader regarding digital transformation and its impact on supply chain practice and the global economy. He also a regular contributor to the GoDaddy blog providing expert advice on business transformation including emerging social media practices.
On 8th February, Jon Hansen will be hosting a webinar alongside Market Dojo. Before the proclamation of the postmodern ERP era, cloud-based procurement solutions were considered to be little more than a “bolt-on” application as opposed to being the linchpin of a dynamic and global digital procurement practice. Find out more and sign up to the upcoming webinar here.