Use the tools wisely
By Kevin R. Fitzgerald -- Purchasing, 4/22/1999
This issue's cover story on page 28 takes a look at how some major purchasing organizations have improved supply management by using the quickly advancing tools of information technology.Over the years, purchasing pros have been exposed to a slew of software and systems that claimed to solve any supply management problem and attain any supply management goal. Much more often than not, the tools didn't deliver the promises.
Example: The CEO of a major chemical company told me that ERP systems can deliver tremendous benefits if you remember three things: One, implementation will cost much more than budget estimates; two, implementation will take much longer than estimated; and three, business processes will have to be changed and employees retrained to work with them.
So purchasing pros must be forgiven if they greet the next round of high-tech gizmos and software with less than overwhelming enthusiasm. And many greet them in just this way.
But IT suppliers are not solely at fault for problems of the past. Then, as now, the tools themselves weren't the basic problem; indeed, they're just tools, and users must learn to apply them properly. There's another, more significant reason for past failures of IT applications in supply management: The absence of a sound plan and clear goals as to what was to be accomplished with the tools.
Many companies rush to implement corporatewide software systems such as enterprise resource planning (ERP) with too little thought given to exactly how the system will help the company achieve its business goals. Contributing to that problem, at least in the past, was the lack of input or involvement of functional groups, especially purchasing, in IT system specification and implementation.
But things are changing. Major ERP suppliers such as SAP AG and Oracle are hearing loudly and clearly from ERP user groups that they must listen to and respond to the needs of both purchasing professionals inside the company and key suppliers that must interface with ERP business systems. Otherwise, ERP systems can cause major, and sometimes costly, delays and other problems.
Suppliers of corporatewide information systems aren't all the way there yet. But they've learned that they must pay strict attention to the needs of purchasing, and that's a big step in the right direction.
It's incumbent upon purchasing pros to ensure their supply management strategies are a driving force when advanced IT systems are specified and implemented, whether they're Web-based e-commerce systems or corporatewide ERP systems. Otherwise, supply management goals aren't likely to be achieved.
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