I read and then re-read a recent article that I came across quite by accident in Scoop.it titled Procurement Technology: Why is the Public Sector Absent from the Table?
He then goes on to trumpet the billions that companies such as Coupa, Bravo and Tamr are spending to innovate and create commercial technologies that streamline and improve the procurement process, while simultaneously calling out the government for being laggards because they are not embracing what these innovators have to offer.
Sharma then writes“it is critical that the public sector make it a priority to explore and leverage commercial technologies to the maximum intent.” In short, governments should stop wasting time building customized solutions, get a better understanding of commercial procurement technologies and, create pilots to test multiple solutions.
Perhaps Mr. Sharma has never heard of Virginia’s eVA, which is an enduringly successful government eProcurement initiative. One of the main reasons for eVA’s success is that technology was not the center of its universe.
While you can read about eVA in my post Revised Forrester Wave Report confirms what I have been saying since 2007 . . . eVA is tops in public procurement, my point is simply this; technology is not the end all, be all that Sharma suggests in terms of public sector procurement. It is a component of a successful overall strategy to be certain, but it is not the difference maker.
The high rate of technology-centric initiative failures provides testimony to this truth.
Examples over the years include multi-million dollar flops such as the Oracle and J.D. Edwards VHA initiative. Besides costing taxpayers a combined $650 million, this undertaking ultimately led to the Bay Pines congressional hearings.
However, and perhaps ironically, said failures are not limited to the public sector. The private sector has had its share of missteps. Hershey Food Corp and Fox Meyer Drug immediately come to mind.
There are of course many more examples to which I could refer. In short, the private sector doesn’t have the answers.
Hewlett-Packard – SAP Procurement For Public Sector White Paper
Other similar stories including Hewlett-Packard’s “lost $400 million in revenue from a failed SAP rollout” (Appendix C) and the £12 million hit that Cadbury Scwheppes took in 2006 as a result of a “bad SAP supply chain” project (Appendix D) are also worth noting. And not just because of the apparent size and resources of the companies in question. Although the HP case study should be somewhat disconcerting given that organization’s level of sophistication and supposed expertise as an SAP integrator.
As RedMonk analyst James Governor put it, “HP is trying to build an application management business to rival IBM’s. What better case study in proving your R/3 and Netweaver capability” . . . by showing “everyone how to merge two SAP systems.”
The analyst concluded by saying “Who would want to go to HP now for large scale SAP integration? The CEO just publicly said HP can’t effectively manage such a project.”
All this being said, what bothered me most about the Sharma post was the sense of the underlying arrogance and condescension of his “authoritative” tone, that suggests he knows what the public sector really needs.
It is representative of the same attitude that private sector technology companies have used over the years, to try and bully public sector clients. Remember the old no one ever got fired for buying IBM axiom?
Unfortunately, and whether intentionally or not, it is this manner in which Sharma presents his position, that stokes a level of simmering resentment on the part of those who have been on the receiving end for such a long time.
What is interesting, is that such attitudes will not likely be tolerated as the up and coming generation of procurement professionals step into more senior positions. Let’s face it, Generation Next procurement professionals are far more technologically savvy than their predecessors. In fact, I would be reasonably comfortable in suggesting that over the next 5 to 10 years, it is the end clients in the public sector who will be teaching the private sector technology companies a thing or two about improving “procurement and acquisition.”
Just as a side note . . .
Two of the highlights of the technology Sharma witnessed includes:
- Shopping made easy through platforms such as Amazon Business that make it simple for users to shop and get the best pricing.
- Process optimization tools such as Coupa’s e-invoicing platform or Bravo’s sourcing technologies.
Before he starts championing them, Sharma should maybe track and quantify the success of the Bravo Solutions Ontario Government implementation that is presently under way, as well as the recent policy ruling by the Indian Government regarding marketplaces such as Amazon.
Just a suggestion . . .