Wie fit ist Ihr Einkauf?

In a series of ten regular posts published by the Procurement Leaders Global Intelligence Network I looked at the different facets to transform procurement to a partner of choice

Part 2 - "apps culture" in procurement?

2012-06-28 14:19

Thought Leaders is a series of regular posts from experts from across industries and regions, looking at the issues procurement faces today. This is the second in a sequence of posts by former Deutsche Post DHL CPO, Hugo Eckseler looking at the different facets of a procurement transformation process.

One of the most fascinating developments in the IT universe is the explosion of new “apps” around the modern smartphones over the last years. The market leader Apple claims more than 500.000 for its iPhone product, and the number is growing day by day. The quality and helpfulness of many of the apps may be questionable, but there are quite a few that I would hardly like to miss - the weather forecast (by using my current GPS position), the route finder on my way to the railway station, the golf app to retrieve the names of my flight partners in the last golf tournament …

The architecture of the smartphone world looks like a huge space hub (i.e., the IT platforms iOS, Android or Windows Phone 8) where numerous small shuttles (apps) dock on and use the hub’s mighty infrastructure and development tools. This model has boosted the creativity of thousands of innovative IT freaks around the world to develop solutions that help to solve (real or perceived) problems of the smartphone user community. Professional apps excel due to their clarity of design, their user-friendliness and their focus on core features relevant for the entire targeted user group. Users can download the apps easily, often completely free of charge or for just a few coins.

Will this "apps culture" have an impact on the way how we run our business in procurement? I think so, passing in mind my experiences over the last months. A few examples:

Spend analysis

Spend transparency is one of the key challenges in procurement and I tested the capabilities of a new service provider in a recent project in Latin America. The results were quite compelling: data extraction, cleansing and classification mostly shifted to the provider, minimizing the workload for the client; data updates and changes of the categorisation logic incorporated on-line; user-friendly analysis and reporting tools and impressive speed of implementation (3 months from kick-off to go-live).

Performance Management

Procurement’s contributions to the financial results of the company are an evergreen in the discussions between CPOs and finance/business management. New players are entering the market and can help with their state-of-the-art IT tools to bring more transparency to the subject by combining a systematic measurement approach with category specific market information and finance data extracted from the corporate ERP system.

Supplier Management

A few weeks ago I encountered a start-up company in the US where suppliers enter and maintain their profile in a standardised "cloud database". Other companies can use the data to build up their own supplier management platform including links to other data sources that provide credit ratings or other useful information. Interaction between companies is guided by a secure, controlled process to protect sensitive information. The benefits of such a “self-service” approach both for suppliers and the Procurement department of customers are evident.

Typically such "apps" have in common that they follow a modular architecture, use modern analysis and reporting tools and dock on the ERP systems of the client for data extraction, etc. Their beauty lies from my point of view in the speed of implementation, the effectiveness of solutions based on expertise from various industries, the flexibility to adjust settings to individual user requirements and low investments (if any) due to the SaaS model (Software as a Service).

My credo: new applications and tools that have been developed over the last few years can definitely help procurement to become more professional. The challenge for CPOs and procurement management: how to keep track of such innovative solutions beside their day-to-day tasks and how to overcome the internal “not-invented-here” syndrome. Well, this is a subject I want to touch on in one of my next blogs.

Hugo Eckseler works today as senior consultant for procurement and supply chain management - after more than twenty years as CPO and manager in manufacturing, logistics and quality management at Deutsche Post DHL, 3M, WELLA and other multi-national companies. You can find his coordinates here. You can reach the author via his email [].

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