Tuesday, October 16, 2007

Why procurement is meant to be hated

There are three hated departments in most companies, they compete to be the most loathed of the bunch but one stands out from the other two as different.

The departments? HR, IT and Procurement.

These are always loathed and cursed and accused of preventing progress or just creating a set of bureaucratic processes that stifle peoples soul and remove the joy from the world. Only one of them has an excuse however.... procurement.

Now the reason that procurement is hated is that in fact this is the job of procurement. Have you ever wondered why procurement systems are almost always a pig to use, and why every "upgrade" seems to work in a completely different and more perverse way?

The reason is simple, the goal of procurement is to stop people buying things. If the CFO wanted to make it easy they would just give everyone credit cards and a cheery wave of "whatever you want is fine". The reality is that the purpose of procurement, a centralised service in the business, is to monitor and control all purchasing decisions, from a new pen through to a new building. The system should be painful to both suppliers and users, ensuring that both sides try and avoid interaction unless completely required. In this way procurement helps to focus spending on what is really required and removes spending on items that are just "wanted" because its not worth the effort.

This is an important thing when looking at building a business service architecture, understand the true drivers of services and don't assume that there are common elements across them all or that the end-users opinion always is the most important. Usability, performance and reliability are all great things when interacting with your customers, but in procurement they are positively to be avoided and a focus on annoying the user and making things slow and painful and prone to failure helps to deliver on the goal of reducing spend.

Don't assume that the goal is always to make things better, or that a system that is seen as "rubbish" isn't actually doing its job. Understand the business value that a service has and the drivers that create that value. This helps you to understand what "good" looks like in different parts of the business and focus your investment and effort accordingly. Don't assume that everything in a business needs to improve and get better, somethings either aren't important enough (general ledger anyone?) or are actually better off being bad (procurement).

So that is why procurement is meant to be hated. The more hated it is, the more successful it is actually becoming.

So that really leaves HR and IT in their daily fight to the bottom of the satisfaction league.

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