The Procurement department usually gets a phone call only after a company has laid off all the staff possible, stopped hiring, done everything including counting paper clips — and still money is walking out the door. Long considered the low mask on the totem pole, in this economy procurement departments are seeing a rise in their prestige, with the CPO taking a seat at the big table, and a new perception as the department uniquely equipped to cut a company’s costs. Enterprise decision-makers are looking to procurement processes as a way to help a company do business more efficiently.
“In the ‘90s, procurement used to be very tactical. Placing orders, chasing down orders, and then expediting them,” says Gregg Brandyberry, CEO of Wildfire Commerce and former vice president of Procurement, Global Systems and Operations of GlaxoSmithKine. “Then people started to transform procurement from tactical to strategic.”
With this strategic view, e-procurement made its debut — going well beyond “the purchasing department.” The Internet could bring the marketplace to the company on its terms. A new competitiveness between sellers would develop, online collaboration between a company and sellers could open up new commerce doors, and the process of buying goods and services could actually have a high ROI.
That all happened. What also happened was the cloud. Long before the “e-business” notion touched other business functions, e-procurement transactions were made outside of the firewall and in subscription-based, browser-fronted, vendor-populated marketplaces. READ MORE