- 17
- AUG
- 2011
Information systems - the food of the gods (and procurement)
Author: Ian George - Categories: Technology & Apps, Procurement Intelligence
When we think about the role of procurement as coordinating internal requirements with often complex external supply networks, the need for good quality and timely information is obvious. However, this doesn't mean that more is better. The tone of caution is illustrated thus - when managers don't know what to do they measure. This gives them a sense of security as they surround themselves with tables and spreadsheets, looking for any glimpse of hope that the numbers may offer. Lies, damn lies and statistics? The desperate act of trying to get through just one more day can be painful to watch and not as rare as you might think.
Gathering the right data is one thing. Turning it into useful information is something completely different. And responding in an appropriate manner? Well, we can live in hope. We don't need to be Six Sigma Black Belts or professorial statisticians. For the numerical mortals among us there are some simple questions that we can ask ourselves when we see new information:
- Should I be surprised?
- Does it matter?
- Do I need to do anything about it?
- What have I learnt?
Information systems should be there to support the leader and manager, not to control them. How often have we seen information systems (often financially focused) swamp an organisation with operational changes and resource demands that don't always appear to improve the performance of the business? Managers use data, they do what the numbers tell them to do. Leaders rely on information to inform their decisions and give feedback on results achieved.
For procurement, pursuit of an integrated information system can be compounded by the need to align, both internally and externally, and by the need to understand both quantitative and qualitative information. Often, single pieces of data don't tell the whole story and so complimentary and contradictory information has to be pooled, compared, dismissed or relied upon. There is often a fine line between gut feeling and considered analysis.
Using information systems simply to report past performance is like spending your life looking backwards. Using the system to help users to predict the future and make decisions can be a significant competitive advantage, one which sometimes seems strangely elusive, but can be achieved with some simple tools.
Comments
Peter Monk
Wed 19 Oct 2011 17:24
Ian I share your conclusions and to a main extent your views too. However we typically see measurement of information to ensure our systems have the capacity to deal with current and forecasted volumes. In my world currently, MI is used to track not just volume as a measure of activity of business, but to ensure the price charged by the vendor is aligned to the transactional volume in purchasing that data.
In these environments the Information System remains God and food to us in Procurement to ensure we have maximised our leverage for price.