Innovation
Procurement Tech: Systems of record or systems of engagement?
March 17, 2017
Jordan Early
2 minutes

I have been harping on a lot recently about how procurement should develop its suppliers with the same gusto, commitment, and investment that HR teams apply to developing staff.

The two processes (HR and procurement) are in fact very similar. At their most basic level, they involve a vetting of a long list of options (for HR that means candidates and for procurement departments, suppliers). Once the right candidate is found, a contract is signed and the focus shifts towards maximizing that investment. I have postulated <here> that I think HR does a better job of this post-contract phase than procurement teams do. But that’s an argument for another day.

Anyway, it’s fair to say I have become fascinated by the similarities between the between the HR and procurement function and have been reading a lot around how HR teams align staff activities to corporate goals in the hope I can find some nuggets that relate to procurement.

So my interest was piqued when our COO Jeff shared this article with our team on Slack.

https://www.forbes.com/sites/joshbersin/2012/08/16/the-move-from-systems-of-record-to-systems-of-engagement/#2d48e2a947f5

The article written by HR guru Josh Bersin discusses a shift in the world of HR software from ‘systems of record’ to ‘systems of engagement’. It also does a great job of highlighting how our product, Vizibl, differs from traditional procurement systems (I’m looking at you SAP).

Josh claims

“Systems of Record” are the ERP-type systems we rely on to run our business (financials, manufacturing, CRM, HR). They have to be “correct” and “integrated” so all data is consistent. And they were traditionally designed for people who have no choice but to use them.

“Systems of Engagement” are systems which are used directly by employees for “sticky uses” – like email, collaboration systems, and new social networking and learning systems. They “engage” employees.

So my question to you is does your organization only use procurement systems to retrospective report what’s already happened?

Or do your systems enable the kind of engagement, that see people from within your organization and its supplier network coming together, connecting to each other and jointly solving problems?

Does your software help people do their jobs and make life easier or is it merely a data repository to create reports that no one reads?

I think it stands to reason that if you want to create an agile organization that makes smart decisions quickly, you need an agile technology stack to support that.

Your system needs to be future focused and centered around allowing people to work towards ensuring goals are met, not just retrospectively reporting that they were not.

Something I will touch on in more detail later in the week is user experience and its role in enterprise software. But while we’re on our HR systems I want to bring up UX here as well. In a 2012 survey, 58% of respondents who had shifted or were considering shifting away from traditional ERPs to a system of engagement (in this case WorkDay) suggested that their decision was based solely on user experience.

In short, if your procurement systems are not forward facing and easy to use it’s time to start shopping for new systems. The future of your business depends on it.

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