It is not unusual to find the procurement departments inside SAP-driven companies at loggerheads with their internal customers. In extreme cases sales, production planning, maintenance and procurement staff are on the verge of conflict – the common enemy being procurement. The typical symptom is accusations of dismal service countered by allegations of poor or no planning and utterly unrealistic expectations. This blame shifting descends into turf defending, silo mentality and, ultimately, supply chain role players becoming less and less liberal with the truth, says Steven Freemantle, of SweetThorn Thought Leadership, in this month’s SmartProcurement.
How do individuals get away with the lies?
To answer this question, you will need to look to the sins of your SAP implementation.
First of all, leadership gave their blessing in the form of sponsorship of the SAP implementation, and then went back to running the business as they should have. After the go-live party, the first sets of reports were requested and all hell broke loose. This pandemonium is exacerbated by the second sin, which is the simple fact that no go-live training was given on the use of SAP’s day-to-day operational reports. And so SAP customers, in their very first year of being live, step into the quagmire that enables misrepresentation of the truth – which is the prolific use of spreadsheets containing massaged SAP data that become the reporting tools of choice.
Once we start using external systems to report, it is quick to falter into other activities outside of SAP that further foster an environment of deceit. It is hard to believe that in this age of rigorous corporate governance, procurement activity can still be kicked off by an email or telephone call, notes Freemantle. He adds that if this happens in your company you are allowing your procurement department to be led up the garden path.
What is the remedy?
Fortunately there is a remedy that can be broken down into these core suggestions:
1. Procurement: Get your house in order – FIRST!
It is important that before procurement managers ask customers to change their behaviour, buyers are ready to respond effectively and efficiently to customer requirements. It is a simple change management principle: if you ask your customers to change and they do change, but you cannot supply, then you will lose them forever.
2. If it is not happening in SAP, it is not happening
This is easy to fix: executives need to issue clear and direct instructions that no purchasing will take place without the demand being triggered by the relevant department, inside SAP. Some change management and training will be required. It is worth noting that this change may result in some other interesting challenges, particularly for those maintenance supply chains that allow maverick or free-text spend (there are many names for this evil).
3. Switch off spreadsheet reporting
Organisations will need to learn how to use SAP’s standard operational reports in order to stop reporting from spreadsheets. Managers must no longer accept spreadsheet reports. The first step is to figure out which of the thousands of SAP reports are relevant to your business. This is somewhat challenging to do in that most consulting firms will encourage you to develop reports using the latest business intelligence tools, rather than explore what is available in the SAP functionality that many regard to be outdated and obsolete. You will need to challenge your service providers to find these standard reports, as much as you will need to challenge your organisation to accept the new reporting routine.
4. Measure your buyers from SAP
Introduce a set of day-to-day operational measures using information extracted with SAP’s Logistics and Procurement Information Systems. You will need to include other supply chain measures that are available from inside SAP. Once again, it is a process of determining which of these reports are relevant to your business.
5. Move to integrated key performance indicators
The proposition is that you agree among yourselves how one department affects the other, how to see this inside SAP and then agree to performance manage your operators according to the way they affect each others’ measures. This suggestion is quite challenging, particularly if your supply chain functions are accustomed to operating in well-entrenched silos. As before, you will need to find the reports relevant to your supply chain, determine which measures to integrate and then embark on an SAP culture-change journey.
The issues raised are by no means an indictment on any of managers or staff referred to in this discussion, emphasises Freemantle. By far the majority of supply chain role players Freemantle encounters do the very best they can, with what they know. It is his experience that most organisations that use SAP have supply chain staff working considerably harder than they should, only because they have not been shown the power of what they already own.
For more information on streamlining SAP in your organisation, please contact Steven Freemantle of SweetThorn Thought Leadership, on email@example.com.