Why Procurement Needs to Change

Many organizations continue to follow purchasing policy that at first glance seems reasonable but can actually perpetuate the problems that the organization is hoping to fix. This policy typically requires that bidders propose products, solutions or technology that have “been in use for at least five years in at least three customers' or similar requirements with the same effect.

Imagine for a moment that you apply this logic to your personal spending and lifestyle. Your “newest” iPhone would be a 3Gs (2 years ago an iPhone would not have been an option since it wasn’t out for five years yet). It would be “safe” to start watching “Parks and Rec” since it debuted in 2009. Your movie choices would expand to “Avatar”, “Star Trek” (the first one), and “Blind Side.”

Are you beginning to see how five years ago is so “five years ago?”

Now of course you wouldn't necessarily want to pick the “newest” doctor, home builder or plumber because a proven track record and the ability to sustain a successful business or practice would be an important indicator. So maybe the “five year” guideline should apply to the organization providing the product, service or solution not the product, service or solution itself.

Even if the language has disappeared or is disappearing the mindset may still be there. New things like derivatives, sub-prime mortgages, etc. may need to stand the test of time, but technologies that get immediate use and distribution are tested and vetted very quickly. At most, a two year waiting period is warranted, but certainly not 5.

Gordon E. Moore famously predicted in the 60's that the number of transistors in an integrated circuit would double every two years. That has proven true, fueling a non-stop hit parade of hardware based technologies that have revolutionized our lives. Often though, software adoption has not kept pace with this explosion.

To further complicate matters, deploying older technology often means there is actually a smaller community of qualified technologists to support it- the best and brightest are learners and innovators not prone to nostalgia. And the integration with other technologies can be a nightmare. Newer technologies tend to support interoperability versus proprietary interfaces making them easier to deploy and assimilate.

In recent years we have seen that many large and successful organization have not be able to innovate and stay current with products and technology resulting in either massive revenue losses or extinction. Market leaders can become footnotes in history all too fast. Kodak and Blockbuster quickly come to mind. Maybe organizations should be more concerned with what the provider has done lately not five years ago.

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