December 10, 2014
In our line of business, and I am sure in yours as well, we hear a lot about “The Cloud.” The Cloud, if we are to believe everything printed about it, sounds on track to not only solve world hunger, but to make us all a little taller and better looking!
There is no doubt the hype-storm surrounding Cloud technologies has worked to confuse productive conversations in business. One of the more meaningful outcomes for business in the Cloud, is the quiet revolution it has brought about for business function owners in Corporate America. It is this quiet revolution that I will be addressing in this post.
One of the original Cloud companies is Salesforce.com. This ubiquitous product, founded in 1999, now has millions of users around the world. What is it about the Salesforce.com platform that has made it so successful? As their new marketing angle emphasizes, it is “Customer Success.”
When this Cloud platform first emerged, Salesforce’s claim to success was “No Software.” And this was important. For the first time, functional departments (in this case Sales) no longer had to rely on the Information Technology department to provide a software platform from which to do business. With Salesforce, the IT work, such as setting up the hardware and software, maintaining the hardware and software, and monitoring and ensuring uptime was all taken care of by the good folks at Salesforce. That allowed the functional leadership in a company to be their own IT department and implement the new technology.
However, this marketing message obscured the real value of the Cloud. And this value is available to more and more functions as platform providers push into more functional areas. The real value? As a functional leader, I now have some control over my destiny. If I have an inflexible system that doesn’t meet my needs, I can identify a Cloud platform and shortcut a lot of the headaches that previously accompanied the cycle of software selection, customization, and implementation. I will give up some of the flexibility of a “custom-fit solution,” but I will also speed my time to effectiveness and minimize my on-going cost of ownership. It is somewhat analogous to getting a “bespoke” suit or just “buying off the rack” and getting my new suit tailored. Few people will care about the difference. And I can still go to nice dinners, regardless of my decision.
So what does that mean for our businesses? It means that as a functional leader I can immediately drive to results. I no longer need to live under the tyranny of someone else’s priorities for the IT department. There is no question IT will still need to be involved, to a greater or lesser degree, depending on organizational imperatives and complexities. However, I have an option, where before, none existed. I believe that is why Salesforce has moved to the message of “Customer Success” from “No Software,” which is what you really want to buy.
So what does that mean for Procurement? Plenty. As an example, Forrester recently rated the 11 most significant software platforms for eProcurement. That is a fairly large number of Cloud providers, and doesn’t include all of them. There are also Cloud offerings for the other functions within Procurement – Analytics, Sourcing, Contracts Management and Supplier Management – and many more vendors jockeying for position.
More importantly, what does that mean to you as a leader in the Procurement function at your firm? It means perhaps some of the assumptions you have had to make in the past regarding the inflexibility of your Procurement systems are no longer valid. It may be time to reconsider what you can accomplish in leading your business now that some of your constraints may be removable.
It’s time to see if the Cloud can help your organization rain results.
The Shelby Group