In a recent interview with Procurement Insight’s Jon Hansen CPO Interactive Co-Founder Martin Krumrey talks about the Fourth Industrial Revolution, and how emerging digital business models are shaking and reshaping the procurement world.
Jon Hansen (JH): Thank you for joining me today, Martin.
Martin Krumrey (MK): It is my pleasure to be here.
JH: As someone who has covered the procurement world for many years, I cannot remember an example where emerging technological advancement has garnered such intense attention. What makes the “digital” evolution different?
MK: To start, I always find the term “emerging” digital evolution interesting it that it might suggest that this is something that is relatively new when in fact it has been a long time coming.
JH: What do you mean a “long time” coming?
MK: Back in 2008 for example, there was the realization that digitizing the sourcing function was necessary to drive increased value through an organization’s supply chain. Unfortunately, and due to the 2008 financial crisis, investment in decommissioning legacy systems and implementing a digital platform was not a priority.
JH: So what changed?
MK: There were different factors including the emergence from the economic crisis such as it is. From my standpoint, and specifically relating to the procurement world, Gartner’s assertion in 2014 that we are now in the postmodern ERP era was a key turning point. Specifically, the realization – or perhaps acknowledgment would be the better word, that the legacy systems that organizations were looking to “decommission” in 2008, were not “sufficiently flexible” to meet changing business demands in a global supply chain practice. Gartner’s assertion that such a system is “an anchor, not a sail,” and holds businesses back as opposed to “not driving it forward” I believe provided the needed impetus to make the change finally.
JH: I wrote a post in the Procurement Insights blog regarding the Gartner Press Release in which they talked about the fact that by 2016, “the Impact of the Cloud and Emergence of Postmodern ERP Will Relegate Highly Customized ERP Systems to “Legacy” Status.” Gartner’s prognostication would seem to confirm what you had already known in 2008. Given your market vision or understanding of the market, now that digital is no longer on the backburner as it was in 2008, what does procurement need to do to become digital ready?
MK: First and foremost, procurement and more specifically procurement professionals, need to take an active role in shaping the digital journey both within the organization as well as with external stakeholders or partners. An active role includes becoming the key interface with suppliers from not only a technical standpoint but a value-based relationship standpoint as opposed to a transactional one.
In an upcoming series of posts on the CPO Interactive blog, we will be talking about specific ways that procurement professionals can take a leadership position in facilitating their organization’s digital strategy.
JH: Where can readers access the website?
MK: Here is the URL to the CPO Interactive website: https://cpointeractive.co.uk/
JH: Thank you for talking with me today Martin.
MK: Thank you, Jon
About CPO Interactive: Founded in 2013 by Gareth Cope and Martin Krumrey, CPO Interactive is a leading boutique consultancy firm that specializes in transforming and elevating procurement practices to a level that ensures ongoing effectiveness and global competitiveness in the emerging digital world.