Should procurement trust social media?

You’ll find no shortage of eagerness to spread the gospel of Twitter or LinkedIn, but if you’re in procurement what you will find is a shortage of reliability in these sources.

More and more, the argument that says that procurement is not just the part of the organisation that buys things it’s the part that manages the flow of information is gaining credence. Being connected to the supplier market creates opportunity – there’s little doubting it.

One of the big criticisms levelled at the use of social media outside of b2c purposes is that the ROI is intangible and difficult to trace. But even those critical of the abundance of enthusiasm for social media would be aware that the potential of social media tools is huge.

Karsten Horn, director of international sales for inventory and supply chain for supply chain optimisation group Inform is a man brimming with ideas about how technology is changing the supply chain. No doubt it is, but should procurement be sceptical about the implications?

Speaking to him recently he described the need for buyers and relationship managers to be masters of the information at their disposal and how social media tools can and will play a key role.

"We can define supply management as a channel of communication – it’s got opportunity for instant feedback from suppliers and allows real-time responsiveness and a wider scope of data," he argues.

He believes that shorter lead times and greater flexibility are an achievable aim of adopting these tools – you can see that point that if you can get the right information faster, you can react faster.

But is social media a risk? Buyers are, it seems, turning to social networks to investigate suppliers but those channels may prove to be useful only in so far that there are suppliers that are not yet in control of their social media brand identity. Once they are, which you’d expect would be an accompanying trend to the rise of influence of social media, the buyers role perhaps flips and becomes more concentrated on managing their own influence in the online space and less on spending time hunting for discrepancies from their business partners.

Potentially the risk for a procurement organisation is maybe that they don’t keep up, that buyers are failing to notice the obvious information that is available on social media. However, again, is it that reliable? Look at the London riots and the metropolitan police’s confused effort to manage the misleading signals coming out of social media sources last summer and you get a sense of how difficult it can be to identify reliable information.

Which will put off some people. Horn agrees: there will be a split. “We’ve talked to customers and they have vastly different approaches, even if they agree that it’s an important trend in the future. For some young MDs, for example, they’ve grown up with this and it’s easier to adopt,” he says.

For those that see more value in having their teams become more adept in this area, they’ll have to face the challenge of working out a system of getting reliable information. Horn points out that some businesses are developing applications to do this and directly enhancing those channels of communications with suppliers.

That strategy seems sensible, but again, requires evidence that it’s worth the investment. Social media, then, won’t just happen and won’t simply be adopted by default – it’ll need to tread a thin line between reliability and openness, focused engagement and demonstrable returns: No easy task.

Steve Hall is deputy editor for Procurement Leaders Magazine. Follow him on Twitter at @thestephenhall.