Procurement is a field that consists of turning marginal savings into bigger ROI over the course of a fiscal quarter or year. It can be an arduous process to enforce the discipline of working pricing all the way down to the lowest possible cent. Traditional eProcurement solutions not only lack sufficient content but product content that is accurate and up to date.
The existing models have failed in three core areas:
1. Lack of attaining spend under management
2. End-user dissatisfaction/maverick or “rogue” spenders
3. Limited value beyond cost savings
What exactly does “Spend under management” mean? It is the spend that passes through an eProcurement system; the spend that is covered under contract; or the one that goes through a formal sourcing process. Only the first mentioned above actually results in direct savings or value. When products and services are bought via an eProcurement system, the savings are considered “captured”.
Three crucial problems for procurement professionals:
1. Maverick spenders who do not have the high-level visibility and experience of the procurement department, they will not get the best deal
2. Maverick spenders eat away your margins, eroding the overall savings
3. Maverick spenders make your reporting harder and less accurate, it becomes much more time-consuming, meaning something is more likely to be missed
But what exactly needs to be changed in the current tools?
The Cloud, mobility, apps and ubiquitous access have refaced business software. These transformative forces have now cornered traditional eProcurement tools. Wouldn’t it be great if eProcurement tools were more usable and intuitive, with little or no training required by everyone who uses them?
With new eProcurement technologies, you can have the entire procure-to-pay process connected for end-to-end data collection, visibility and control. A solution should have:
· Free tools for suppliers to upload and manage their products
· Buyer access to all of this product content from verified and trusted suppliers
· Rapid supplier enrollment and verification
· A broad set of buying options that covers materials, services and spot buying
· A collaborative exchange between people involved in the buying process within and outside the company
· With such capabilities, procurement leaders and buyers will be able to overcome the problems discussed, as well as many others.
If you aspire to be one of the organisations that think exponentially, to be successful in the digital age, then you need a truly open eProcurement network.
Dave Food