The whitepaper highlighted that most procurement professionals found their top bottleneck to be the management of time and resources. Procure-to-Pay software solutions can certainly help to alleviate those bottlenecks, but procurement pros must make sure that they do not become overly reliant on software-only solutions.
- Time/Resource Management
- Approval Workflow
- Supplier Enablement
- Lack of Automation/Manual Processes
- Spend Analytics
These days, procurement departments are understaffed and overburdened with internal initiatives and volatile markets. One of the most time consuming and difficult tasks that many procurement departments handle is the strategic sourcing process. Fortunately, there are a variety of tools to help reduce the resources required to conduct sourcing events, such as full Procure-to-Pay Solutions and niche tools like Source One’s free WhyAbe.com e-sourcing tools.
However, procurement pros, be cautious: While these e-tools can help alleviate the time/resource bottleneck, there are common errors companies commit in the use of them that can severely cuts back on your potential to save money.
By far, the most common problem inexperienced (or time-constrained) e-sourcing tool users succumb to is their heavy reliance on the tool to conduct supplier communications exclusively for them. In other words, buyers can frequently get caught up in the glamour of being able to blast email RFP changes, or the allure of a “supplier network”, or the speed in which they can draft RFP templates; that they forget the golden rule: “Treat others as you would like to be treated”. So, in other words, if you keep your potential suppliers completely at arm’s length, and don’t want them speaking with you during the sourcing initiative, do you expect their relationship to be any different to you once you sign a contract? More importantly, as we commonly rant, sending out a blast RFP to a group of supplier email addresses that you found online is NOT strategic sourcing.
You would not believe the mistakes we see e-sourcing tools users commonly making. And really, it’s not always their fault, they just don’t have the time or training. For instance, we often see users neglecting to invite any suppliers to bid (thinking that suppliers are trolling for work and will find their bid request), we see them neglecting to contact suppliers prior to the sourcing event or only sending an email, inviting the wrong suppliers or people, including the wrong specifications, neglecting to familiarize suppliers with the tool, and conducting the wrong type of sourcing event (reverse auction instead of RFP). Click here to see some more common RFP mistakes.
Procure-to-pay and e-sourcing tools are an excellent supplement to the procurement professional’s arsenal and can certainly help alleviate resource constraints, when utilized properly. However, an overreliance on technology or a lack of training can cost your company significant savings opportunities.