“But we can do it ourselves”

“We already have a procurement team”

“We use SAP/Orace/Ariba/Cognos /(Insert name here)”

“What makes you think you can do better than us?”

The list of anti-outsourced strategic sourcing excuses goes on and on. But none of them is harder to conquer than a significant investment in software and training to use that software. After all, the internal sale to invest in that software was likely extensive. So who would want to sign up to lead the charge and say “software alone is not enough”.

But in fact, it is not enough. Software is a tool, and a tool only functions as well as the user knows when, where, why and how to use that tool. Many firms make the mistake of believing that a single tool can revolutionize their sourcing. After all, that’s what the salesman are telling them.

Let’s take for example an expense management software product that is gaining significant traction in the marketplace, telecommunications expense management software. Suppliers are springing from the wood work with solutions offering a number of functionalities designed to offer the following:
  • Traffic Management
  • Asset Management
  • Inventory Control
  • Contract Management
  • Billing Audit and Payment
  • 100%, 24/7/365, real time visibility
Now don’t mistake me. The products are good, and I’d be bought in too. But the software alone is not enough to meet the needs of sound strategic sourcing. It fits well into the lifecycle, but where are the sourcing events? Where is the dispute resolution? Where is the contract negotiation? Where is the inventory right-sizing? Where is the industry savvy and market monitoring that finds more efficient, lower cost solutions? Where’s the refund recovery? How do they monitor and manage new offerings? How does the system search tariff filings?

The answer is; it isn’t in there. All the software does is capture the information necessary to maintain the strategic sourcing life cycle. It’s an excellent tool for just that, and some back office functions as well. But it’s no substitute for strategic sourcing.

That’s where the people come in; because software may have logic, but logic is no substitute for thought, for vision or for creativity. Thank heavens us people are not redundant quite yet.

Let's hope that this year, more forward-thinking organizations break the trend of "Software is the answer to everything"
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