Technology in Procurement Part II: Empowering Suppliers to ensure eSourcing Success

          In part I of this blog series, Why Your Supplier Hates Your E-Sourcing Software, I discussed the challenges with fostering meaningful supplier engagement when conducting a sourcing initiative on an eProcurement Platform.  While this new technology streamlines the data analysis process for the buyer, it can often be more resource exhausting for suppliers than more traditional methods of conducting RFx events.  The nuances that make each platform unique can be frustrating to a sales manager who must take on the task of completing each bid request for each potential customer, and as a result the resources wasted may impact the overall value of a proposal.  There are, however, a few things that can be done to set resource expectations and empower suppliers to put their best foot forward while utilizing the software of your choice.

1.       Provide each potential supplier with a single, responsive point of contact.

          While technology streamlines many aspects of a business transaction, there is no substitute for meaningful and productive verbal communication.  It is critical that the supplier is reassured that should they have direct questions or require platform assistance, they have a single point of contact that can be reached immediately, rather than having to call a generic helpdesk for answers.

2.       Be as transparent as possible with scope, expectations, and timelines.

          A concern that many suppliers have when participating in online sourcing events is that their pricing and proposal responses are being used to benchmark market pricing, and their efforts are not going to be evaluated as a real opportunity to gain additional business.  Communications within these platforms are often automated, and there is a larger degree of separation between supplier and event host than with more traditional methods.

          To mitigate this concern, it is vital to offer as much upfront information surrounding the nature of the event as possible.  The supplier should have an understanding of the scope, the award criteria, approximate value of the business, and the products or services that are being evaluated to better help them allocate resources to complete the proposal.

3.       Offer flexible options for suppliers without the proper technological experience to participate through the platform.

          Before excluding a supplier due to their refusal to participate using eSourcing Software, consider the value of allowing them to complete an offline bid.  While it may take additional time for the analyst to process this type of response, it reassures the supplier than their participation is valued, and makes them more likely to be willing to learn and utilize the software for future events.

4.       Maintain the human element from sourcing to conclusion.

          The challenge with any sourcing event is that products and services do not always follow the same pricing structure, and two similar items might not be directly comparable when assessing value.  In more complex categories with versatile pricing models such as uniform rentals, waste management services, or office machine leasing, suppliers may worry that their pricing is appearing unfairly inflated due to template misalignment or billing nuances.

          This is where the reassurance of human intervention is vital in reassuring suppliers that each response will be audited, and pricing can be restructured if necessary to ensure a proper comparison.  It is not to the benefit of the purchaser or supplier if pricing is not correctly compared in terms of Total Cost of Ownership (TCO), and follow up conversations should be had to allow each supplier time to fully explain their submission.

          Finally, when business is ready to be awarded, it is critical that suppliers receive constructive feedback on their overall proposal from the perspective of the decision makers.  An automated message informing a supplier that they did not receive the business is unlikely to prompt them to participate in an eSourcing event in the future, as it provided no value after they invested time and resources to complete the bid.  Providing direct feedback relevant to their proposal will help the supplier ensure competitiveness in future initiatives.

          Conducting events with these items in mind can add an immense amount of value to a sourcing initiative.  While technology eases the burden of procurement activities, it is important to remember that there will never be a one size fits all solution to automation.  Procurement relies both on the availability of meaningful data and on the negotiation and communication skills of the employees driving the initiatives.  Allowing the software to undertake the tactical aspects of a sourcing event gives stakeholders more time to focus on the strategic aspects, and reassures suppliers that evaluation encompasses more than what the platform outputs suggest.