How can you make procurement processes less painful and less costly? Effective supplier and buyer enablement. Here's how.
Lured by the promise of millions of dollars in savings, many early e-commerce adopters jumped onto the e-procurement bandwagon only to find that getting results was not easy. Most of those companies learned the hard way that achieving the value and efficiencies available through e-procurement and supplier connectivity requires more than software deployment and technology integration. It requires effective supplier and buyer enablement, which includes an efficient content development process, buyer and supplier process alignment, and complete preparation and training of both parties.
Simply put, "enablement" is the process of helping suppliers and buyers to effectively connect and execute a broad range of complex transaction types with one another online. By neglecting or misunderstanding the enablement component of e-procurement, companies are likely to face system implementation delays and potential service issues while missing forecasted returns. Organizations must execute thorough readiness and adoption strategies on both the supplier side and the buyer side in order to overcome these challenges, which generally include:
The development of catalog content, the descriptive information associated with an item, is one of the most underestimated aspects of e-procurement. Because many suppliers do not have their content in electronic format, customers are forced to generate their own e-catalogs from multiple sources in multiple formats. Any company that has attempted to create and maintain standardized catalog content knows this is a cumbersome and expensive process. Developing content in a way that supports the various category specific searching patterns adds further cost and complexity.
Hands-free Transaction Integration and Support
Enablement, however, is about more than just building e-catalogs. It involves connecting and integrating suppliers of all sizes with a company's e-procurement, enterprise resource planning (ERP) and financial systems to lower costs and improve processes. Suppliers have varying levels of technical capabilities and are able to receive orders and submit acknowledgements and invoices in a variety of electronic formats. In addition, some of the best suppliers simply do not have the capability to connect with their customers electronically due to the inability to receive electronic data interchange (EDI) and eXtensible markup language (XML) documents.
Decentralized, Disparate Business Processes
Most companies have autonomously created business processes at the plant or site level. Couple that with variations across local supplier branches, and aligning processes and training suppliers to handle your business requirements becomes difficult. Standardizing processes so that true enablement becomes a reality requires sophisticated process engineering and training.
Resistance to Change
As with most major changes within a company, users are generally slow to accept and adopt a new e-procurement solution and the associated supplier and process changes. Most companies fail to implement effective change management strategies, such as continuous training and communication, to ensure that the new solution is accepted and easy to use. Change management is a cultural issue, requiring a substantial investment of time and effort, and most organizations undervalue its importance to the overall process. Savings will never be fully realized unless an e-procurement system is embraced and leveraged by end users.