Catalog Content and Supplier Connectivity
Companies can quickly overcome the challenges of catalog content by leveraging "pre-built" e-catalogs. Procurement service providers often offer and manage these catalogs to help customers accelerate the enablement process and facilitate ongoing maintenance. In addition, some of these service providers create custom catalogs for unique, customer-specific categories. These alternatives are significantly more cost effective than building and maintaining a catalog internally.
Regardless of whether companies undertake content development and maintenance with a service provider or handle it themselves, they should not attempt to build a catalog with every item they purchase. As a company examines its own spending practices, most often it will discover that 80 percent of its spend in any category is associated with 20 percent of the items. For a higher success rate, a company should understand what it frequently buys and then build catalogs to address the majority of items while augmenting with additional items at a later time. Building and maintaining content for rarely purchased items will be cost prohibitive. Before building content, it is also critical to understand how buyers will search for items and then build or attribute content accordingly. Finally, implementing business processes for repeatedly "spot bought" items is important for user adoption.
Companies should also develop a sound supplier integration strategy in order to ensure a seamless procurement process. For successful connectivity with their trading partners, companies must be prepared to connect with suppliers through a variety of technology formats. Some of the less technically ready suppliers that cannot receive XML or EDI formats will require a hosted, self-service interface to electronically receive orders and transmit order acknowledgements and invoice transactions. Outside service providers have the expertise to rapidly implement and centralize heterogeneous supplier connection formats into a buying organization's existing platform.
Business Process Integration and Supplier Training
Companies need to confirm that business processes are optimized and will be supported effectively. Before placing orders through a system, a company should carefully examine existing purchasing processes and requirements and model them, if necessary, in order to be more efficient. Taking an inefficient, manual, offline process into an online model will most likely make the process even less efficient and unacceptable to users. Processes inevitably vary from plant to plant and site to site, so companies should examine their processes and requirements at various locations in order to effectively align the e-procurement solution with each process, as well as to prepare suppliers accordingly.
Companies should also plan to fully integrate their e-procurement system with other operations systems in order to automate more of the complete purchasing process and generate additional value for the organization. By using experts to manage the integration process, companies can quickly integrate with existing ERP or legacy systems to engage one seamless platform for purchasing.
User Change Management
Companies implementing a process-changing system like e-procurement must also look beyond technology and make change management a high priority. In order to ensure that users are ready, willing and able to maximize the value of the new system, an effective change management strategy needs to be deployed. Change management should include strategies for engaging executive stakeholders to help drive change; a comprehensive communication and training strategy; ongoing compliance analysis; and closed loop, user-driven improvement processes.
Keys to an Effective Enablement Strategy
Here are a few suggestions for companies seeking to fully capitalize on their e-procurement investments:
Consider and prepare for the costs and time required to fully enable suppliers and buyers before embarking on an e-procurement initiative.
Companies should resist the urge to dive into an e-procurement initiative without first examining supplier and buyer connectivity and employee adoption challenges. A carefully researched, comprehensive approach to e-procurement will yield more savings and benefits in the long-term. Many buyers of e-procurement have found this to be much more difficult and expensive than originally anticipated.