iSource: Is that something many companies haven't understood?
Provenzano: All too often, when organizations try to implement the technology piece by itself they find it's difficult to succeed. What they haven't recognized is that there has to be a logical path to get to the future.
But it just doesn't happen overnight. Organizations need to adopt reasonable timelines and strategies. And there needs to be a coupling of both technology and services that support that technology.
It comes down to this: It's an evolution, not a revolution. Too much revolution has been preached. That's just not the reality. The promise of e-procurement technology, for example, is great. But it doesn't always happen as quickly as everyone expected it to. As a result, there is definitely a degree of disillusionment in the marketplace today.
iSource: Of course, the attitude in the market has changed a lot over the past few months.
Provenzano: Yes. The market is very different today. Before, there was confusion - a deer in headlights mentality because there were so many different messages out there. Organizations were inundated with information on e-procurement and there was a lot of fear and excitement: excitement about the opportunity and fear that if you didn't do it quickly you would be left behind.
Now there's some disappointment and many companies are licking their wounds. I do feel confident, however, that we'll start seeing a greater acceptance of e-procurement technology, but that it isn't going to happen overnight.
iSource: What other roadblocks have companies encountered?
Provenzano: Because of the decentralization that exists in purchasing, people have had the ability to buy on their own outside of any corporate guidelines. But when you start to put a solution in for indirect materials purchase, you're taking away some of the user's ability to make purchases not authorized by the system. The change management piece is very critical. And getting buy-in at all levels in a customer organization is very important.
iSource: How do you handle that?
Provenzano: By involving various levels of the organization very early on in the sales process. It can't just be a mandate from the executive suite. It needs to be accepted by the end users, the folks who will be using the solution. You must identify the decision-makers and the people who are going to be using the solution and give them all a say before the solution has been chosen. It makes a big difference in terms of implementation afterward.
iSource: What other concerns do you think users have?
Provenzano: If a company has an outsourced solution, it often loses the ability to perform that function internally. As a result, there's the fear that, by doing this, they will lose the ability completely. Let me explain: When an organization adopts an e-procurement solution, for example, certain activities that used to be performed internally start to be performed by a third party. The people who used to do it are moved elsewhere. However, if the arrangement doesn't work and that competency doesn't exist in the organization any longer, then the company could be in a difficult position. Those are the risks that many customers fear.
Often, we see situations where companies picked a solution that isn't delivering what it promised. And that's another fear. What if we choose something and it doesn't function the way we want it to? In today's economy, that prospect becomes even more of an issue, particularly in light of the many failures that have occurred.
iSource: Why has the market not been as interested in the e-procurement of direct goods?
Provenzano: I think the marketplace, in general, purchases direct products far more efficiently than indirect. So I think procurement of direct goods hasn't been as much of a problem. By eliminating the indirect problem, you are able to redeploy your resources to handle more strategic issues. The less time you spend on indirect materials, the more time you can spend on more mission critical materials.