In the first installment of this series, based on the Spend Matters research paper Avoiding “Dumb Ways to Die”: eProcurement and P2P Style Adoption Scenarios to Breathe Life into Implementations, we explored an idealized P2P buying state from a search and shopping perspective. But this nirvana is rarely achieved, resulting in less than stellar eProcurement adoption. The primary reason for such poor adoption is that companies all too frequently forget that “preferred supply” is not just based on SKU catalogs that are overseen internally (regardless of whether they’re supplier-managed or curated internally). A poor feedback loop from a requisitioner searching for supply back to the sourcing process is just one example.
But there are others. The items may already be in stock somewhere within the company, or there might be an equivalent substitute. Preferred items might also be outside of a catalog. For example, they might require a punch-out to a configurator hosted at the supplier website.
Then there is the case of services where tabular item catalogs aren’t as appropriate, as there are many different ways to implement poorly even rate-based services into a product-oriented catalog structure. There will likely be a contingent labor requirement (perhaps owned by procurement, HR, and/or shared services) supported by a services procurement VMS platform either overseen by an internal team or an external managed services provider (MSP) separate from the ERP and eProcurement environment.
Yet many organizations might not realize that they need more than a master services agreement (MSA) in a contract management system (CMS) and rate-cards in a narrow services procurement module. Services are broad, ranging from unskilled contingent staffing for warehouses to facilities maintenance to management consulting to legal services to geese herding! And each can bring its own unique set of challenges (though the ones pertaining to geese we won’t get into).
Perhaps this is the most important question at this stage: what can be done to overcome these challenges?
One answer is to build a “virtual catalog” that goes across locally hosted catalogs. This might include items that fall into what we might describe as “stackable MRO” that can be requisitioned and pulled from stores, punch out sites and access third- party marketplaces, networks or sites. Providers have attempted to solve this issue for customers in different ways, including the general buying interface overlays of Coupa to the more advanced cross-catalog/source search from specialists such as Vinimaya and Wallmedien.
Stay tuned as we continue to explore this topic in Part 3 of this series.
This post is based on content contained in the Spend Matters Compass series paper: Avoiding “Dumb Ways to Die”: eProcurement and P2P Style Adoption Scenarios to Breathe Life into Implementations. The paper, authored by Spend Matters Chief Research Officer Pierre Mitchell and Jason Busch, is available for free download in our Spend Matters research library.