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.
Do many of your SAP, Oracle, PeopleSoft, Ariba or other eProcurement and P2P users have trouble finding approved suppliers that don’t seem to exist? You’re not alone. It’s strange, but not uncommon—or at least in far too many eProcurement implementations we’ve observed over the years. The challenge in this case is that approved suppliers don’t seem to exist.
This raises the obvious question for the end-user: now what?
Should they go off and find their own supplier and have them send procurement (and A/P) an invoice? What happens when the user sends it to procurement, but the commodity in question is not on the sourcing team’s “wave chart” in the sourcing pipeline? And what if “Pat the generalist buyer” gets the request and wants to do a more efficient three bids and a buy—gotta’ justify his job, you know—rather than just going a Googlin’? We’re of course assuming that Pat is not just asking for a 5% price reduction from the supplier and moving on!
Taking into account the virtual head nodding from readers, we’re pretty certain that this scenario is a common one. But what can procurement do?
First, try to get some real-time intelligence on the population of suppliers that you have used somewhere at some time—suppliers who have registered on the portal or whom you have encountered in the sourcing process—or even have just assigned commodity codes to based on external information providers (or again by the supplier during registration). In other words, you’re creating your own private, internal “supplier network.” Establishing basic approved vs. preferred suppliers by category/commodity or by supplier/item combination in your ERP system is a good start—especially if your requirements are simple.
There are other approaches as well. Stay tuned as we explore them in Part 2 of this series. Or download the full paper in our research library immediately.