eProcurement Troubles: Finding Approved Suppliers That Don’t Seem to Exist (Part 2)

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 began to explore the Twilight Zone buying scenario of frontline users who can’t seem to find approved suppliers. In other words, on-boarded vendors vanishing into thin P2P air.

To overcome this challenge, many leading organizations are starting to use supplier information management (SIM) tools in order to find potential suppliers from a smaller universe of registered/approved suppliers rather than from an über-marketplace or world-at-large. The linkages with eProcurement can be invaluable. Moreover, this approach can help organizations direct spend to diverse suppliers (loaded, credentialed and managed by a common SIM platform). Yet before going down this path – or adding the SIM capabilities of your chosen P2P provider, provided that they exist – be sure to ask for references, as proven implementations are just starting to become more common.

What is likely to come in favor is a universal supplier discovery search engine that understands and cross-references market taxonomies—and associated suppliers— of various supplier networks, including Amazon Supply, Google/Bing shopping, ThomasNet and niche B2B directories. For example, recent efforts by Ariba and ThomasNet (and previously, Rearden/Ketera and ThomasNet) to map cross supplier databases and network taxonomies prove that such a universal effort is not that far out. Add in some component tools like virtual catalog agents and MDM tools with multi-dimensional taxonomy management – and things become rather interesting!

But for now, companies must realize that while just about every P2P vendor touts an “open supplier network,” they won't expose their network beyond providing basic connectivity for transactions outside their own private customers. Cross-network “roaming” for search and discovery is akin to attempting to bring a CDMA-based iPhone to Europe from the US. Turn it on and it won’t work. Yet kludges don’t make for good procurement, let alone be able to pick up a call when someone rings you from across the pond.

Fundamentally, a P2P process that can't find preferred supply must feed back into a sourcing process, which will likely be tactical and go to a “buy desk” (although, depending on scope, it could possibly re-sort and take priority in a strategic sourcing queue). Ultimately, this will then need to enable true process linkage with a super-efficient and effective sourcing and buying process, and therefore to such a search engine or less optimally to a “business network."

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.

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