Spend Matters welcomes a guest post from Alan Buxton, COO of MarketMaker4.
I see a lot of RFIs. And I have to admit that it puzzles me that in these modern times buyers have to ask prospective suppliers the same questions again (and again, and again): What are your revenues? What are your manufacturing locations? How many staff do you have? What certifications do you hold?
It wasn’t supposed to be like this. E-sourcing was supposed to bring buyers and suppliers together in a seamless, frictionless world.
But here’s the paradox: the internet has brought vastly more information to our fingertips. Buyers now have access to almost limitless quantities of potential suppliers. Alibaba advertises over 2 million storefronts; the Ariba Network advertises nearly 1 million. D&B talks of more than 200 million records. A simple Google search for fasteners manufacturers gives me about 18,000,000 results. Great. I only wanted the 10 most relevant!
Quantity is no longer the problem. The problem is quality. How to gauge supplier quality?
Well - it’s quick, easy and cheap to send out a bunch of emails with an Excel attachment, or set up a questionnaire on your favourite sourcing platform, so it’s hardly surprising that people default to this. But it causes more work and loses more time later on in the process: chasing suppliers to fill out yet another form; collating the responses; realising an important question went unasked.
There must be a better way.
I can see some glimpses of how it will get easier for buyers to truly find quality suppliers. It’s in the niche, specialist players. You won’t find MFG.com or ChemicalInfo.com talking about the millions of suppliers they have access to, because they only have a tiny fraction of the numbers you would find on Alibaba. The differentiator is that the quality of suppliers is more of a focus – whether through star ratings systems or through specifying relevant certifications that suppliers need to present. Each niche provider has, over time, developed its own expertise in how best to provide their customers with access to quality suppliers.
But these islands of information are of little use if buyers don’t know where to find them.
Squaring this circle will require a shift in mindset amongst providers. Providers will need to stop worrying about building their own walled garden with as many suppliers in as possible. We are not consumer internet sites, selling eyeballs to advertisers. It’s a different kind of game. It requires a recognition that value does not reside in the sheer quantity of suppliers you can find in a database. It requires an opening up of supplier information across providers in such a way that a buyer can find the best suppliers irrespective of which database they are to be found in.
This change won’t happen quickly. There are too many mindsets rooted in the view that a bigger database equals a better database. This is probably true for a Yahoo or Facebook or a consumer start-up looking to build traction, but in our world things are different. But the change will come. And I look forward to when the term “RFI” becomes a distant memory.