Procurement Horror Stories from Us (Note: We Accept No Responsibility for Advice Not Taken!)
Ah, that wonderful procurement rite of passage that is the horror story.
All organizations have them, and all individuals too. For the latter, think car and home purchases that didn’t work out. To level the playing field a little, as it’s not just suppliers that underperform, I thought I’d share a horror story from the perspective of the technology and services solutions provider. After all, buyers can be klueless klutzes too.
Tale of Caution from the E-sourcing Services World
When you deliver the insights around configuring and running successful eRFx events (auctions, for example), it’s typically done in addition to providing self-service technology— but some firms deliver this as a standalone activity. To the point, during my years at Procuri (later acquired by Ariba), I was involved in a good number of e-sourcing events. I took on roles in customer support and professional consulting services, acted as the demo/pilot jock in the sales org, and of course participated in all-hands-on-deck efforts during major upgrades. We had a couple of spectacular failures caused by individual buyers, some through willful ignorance and others through buyer malice.
One was at a major food and beverage PCG bidding out custom PET bottle designs in a global event. So far, so good. But the buyer decided to capture a lot of bid detail per bottle: raw materials, BOM type component breakdown, and several bottle types. So far, still not that bad. What threw things off the rails was not so much the complexity but the number of suppliers and their far-flung locations. The buyer had invited over 60 suppliers, maybe even over 100.
The number of “bid points” (essentially the complexity of the event multiplied by the number of suppliers) was ten times what we had tested and recommended as sustainable system loads at the time. This took place eight years ago. There was less bandwidth and more latency around the globe then, back end systems were not as capable, and user browsers couldn’t load as much into a page.
The result was an agonizingly slow event that took suppliers nearly forever to load, if at all. We caught this early on in our event support desk, but the buyer was pigheaded and kept the event going. At the end of the exercise, we had to have our database analysts pull the bid info out of the back end, as the front end didn’t load.
Technological Systems have Limits
Another blowup, albeit not as spectacular, took place in the German subsidiary of the world’s largest diversified manufacturing conglomerate. Again, it involved an engineered product with lots of specification details. It became clear that the buyer was not interested in changing his ways by adopting e-sourcing methods, and he showed this by loading everything he had in his Autocad repository into the event. One of our differentiators was not capping file sizes, but we didn’t expect anyone to load hundreds of large files into a single event (after all, how would the suppliers consume that much content via the web?).
Again, this was around eight years ago. So the stubborn German kept uploading files until he had nearly a Gig in the event. I think we had less than 10 Gig overall across all clients back then, and our CTO began to wonder who was using up his database storage.
I could go on, and my point back then still holds true, all systems have a breaking point – you need to operate within the supported parameters. Laptops can be used as hammers, but why? Your technology and service partners probably know what works. So listen to them, use that as a baseline, test in an event, and if you still need to push the envelope, at least you can do so armed with some experience.
What buyers coming from paper to technology didn’t understand back then – and probably still don’t – was how technology transforms the way you can and should do business. E-sourcing allows for such short event cycles that it’s better to run numerous smaller events than one annual massive boil-the-ocean effort.
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