Leveling Up to E-Sourcing Mastery: A Collaborative Approach

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With many procurement organizations using their solutions on only a quarter of applicable events, it’s clear that e-sourcing solutions have a ways to go to reach full adoption.

From overwhelming practitioners with functionality to overemphasizing the prescriptions of industry analysts and consultants, e-sourcing providers have failed to help procurement realize the full benefits their solutions can offer. But it doesn’t have to be this way.

The silver lining to this situation is that technology is not the problem — humans are. E-sourcing adoption is low because the way providers, analysts, consultants and even procurement professionals approach acquiring and using these solutions is flawed.

One potential remedy is to treat e-sourcing adoption more like a game. In this post, we explore how each party at fault in the e-sourcing quagmire can use gamification to help everyone level up to e-sourcing mastery.

E-Sourcing Providers

Overwhelming users with functionality led e-sourcing providers astray when designing their solutions. Instead of focusing on creating the best user experience possible for procurement, providers packed too much functionality into their solutions, relying on ambitious analyst wish lists and misguided RFPs to guide their product development and implementation.

But that doesn’t mean the solutions themselves aren’t useful. In fact, many organizations may find they need more advanced functionality only after they’ve mastered the basics of the e-RFX or auctions. Rather than start at the final level, they first need to learn the rules and basic tactics of the game.

Providers should thus focus on building gamification into their implementation processes. This can be done even at the module level. By leading users through “selective access” to increasing levels of functionality within the same module, providers can give users incentives to access more advanced capabilities only when they’re ready to do so.

To level up to more powerful e-sourcing functionality, users would have to complete a certain amount of projects within the lower tiers or demonstrate an appropriate level of competency with the system. This last point also raises the need for selective access for each user based on that person’s level of sophistication. An entry-level procurement clerk may need just the basics to start using the solution, but a category manager may need access to more powerful features to get her work done.

Analysts and Consultants

When it comes to evaluating e-sourcing solutions, the age of mass produced, one-size-fits-all recommendations has come to an end. Today’s procurement organizations are increasingly choosing to customize their approach to technology selection. That could mean starting with a spend analytics application and moving to sourcing later via a suite option, or selecting a best-of-breed vendor that can offer tightly coupled capabilities in sourcing and supply base management.

To respond to this changing world, analysts and consultants need to offer more customizable approaches, as well.

On the analyst side, one way to do this is to take a persona-driven approach to solution evaluation. Since no two procurement organizations are alike, each has its own value proposition to the business, engagement approach and stakeholder needs.

For example, a decentralized procurement organization serving a middle-market company may value speed, low price and a continuous stream of quick “wins” in a provider. A larger company in a creative industry, however, may have specific sourcing requirements that could be supported more directly by certain providers.

Ultimately, analysts need to give users the tools they need to best evaluate their specific situation.

This same concept applies for consultants. With the capabilities and requirements of the appropriate solution clear, consultants should enable a “crawl-walk-run” approach to on-boarding and implementation to guide organizations to e-sourcing maturity.

To understand how, consider this case example. A major European water services company phased its rollout of an e-sourcing provider’s platform by starting out with e-RFX and e-auctions. As the capabilities and familiarity with the system of the users increased, the implementation consultants then moved the team members onto two additional modules: supply base management and contract management. After about three years, nearly all of the team members had adopted all four solutions.

The keys to this adoption success, according to the customer, were the detailed targets and success metrics the consulting team had provided. Each user needed to prove his or her competency in one solution before being provided with access to the next. While the journey to e-sourcing mastery certainly took time, the organization was able to fully realize the benefit of its e-sourcing partnership.

Practitioners 

While providers, analysts and consultants have done their fair share to complicate e-sourcing, practitioners also shoulder some of the burden.

As we mentioned in Part 1 of this series, a 12-week, 300-hour strategic sourcing initiative to revolutionize your IT hardware category is likely the wrong place to start your e-sourcing program. Instead, the best place to start is with quick wins, because you can train your team on a smaller number of features first, later moving on to the full set of capabilities you’ll need to complete a larger project.

One place to begin with could be resourcing some categories in your tail spend. These low-criticality, often one-time purchases require no analysis or contract creation, so users can focus on mastering the functionality needed to produce an RFQ. Once the RFX and e-auction capabilities are up and running smoothly with the whole team, tackling a bigger category redesign may be within your sights.

Finally, practitioners should aim to view their e-sourcing journey as one that involves a larger community of partners. By working closely and collaboratively with providers to get the most value out of their solutions over time, as well as following up-to-date recommendations and best practices from analysts and consultants, procurement can once and for all resolve the e-sourcing adoption conundrum and claim the benefits these solutions offer.

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