So why can’t eProcurement in business be like on-line shopping at home?

- November 28, 2012 1:31 PM
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(In what we hope is going to be the first of many guest posts, we’re pleased to welcome Owen Inglis-Humphrey, a long-serving e-Procurement practitioner and now Director of advisory firm, More then Glue).

When I first came across the subject of eProcurement back in the late 90s it was in an age where the internet was still a new phenomena.  Children of the day still wanted to spend their days hanging out in the shopping malls, or going around to friends houses.  Music was still something that came on round plastic discs and people actually talked to each other, face to face.  Working in a manufacturing and engineering business I can still remember the shelves full of paper catalogues.

It was a time of having to reach for the requisition pad to start the lengthy process of collecting signatures before, eventually, someone, somewhere would actually speak to a supplier.  Throughout the process the paper would slowly be filled with bits of information telling of where the products would actually come from, where they should go, and importantly where the money was going to come to pay for it.

Then along came on-line shopping, the revolution that swept through the houses where you could (virtually) wonder through any shop you wanted, whenever you wanted, even dressed in little more than pyjamas.  You could choose what you wanted, see details, order and pay for it without leaving the warmth of your bed.  Then a few days later a parcel would arrive and all would be well with the world.

Within businesses we started to hear about opportunities that were going to be available to us as members of staff to do the same thing, to be able to concentrate on the business and that, at the touch of a button bureaucracy would be eradicated. So what happened?  For some seemingly unknown set of reasons the simplicity of on-line shopping never really translated to simplicity in the business environment although some solution providers are starting to making moves in the right direction.

In my experience the reasons are actually fairly straight forward

– processes are invariably written by the folk that ran them before eProcurement

– there is a lack of trust, whether implicit or explicit, intended or subconscious, between an organisation and it’s staff

– buying in business setting is subtly different from buying at home

Over the following series of articles I’ll go into the reasons in a bit more detail but throughout would ask you to keep one thing in mind – it doesn’t have to be so difficult!

Comments

  • eSourcingSensei:

    Hello Owen

    I look forward to the rest of your series of posts.

    I too have been involved since the late 90’s (97) and have seen eSourcing technology grow but have not seen a universal uptake across the business environment

    Having met with various organisations over the past few months I am amazed at how far behind in the use of eSource technology they are from where I would have expected them to be and how many are still at the infancy stage f using and understanding what is available and how it could be used.

    Whilst I would say that certain activities within eSourcing may be quite complex and require a certain “expert” knowledge to maximise their benefit to a business, I would agree with your closing comment and maybe say it this way, that eSourcing should be seen as your “friend” and not your “enemy”.

    • Iain.wicking:

      The reason is ‘sourcing’ is a ‘mental exercise’ that requires the processing of multiple types of information, examination of multiple relationships and the weighing up of options. Software is merely a crutch and cannot replace this highly iterative exercise. It can help support and it can also hinder.

      Furthermore, a lot of software is designed for the convenience of the coder and not from the perspective of the end user.

  • RJ:

    I’ll also look forward to this series as it’s something that is so often misunderstood by users of procurement. However, for most of the businesses with which I work, the purchase of fixed products from a catalogue at an agreed price has indeed been automated – where the simple “home shopping” experience tends to fall flat is when you are buying a complex or bespoke product or service with multiple variables.

    It is difficult to imagine a world where I could go to a website and say, “Hmm, I think today I’d like to pick the buy one get one free on the marketing campaign with Stephen Fry in the telly ad, cavorting with 5 reindeer (or perhaps I should opt for the one with Johnny Vegas and the stuffed rabbit?), together with the 30% off viral YouTube animated giraffe sequence… Oh, and look I get Clubcard points with that, too!”

    But then maybe I’m just not clever or imaginative enough with my use of Ariba or Oracle eProcurement?

  • Ronald Duncan:

    We are unique since we started with ecommerce before going into eprocurement, and all our ecommerce sites sell directly online as well as through the p2p system. We have ecommerce sites directly linked into Ariba, SAP, Oracle, and the other finance systems along with a number of organisations that come directly to our marketplace.

    Check out http://www.abdserotec.com for one of our b2b ecommerce sites.

    My biggest dilemma is that having analysed over £ 100 billion of spend. I know that 65% goes directly to the supplier and 35% goes through the official system.

    The figures are even more stark on our marketplace since we have over 400,000 organisations that purchase through the system on an unofficial basis and a few hundred that purchase officially.

    My favourite statistic is that we have more unofficial users from Cambridge University on our system than Cambridge University have official users on a competitors system. I went to Cambridge.

    It is nuts and change is slow, but we do have a number of compelling advantages.

    We get the price right!! Shock!!!

    All our invoices match!! Shock horror!!!

    Think about it, in an ecommerce world we get price, delivery, buy one get 1 free etc etc right every single time because it costs money to refund a card if you get it wrong upwards and you loose out if you under price.

    Our competition, can not handle Deliver charges, complex items, discounts, price break points, promotions etc etc. They are also clunky and difficult to use, because they are not competing for every sale against thousands of other sites on google.

    Still we have Visa rolling us out globally, and at some point the message will get through to the rest of the industry, that ecommerce based eprocurement is the future.

    Thanks for spreading the world.

    Best regards
    Ronald Duncan
    @UK PLC

    PS And we also guarantee savings using our SpendInsight and GreenInsight software to look for all the pricing errors caused by our competitors legacy procurement systems.

  • Implementing eProcurement – who defines the process? — Spend Matters UK/Europe:

    […] my first article (available here) we considered the issues that business users face reconciling why there are differences between the […]

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