Sustainable success with e-procurement is not just financial.

July 7th, 2008

Primary success in e-procurement programs is ultimately measured by cost reductions that drop directly to a company’s bottom line. More than once I have heard; “did we hit a home run?” Less emphasis is placed on cost avoidance and sustainability and as such can often lead to less spend be assigned to these very effective tools than should be.

Primary success in e-procurement programs is ultimately measured by cost reductions that drop directly to a company’s bottom line. More than once I have heard; “did we hit a home run?” Less emphasis is placed on cost avoidance and sustainability and as such can often lead to less spend be assigned to these very effective tools than should be.

In order to ensure that results are sustainable; the strategies for all targeted e-procurement categories require consistent deployment across all departments throughout the host company. This is accomplished by utilizing a well planned repeatable process for category selection and discovery, supplier selection, and a solid strategy that is well understood by all buyers and category managers for negotiation and award of business.

Supplier selection and management is a critical stage that requires the understanding and participation of all sourcing professionals within an organization. One small mistake by anyone with the procurement organization could negatively impact the potential results of an e-procurement event. Historical long term relationships that drive behind the scene comments like; “don’t worry we’ll be fine” to a long term supplier may drive inappropriate bid behavior and lack of ongoing credibility with your program. Not to mention the potential legal implications.

If you are not having the results you would like to or have less than twenty percent your total corporate spend assigned to e-procurement tool’s that are offered in the form of SaaS or Software as a Service, ask your provider why?

I look forward to your comments.

Ron

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