Let’s cut thorough the hype and improve retail results now. Retailers should use e-procurement reverse auctions now to improve earnings. We guarantee the results.

October 28th, 2008

Why are spend management solutions not getting the play in retail that they deserve and when they do

Why are spend management solutions not getting the play in retail that they deserve and when they do, where are the results?

Just the like the polls in this years presidential elections, often times the news we get relative to spend management solutions results are skewed by what spend management companies wanted to sell you. In this political year, there have been over 170 polls conducted that range from one candidate leading by double digits to polls that show the election being a virtual dead heat. So, who’s right? That depends on who you ask and what they are trying to accomplish.

Much the same is true of spend management solutions. What is the ultimate goal of using e-procurement solutions? Specifically reverse auctions. This author believes the question has a simple answer. To reduce costs period. Many argue that to reduce costs without maintaining quality makes no sense. Is there anyone out there that really thinks a retailer is going to buy lower quality merchandise knowingly and try to pass it on to their consumers? If so, I have a bridge in Brooklyn I can sell you. Poor quality equals poor sales and a resulting lower wallet share or lost customers. The same can be said for holding suppliers accountable to safety and environmental standards as we do at SafeSourcing. The trick is that companies need to maintain focus on the primary goal of spend management solutions which is to reduce costs while also ensuring that additional elements of the e-procurement process such as maintaining and enhancing quality and supporting safety and environmental standards are included in the process as a service or byproduct of the tools being used without any additional costs or time delays injected into the procurement of the product from new sources of supply at a lower price.

Here is the simple process. Let’s not over complicate it. 1. Select a category 2.Collect product or services specifications. 3. Identify suppliers. 4. Train Suppliers. 5. Hold the event. 6. Do it all in less than two weeks from the date of category selection. 7. Do it over again with another category. Make sure that everything else is included in the pricing with no extras.

Spend Management companies goal should be to be concise and complete with their offers while not being intrusive of the normal daily activities of procurement professionals.

Addressing just ten percent of companies total spend or cost of goods can have an impact on net profitability of nearly 100%. And, it can be done quickly. So let’s go CEO’s, it’s about the money.

We appreciate and look forward to your comments.

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