Part II of II. The Word “CHANGE” Is Not Only Applicable to Politics’ These Day’s!

November 4th, 2008

The impact of the results discussed during Part I of this blog post on Monday November 1st suggests the following.

The impact of the results discussed during Part I of this blog post on Monday November 1st suggests the following.

What the results discussed during yesterdays blog post indicate is that World Class Companies are adapting their procurement practices in accordance to lowering their cost of goods while simultaneously adjusting other costs resulting in savings directly to the bottom line. We are not advocating a lesser workforce to aid in the bottom line savings, however we are suggesting that more and more responsible professionals within procurement organizations need to acknowledge that change is a coming and they need to adapt to e-procurement tools such as Requests for Information or RFI’s, reverse auctions and user friendly reporting tools.

One of the most frustrating daily activities for most e-procurement professionals is winning a new opportunity via the direction of a compaies CEO or CFO and then getting nothing but push back from buyers within the organization when tools such as reverse auctions are mandated. Now we realize that the pushback can mean many different things….does the responsible buyer not have product specifications, does he or she not know more than one or two vendors that can provide the product or service to his or her company… or is he or she simply resistant to change and unwilling to change the way he or she has procured the goods or services for the last 25 years?

The benefits to running reverse auctions are many and far outweigh continuing to do the same things the same way and expect different results. These benefits include but are not limited to the following:

– Maximize your visibility to additional suppliers

– Make better informed decisions

– Reduce sourcing time

– Lower cost of goods

– Streamline internal processes

– Excellent medium for aggregating

– Increased pricing visibility in the marketplace

– The retail industry is actively using this tool and improving
Competitive position

Make no mistake, this blog post is not a way of pointing a finger at any particular organization, however there is a common trend that when an e-procurement program is adapted within an organization it is very predictable that resistance to change will emerge and remain until someone is strong armed by senior management and the results prove that support for this process is best for the company. E-procurement tools such as reverse auctions are a different way to gather pricing in a quicker fashion, from more vendors, with your specifications and timelines with results typically 18 to 20 percent less in cost of goods which drops directly to your bottom line.

Change is uncomfortable but inevitable and requires acceptance in order for companies to stay competitive and retain the market share that one so diligently worked for in the past!

We appreciate and look forward to your comments.

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