Archive for the ‘E-procurement Tools’ Category

An Unfortunate Truth! Most Mid tier retailers are getting further behind by not using e-procurement tools.

Monday, August 1st, 2011

All Retail industry leaders know for a fact that e-procurement improvements can directly improve their bottom line as well as positively impact shareholder and stakeholder equity. In many cases in upper tier companies significant strides have been made to this end.

In? mid tier markets, it?s an? unfortunate circumstance that? procurement departments or purchasing as it had traditionally been known has not evolved significantly beyond its traditional functionality in many cases. Many mid tier companies will introduce you to their category managers. However, it very quickly becomes clear that although many have strong backgrounds as product buyers; very few have been exposed to the most current e-procurement tools available today. This is in no way the fault of the purchasing department or of the retailer. Reduced staff counts and the aforementioned lack of attention from software and consulting providers as well as a lack of near by formal e-procurement training programs combine to make the transition to e-procurement tools difficult.

What can retailers in the mid tier markets do? The answer may be working with boutique software houses that have no where near the overhead of the largest companies in this space. The largest well known companies in the e-procurement space may dominate your web based searches because they can afford to pay for large numbers of key words used in web searches. It may actually pay to drill down a few pages beyond your original search to find companies that have unique e-procurement software offerings that are often developed by highly skilled entrepreneurs that know the retail procurement business and can offer e-procurement solutions for a fraction of the cost associated with the better known legacy providers. The risks associated with this approach are minimal as most offers in the e-procurement space are offered as a hosted service today. All that is required on the retailer?s part is internet access. You might even get treated more like a customer to boot.

We look forward to your comments.

Procurement deserves more attention from the executive suite now!

Wednesday, June 15th, 2011

Procurement when looked at properly has the largest single impact on a company’s financial performance. In fact more than any other area of the company. The fact is that when additional sources of supply compete for a company’s business, it results in compressed pricing that drops directly to the bottom line and also often delivers better quality products or materials. Coupled with the prevention of possible disruptions in a company’s regular source of supply – like the situation businesses have experienced during the last several years, e-procurement tools offers many advantages that can not continue to be overlooked. Companies that are more profitable grow and companies that grow generate jobs.

The benefits to be realized in using e-procurement tools beyond savings include faster time to purchasing decisions and more effective supplier management. Today’s easy to use tools are a result of technology advancements, enhanced data mining techniques and data management best practices  driving significant improvements in the e-procurement process.

In today’s tight business environment, lowering costs through the use of e-procurement tools are proving to be a valuable aid to ensuring profitable operation.

If you are not using them, you should be. If you are reducing staff in your procurement area you should not be.

We look forward to and appreciate your comments.

So what are the benefits of SaaS? It sounds Sassy which means rude and disrespectful.

Friday, May 13th, 2011

If you have an e-procurement solution installed behind your firewall on your own servers, this might be the 1st place you want to begin saving money by replacing it with a SaaS based solution.

On demand SaaS (Software as a Service) by its nature is an internet based application and as such is accessible from wherever you happen to be as long as you have a network connection. With today’s broadband offerings, it literally means any where. In addition, since most of the newest versions of SaaS applications are native web based applications, they integrate very nicely with most business infrastructures.

The e-procurement buyer’s data at a SaaS provider is often more secured than the data at many business offices. Since this is the core business of a SaaS provider, the architecture of the application normally has multiple levels of redundancy, failover recovery and routine data backups. SaaS applications are, by-design, easier to update than locally installed applications and buyers usually experience lower feature upgrade charges as well.

The return on investment (ROI) breakeven point for an e-procurement solution is usually reached more quickly in a SaaS environment than a locally installed solution – often much more quickly. In fact there are many instances of breakeven ROI’s occurring with the first series of e-procurement events.

Stop wasting money and call a SaaS provider and while you are speaking with them ask if their offering is cloud based. More on that later.

We look forward to and appreciate your comments

Where should your RFI data come from?

Tuesday, April 26th, 2011

So a Request for Information (RFI) is primarily used to gather information to help companies make a decision on what steps to take next. RFI’s are therefore most often the first stage in the procurement process particularly with new sources of supply. They are used in combination with: Requests for Quote (RFQ), Requests for Tender (RFT), and Requests for Proposal (RFP). In addition to gathering basic information, an RFI is often used as a solicitation sent to a broad base of potential suppliers for the purpose of preparing a supplier’s thought process in preparing for a Request for Proposal (RFP), Request for Tender (RFT) in the government sector, or a Request for Proposal (RFP).

Much of the data required for an RFI is generally available and can be found on company websites, U.S. Security and Exchange Commission (SEC) filings for publicly traded companies in their Edgar system, industry guides from companies like Trade Dimensions, or from sources like Dun and Bradstreet.

The challenge for most companies is that they do not have the necessary resources to complete this research. Therefore providers of supplier data should be able to make this data available in templates that companies can begin with. Simple data should always be available in any database as to Company Name, Annual Sales, Product category expertise, contact information, e-procurement experience and product specifications. This data should be easily exportable to a variety of formats such as MSFT Excel.

A simple request of your e-procurement supplier should get you well on your way to completed RFI’s that lead to quality RFP’s and RFQ’s without spending a lot of your valuable time on basic research. If they do not, we’d be glad to hear from you.

We look forward to and appreciate your comments

Why procurement and supply chain professionals need e-procurement tools more than ever.

Thursday, April 14th, 2011

Procurement and other supply chain professionals have developed and nurtured existing relationships within their incumbent suppliers for years and in some cases decades. Too often, this has led to incumbent suppliers becoming to comfortable. The feeling of entitlement begins to creep in and some suppliers feel as though their business will be renewed annually. Too often this is true.

This author has often said that the job of buyers, category managers, procurement executives and other supply chain knowledge workers is the most difficult job in all of retail and retail distribution. These professionals are literally swamped. Quality, safety, environmental issues coupled with the enormous amount of new product offerings is overwhelming. Just conducting the basic research required to identify potential new sources of supply, finding the correct contact information as well as determining if the company has the capability to meet your needs. All of this is before you even sample, price or test new offerings. No wonder it is so easy to just stay the current course. This however would be a mistake.

A general rule of thumb that this author has always ascribed to is if you are doing business with a current supplier for more than three years and are only negotiating with that supplier, your prices are probably too high. The question is how can you find out?

That is where e-procurement tools come in to play. I won’t advertise here, but if you were to Google e-procurement or reverse auctions etc. any number of companies will come up. Or if you were smart, you just click this link and have measurable savings in less than 30 days and often faster. Visit SafeSourcing.

We look forward to and appreciate your comments.

The importance of RFx in the Procurement Process – Part II of II

Tuesday, April 12th, 2011

This is a continuation of my last post where we began to discuss the importance of running a Request for Proposal/Information before a competitive pricing event is run.  The last post talked about being specific in the information requested and not being afraid to run an RFx on an existing spend.  Here are some additional details to keep in mind.

• More than a template.  To obtain truly great RFx results the process should involve more than a template off the internet.  Having a team that knows how to properly run an RFx will ensure the right formatting is used; answers will be collected quickly; full results analysis will be conducted; as well as an assurance that the right companies are invited to the process to provide a mix of leaders; innovators and up-and-comers.

• If you use an online tool, go beyond the basic survey providers.  Providers that give access for creating free or inexpensive surveys are good for basic questionnaires but often lack the flexibility and post-survey analysis that a company used to handling RFP/RFI responses can provide.

• Remove the bias.  If at all possible try to find an independent company that can handle the entire RFx process all the way through to the final results and analysis, ensuring your results will show the best company with no bias.

• Integrate with the Reverse Auction.  Having an RFx process tightly integrated with the initial quote gathering and final competitive pricing event means that your company as well as all of the suppliers can get comfortable with one system for everything and not have to go from one tool to another to deliver the information you need.

For more information about the SafeSourcing RFx tools and professional services, please contact a Customer Service Representative today.

We look forward to and appreciate your comments.

Standard e-procurement objections.

Wednesday, March 30th, 2011

Most of the time when we present our solutions, the majority of objections come from buyers and category managers. This author has long held that this is not the correct audience for a first presentation to a company of any size. The correct audience is the CEO or CFO, or both. Procurement when looked at properly has the largest single impact on a company’s financial performance of any area of the company. CEO’s and CFO’s primary areas of focus are the financial performance of the company.

Here are the bullets I normally speak to at the beginning of a presentation as to what leaders will here from their teams relative to the use of these tools. All have very detailed rebuttals that cover the gamut of the procure to pay life cycle.

1. We already get the best cost
2. We’ve done business with this supplier for years
3. We don’t have product specifications
4. We don’t have time for this
5. Our switching costs will be to high
6. We can’t insure the same quality
7. We need to adhere to certain standards
    
Here are a couple of hints as to how to nip these objections in the bud. Get the CEO and CFO     involved early, and keep them involved throughout the process. If savings and cost avoidance are delivered as promised, you won’t have any problem keep their interest.

We look forward to and appreciate your interest.

Sustainable success with your e-procurement program is not just based on financial results!

Thursday, March 10th, 2011

More than once I have heard; “did we hit a home run?” Unfortunately 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.

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

After a quality specification is completed and terms and conditions agreed upon, supplier selection and management is the most critical stage and 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 whether and RFI, RFP or RFQ. 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 new e-procurement program, and may even have 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 tools, it may be time to ask your provider why?

We look forward to and appreciate your comments

Here are twenty steps to running high quality retail e-procurement events.

Wednesday, February 23rd, 2011

There are well established processes which when followed will create higher quality sessions for the retailer and their supplier partners, resulting in better savings or cost avoidance dependant upon the category and market condition.

Although brief, the list below provides a good framework by which to build your program and should get you headed in the right direction.

1.?Executive sponsorship is mandatory by the CEO,CFO and or the COO
2.?Get the entire buying organization together for a kickoff session.
3.?Provide an over view of what you are going to do and the impact it can have on the company. Use company financial models.
4.?Discuss and agree on success criteria.
5.?Every event is not a homerun. Singles and doubles score runs.
6.?Create a fun environment.
7.?Consider prizes for the most creative use of an auction.
8.?Use scorecards by department with percent of savings.
9.?Discuss the meaning and importance of corporate aggregation.
10.?Hand out event templates to gather existing product specifications.
11.?Put a time requirement on data collection.
12.?Gather an accurate list of your present suppliers.
13.?Work with your sourcing company to identify a top 100 list of events.
14.?Calendar the events.
15.?Prioritize by dollar value, date and strategic value.
16.?Conduct department level discovery meetings of 30 minutes to an hour.
17.?Investigate existing contract language.
18.?Look for auto renewal (evergreen) language roadblocks.
19.?Determine alternate sources of supply with your sourcing company.
20.?Develop an event rules and instruction template and post with each event.

Although these steps are not all encompassing, they provide a format for getting started that offers the best opportunity for reduction in capital expense, cost of goods, expenses and improvement in corporate earnings.

We look forward to and appreciate your comments.

IT Sourcing and the Relationship Between Hardware and Software

Tuesday, February 22nd, 2011

We live in a world that is moving so technologically fast that it is difficult to be an expert on everything that is happening.? Because many of us have businesses and responsibilities that have nothing to do with all of this emerging technology, we rely on 3rd parties such as consultants and sometimes our own vendors to help make decisions that relate to these areas.

One of the places that I consistently see businesses make mistakes on when they take direction from an outside source is to buy the hardware they need to go with the software they purchased from the software vendor.? While it can be cost-effective in some cases, generally if a software company is selling hardware they don?t manufacture, you are either paying too much for it now, or you will down the road when it comes time to upgrade or repair that hardware.

Many times vendors will claim that a company must get the hardware from them because it was made specifically for them.? Frequently this is just not the case, and when it turns out to be the case, it is probably time to evaluate the vendor/company you are using for that software.

I ran across a blog the other day that actually dealt with this very topic.? In the blog the author was discussing how important it was for the customer that they select software that is completely independent of the hardware used in it.? It also went on to detail that the best software will integrate with several types of hardware giving the customer the choice to select the products that fit them the best when it comes to features, functionality and price. As the consumers you have the power to demand these types of options, make sure you select vendors that will give them to you. Blog

We look forward to and appreciate your comments.