I am sure you have heard those commercials where they promise “low prices”. Some even claim to have the lowest prices. Unless you do your homework you could find that the low price you paid wasn’t the best deal.
Determining the total cost of ownership seems like it should be a normal goal. Your eSourcing tools should allow for multiple scenarios and in-depth analysis reports. These features should be standard and not part of an upgrade. They should also be quick to set up with built-in templates.
Here are some features that I believe should be standard and available via template or examples that you can quickly add to your RFP:
- What if calculations in any cell (this feature should also support multi-level what if scenarios)
- Drop down or multiple choice questions that calculate the impact on cost automatically based on the choice made
- Multi-level questions – that can lead to follow-up questions depending on the answer provided
- Soft cost calculations based on if then formulas
- Table lookup
- Financing and payment scenarios
- Delivery quantities and location differences
- Download to Excel and Upload from Excel
There are more features that will allow procurement professionals to better determine what the true cost is. Your tools should allow for creative approaches and analysis that should only be limited by your imagination.
- Suppliers should be aware of all the factors that you will be using in calculating the total cost of ownership. By making them aware it should also allow them to offer other solutions.
- One more feature that is a must in my book – the ability to modify the RFP during the event. This feature will allow quick modifications to the specifications. All participants should only have to consider the impact of the change. This should not require a new RFP.
- Ease of use, flexibility and access to templates and past events that can be quickly modified will make your life easier.
The analysis should be much more compelling and support the value of the sourcing group.
Action Step: What should be your next step?
If your tools are making it a challenge to determine total cost of ownership, we should chat.
EC Sourcing Group is one of the companies I represent because their tools have been created by dedicated and experienced sourcing professionals. They know the day-to-day challenges you face and have built their tools to solve them. If you want to know how, I invite you to request a demo or 30 minute discovery conversation so you can experience the platform, process, people, and tools. You can reach me at 973-936-9672.
Next week I will continue on this same theme so your organization can improve your bottom line.
If you would like to know more ways to reduce costs without changing the way you do business simply give me a call or send me an email with your contact information and the best time to reach you.
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Until Next Time, I Wish You Great Success in Your Business and in Your Life