How often are you frustrated by a lack of stakeholder participation in your sourcing events?
Based on my experience, full participation is the exception rather than the rule and less than full participation is the norm.
Rather than write about incomplete specs, changing deadlines, moving targets and all of the other issues that drive procurement professionals crazy, I will focus on a well run eSourcing event.
Let me start with some background on the organization and the event.
One important aspect of this event is that it is the first automated event the organization has ever run. They weren’t even aware that eSourcing tools were available that could help an organization with minimal RFPs in a given year. They make a large technology purchase each year and previously did it using email, Excel and Google docs. They also spent a large amount of time on the phone clarifying bids, following up and handling other administrative tasks. They needed to get on the phone because the bids often didn’t match up with the specifications, deadlines were looming, suppliers had questions and much more. Part of their process includes obtaining devices for testing. The devices typically get a significant amount of use and abuse so this is a critical step in their evaluation process. In past years this one purchase would consume hundreds of hours of time for a small IT department. The IT group is supported by designated stakeholders that participate in crafting the specifications and testing from a user standpoint. The stakeholders also had to spend hours and hours on this purchase.
Despite their best efforts, in 2015 they were unable to get any bids that met their budget. The budget certainly looked reasonable based on the upfront research on pricing and availability.
No one was happy. The user departments and IT ended up “splitting” the budget overage plus the device that was chosen proved to be less durable than expected. Something had to change.
Late in 2015 they became aware of an eSourcing tool that could accommodate their annual purchase and possibly help them with some other significant infrequent purchases. The IT head and select members of the business units participated in a demonstration of the tool and decided to make the investment for this project. In effect they are leasing the tool for this project.
An experienced project manager from the vendor was assigned who worked with the team to plan and update the RFI qualification questions and to create the specifications. The project manager’s experience shortened this task to less than four hours. The event was set up in the tool and reviewed with the team. Several modifications were made and the event was launched just a week after the planning. Clearly the organization was astonished at the progress and efficiency.
Nine suppliers were invited to participate and six signed on. Bids were required within two weeks. This timeframe gave the organization a considerable cushion in case something went wrong during the balance of the process. Testing and selection are scheduled to be completed by end of the first week in May.
Why has this worked?
The stakeholders realized that the amount of time they would need to spend would be considerably less than in past years. The time savings allowed them to do a better job without feeling like the process was going to be endless. They can see the progress of the event in real time and this gives everyone a comfort feeling that it is progressing as expected. They also realize that conducing the process in future years will take even less time to set up.
The IT group realized that setting up the specifications inside the tool gave them control and it minimized “off spec” bids. The questions and specifications were set up to require compliance and to eliminate offline negotiations with suppliers. This alone has motivated suppliers to participate.
Suppliers can submit alternative bids as long as they provide a bid that does meet the specs. This allows suppliers with flexibility to go to their strengths if they choose to.
This same approach can be used with more complex RFPs. Project managers at eSourcing companies can provide tremendous insight into solutions based on experience with similar events. They can do this and maintain customer confidentiality.
One final important takeaway is that a flexible eSourcing platform can help smaller companies and organizations with periodic procurement needs achieve their goals. One-time events and periodic RFPs can be met with the right tools.
Action Step: What would be next step?
If any of these situations apply to your company then let’s chat for 30 minutes to determine if it makes sense to see an eSourcing demo. You can reach me at 973-936-9672.
EC Sourcing Group is one of the companies I represent because they help procurement teams deliver quantifiable cost and time savings. 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.
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