Let users / requestors do the hard work for you when evaluating suppliers!

As procurement professionals, you get to evaluate supplier performance every so often.  Typically, these evaluations are based on easily available factors such as pricing, business volume.  Information such as quality, customer service and timeliness is hard to collect and hence it is taken into consideration depending on availability.  Clearly, such evaluations do not give you a full 360 degree view of a supplier’s performance plus you get to do all the hard work yourself.

Example of supplier ratings from Coupa’s cloud based eProcurement platform

Admittedly, gathering qualitative information is difficult. However, this is a case where the dictum “don’t work hard, work smart” applies perfectly.  Instead of carrying the burden of gathering such information on your shoulders, you can offload it to users / requestors.  The benefits are obvious – first of all, you get a first hand view from users about the quality, customer service, timeliness etc. Secondly, with that kind of an input, you are easily able to filter out problem suppliers and focus your efforts on suppliers who rank high in terms of both cost effectiveness and quality.

How do you involve users?  The best way to involve users is to harness their community spirit.  Encourage or even require users to “rate” a supplier.  This is very much like ratings for items and vendors you see on Amazon and eBay.  Wouldn’t it be great if you can see the ratings on your suppliers any time just the way you see them on Amazon or eBay ?  Perhaps you are wondering, this all sounds good and it’s one thing for Amazon or eBay to do it, but can I do this?   The answer is an emphatic YES – you can do this in no time and that too without breaking your bank. All you need is a truly cloud based eProcurement platform.  One more reason why they are being adopted so  rapidly!

I hate the dentist – and I am due for a midyear check up. I am lucky enough to work for a company that offers good insurance and yet, even though all the information I need is right there at my fingertips, I still do not schedule that darn appointment. Why? Because I don’t want to hear what’s good for me; I’ll just wait until December to see how I did, how many cavities I racked up and fillings will be needed.

This type of procrastination is not limited to just medical appointments, visiting the in-laws, or starting a new diet and exercise regime. In the world of procurement, we often wait until the end of the quarter or the end of the year to see whether or not we are on track or have met our spend and savings goals. This often leads to surprises, both good and bad. Like you were significantly over budget and will now have to find a way to “make up for it”. Or you lost the opportunity to save 20% more on that contract because you didn’t realize the obscene amount of cardboard boxes your shipping department uses.

Spend measurement and benchmarking is critical to proving your initiatives’ success. Best-in-class organizations have a specific strategy to measure the effectiveness and efficiency of their process. They continuously monitor core KPIs, identify areas for action, and fine-tune the process along the way. They align their measurement strategy with the maturity of their organization and continuously strive to take their efforts to the next level. And these spend samurai are kicking their spend management efforts up a notch and delivering on average 11% more in savings than the market.

So, are you ready for your midyear check up? Join Sourcing Interests Group, Coupa executive Ravi Thakur and renowned AMR analyst Mickey North Rizza for “Big Bang Benchmarking”, a live web event on Tuesday, August 3rd at 11:00am Pacific / 2:00pm Eastern. During this session, you will discover the secrets to showcasing your success in 2010 including how to develop a long-term strategy, how to calculate the 10 must measure metrics and will even provide market benchmark data where you can see how you stack up.

Register for this event today and get your spend measurement questions answered by the experts. Oh, and don’t forget to floss.

Over the last several days, I’ve spoken with heads of Procurement from across diverse industries – retail, business services, construction materials, financial services. Each one was interested in learning more about the benefits of e-procurement, but each was also concerned that embarking on an eProcurement initiative would be a career-ending move, rather than a career-enhancing one.

Their primary fear was grounded in something they cannot directly control – adoption by end users spread across various locations. In their collective experience, employees avoid using the existing ERP or other procurement software modules because they are hard to use. User interfaces are not intuitive and require extensive training. Companies can hardly afford the change management processes required to consistently train new and existing employees on how to use the system. Which begs the question – why is adoption by end users so important in the first place? After all, don’t most companies have preferred suppliers and contracts already in place? Of course they do – but there is no way to ensure that employees are buying through preferred suppliers. Since existing software solutions are so difficult to use, employees are unable to find what they need and resort to maverick spend. Naturally, the hard fought savings are lost!

The adoption challenge didn’t stop there – they were concerned about effect on suppliers. How is it going to affect the way suppliers do business ? Will it affect the favorable pricing and processes set up with key suppliers?

Clearly, the success and failure of eProcurement initiative depends on adoption! The only way to ensure adoption is to pick a solution that is usable like other applications that we use daily – Google, iPhone. This will alleviate the need for user training and result in organic adoption. Lastly, suppliers should not be required to join a network or change their way of doing business.

Bottom line: eProcurement can indeed be career enhancing move – if done right!

If the late 90’s and early 00’s were the best of times for banks; the financial meltdown and resulting recession we are experiencing today, could only be described as the worst of times. And for bureaucracy driven, process paralyzed banks the times are about to get a whole lot tougher thanks the sweeping financial reforms passed on Capital Hill.

But let’s remain optimistic, because beyond the gloom and doom, end of times headlines, there is hope. Recently I had the opportunity to talk with two different financial institutions that are redefining procurement within their organizations. It’s inspiring to hear how they are using Coupa to build smarter savings – and smarter spending – banks.

Berkshire Bank

Berkshire Bank didn’t have long to get their 42 branches on one centralized e-procurement platform – in fact, they just had 6 months. Armed with a list of requirements from the different users and branches, Dee Harrish, purchasing project manager, set out to find a solution that would eliminate their costly, inconsistent manual processes while ensuring efficiency, accuracy and regulatory compliance. Dee landed on Coupa, who could not only meet her rigorous list of requirements, but could also meet her aggressive timeline – and things couldn’t be better.

“Prior to Coupa, our procurement processes were highly manual. Coupa provides greater visibility into, and control over, our spending. Now we have full automation from requisition to invoicing, with tight integration into our back-end financial systems. Employees are using the solution, and the feedback has been universally positive. A key benefit is that Coupa provides audit trails, which track our approvals to ensure that we comply with regulatory requirements. Additionally, Coupa helps us identify savings opportunities by using the tool to effectively analyze our spend.”

Tesco Bank

Tesco Bank faced an entirely different challenge. Though under intense timeline pressures – they were given 3 years to complete their procurement migration – unlike Berkshire Bank, Tesco Bank had a completely clean slate to start. There were no existing processes or platforms in place. This was an opportunity to do it right, from the ground up.

Join Tara Dibble, head of indirect procurement at Tesco Bank, and Coupa on July 29th for a live web event where Tesco Bank will share their incredible story of how they seized the opportunity to create a smarter savings – and smarter spending – bank. Register today.