Tag Archives: procurement technology

The Efficiency Value of a Marketplace Approach

Procurement talks a good game when it comes to efficiency. However, few are walking the walking when it comes to taking real action.

marketplace-efficiency

This is the second in a three-part series of posts. If you missed my first, ‘Instant Access to Supplier Information a Step Change for Procurement Productivity’, click here to read it.

In that post, I presented a challenge to anyone who assumes that having technology guarantees progress. Make sure your technology is earning its keep and not just putting your inefficient, manual methods online.

In this post, I’m going to take the same approach to efficiency.

What is Real Efficiency?

We talk a lot about efficiency in procurement, but we take very few steps to actually improve it. Real efficiency is more than doing more with less. It is also about timing. Sometimes, doing the same task at a different time increases the impact potential of the effort behind that task.

Take risk management or risk mitigation as an example. Addressing risk should be an active part of the sourcing process, not something to be managed afterwards. While risk information is readily available, sometimes what procurement really needs to know what their peers think of a supplier.

That is why tealbook combined internal supplier knowledge, data from Dun & Bradstreet, and aggregate intelligence from your industry peers into each supplier profile. Adding a peer view to the supplier discovery process not only makes it more robust, it significantly increases the trust factor for everything procurement learns.

Addressing risk early is critical. Two of the first opportunities procurement gets to mitigate risk arise during the supplier discovery process:

1. Inviting more qualified suppliers to participate in the sourcing process improves the final award decision.

You’re always going to lose some suppliers to disqualification or elimination. Investing in the discovery process up front decreases the fall-off rate, and ideally presents the team with a larger number of more qualified suppliers to negotiate with and consider for contracts.

2. Looking at supplier-related risk factors before the sourcing process begins makes it possible for procurement to push back on requirements if they are too confining.

Procurement tries to be good about collecting risk information in RFx’s, but many times it is too late to change the direction of a project based on what the team learns from suppliers.

By doing an early assessment of the available pool of suppliers and their relative risk before going to market, procurement creates an opportunity to widen the pool of prospective suppliers.

Making Efficiency Proactive

In addition to thinking about the timing of tasks and what impact that has on efficiency, procurement needs to look for opportunities to combine activities.

If you are going to conduct a supplier discovery exercise anyway, why not search a platform that incorporates third party risk data in addition to supplier information and buyer knowledge? tealbook incorporates D&B information into supplier profiles so procurement see which suppliers offer the product or service they are looking for in one place.

Taking efficiency to a more proactive level, why not pre-vet hundreds (or thousands!) of suppliers across a wide range of categories? With the right technology and information, procurement could, in essence, create a custom virtual marketplace of suppliers that are ready to bid at any given time.

A broad approach drives efficiency because the suppliers are already vetted and risk is moved up in the process without adding a step or a delay. This is an ideal application of technology because it enables something procurement can’t do on their own on the same scale.

Value creation goals notwithstanding, good procurement teams want competition as well. Without the supplier discovery pre-work being done, procurement is stuck with the same old suppliers time and time again.

And there is nothing efficient or strategic about that. Marketplaces are certainly not a new idea, but they are a path to efficiency that we should look for ways to improve.

Now that I’ve shared my point of view on scalable technology and marketplace efficiency, I’m going to wrap this series of posts with an optimistic view of procurement’s forward looking potential.

Gregg Brandyberry is a recognised pioneer in procurement and sourcing technology. He has over 40 years experience in industries such as automotive, textile, manufactured goods, electronics and healthcare.
He is the former Vice President of Procurement – Global Systems and Operations for GlaxoSmithKline, and a Senior Advisor for A.T. Kearney’s Procurement and Analytic Solutions organisation.

3 Ways the IoT Can Benefit the Supply Chain

We’ve heard about the IoT disrupting our personal and home lives. But where will these technologies really stand up in the supply chain?

iot in supply chain

We’ve come to know the Internet of Things as a technological phenomenon that is revolutionising many ways of life. The idea is that devices and computer systems can communicate and work with each other, and make things easier. And we’re starting to see applications in all manner of places.

The IoT is making exercising more intuitive, making homes more secure, and making offices and hospitals more efficient. But these benefits are only scratching the surface. There are also many IoT benefits that are less visible to the general public. One that is becoming fairly interesting is the effect on business supply chains.

This may not be the sexiest application of the IoT, but it’s one with significant potential to change the nature of big retail companies and even lower costs for consumers. Here’s how it’s happening.

IoT In Production Plants

IoT sensors are allowing manufacturers to collect key data from various physical spaces within production plants and manufacturing facilities.

Sensors can be used to monitor machine temperatures and send automatic alerts to problems by way of changing lighting. They are also able to monitor the use of safety equipment (and the condition of that equipment) automatically.

Additionally, factory conditions such as temperature and humidity can be tracked and controlled. Individual pieces of inventory can be tagged the moment they’re created, so as to be kept track of in the future. Other functions more typical of ordinary office environments can also come into play, like security and communication measures.

It’s easy to see how basic IoT sensors can help to automate some of the trickier aspects of production that kick off the supply chain process.

IoT On The Road

Perhaps the most fascinating impact of the IoT on supply chains is occurring on the road, in shipping vehicles. Tracking sensors on individual pieces and crates of inventory help companies to “watch” those materials until they arrive at retail locations or other points of sale.

However, there are also IoT measures being put in place to keep fleet vehicles operating safely and on schedule.

By outfitting fleet vehicles with high-end GPS and WiFi, companies can provide managers with real-time sharing of vehicle diagnostics and more important data. These devices can keep track of vehicle performance, driver activity, and routing information, effectively automating the management and scheduling process that was once a headache for everyone involved.

Vehicles can be repaired precisely when needed, and be directed on the most efficient routes. Plus drivers can be kept on reasonable schedules, and held accountable for their own tendencies on the road.

IoT In Stores

Finally, once the product has been shipped to retail locations, there are also IoT-related technologies in place to monitor that selection for the sake of restocking inventory when necessary.

The IoT has the potential to drastically alter numerous aspects of the retail experience. However, when it comes to the supply chain, “smart shelves” are making the biggest difference.

These are shelves that can recognise when inventory is getting low and send automatic alerts to store managers, or even directly to production facilities, communicating orders and keeping the store in supply.

That about covers an overview of how the IoT is changing the supply chain in retail businesses. On the business end of things there’s no telling how much these changes can cut costs and improve the speed and accuracy of production.

And for consumers, those same benefits should ultimately translate to fair prices and consistently stocked store shelves. All in all, it could be one of the more impactful mainstream IoT developments.

Blaine Kelton is a programmer and freelance writer currently living in Beverly Hills. From technological advancements to new albums by favourite artists, he’s eager to just write and get his work out there.

5 Common Failures in Technology Implementation

Technology should provide huge benefits in procurement. So why do so many projects fail at the implementation phase?

failure at implementation

 

Join our webinar on the 7th of November and find out how to drive successful technology implementation.

If you’ve been a procurement professional for any length of time, this is probably a familiar situation.

Your company has decided to implement new technology in the procurement function. A date for go-live has been set, and some training has been arranged for current users. There are grumblings about yet another system to be used, but that doesn’t fit with current procurement processes.

When you ask around, very few, if any, of the department have been asked to input into this decision. The company certainly doesn’t seem to have spoken to people who are actually going to be using the system.

When the time comes, the technology is implemented, and training is rolled out. The procurement team accept the new system (perhaps grudgingly), and start to use it.

Within a few weeks, the (very short) honeymoon period is over, and the issues and bugs have appeared. Far from improving or simplifying the processes, the technology isn’t working out as planned. It’s begun to make even simple tasks more difficult.

Within months, the shiny, new, purpose-built technology is being used for the bare minimum that the procurement team can get away with, and they have begun to come up with novel ways to work around the system.

Difference Between Success and Failure

While situations like this may be decreasing in number, they still occur with uncomfortable regularity. When it comes to technology across organisations, not just in procurement, implementation is the stage in the process that is most associated with the success or failure of the project.

Ahead of the free webinar between Oracle and Procurious, Darryl Griffiths, Acting MD at Enrich, and implementation expert, shares his key reasons for why implementations fail.

  1. Alignment of Strategy and Technology

Ensuring that the business, procurement and operational strategy all aligns is the first step in this process. However, too often, strategies aren’t aligned, or have been created in isolation without proper discuss.

Without fully understanding the strategy, the objectives for the technology implementation can’t be fully understood. This can lead to the wrong technology for the project being selected, and not being fit for purpose against the objectives.

  1. Lack of Change Management Plan

The plan for how the technology is going to be implemented should be laid out clearly from the start. Frequently, organisations work towards their go-live date, but give little thought to the short, medium, and long-term plan following the launch.

Too few plans take into account training requirements, or how new users will receive this training when they start in the department. 

  1. Lack of Communication or Champions

Without good communication, it’s likely to be a fight to get buy-in. Without buy-in, the implementation is doomed to failure.

Organisations don’t take into account the end users of the technology. This leads to the ‘why’ of the project never being disseminated.

This leads to the perception of new technology being forced on them, and breeds resistance. This resistance undermines the project, creating a situation where users are expecting the technology to fail, rather than having an open mind on how it can help them.

  1. Poor or Out-of-Date Data

The old technology didn’t work properly because the data wasn’t right. But there’s no data clean-up been carried out before the new technology is implemented. Which means the new system won’t work any better.

There is a vast amount of data available to procurement, which technology is frequently implemented to help sift through. However, putting poor data into the system, as well as not keeping the data up to date, will inevitably result in bad data out.

  1. Built to Last vs. Built to Change

In years gone by, products were built to last. It was common for things to last 10 years or more. However, in a marketplace and environment where agility and flexibility are valued, a built-to-last system may not fit the bill.

If the system hasn’t been built to be changed easily, then it’s going to go out of date very quickly. And it’s unlikely that budget will be available for a new system after 1-2 years, when it was designed to last 10 years.

Secret of Success

It’s easy to pin-point where technology implementation fails, but far harder to ensure that it’s a success from the outset. However, if the right strategies are in place, and all the planning is carried out, procurement gives itself a greater chance of success.

If you want to find out more about how to manage your implementation, and hear more from Darryl on how you can set yourself up for success, join our free webinar on the 7th of November.

Darryl will join Oracle Business Development Direction, David Hobson, in a discussion chaired by Procurious Founder, Tania Seary. The webinar is aimed at helping Procurement Leaders come to terms with volatility, understand the role and benefits of technology, especially cloud, in procurement strategy, planning and decision making.

For more information, and to register, visit our dedicated page.

Why Instant Supplier Information Access Can Fire Productivity

Procurement needs to maximise its productivity if its going to meet business needs. Having access to real-time supplier information is a step in the right direction.

supplier information productivity

When I started my career in procurement over 40 years ago, we used notebooks to store all of our supplier information.

Go ahead – be shocked or have a little chuckle about how ‘primitive’ we were! But guess what? Things haven’t changed nearly as much as people like to think.

Today, most procurement teams have modernised their supplier information management by using some type of a shared database. These solutions, while centralised and searchable, still rely on internal team members manually entering and then searching for supplier knowledge.

And while most companies are doing the best they can with scarce resources, it is important to remember that it is possible to make progress without actually resolving any key business issues, or becoming the slightest bit more strategic.

Value in Scalability

We had notebooks and you have a database. But if the information isn’t (a) current and (b) fully leveraged, it doesn’t really matter where it sits.

The true transformative value of any technology is its scalability. How much of an effect does it have on the amount of work each person can accomplish?

tealbook, a platform that centralises supplier provided information, internal supplier knowledge, data from Dun & Bradstreet, and aggregate intelligence from industry peers, has set this challenge of scalability as their target.

Making it possible for procurement to accelerate the discovery process through instant supplier recommendations, and improving the match between business needs and prospective suppliers, gets at that need for scale.

With better suppliers available sooner, procurement can achieve a step change in their productivity. This also helps to move the needle on the all-important metric of spend under management.

Productivity – Focusing Your Efforts

Let’s say you’ve got 20 people working 40 hours a week, 50 weeks a year. That gives you a maximum of 40,000 procurement hours per year. You’ve got to ask yourself how many of those hours the team spends looking or searching for something to satisfy an information need. Every hour not spent on value-added activities is an opportunity to improve productivity.

When we look at procurement’s productivity in the context of supplier discovery, we have to focus our attention on how much time procurement spends searching for the right suppliers before a sourcing project can get off the ground.

In order to decrease the time required for discovery – and increase the quality of the suppliers invited to participate – we need to make sure we’re searching a resource dense with suppliers and supplier information, preferably using a common language search rather than archaic codes.

Whether you’re looking at a supplier discovery platform or a more traditional supplier marketplace, the point is to focus your efforts where they are most likely to generate positive results.

There’s a huge advantage in somebody being willing to take the time to centralise the right information and maintain it. The resulting resource will make a dramatic improvement to what procurement is able to deliver, how often we can deliver those results, and just how BIG those results are.

There aren’t many companies adding employees, so if you can find a solution that dramatically changes the amount of work each employee can do, you’ve really got something strategic.

Meeting Real-Time Supplier Information Needs

Today, an increasing number of corporations want to believe that their procurement teams operate strategically. As that reputation spreads, more and more projects will come from the business.

In order to handle the increased demand for our time and skills, procurement has to be really good at making decisions about how to spend time and allocate scarce resources.

If we are going to facilitate purchases, strategically source every category, AND meet the real-time needs of the business, technology has to be capable of actual heavy lifting, not just function as an electronic supplier notebook.

In my next post, we’ll go beyond the supplier information modernisation process to look at the strategic value of a marketplace approach.

Gregg Brandyberry is a recognised pioneer in procurement and sourcing technology. He has over 40 years experience in industries such as automotive, textile, manufactured goods, electronics and healthcare.

He is the former Vice President of Procurement – Global Systems and Operations for GlaxoSmithKline, and a Senior Advisor for A.T. Kearney’s Procurement and Analytic Solutions organisation.

European Business Abandoning Manual P2P Processing

New research has revealed a move by European business towards a completely digital P2P environment.

automatic p2p european business

Canon, world leader in imaging solutions, recently announced that just 3 per cent of Western European businesses believe that manual P2P processing will continue into the future.

The finding originates from The Future of Purchase to Pay (P2P) 2016, a Canon trends report compiled by ICM Unlimited. The report asked finance and procurement leaders how they believe the world of P2P would to evolve over the next few years.

The study, conducted by ICM Unlimited, and developed in conjunction with Purchasing Insight, is the result of 706 online interviews with business influencers and decision makers spanning 12 European markets.

The respondents were sourced from board level directors within corporate finance and procurement functions, and from businesses of varying sizes.

Spend Under Management?

Most businesses report that they have yet to fully control spend using Purchase Orders (PO), while half say they have less than 50 per cent of their spend under control. Despite this, however, there is almost universal agreement that the P2P process will be automated in the future. Over half of the European companies have already begun that journey.

The report found that while there are concerns around cost and productivity, businesses seem motivated to explore how P2P technology can help. Half of finance decision makers (50 per cent) feel their department productivity is below average, while 42 per cent of procurement leaders feel their department is operating below the desired level of productivity.

However, the trend towards automation in finance sees no sign of slowing down. 23 per cent of European decision makers are saying that their businesses will achieve full digital transformation for P2P in the next two years.

It seems businesses view manual processing of P2P as wholly or partly to blame for the situation. This is shown by 10 per cent of businesses in Europe saying they have already achieved full digital transformation of P2P.

Increasing European Collaboration

Rachel Griffiths, Business Process Consultant, Canon UK, comments: “In this challenging market, European businesses clearly feel that they need to get a better grip on P2P. They want to be able to access and pay for goods and services in the most cost effective and efficient way possible.

“Efficiency and productivity are key elements to any successful business. And technology is seen as the best platform through which to improve in these areas. In order to boost these factors through technology, businesses will need the support of trusted partners.

“At Canon, our expertise at providing cutting-edge technology not only solves business challenges, but supports the delivery of superior results in any business function, including P2P,” Griffiths said.

This view was echoed by Pete Loughlin, Managing Director at P2P consultancy firm, Purchasing Insight.

“The selection of a partner for P2P is very important and European businesses want to collaborate directly with solution vendors for this challenge.

There is a remarkably strong sentiment towards working with a single vendor across the entire P2P spectrum, rather than cherry picking point solutions. This ability to work with a single partner is what will provide end-to-end P2P solutions and services, under several delivery models. This will be crucial to the successful transformation into a P2P excellence organisation.”

Communication Queen – Not Your Typical Procurement Pro

There’s a step change coming in the procurement technology and software industry. And communication and relationships will be the central pillars of it, says this Millennial.

Communication Queen
Simona Pop

There is step-change coming in procurement, and the change is going to be keenly felt in the procurement technology and software industry. But for this change to take effect, it needs support on both sides of the aisle – buyer and supplier.

Simona Pop, Head of Partnerships & Global Communication at InstaSupply, is not your typical procurement professional.

She’s one of a new breed of professionals involved in procurement and supply chain, who believes change is on the horizon, and that it can’t come soon enough.

A tattooed Millennial, with a stake (both monetary and emotional) in the company she works for, Simona presents a refreshing view on buyer and supplier relationship management, and believes in creating emotional connections with clients.

Not only that, but she also walks the walk when it comes to leveraging social media in business.

Procurious caught up with Simona, and chatted to her about her career, her approach to social media, and why she believes we shouldn’t have to leave the real-time efficiencies of our personal lives at the office door.

Tell us a bit about yourself – how did you get to where you are today? 

It has to be said, my career trajectory isn’t what you might call straightforward. I got out of school thinking I was going to be in advertising. Then I moved to the UK and started working with Brakes, the food supplier, in a sales role. I then went 180 from that path and started working in events.

Finally, I started working with InstaSupply as Head of Partnerships and Communication. One thing lead to another really, and in the end, it makes a lot of sense.

I love communication and building relationships. That’s what makes the world go round, as far as I’m concerned. My communications background is ultimately the driving force behind my take on business.

You’ve recently won your place at Virgin Disruptors – congratulations!

Yes, I am very excited about it. It was all about presenting my vision on what industry needs disrupting and how I would do it. I went straight to the core and illustrated how ALL business needs disrupting.

You can see my video below. It’s all about changing procurement and finance. They are the engine of each and every business so they need to be as well oiled as possible.

What role did social media play in the award?

As with every bit of communication I put out there, this was also a social affair. I got to chatting with Virgin via Twitter and found out about this opportunity. As everything in social media moved pretty fast, I only had a couple of days to script and create the video in order to stick to deadlines. I then uploaded it on YouTube and shared it via Twitter again.

I am a true believer in the power of social and its ability to not only bring us information in real time but also challenge us to become more creative and innovative. It’s why I am so happy to be part of the Virgin Disruptors community as a technology company.

So many procurement technology implementations fail – why do you think this is?

It comes down to how people interact with the technology and the company providing that technology. Is there a match there in terms of values? Or is it more about ticking a box and signing a three year contract so you don’t have to worry about it?

So many businesses will go for old technology just because someone else in their industry has used it before. Even if it’s not a great fit for them and their staff, they will implement it anyway just to tick that “tech” box and consider it done.

More often than not, businesses pay the price tag of an Aston Martin, and end up using it like a second hand Ford.

The fact that back office operations, procurement and finance technology involve so many different roles and levels of seniority, makes it paramount that the interface and functionality appeals to all age groups.

There shouldn’t be a difference between the way we interact with brands in our personal lives, and brands that we see at work.

What are the key changes you think need to be made? Can we make procurement/B2B software more like B2C counterparts?

The way I see it, every business relationship is a partnership – it’s not a case of sell and move on. As a tech supplier, you are going to be working closely with your client, as they will interact with your product every single day.

You want to allow them to work smarter, be more efficient and ultimately make their lives easier. You need to provide top notch tech, but also real time support. There’s no place for a helpline that keeps people on hold for hours, or an email they get a response to in three months. That would be unacceptable in B2C nowadays!

There needs to be a shake-up. We need to remove the jargon, the boring pages of bland text, the hieroglyphic appendices, and the contracts that tie you into five years, whether you like it or not.

Software providers want partners, not prisoners. We are here to simplify buyer-supplier relationships, and make life easier for everyone involved in running a business, regardless of role and seniority. Ultimately we want to support them in growing their business, and having a better quality of work.

After all, why should we leave all the efficiencies of B2C, our personal life, at the door, when we get to work?

How to Stay Ahead of the Curve with Process Automation

Traditional supplier relationships are under scrutiny as organisations assess capabilities for the future. Could process automation help procurement teams stay ahead of the curve?

process automation
Image courtesy of Opus Capita

ProcureCon Europe 2016 is rapidly approaching! The ProcureCon team has been investigating some of the fast-moving issues which are affecting CPOs across Europe today.

Perhaps more than any other factor in the industry right now, process automation and advanced analytics are having a huge effect on the ability of Procurement teams to deliver improved cost performance.

This changing landscape calls into question traditional supplier relationships. Of the CPOs and Heads of Procurement we interviewed in advance of the event, 76 per cent told us that they are concerned about the ability of their existing supplier base to serve their business needs in future.

At the same time, more than half of our research participants think that implementing automated procurement is a high priority for their business. This raises questions about how best to manage your supplier network to make sure that you’re ahead of the curve when it comes to process automation.

We spoke to Kelly Babbit from jCatalog and the Opus Capita Group to find out more.

ProcureCon: How is digitisation and process automation affecting CPOs today?

Kelly Babbit: In the digitised, networked economy, companies find themselves in a changed competitive field. The game is no longer primarily based on unique business relationships.

The success of a corporation is premised on the performance of its network of supply chains – its entire business ecosystem. Corporations are looking to strengthen relationships, and create new forms of collaboration – and gain control and compliance over their extended business processes.

It is significant that more than half of respondents to this research gave high priority to the implementation of automated procurement processes. Furthermore, we expect a future adjustment to the demand drivers and criteria used for selecting P2P service providers.

This trend is due to a far-reaching shift in business priorities toward digitisation and automation.

What kind of processes are we talking about?

Progressive solutions cover the complete process from sourcing to payment – from managing the first request for quotations (RFQ) to optimised working capital management and supplier settlement.

This is where the traditional view of P2P processes needs to be expanded. Enterprises will no longer evaluate the quality of solutions with a sole focus on basic procurement functions. Solutions need to be part of a global strategy and based on pivotal interconnections between buyers and suppliers.

As a result, the responsibilities of the CPO and CFO functions will begin to converge. Cloud based SaaS solution providers will need to support this interconnection with a global perspective and inclusion of diverse company stakeholders.

Connecting and automating processes from sourcing through to payment will become the expectation of leading companies.

What features should CPOs / CFOs be looking out for in a source-to-pay solution?

Cloud-based business network solutions must support effective sourcing, procurement, invoice, and payment automation. This includes implementation and adoption across their global business.  Some of the key features to look out for are:

  • Complete transparency, real time control and compliance with full audit trails across the entire source to pay process.
  • P2P automation and integration of the purchasing department with the accounts payables department. Plus full visibility to all purchasing and accounts payment data.
  • Visibility to company spend with total cost monitoring and supplier performance tracking as well as contract improved contract compliance.

Thanks very much for your time, Kelly.

To read the full results of our research amongst 100 CPOs and senior procurement executives, download the Procurement Challenges report here.

ProcureCon Europe, now in its 17th year, is Europe’s most strategic procurement conference for CPOs and senior procurement executives. See the full range of topic and speakers at the event here.

Cloud, Not Laughter, The Best Procurement Medicine

A spoonful of Cloud makes the medicine go down. Healthcare patients in England could benefit from a move to Cloud eSourcing.

laughter medicine

This article was written by Daniel Ball, Director at Wax Digital.

Healthcare organisations are under constant scrutiny to deliver high quality care to patients. In England, it’s The Care Quality Commission which regulates all health and social care services to ensure fundamental standards of quality and safety are met.

The findings of its reviews are published to the general public. This puts organisations not coming up to scratch at risk of suffering from a negative public reputation.

Improving Quality of Care

However, help is at hand from The Healthcare Quality Improvement Partnership (HQIP). The organisation works with healthcare organisations to identify areas where quality of care can be improved.

The HQIP is an independent organisation responsible for managing clinical audit contracts on behalf of NHS England. It was launched to promote quality in healthcare, and, in particular, to increase the impact that clinical audits can have on healthcare quality improvement.

Commissioning and managing clinical audits means having to source a range high quality external experts to carry them out. To do this, HQIP recognised that best practice procurement tendering processes were needed to to run an audit.

HQIP saw the value in moving to an eSourcing platform so that it could speed up the procurement process. It knew that if it was able to source experts quicker and do away with paper-based, manual tender processes, it could save itself valuable time and resources.

Moving to the Cloud

HQIP decided to go with Wax Digital’s cloud based web3 eSourcing. This allows the organisation to publish tenders electronically and make use of existing templates. It also enables suppliers to submit responses online.

The system also offers a mix of automated and manual scoring facilitates, with subsequent contract awards also taken care of electronically via web3.

Its project management function also allows HQIP to plan its eSourcing activities so that all relevant information is stored in one central place, which can be easily accessed by system users.

Judith Hughes, interim Head of Procurement at HQIP said: “As we’d aimed for, Wax Digital web3 has greatly improved our processes. Moving away from paper-based tendering has significantly reduced the time it takes to review and award teams for projects.

“It has also helped further ensure our quality guidelines are upheld and we now have a much more efficient way of engaging with our suppliers and them with us.”

An increasing number of healthcare organisations can benefit from the speed and efficiencies offer by cloud-based software. Innovation starts within the supply chain. By rolling out eSourcing technology, HQIP enjoys a more efficient supply chain for audit management. This in turn can aid healthcare organisations meet required care standards, and improve the quality of service for patients.

Stimulating Competitive Bidding With Traffic Light Feedback

What does a traffic light have to do with the sourcing process? When you’re considering sharing information, it might be a good way to retain a balance.

Traffic Light

RFX processes can be frustratingly opaque for suppliers, particularly in the private sector.

Submitting a bid can be like trying to play a game of darts in the dark. After the dart leaves your hand there’s simply no way of knowing if you’ve hit anywhere near your target. And frequently there’s no response until the buyer informs you that your bid hasn’t been successful.

Don’t Give Away Too Much

Why are buyers typically so hesitant to give feedback? It may be due to a perception that knowledge is power, and giving away too much information will cause you to lose your advantage. To a certain extent, this is true. Too much granularity might allow the supplier to determine the target price necessary to win.

Similarly, giving away too little will cause your supply base to become frustrated and disengaged with the sourcing process. What buyers need to achieve is a balanced response, giving just the right amount of feedback to stimulate the supplier into giving a further discount.

A little bit of ambiguity can go a long way towards stimulating aggressive bidding behaviour, especially for suppliers who are aware that they’re in second or third place.

In a thoughtful article on the pros and cons of supplier transparency, Charles Dominick explains that a high level of transparency (through feedback) will help suppliers focus on what your needs are, instead of having to guess.

Transparency fosters open communication, collaboration and continuous improvement, and will help build your reputation for fairness and impartiality.

Finding a Better Way

Speaking at SciQuest’s Next Level Conference in Nashville, solution consultant Jason Hochreiter explained his organisation’s “Expressive Feedback” feature, which is a part of the Advanced Sourcing Optimizer module.

“Buyers need to get into the mindset of suppliers during the RFX Process”, he says. “Greater visibility of how their bid compares may actually help stimulate competitive behaviour and potentially lower bid prices during a sourcing event.”

SciQuest’s Expressive Feedback is named as such because it’s highly configurable, meaning that the buyer can choose when, how and what feedback to give suppliers during the sourcing event.

For example, the buyer may choose to only give feedback after the second round of bids, either sending out specific comments or using a green, yellow and red traffic light system to show at a glance if the bid is competitive, non-completive or significantly non-competitive.

Using the Traffic Light For Fast Decisions

Colours are a powerful tool to show suppliers at a glance how competitive they are, and if used intelligently, can encourage suppliers to make an impulsive decision to lower their bid.

Green: Consider what you need for the traffic light to show “green” – what does this actually mean? It could signal that the supplier’s price is within 10 per cent (or whatever percentage the user configures) of the target price. Or it could mean that they’re within the top five bids, without giving away their actual ranking.

Keep in mind that you wouldn’t want to alert a supplier to the fact that they are the cheapest, as it would almost certainly stop them from putting in a lower bid.

Yellow: This is where the psychology of feedback comes in. Hochreiter explains that it’s human nature to care about the loss of something (such as moving the traffic light from “green” to “yellow” status). This may prompt a fast decision to attempt to regain that status.

A supplier, seeing that they’ve slipped from the green bracket into the yellow bracket, may quickly submit a cheaper bid without considering the longer term implications of this action.

Red: Hochreiter cautions against using “red” for a supplier that you are interested in retaining. “If they see red, it’s likely that they won’t update their bid but assume instead that they are out of the race. Adjust the range as needed, so they’ll see yellow and will be more likely to compete.”

For more information about Advanced Sourcing Optimizer, please visit SciQuest website or contact SciQuest.

Lisa Malone, General Manager Procurious, was reporting from SciQuest Next Level 2016 last month, bringing you all the best bits.

From Drowning in Paper Contracts to CMS Utopia

Lack of visibility, time-consuming manual processes – it’s an all too familiar story in procurement contract management. One university shares their journey from contract chaos, to CMS utopia.

CMS Utopia

There are few procurement professionals in the world who haven’t dealt with paper contracts at some point. And very few, if any, who would look at this experience with any sort of fondness.

For the longest time, contract management has been a labour intensive process, with myriad issues caused by the use of paper contracts.

Every business suffers from the same issues, but not every business takes the steps to make a real change. We can all learn a thing or two from North Carolina A&T State University.

Drowning in Paper

North Carolina A&T starts as an all too familiar story, as you might imagine. NC A&T is one of the USA’s top historically black colleges and universities. It employs over 2,500 people, and educates over 11,000 students at any one time.

With an award-winning faculty, and programmes that focus on community engagement, it’s very much in demand.

However, it suffered from the same issues as many of its competitors. A manual contract management system (CMS), with little or no visibility on contracts, and an average of over 15 days to execute a contract.

At Next Level 2016, Nikki Williams, Director of Procurement Services at North Carolina A&T, talked candidly, and all too familiarly, about her experience of the process.

This included the process of scanning all the pages of a contract, walking (quite literally) to the third floor for signatures, and, of course, the inability to find a contract when it was needed.

On top of this, 99 per cent of the contracts were fully executed by a third party. Although the university would sign the contract, they would never get a signed agreement back from a supplier, and therefore never have a fully executed contract.

Contracts would rarely come back from the third party, and when they did, there was no repository to store, and find, existing contracts.

Chaos to CMS Utopia

Sharing their journey from contract chaos, to contract management utopia, Nikki explains their key goals were to:

  • Optimise the CMS process by:
  1. Eliminating paper contracts – this was an enterprise business goal for the entire university
  2. Reduce contract execution time from 15+ days to 5 days
  3. Reach 100 per cent fully executed contracts, with signatures from both parties
  • Deliver insights into the CMS process with:
  1.  A mechanism which tracked each contract throughout its life
  2.  Creation of a centralised repository for all contracts

Nikki shared the before and after implementation workflow diagrams – and the differences were startling. Rather than a heady mix of workflow rectangles, decision points and dotted lines, today’s contract workflow is a blissfully simple diagram. There are 4 task boxes, one approve or reject decision point, and only forward motion.

Full Steam Ahead

Using these forms, the procurement team can see that the request template is all ticked green. The form ties all the required, and specific, approvers to the workflow. Best of all, it’s fully automated.

The request form confirms that the supplier is not a student nor an employee (who they are not permitted to contract with), then channels it through the various approvers. All requests are also tracked through TCM (Total Contract Manager) by form number.

Once the request form is turned into a contract, a contract number is created, and tied to the forms so that every stage can be linked together. Once the vendor has signed the contract, it returns to TCM, which acts as the central repository. The system even completes basic information such as vendor names, department names, and approvers automatically.

The university now has a fully complete request workflow. The purpose of contract, department, and other information is contained within the request document. The contract goes to the appropriate person to approve or reject, and on that basis, procurement creates a contract. DocuSign is used to get both parties to sign off on the completed contract.

Challenge of Change Management

Asked about the roll-out of the process, Nikki acknowledges it has been a long one.  “We’re not just changing the workflow process, but we’re changing the contract policy at a Trustee level. Changing contract policy is driving the roll out, then we can rock & roll!”

For more information about Total Contract Manager, please visit SciQuest website or contact SciQuest.

Lisa Malone, General Manager Procurious, was reporting from SciQuest Next Level 2016 last month, bringing you all the best bits.