Deborah R WilsonI was just reading an interesting blog on PurchasingNet.com – see http://www.purchasingnet.com/p2padvisorblog/?p=168 . I used to think that voluntary use of an e-procurement system was an OK idea – especially in companies where the culture has been to “empower” requisitioners to buy what they want when they want it and from where they want it, as long as their budget squares up at the end of the financial reporting period. Maybe I’m getting crotchety as I get old – but frankly I’ve changed my mind. Voluntary shmoluntary – if you need good governance BEFORE orders are placed, and you want to direct end users to your corporate contracts, why would you make e-procurement system use voluntary? Because you don’t trust the purchasing department? Because you don’t want to offend anyone? Because what? What other system in any corporation is set up as voluntary? Can you voluntarily fill out vacation requests? Submit expenses? Sign your employee review? I’m beginning to think the voluntary approach is just plain wimpy and a major vote “against” procurement. And actions speak louder than words . . . . . .
Category: Cost Cutting E-Procurement Tags:
3 responses so far ↓
1 Mark McCarthy July 1, 2009 at 2:36 am
The advice we give our clients is… use both…
The carrot is… make it easier to use it than it is to abuse it. This comes down to ease-of-use and relevance of content, but we also have a few other tips and tricks.. like offering an Employee Expenses module to coax users into the system for their own personal gain… i.e. to reclaim their own expenses.
The stick is policy and mandate, but also a few tricks like… a dashboard component on everybody’s home page showing the “top ten non-compliant staff”… nobody wants to be on that one. Or bounding invoices with no official PO number, which has the effect of embarrassing and hassling staff who have by-passed the system. They rarely do it twice when they have had an irate supplier on the phone.
Either appraoch used in isolation is ineffective, in my experience.
2 Debbie Wilson July 1, 2009 at 9:57 am
Interesting – I like it and thanks for the comment Mark.
3 Tim McEneny July 6, 2009 at 3:28 pm
Debbie -
We have customers and prospects that say things like, “We can’t dictate to our end users.” The reason vary from “our people are very entrepreneurial” to “we can’t make Partners do anything they don’t want to do!”
I do get your point that avoiding the Expense Reporting system is not an option in almost every company I know, so why should eProcurement be any different?
Here’s the difference…First, the CFO and his/her staff have tons of clout in every company. If the CFO wants something, it will be done. Unfortunately we run into many CFO’s who a) don’t have the Procurement organization reporting to them and/or b) don’t understand the complexities of Procurement and wish to stay “above the fray.”
Why is this the case? After all, the eProcurement system controls far more expense and capital dollars than the Expense Management system in most companies.
When CFO’s are truly committed to eProcurement and Procure-to-Pay systems, they pay tremendous dividends…and it all falls right to the bottom line.
Enlightened CFO’s understand this and can use the carrot or the stick, depending on their style, to achieve the same result.
If the CFO’s not committed, and the eProcurement Executive Sponsor lacks clout, the carrot may be the only viable option available.