Deborah R WilsonIt’s been an especially wonderful week this week in my work life, because I’ve had the privilege of speaking to a number of reference clients for our upcoming e-procurement rating document. As a part of our due diligence in rating vendors, we survey and speak with as large a number of user clients as we can stand! Doing reference work is usually an incredible experience because you get to hear about the diversity of use cases and richness of experience organizations have with a solution type.
One of this week’s e-procurement reference calls was an oil & gas company using an e-procurement solution to buy pipe, fittings, bolts, nuts, rags and soap. This organization heavily uses blanket order capabilities in their solution, and they [very creatively] support an in-house, third-party-run storeroom with their e-procurement system. Some of their challenges include integrating with a separate e-invoicing platform, and managing inventory given that they do things like buy pipe by the foot but store it by the joint. Another reference couldn’t have been more different. This European public healthcare agency uses an e-procurement solution to buy everything from IT equipment to hospital supplies. Their shared service implementation supports multiple business units, and their implementation houses several hundred catalogs. This health group also uses its e-procurement solution to buy hourly services. “Just put in clerical assistant as a product in a catalog with his or her hourly rate as the price, and then buy the number of hours worked,” said the reference when I asked him how it works. While he admits that it may not be elegant, it does get the job done.
Calls like these remind me not only are e-procurement systems used very differently, but also that there is quite a bit of differentiation in the market today across the solutions. I can’t wait for next week for more reference calls. And it’s a good thing . . I have dozens of calls to go . . . . .
News
Zycus continued making inroads in the American higher education market – as evidenced by its recent deal to provide iSource and iContracts to Liberty University in Virginia.
Insider Media Limited ran an interesting piece this week on fears within the clothing manufacturing industry that reverse auctions are ruining vendors. Although the commentary provided by Jeff Banks could just be sour grapes about losing out business to a competitor, the article should be a good reminder for buyers that price is only one factor to consider when making an award.
Maybe I’m late to the party but I just saw one of the funniest videos I’ve ever seen. It pokes fun at some questionable procurement practices – and unfortunately some of this stuff is all too real, which I guess is what makes it funny, no? See http://www.youtube.com/watch?v=R2a8TRSgzZY
Category: Uncategorized Tags:
3 responses so far ↓
1 Mike Kanze March 19, 2011 at 1:48 am
Debbie,
>Maybe I’m late to the party but I just saw one of the funniest videos I’ve ever seen.
Funny, yes. And very sad. I know it’s hyperbole but it is a compendium of some of the sleaziest and short-sighted practices one encounters in procurement.
One of my consulting clients once demanded similar of me. I terminated the contract immediately, foregoing what would have been a very nice fee. Two years later the client went bankrupt, in part due to the ill will it had generated with its supply base due to such practices.
The above client was an anomaly in an industry vertical otherwise known for generally fair treatment of its supply base. Sadly, though, there are entire verticals where “screw or be screwed” is the standard practice.
It doesn’t have to be this way.
There is a real competitive advantage for the firm that treats its suppliers with respect and fairness, especially in industries where predatory treatment of the supplier base is prevalent. Consistently fair treatment ensures that vendors will come to your door first, with their best offers and latest innovations. These help your firm – and your vendors – succeed where others will struggle and sometimes fail.
Mike
Robert M. (Mike) Kanze, MBA
CPSM, C.P.M., A.P.P.
President
Cornerstone Services, Inc.
Consultants to organization leaders in supply management, administrative change, and management accounting.
2 Andreas Bernhard March 22, 2011 at 9:27 am
I love the movie! All these negotiation techniques put into “real life” situations is an awesome idea!
3 Debbie Wilson March 22, 2011 at 9:35 am
Thanks for the comments. It’s clear that there is a fine line that separates prudent business practice from sleazy business practices. You’ve got to do your best to get a good deal but be fair and reasonable at the same time.