Why Can’t We Get No Satisfaction?

A few days ago we lamented, in song, that we can’t get no satisfaction. Why? Because buyers rarely get satisfaction. Rarely. Why?

Stakeholders are never pleased.

You save them money, they moan and groan that you changed suppliers. You stay with the same supplier and work with them to improve quality, they complain and lay the blame on you for the cost increases. You split the demand across preferred suppliers across geographies to mitigate risk, they lament that now they have to work twice as hard with logistics. And so on.

Management is pushing for savings today at the expense of cost tomorrow.

As we indicated in our post on Once Upon a Time, Not So Long Ago … the primary goal of Procurement should not be short term savings but long term value generation as the name of the game is long term cost control. Besides, savings that are too good to true really are too good to be true and the savings that comes out of one budget category from chasing a pipe dream just inflates another budget category.

They are never enough tools for the job.

Let’s face it, almost 40% of Procurement departments still don’t have any modern Procurement or Sourcing solutions, and of those that have these tools, the number that don’t have a modern spend analysis solution is greater than 40% and the number that don’t have a modern optimization (-backed) sourcing solution is greater than 80%. And let’s not talk about a modern Contract Lifecycle Management (CLM) solution with contract analytics, a modern Supplier Relationship Management (SRM) solution with true relationship and innovation management, or a modern category management and planning solution.

The tools they have are often out of date …

Many companies that acquired on-premise tools last decade are still using the on-premise versions of those tools almost ten years later. While these first generation tools were great at the time, in many ways we are now entering the third generation of Sourcing and Procurement solutions with advanced functionality, advanced usability, machine learning, community intelligence, and other innovations that are the foundation of what will be required to take performance to an 11!

… or provide a bad user experience.

As you might have guessed from our recent onslaught of posts on UX, both in general and specific to e-Negotiation in general, e-Auction, and optimization, many, if not the majority, of solutions out there are lacking in UX to some degree (and many of the older solutions don’t have any semblance of a modern user experience at all!). The most significant barrier to adoption, which is critical to success, is the user experience, so if it’s bad, you would have been better off spending that money on beer-filled Friday pizza parties because at least then your team would be happy one day a week.

In other words, Procurement is a tough job which often offers little, if any, comfort to the seasoned professional trying to make the best of a bad situation. So the least you can do is get them some good tools, use your head and put long term success ahead of short term cash savings, and realize that everything is a trade off and that if you demand Procurement increase the value along a certain dimension, another dimension will diminish. It’s life. Just like you can only ever control two out of three when it comes to time, resources, and cost when doing a project, trade-offs are a reality of life. Procurement will do the best they can, but every hard constraint will hurt you. Remember that.

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