Last week, Tony Bridger gave us a great two-part series which asked if e-Procurement benefits were fact or fiction because it has fallen out of favour with the academics over the last decade, with few toting its benefits as they did when it first hit the scene.
And Tony had some great points. E-Procurement was touted as the panacea for all Procurement woes, but the first generation of solutions did not deliver. Many Procurement teams use systems to negotiate great contracts, but great contracts don’t deliver improvements — execution against them does. The best spend analysis system delivers zilch out of the box — it takes an educated, trained, experienced, intelligent buyer to sniff out the true savings opportunities. And, most importantly, every single buy is just a tiny bit different. And buys that are far enough apart need different capabilities and solutions.
And, most importantly, the best platform in the world is useless if it is not adopted and use by all of the buyers all of the time.
e-Procurement platforms can deliver the benefits they promise, namely an end to maverick spend, approval control, workflow configuration, and spend under management. But only if they are properly implemented, properly adopted, and properly used.
You can search the archives here on SI and over on Spend Matters for a description of the benefits, as well as a description of necessary platform requirements to get those benefits.
But one thing that is not always clear in our past articles, and that should be made clear as a result of Tony’s posts, is that e-Procurement is more than just platform, it’s process. It’s the process of doing a proper event, recording the contract and meta-data in the e-Procurement system, issuing the POs against the contract, insuring the invoices — and shipments — match the POs, and getting approvals before payments. If there are no contracts, and the buy is not big enough for a sourcing event, but over a certain amount, then it’s critical to get proper approvals. All spend haas to go through the system, and, when necessary, get approvals, according to the organizational policies and processes. A proper e-Procurement platform automates that process, simplifies the m-way matches and comparisons and classifies the spend for easy analysis. It enforces a process that saves money, it doesn’t save money out of the box.
And maybe when the academics realized this, and that they were writing about a solution which had no inherent sorcery, they dropped it like a hot potato. Even though there are dozens of companies that have went on record saying they saved millions with proper platforms (which saved them millions because they implemented, and supported, proper processes).