Just as there is no one platform and no one workflow for Supply Management, yet alone even S2P (although the vendors claiming to have such seem to be increasing by the day) — and the only way to make progress is to define the core workflow, identify a set of overlapping/integrating systems to achieve the core workflow, identify vendors that can provide these systems — with enough configurability to allow you to support the necessary variances, and then select those vendors that best meet overall organizational needs and move forward — there is no one starting point.
The starting point, with the ever increasing complexity of systems, processes, and global supply chains, is more organization dependent than ever. One has to take all of the following questions, and corresponding answers, into account … and more!
- What does the organization have now for systems and processes?
- Where is the organization in its Supply Management journey?
- What is the talent profile — what is its average and collective IQ, EQ, and TQ?
- What are the organization’s biggest pain points?
- What are the organization’s top pressures?
- What is the organization’s budget? Can it be extended? Leveraged?
- What resources does the organization have available to support implementation and change management?
- What resources and programs do its current, and prospective, vendors have to help?
- What professional organizations and associations can it lean on for support?
- What leading research and advice can it access?
- And so on.
It’s tough. Typically, an organization makes the jump when it’s desperate to get savings, and typically, when doing a systems buy, the organization will focus on the system that is advertised to identify the biggest return. In Supply Management, that’s a true strategic sourcing system that supports complex sourcing as only decision optimization and spend analysis technologies have been repeatedly found to identify year-over-year savings in excess of 10%, with everything else being single digits. (This system will support complex sourcing workflows, decision optimization, and at least industry average analytics as well as a solid supplier master / SIM capability. Contracts can be external.)
But identification is not realization. In an average organization without the proper processes and systems to support contract implementation, as per a classic AMR series on reaching sourcing excellence, an average organization will only capture 60 cents to 70 cents of every dollar of negotiated savings at the end of the day.
If the organization is not set up to capture savings, it has to start simple. Processes. e-Procurement/I2P. SRM to get suppliers on board with processes and programs that will allow it to capture data and insure the suppliers deliver the value they promise without constant monitoring by the buyer. If the organization is set up to capture savings, but can’t identify any, it has to look at more complex platforms or options. However, regardless of the answers to the above questions, it should start simple and work it’s way up the technology and process complexity ladder. The key to success will be adoption, and that will mean not overwhelming those that will be required to adopt the new systems and processes if success is to be achieved.