e-Procurement

I can buy something from amazon in just a few clicks. I feel confident that I’m getting a good price and I feel safe because the product I’ve selected has good reviews. The whole amazon experience has encouraged millions to change the way they shop. The purchasing process (as we like to think of it – it is more accurately a sales process), has been refined and iterated over the years, so what’s gone wrong with the B2B version – e-procurement? The e-procurement vendors’ sales and marketing material will tell a very different story. They'll explain how corporate purchasing could be but it won’t tell you what, in 9 out of 10 cases, it is really like.

The more I look at the proposed acquisition of Ariba by SAP, the less sense it makes. SAP didn't need the functionality. They didn't need the brand. The Ariba shareholders will clearly be pleased to see this deal go through but what, I wonder, would an SAP sales guy be thinking and what would Ariba's competitors be making of it all?

B is for buying experience

C is for Coupa

D is for déjà vu

I’ve been enjoying reading the Coupa blog recently and especially since SAP’s intention to buy Ariba was  announced. It’s been an excuse for Coupa to really blow its trumpet about cloud and the importance of usability. Coupa’s message is very current although we have heard it before.

The original vision was right. The cost of purchasing as well as the cost of purchases could be dramatically reduced by applying the new technology. And there was a road map – a detailed vision showing how to secure the savings. The costs weren’t even that high – especially in comparison to the potential savings - but in the excitement, we lost the map and now, the vision is lost.

Finally the penny has dropped. Automating the purchasing process and controlling spend more closely by using modern technology reduces cost compared to following a manual or paper based process. This could save between 5% and 20% of procurement expenditure according to the EU commission. That means that the EU could reduce its public procurement spend of €2 trillion and save a massive €100 million. And all this can be achieved in 4 years – apparently. That’s a huge amount of money. 150 large hospitals could be built with that so it’s worth aiming for before anyone gets excited – and I hate to be the bearer of bad news – it isn’t going to happen.

Ask anyone who’s worked in more than one purchasing organization. When it comes to technology, they’re not normally what you would describe as model implementations. Supplier data all over the place, catalogues out of date, Heinz 57 varieties of purchasing system. Purchase to Pay processes are very rarely joined up and if purchase to pay really is the plumbing of your organization, you’d be drowning. But before you beat yourself up about your role in this chaos, ask yourself the question: Why is it that everything is always a mess?