Companies have invested millions of dollars over the years to automate processes, improve resource efficiency and eliminate paper. From HR to Manufacturing to Purchasing, the use of technology to reach these goals has had varied success. For companies that have struggled to achieve the goals of their original technology investment may be reluctant to consider the addition of more technology to build on the existing investment. There are often cases, particularly in procure-to-pay, where the selected software delivered returns but fell short in areas such as user engagement. The addition of a Marketplace such as BuyerQuest can help optimize the procure-to-pay investment.
If the business is reporting any of the following issues, it may be time to add a Marketplace to your current ERP, MRP or P2P system.
1. High Levels of Contract Leakage
Purchasing and contracts teams work diligently through sourcing and contract management technologies to create and manage negotiated rates. Unfortunately, on-contract spending is not reaching the expected levels. Casual users may simply be making off-contract purchases because it is easier. On a case-by-case basis, this may not be significant. If however, the scenario appears across the organization, it is affecting the bottom line and needs to be addressed.
2. Low User Adoption
A challenge of any new technology is gaining user acceptance. In many cases, this is simply a matter of the user community adapting to the change in interface and associated processes and over time will lead to user engagement. In other cases, the technology is simply too cumbersome for a casual user to learn and operate without deep technical knowledge of the application. In these cases, a user will give up attempting to follow the purchasing process and buy what he or she needs via other means. This issue likely will not improve over time and is an opportunity to look for a more user-friendly marketplace.
3. Supplier Invoices higher than expected
Some procure-to-pay technology connects to trusted supplier sites via punch out. On the surface, this is a seamless method to incorporate purchasing from certain suppliers into the corporate purchasing process. As previously mentioned [link to previous blog post], purchouts can be costly as control of the site and products displayed resides with the supplier and not the company. If supplier invoices are arriving at a higher value than expected, and punchouts are part of purchasing, this may be the issue. Working with suppliers can mitigate this, but it also makes sense to explore a single marketplace of supplier products.
4. Large number of punchouts to maintain
Managing a large number of punchouts to supplier sites can be an administrative challenge. Ensuring the functionality of the punchouts, the accuracy of the products shown and the timeliness of updates can be a full-time job. Using a technology such as BuyerQuest Marketplace can put the responsibility to make timely updates in the hands of the supplier while also simplifying the technology requirements for suppliers to access the Marketplace through a supplier-specific portal.
5. Substantial buying community
Many business to business technologies were built on the concept that small user groups consistently performed a small number of role-specific activities in the system. While initially there was training and adaption required by the users, over time they became experts in the specific functions they performed. Purchasing has moved out of the procurement organization into the hands of individual, casual buyers across the disciplines in the organization. A Marketing manager may make a purchase once a month, or a repair technician only when maintenance work is performed. Buying is a small part of their overall position, but important. In complex systems, these users quickly forget their training and waste valuable time trying to navigate the buying process. If this is the case across a large user group, an intuitive e-Marketplace can simplify the buying process and encourage usage.
A Solution: BuyerQuest Marketplace
Designed with the end-user in mind, the BuyerQuest Marketplace addresses the challenges of buying in traditional business to business technology. With an “amazon-like” interface, users can, with little or no training, find the products they need, add them to a shopping cart, and begin the purchasing approval process. Because it is integrated into the ERP, MRP or P2P technology, the BuyerQuest Marketplace ensures purchasing compliance.