E-Sourcing Forum » Interview Part I: How to Successfully Implement e-Sourcing in a Global Retail environment

Interview Part I: How to Successfully Implement e-Sourcing in a Global Retail environment

March 5th, 2007 at 03:09am Agatha Degasperi - Iasta Europe

I recently sat down with a former Financial Controller of a Global Retailer to look back at his experience of implementing an e-Sourcing solution in Europe. This is the first in a 3 part interview.

Q1: How/Why was the decision made to use e-Sourcing?

A1: The initial decision to look at e-sourcing was made by Corporate. Reason for implementation in Europe was the creation of a competitive environment to tender all contracts related to indirect expenses. Focus on expense control should be a key performance indicator for any company, especially when operating in a very competitive environment (i.e. retail). It will free-up/save capital to invest in the long-term success of the Company.

In addition to the competitive environment, it also allows a Company to ensure compliance to the Procurement Policy, tracking of contracts and streamline the tender process across all departments.

Q2: What was the process for selecting and deciding to use an e-sourcing provider in Europe?

A2: Initially one specific e-sourcing provider was considered to be the world-wide provider for our organization. We concluded that their system was not user-friendly and flexible enough to meet our business needs. Eventually we decided to go with another solution because not only was the tool easy to use, but it also provided the flexibility and tools needed for easy implementation within the existing processes. With the e-RFx tools it forces buyers to think about business requirements and ensure proper products/ services are purchased to run a successful and efficient business.

Q3: How was the tool implemented?

A3: After the decision was made to implement the tool, a training session was conducted for all European buyers of indirect expenses. The message there was that this tool will provide them with an easy platform to competitively tender contracts and ensure the best possible pricing is obtained for the Company.

When the first auction was set-up we invited the European Management Team to showcase the tool and discuss the potential benefits to the organization. The first auction immediately resulted in a 20%+ year-over-year saving, which helped get buy-in from all key players within the organization.

Q4: What was the key to making this implementation successful?

A4: The key to a successful implementation can be split in 3 steps:

1) Select the technology that best meets your business needs. This is important for any technological implementation/enhancement and e-souring is no different. The tool should be flexible enough to tender all your contracts without being too complicated and/or time consuming for the user.

2) Ensure buyers are not only comfortable with how to use the system (i.e. Training) but also assist them whenever needed (with analysis, search for suppliers etc.) Schedule regular cross-departmental meetings to discuss lessons learned and frequently monitor their activities in the system. Never assume buyers know what they are buying and how they should buy it, challenge them and provide alternatives.

3) Obtain buy-in from Senior Management!

Q5: What didn’t work as well?

A5: Make sure buyers understand the importance of frequent communication with the suppliers during an auction (this doesn’t change vs. a traditional tender) and ensure suppliers understand the process. This will prevent surprises during or after a completed auction and is critical for the success of future auctions. Unpleasant experiences will prevent suppliers from participating a 2nd time!

Email Forward & Bookmarks

Close this Window Bookmark and Share This Page

Save to Browser Favorites / Bookmarks

Email This to a Friend

Copy HTML:

If you like this then please subscribe to the RSS Feed.

Entry Filed under: General, Interviews, Supply Management Best Practices, Technology / SaaS

Some HTML allowed:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Trackback this post | Subscribe to the comments via RSS Feed