Overcoming e-sourcing apprehension

trucks driving on a freeway in the sunrise

Procurement professionals, if you are considering a transition from manual and Excel-based RF(x) to online automated e-sourcing platforms, here is the information you need to mitigate fear, uncertainty and doubt in your supplier base.

As companies become leaner and available time becomes scarcer, process automation is the clear solution for busy procurement and supply chain teams. But feedback from suppliers on the available procurement automation platforms tends toward the negative. Read on to learn how to shift from Technophobia (Fear of Technology) to FoMO (Fear of Missing Out).

Conquering your Suppliers’ Top 6 e-Sourcing Fears:

Don't let your suppliers' fears keep them away from time-saving process automation[/caption]

1. Devaluation/commoditization of their service

If your own product or service had to enter a price war with your competitors tomorrow, how certain would you be that you could win based on price alone? Transportation suppliers are no different and hope to maintain business relationships based on their value proposition, which includes cost, service level and possibly investments. Some suppliers view RFPs as static cost-cutting exercises, which devalue their offering.

SOLUTION: Communicate your strategic intentions to your suppliers up front and, wherever possible, make it clear which business parcels or lanes will be bundled together. Additionally, a platform that is able to factor the cost of supplier-change will enhance your ability to assess itemized cost-savings vs. overall business cost. Let your suppliers know that this will factor into your decision making.

2. Uncertainty regarding technology

Some suppliers—for example, smaller asset-based trucking suppliers that might be juggling operations during the week with administration on evenings and weekends—do not have the technological know-how or the available resources to participate in online events.

SOLUTION: Use a platform that has been specifically designed for supplier ease of use with a minimalist supplier interface, a dedicated screen-sharing capability and round-the-clock support hotline.

3. Multiple platforms require training and support

While the basic concepts of an RF(x) may be similar, regardless of the commodity or service being procured, the tools that exist are usually not identically operated. Suppliers need to invest time and resources into learning the steps and methods involved in each platform.

SOLUTION: Conduct an online screen-sharing session or mock RF(x) in which participants do not have visibility of each other, but are able to receive training and pose questions and feedback. Preferably, however, find a platform that already has a wide and detailed supplier network to minimize training and business disruption.

4. Lack of feedback and transparency perceived as one-sided

Certain platforms have a high degree of rigidity in terms of the types of offers allowed per event. While this is rightly the case (due to the business requirements of the event), suppliers may struggle to notice the reasons they are not considered for business awards.

SOLUTION: Ensure that your selected e-sourcing platform provides real-time dynamic feedback to your suppliers, either in the form of a built-in offer analysis tool or itemized/overall ranking. Ideally both of these features should be available.

5. Accounts, branches and user management perceived as opaque

While you may be in contact with a sales or account manager, the supplier account (and pricing offer) may be entered by a different party within their organization. When different regions are involved in an event, your supplier might require the involvement of multiple parties around the world. Some platforms even prohibit multiple logins per account or event.

SOLUTION: Look for e-sourcing platform providers that allow multiple user IDs per supplier; who actively manage their network of providers (to prevent duplicate accounts being created); provide a standardized export functionality for easy internal collaboration; and ideally the platform should allow suppliers to register online easily, possibly even free of charge.

6. Online events are time-critical and may adversely impact suppliers’ internal schedules

Account managers historically picture online events that have small timeframes, harsh deadlines and are based purely on bottom-line costs. Managing their schedules around these bid windows while still providing thoughtful and sustainable offers is, in many instances, impossible.

SOLUTION: When planning your event, leverage the inherent capabilities of e-sourcing by allowing a longer response window. You will be able to dedicate less time gathering and consolidating offers, (as this is done through the platform), and thereby allow more time for suppliers to input and refine their offers.

For more information

If you would like more information about e-sourcing, please get in touch with me directly at pretorius[at]ticontract.com.

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