One of the most popular topics of discussion in the procurement industry is how to improve user adoption rates of strategic sourcing technology platforms and processes.
There are many studies about Best Practices to Improve eSourcing Adoption and Drive Savings. Scanmarket is no stranger to this topic having written about it frequently in the past and hosting webinars on Overcoming Barriers to eSourcing. Many organizations have struggled to broaden adoption despite strong evidence of the benefits and value of strategic sourcing.
Our own Richard Brown has a long and successful track record of implementing strategic sourcing programs that drive user adoption. He even wrote a doctoral dissertation on the topic. His primary recommendations for ensuring adoption are the following:
- Go Full Circle – By definition, strategic sourcing is a business process that involves many stakeholders from inside and outside the organization. One barrier to adoption comes when organizations focus too much on only their internal users and not enough on other stakeholders. This is especially true when you remember that the stakeholders least connected to your strategic sourcing program will be the ones most likely to be hesitant about the process and prone to opting out altogether.
- Dispelling Myths – Even after so much time and many successes, there are still myths in the market about strategic sourcing (think “It only works on simple goods,” or “It’s all about price,”). Make sure that you’re confronting myths head-on and publicizing successes via email, newsletters, town hall meetings, and case studies. It’s all about making the impossible possible.
- Platform Selection – Nearly all software platforms will provide the basic functionality you need. The most important considerations are ease-of-use, matching the platform to your organization’s specific needs, and finding a provider that you can work with who isn’t only interested in talking with you when they have something to sell. Companies can have the most advanced tool in the world, but the likelihood for user adoption is almost entirely dependent on its ease of use. When searching for an S2C platform, ask a lot of questions and be an active participant in your provider’s development agenda so your organization’s specific needs are in the plan. While it might not seem like the most valuable use of time, it will pay off in the long run.
- eSourcing Network – Leverage your network, both inside and outside your organization. Inside, pay special attention to your regional and business unit champions and put them out front in your communications as proof points and sources of innovation. Outside, see #5 below.
- Bringing the Best In-house – There’s a lot of knowledge out there so grab what works for you. Whether it’s roundtables, conferences, consultancies or analyst firms, be sure to listen to what they are saying. Chances are you will pick up something useful without having to sign on for an expensive engagement. While there’s plenty of expertise available, you are the best at determining which will fit well into your organization so use a critical eye.
- Innovation – Take what you learn from others and make sure it gets implemented. eSourcing programs can sometimes get a bit stale. So, try new formats, event types, communication strategies, etc. There’s significant research out there showing that the use of different approaches can improve strategic sourcing results.
Since you’ve invested significant effort, capital and resources in your Strategic Sourcing program, make sure that you’re using all your options to drive adoption and results.
Common Barriers to Strategic Sourcing User Adoption
Reluctance to employ strategic sourcing typically falls into five different categories:
- Fear of Change - Change is hard, especially in procurement practices where they've always done it the same way and would be perfectly happy to keep it that way. The key to addressing change management is patience, understanding and training. While the applicability of a BidMatrix event or Cherry-picking eAuction might be readily apparent to you, your stakeholder probably doesn't see it that way. Instead, walk through the event with your stakeholder and determine where exactly eSourcing can make his/her job easier. Show them how having a single repository, simplified tracking, and better evaluation can help them each day.
- Mine is Different - We have yet to find a category, no matter how complex or obscure, that wouldn't benefit from the use of strategic sourcing. In fact, we would argue that the more complex the category, the more important it is to incorporate online tools. The key to addressing this concern is deference. When dealing with stakeholders, be sure to acknowledge the complexity and try to understand what challenges the stakeholders face. That way, you can target your efforts toward their pain. For difficult categories, this usually involves a focus on data collection, organization and evaluation.
Additional read: Optimize Your Supplier Relationship Management Strategy
- Reluctance to Relinquish Control - Whether for good (pride of ownership) or bad (nefarious activity) reasons, spend owners will sometimes be reluctant to use eSourcing if only because they don't want procurement teams looking over their shoulder. The key to addressing this concern is emphasizing your support role. Rather than presenting eSourcing as a power grab from procurement, roll it out as one more tool to make the spend owner's life easier, just like Excel or even the telephone made them better buyers in the past.
- Poor Past Experience - We frequently encounter spend owners whose full knowledge of eSourcing consists of, "Yeah, we ran an auction during the dot.com days and it didn't go well." While these are becoming less frequent, they still happen. The key to addressing this push-back is an emphasis that the online tools have come a long way since late 90's and are no longer focused on single-line reverse auctions. Most of the improvements have come in either bidder feedback or decision support, both of which are important to spend owners.
- Lack of Advanced Planning - Probably the most difficult and least acceptable of the excuses for not using eSourcing is the Tyranny of the Urgent, regular tension between things that are urgent and things that are important—and far too often, the urgent wins. A buying request needs to be executed quickly so there's not time for any sort of competitive bidding process to take place, regardless of how much eSourcing can speed up the process. This is where you'll definitely need executive support because leaning on the demands of the business is an easy path to avoiding better sourcing techniques. The key to addressing this concern is executive support and setting targets for eSourcing activity so that stakeholders "need" to pick something.
Additional content: Watch our Webinar on Overcoming Barriers to eSourcing
Best Tactics to Overcoming Barriers to Strategic Sourcing Adoption
Our customers and stakeholders are constantly searching for ways to introduce eSourcing into new spend areas. Some of the best tactics we've seen are the following:
- Know your stakeholders pain points and focus your efforts on those. While you might be focused on a specific savings goal, your stakeholder's incentives likely lie somewhere else. Talking up savings potential to someone whose job is to keep the warehouse running isn't going to get you anywhere. Instead, start with what ails them.
- Enlist your executives early and often. Sometimes, a good old fashioned push from the top is what's needed.
- Focus on some of the non-savings benefits of Strategic Sourcing. Your stakeholders will likely be more open to the efficiency, transparency and decision support benefits.
- Start small. Instead of heading straight for an eAuction, employ eSourcing as a data collection, aggregation and evaluation tool.
- Be a support system, not a takeover. If you can present yourself as a support structure to your stakeholders, you will go much further than if there is an apparent procurement "takeover" under way.
At Scanmarket, we've been eSourcing evangelists since 1999. While we believe that eSourcing can benefit any sourcing exercise, we also understand that each situation is different and needs to be addressed separately. By using these tactics, you will be able to increase the amount of spend and number of stakeholders involved and the benefits you get.