1 min read

Leverage B2B e-Commerce through Information Sharing

By Rusty Zosel on Mon, May 28, 2012 @ 09:00 AM

iStock_000019640264XSmall-resized-600B2B e-Commerce or e-Procurement is here to stay. Vendors and buyers alike who leverage the power of e-Procurement receive numerous benefits including, among others:

  • The elimination of manual processing and B2B processing cycles
  • Elimination of Dual-Data Entry (DDE)
  • Improved data quality and movement, data mining, and real-time reporting
  • Improved demand and supply forecasting
  • Management of complex logistics operations
  • Improved cash flow
  • Better management of contracts
  • Improved communications between business partners

Acknowledging that B2B e-Procurement is the wave of today’s procurement practices, I’d like to revisit a topic mentioned in an earlier blog, the Patronizing Partnership, the best way to leverage B2B e-Procurement. The ideal relationship between vendor and buyer is a partnership that is mutually beneficial. In this kind of a relationship, both parties work to ensure that each financially benefits; the vendor makes money and the buyer saves money. In a Patronizing Partnership, buyers and vendors tie their procurement goals together based on economic outcome, coordination improvement, and process collaboration. These goals have energized the B2B eProcurement wave.

A key component of B2B eProcurement is information sharing in which both buyers and vendors alike can readily share information about the entire transaction process from the time the PO is created on line, the order is approved, placed, received, and acknowledged to the time when the item is shipped, received, invoiced, entered into the GL, and paid. During this process, feedback about product quality, contract consistency, and delivery, among others go both ways. In the book, The One-Minute Manager, Ken Blanchard writes that feedback is the breakfast of champions. By sharing information, vendors improve customer service and both parties improve the quality of their relationship and cooperation. Both are winners. Information sharing also champions a high level of trust and performance expectations, because it makes the entire procurement process transparent. 

Leveraging the power of information sharing through B2B e-Commerce, vendors and buyers are able effectively to create and strengthen a Patronizing Partnership which is financially mutually beneficial. 

How has B2B e-Commerce benefitted your company?

Topics: Procurement Automation cost saving information sharing B2B eCommerce eProcurement procurement process
1 min read

Save Money by Improving Your Procurement Process

By Procurement Partners Staff on Thu, Apr 05, 2012 @ 09:00 AM

iStock_000019812779XSmall-resized-600With prices rising, it may be time to take a closer look at procurement. For many businesses, the procurement process represents a valuable opportunity to save money and reallocate resources. In a recentBain & Company executive survey, more than half of the respondents said cost pressures constrain their ability to make strategic investments. Considering that procured costs can represent 25 to 60 percent of a company’s total costs, it’s well worth examining how this process could be managed more effectively.

Despite procurement’s significance and cost-saving potential, there is plenty of evidence to suggest that for many companies, this is an area with lots of room for improvement. When Bain & Company surveyed executives about their experience with past procurement management initiatives, 72 percent of the respondents felt that they do better and save substantially more than they have in the past. This belief was expressed just as often by the heads of procurement as it was by CEOs and CFOs.

While most executives realize they could reduce their procurement costs, actually making it happen is no easy task. Without a predefined, systematic plan for reducing costs, most organizations never fully reach the potential savings. But again, it’s not easy to create and implement such a plan. For example, 77 percent of the executives surveyed noted that their companies’ procurement efforts are especially weak when decisions are fragmented across many buyers. 

This study demonstrates the need for better integration of the procurement process. In fact, research indicates that by implementing the right tools and processes in a number of key places, you can cut procurement costs by 10 percent. Procurement Partners offers a wide variety of automation and cost containment processes to help you save that 10 percent, or even more. Contact us to learn more.

Topics: cost containment process cost saving eProcurement procurement process reduce procurement costs real savings
2 min read

What are your procurement process resolutions for 2012?

By Rusty Zosel on Tue, Jan 10, 2012 @ 02:02 PM

Happy New Year!

iStock_000017226502XSmall-resized-600Regardless of how you fare with New Year’s resolutions in general, now is a great time to resolve to squeeze every penny you can out of your procurement dollar. Looking back on our blogs from 2011, you’ll discover some great tips to help you realize savings by updating your organization’s procurement process. For your convenience, I am summarizing some of the high-profile tasks you should take on immediately.

Task #1 - Make procurement a priority in 2012.

SupplyChainDigital.com has published on its site the article, Making procurement a 2012 priority, by William Gindlesperger, Chairman and Chief Executive Officer, e-LYNXX Corporation. In the article, Mr. Gindlesperger emphasizes that procurement “has earned its place at the strategic decision-making table of any organization that wants to improve its bottom line.” While it may seem to be obvious that procurement and procurement practices have a direct connect with an organization’s financial viability, we agree with him that this needs to become a priority – a top priority.

Task #2 – Commit to forming a mutually-beneficial relationship with your vendor partners

In our blog entitled, 5 Tactics to Becoming the Fittest in the eCommerce Evolution, I wrote,
“The fittest Vendors and Buyers will internally promote and put into consistent practice procedures to support an open and free-flowing level of communication within and outside their organizations.” You can refer to our earlier blog, What is the ecommerce evolution?, for more details. 

Task #3 – Commit to exploring and leveraging eProcurement

Advances in information technology and cloud computing have made eProcurement affordable and reliable. In our blog,Procurement Partners eCommerce Evolution Blog, I wrote that businesses today can leverage “enterprise-class features, instant application service delivery and management, easy set-up and use, reliability, availability, responsiveness, security and encryption, scalability, data storage and backup, user and systems support services, Business Intelligence reporting, high availability, business continuity, interoperability with many platforms and 3rd parties, and disaster recovery.” If you haven’t already done so, include technology in your procurement processing planning. 

Task #4 – Create and implement an effective plan

The blog mentioned above also cited what is likely the most important task to tackle from the start - planning. “The fittest have a plan that will put into effect their commitment, best practices, and the required technologies. The plan will include a specific statement of the goals; deadlines; obstacles; people, groups, and organizations which can assist; the benefits to achieving the goal; the skills needed to acquire the goals; and development of the plan.” 

New Year’s resolutions have the tendency to evaporate over time. However, in today’s economy that is a luxury few can afford. Get back to the basics and make streamlining the procurement process a priority. 

What steps have you taken to economize in 2012?
Topics: procurement practices eProcurement procurement process eCommerce Evolution automated procurement process
2 min read

eProcurement – What is it? What’s in it for the Buyer? (Part I)

By Rusty Zosel on Thu, Aug 11, 2011 @ 09:30 AM

Introduction

iStock_000001263418XSmall-resized-600In past blogs I’ve referred to Patronizing Partnership as the highest level of eProcurement Evolution, a Buyer/Vendor relationship marked by trust, cooperation, and mutual support. Let’s discuss this in more practical terms which go beyond the platitudes and attitudes, first by defining what is eProcurement Evolution, specifically, complete procurement automation. (In Part II, I’ll illustrate the benefits of eProcurement with a plausible ROI scenario.)

The Automated Procurement Process – removing the barriers to communication

Let’s start with that which lies at the heart of eProcurement Evolution – open communication between Buyers and Vendors facilitated by the automated procurement process. What are the essential features of a fully-functioning automated procurement process?

The automated procurement process essentially is comprised of the following three elements:

  • A user interface to support configuration of custom business rules, vendor management, and item management
  • An automated exchange of transactions with vendors and buyer systems
  • Application logic to check all configuration and business rules against vendor transactions and buyer systems

For the user of Procurement Partners, transaction automation embraces:

  • A customer-specific and customized application access point for all users
  • A corporate access point for enterprise customers, enabling corporate staff to view procurement activity at all levels of the organization from the corporate level to the individual facility
  • Order approval workflow and tracking
  • Electronic Transactions: purchase orders, acknowledgements, confirmations, updates and invoices
  • Contract and item maintenance with vendors

Automated exchange of transactions with vendor and buyer systems insures an open two-way conversation, including:

  • An online communication protocol with vendors and service providers
  • Custom integration into vendor order processing and item database systems and buyer ERP/accounting systems using their best practices
  • Transaction processing with update/change notifications
  • Electronic invoicing for all types of invoices
  • Invoice approval workflow and tracking
  • Contract price and freight reconciliation
  • Custom alerts at multiple steps in the procurement process

Application logic is the “secret sauce” that really makes procurement automation work.  Here are a few of the ingredients:

  • Customized business logic
  • A vendor product catalog with content maintenance capability
  • Contracted item maintenance, analysis, and reporting
  • Enterprise user administration and management
  • Price reconciliation for contracted items
  • General ledger structure, assignment, and processing support
  • Budget support, tracking, and alerts
  • Intelligent reporting

Conclusion

The two major benefits that Buyers experience from a fully-automated procurement system include:

  • Improved contract compliance – getting the consistent value and price they negotiated with their Vendors.
  • A tangible ROI – leveraging the contract compliance process for real savings. This is what I’ll address in the next blog

Question: What features would you like to see in a fully-automated procurement process?

Topics: order approval workflow business commerce evolution eProcurement ROI automated procurement process partnership
3 min read

5 Tactics to Becoming the Fittest in the eCommerce Evolution

By Rusty Zosel on Mon, Jul 11, 2011 @ 11:00 AM

Introduction – A review

HiRes-resized-600Last time, when I addressed the theme of eCommerce evolution, I wrote that for eCommerce to evolve Buyers and Vendors alike must trust each other through communication and consistency in services, processes, and meeting commitments. And they must trust and implement technologies and innovations as well as further refine their practices and reach their goals.

Taking this metaphor one step further, evolution implies the survival of the fittest - a natural selection of those who subscribe to the benefits of eCommerce and understand and implement the steps necessary to fully participate.

eProcurement – What’s in a name?

Going forward, I’ll take the license to substitute the term, “eProcurement,” in preference to “eCommerce.” eProcurement, “the business-to-business sale and purchase of goods and services[1],” helps businesses simplify purchasing and reduce costs associated with operations and transactions processing. Since today’s Vendors and Buyers are able to more readily and openly communicate, eProcurement facilitates negotiating, contract and formulary management, order processing, spend management, and reporting.

eProcurement Evolution - Survival of the fittest

Back to the topic at hand: To fully reap the benefits of eProcurement, Vendors and Buyers alike will have to emerge out of the primordial soup of out-dated procurement practices. (Please refer to the blog entitled, What is the ecommerce evolution?, for more details.) In my opinion, the fittest will survive this natural selection, because they embrace the following five survival tactics.

Five Survival Tactics

Survival Tactic #1: A commitment to “Patronizing Partnership” at all levels within the organization

The fittest Vendors and Buyers will internally promote and put into consistent practice procedures to support an open and free-flowing level of communication within and outside their organizations.

Survival Tactic #2: A commitment to the automated procurement process

The fittest will themselves employ “natural selection” to identify and retain those practices and processes which will enable eProcurement. This self-discovery will compare and contrast current practices with successful eProcurement requirements. Based on this discovery process, Buyers and Vendors will be able to naturally discard practices that are roadblocks and retain or acquire enabling practices. Concurrently, they must also have the tools of technology.

Survival Tactic #3: An IT infrastructure that supports eProcurement

Obtaining and implementing a web-based software application, which integrates all aspects of procurement from contract management to automated GL entries, is the first step in this natural selection process. Next, the fittest will have identified and secured necessary IT systems and infrastructure which will give them enterprise-class features, instant application service delivery and management, easy set-up and use, reliability, availability, responsiveness, security and encryption, scalability, data storage and backup, user and systems support services, Business Intelligence reporting, high availability, business continuity, interoperability with many platforms and 3rdparties, and disaster recovery. Many will find that Cloud Computing Services Providers offer the fittest features, flexibility, and affordability available.

Survival Tactic #4: Create a plan to meet the demand of eProcurement

The fittest have a plan that will put into effect their commitment, best practices, and the required technologies. The plan will include a specific statement of the goals; deadlines; obstacles; people, groups, and organizations which can assist; the benefits to achieving the goal; the skills needed to acquire the goals; and development of the plan. 

Survival Tactic #5: Implement the plan

While this may appear to be a no-brainer, I think it’s important to state, because in the implementation of the plan, the fittest revisit the plan regularly to identify progress made and to readjust the plan’s milestones if necessary. The fittest stay focused.

Conclusion

Following these five survival tactics will help Vendors and Buyers naturally take the steps necessary to be among the fittest in this exciting new eProcurement Evolution world.

What steps has your organization taken to leverage the brave new world of eProcurement?

What benefits have you seen as a result?


[1] SearchCIO.com, definition, e-procuremet (supplier exchange)

Topics: IT infrastructure automated procurement eProcurement Evolution eCommerce eProcurement business-to-business sales partnership