It is human nature to focus on the "exciting" part of the job. For the sourcing and procurement professional, it's usually the front end of the process"”finding opportunities for savings, creating and executing winning sourcing strategies, conducting skillful contract negotiations, and closing a deal designed to save the company millions of dollars. The back end of the process"”getting the people in the organization who are making purchasing decisions to actually buy products and services from that hard-won contract"”is not necessarily the sourcing and procurement person's favorite part of the job.

This is where the nature of the system and buying process given to the end user can make a material difference. Most people hate non-value-add administrative work (this author included). That is one of the reasons that it is so hard to get salespeople to actually use salesforce automation systems. They will only do so if they see a material benefit"”like getting more leads and closing more deals"”and if the system fits intuitively and effortlessly into their daily workflow and the actual work as they perform it. If it is seen as being an extra step needed before or after the actual work is done, or if they need to go to a training class to figure it all out, then there is much more likely to be "rebellion in the ranks" against using that tool and process.

The same is true of the tools given to business users making purchasing decisions and/or approvals. The system and process is much more likely to be used if it is intuitive (think Amazon.com) and does an excellent job at helping the user quickly and easily find the products and services that they are actually looking for. It should require no training and just be fast and simple to use. That may be the most powerful weapon that the sourcing group has to increase rates of compliance and on-contract purchases.

The e-procurement solution market is a mature segment. Yet newer entrants, such as Coupa, have been able to gain significant market share in part by making the process easier for the end business user. That should be a lesson, not just to sourcing and procurement solution vendors, but to all enterprise solution vendors.

The Outlook

As a mature segment, expect e-procurement to maintain steady growth in 2013. But that growth will not be spread evenly among the vendors. We could also see some continued consolidation in the market this year.


Keywords: sourcing solutions, supply chain management, supply chain management IT, supply chain solutions, spend management