Talk about globalization has been going on for some time, and there are still resistants’ and supports (as in life). It is good to be in a broad market, a competitive one. But above all it is important to have means to do it, and in this vast and free market, select and analyze correctly, who we are related to us. Just as in friendships. If we are whole, correct and good people, it is normal to search for people similar to us to be a part of our lives, otherwise (and for illustrative purposes) as the said by Johann Goethe: “Tell me who you go with and I´ll tell you who you are”.
Let’s imagine you take on, for example, the role of a buyer in a hotel business and that when you cross paths in the corridor with the responsible of the interior design sector, you receive an urgent request to purchase white floating floor immediately, for the construction of a new estate that was acquired by the group. Details aside, the first thing that you will do as a buyer, is to try to understand with the requester the specifications of the request (type of material, m2, delivery deadline, budget…) and in the rush he says that he will send those by email, but will leave the whole process in your hands, after all it is your competence.
Panic! You received a purchase order verbally and will eventually receive the incomplete specifications by email, but and to complement, they demand the best price in a short amount of time, because the construction has stopped. Meanwhile, on the way, some new requests have appeared and in your email there are still other new requests. It is in this situation that many buyers/negotiators find themselves daily. And it is here that I begin to transmit what I truly want to.
Decades after decades of selling, negotiation and purchasing, have been reinvented (I am not saying anything new) and beside the resistance, technology has come to stay and is an essential aid for many professionals, but not a substitute. In October of 2016, whenever I was at a congress or an event of procurement sector, someone would hear me say that buyers have been gaining prominence within the companies, and that the various departments have started to understand that there role has relevance in the strategy. Nowadays I affirm that finally the procurement area has gained the well-deserved prominence and has already a great role in the economic and financial context within the organizations.
So that both the buyer and negotiator functions carry on contributing for the reduction of costs and the increase of efficiency within the companies’ processes, the automation of the whole purchasing process must be stimulated, fostering innovation that will by his turn, will gradually allow quantitative and qualitative growth in the strategic planning. In Procurement 1 euro in savings is 1 euro of revenue.
In the scenario above, in another company of the same sector, the buyer manages the situation in a smoother form recurring to functionalities available in the electronic platform:
Allows a beginning point to start with the history of negotiations that have been concluded. Thereby, being able to rapidly analyze the average time of negotiation in that category,supplier evaluation from the relationship with the company, the market prices… The benchmarking will also serve to better the negotiations, as it will allow the visualization of ongoing processes with that supplier, and aggregate orders, increasing revenue.
The immediate access to a supplier list of registered and qualified suppliers, that would be ok to supply your company (upholding the rules of negotiation), allowing the fulfillment of compliance norms, each day more valued in the current scenario of commercial relationships.
Transparency and Auditability
With an electronic platform, all information is made available and is transmitted equally to all participants, being able to follow at any moment the stage of the processes. All kept documents may be targeted for registration and auditability, which not only helps the company’s image to the market, but also helps to comply with the organizations goals, raising the ethical standards (being compliant).
Based on all the documents and information that has been exchanged, shared and stored, it is possible to choose the most adequate (based on the technical specifications, delivery time, available quantity, in comparison with the best market price).
The procurement area and the negotiator gain more visibility, because it is possible to measure the saving obtained by the negotiator, the accumulated ($) of the sector, the duration of the processes, the global efficiency of the process versus the target, the best 1st offer, the quality of the purchase…
Thus, the process in the e-procurement are realized in more agile cycles, transparent, maintaining compliance, allowing all process information to be organized and audited.
By automatizing the purchasing processes it is possible to measure, analyze and treat information in a more transparent form, auditable, besides joining and sponsoring all of the stakeholders involved in the fulfillment of rules, improving the vision and the efficiency of the realized processes. In this sense, the process gains more agility in all stages, reducing the Procurement cycle and allowing focus and reduction of administrative costs (which are computerized and standardized), dismissed before in the treatment of the reception and validation of invoices manually. Thereby, buyers/negotiators redirect their focus to strategic negotiation and also the negotiation of better contracts, raising revenue by bringing more contract purchases, by researching better prices, volume discount…and without administrative tasks.
To sell more and buy better, technology is not enough, of course. It is necessary to have a combination of people, defined processes and the right specialized technology, to generate agility in the processes, more governance and collaboration between all.