The eSourcing 2.0 Campaign Trail

Like any good successful politician (good politician = oxymoron), I am trying to stay on message with the eSourcing 2.0 campaign (Source, Baby, Source!). It’s a grass-roots movement and we need your help. And with eSourcing solutions in place at roughly 60% of companies and usage (for those companies with the solution) hitting less than 1/3 of addressable spend, we have much work ahead. I have been barnstorming around the US in May and have been able to work in a section on eSourcing 2.0 into presentations that I have given on any number of CPO-themed topics. (Sidebar: I’m racking my brain to figure out how I can do this next week when I am presenting on Sell-Side contracts at Ariba Live, I just don’t think it will work). Although we will soon move from having it as the regular Friday article, it will continue to be a major theme here and it will remain a major part of my “stump speech” this campaign season. Reminder #1:

eSourcing 2.0: Every negotiation that results in an executed contract should use an eSourcing solution.

Reminder #2 – I believe that adopting the eSourcing 2.0 in 2010 will fast-track any procurement transformation and have the most significant, broad-based, and long-lasting benefits of almost any strategy that could be enacted this year.

Gregg Brandyberry, who lit up the stage with a fantastic keynote presentation entitled “The Smart Buying Revolution” at a Chicago event a few weeks back, not only included the theme early in his presentation, but was an active and strong proponent of the value of eSourcing while serving as the CPO at GlaxoSmithKline (Sidebar: we’ll circle around on some of Gregg’s other ideas in a future article). If memory serves, Gregg’s team sourced close to 90% of addressable spend, and I mean sourced competitively, not just utilizing an eSourcing tool as a means of information or process capture.  His successes and those of many other eSourcing trailblazers should have been reason enough to have helped win over the hearts and minds of procurement (and business) leaders everywhere. Easily win them over. From the stats I quoted above, we have much to do and miles to go before we sleep (as I write this I am preparing for a redeye flight and I hope that I do not literally have miles to go before I sleep. I hate redeyes).

I was in New York on Tuesday meeting with the leaders of a 50,000 person IT organization to discuss some of their pressing challenges, when one of the directors exclaimed, “Our company and our group doesn’t have a problem with change management. When someone at the top states an objective, it becomes a mandate and people do it.” So of course, the more we talked, the more it appeared that change management was a huge problem. This aspect of the meeting reminded me of the Mandate or Sell debate posed a few weeks ago regarding the best way to implement eSourcing 2.0 (or any new initiative, really). At the time, I left open the possibility that both approaches can work. Most readers (based upon comments, emails, and conversations) believe that a mandate is the way to go. Truth be told, I am a strong believer in the use of mandates to drive individual and organizational behavior, but I also believe that mandates are significantly more effective when they are accompanied by a rationale, by an explanation of the benefits (some type of compliance audit is also recommended). That means I am recommending a strong mandate that is also sold.

Inevitably a change management initiative (and eSourcing 2.0 is a change management initiative) hits a few classic roadblocks, one which we’ve talked about more in the context of sourcing strategy is the NIMBY (not in my backyard) contingent – those that believe the new process is great, but that it just doesn’t, shouldn’t, or can’t apply to them. It is usually a blend of arrogance and fear of change that creates the NIMBY-movement within organizations.  Even with a strong mandate in your organization, NIMBY will be a real issue on the eSourcing 2.0 campaign trail. Some ideas on how you can counteract NIMBY.

1. Argue the base case benefits: visibility, efficiency, knowledge capture and retention, best practice development, etc.
2. Challenge the NIMBY-proponents on their arrogance, parochialism or drawbridge mentality and their failure to support enterprise objectives.
3. Maintain a list of all contracts that are executed without prior use of eSourcing, circulate it monthly to all procurement, finance, and business unit executives. Even the most arrogant individuals try to avoid being on high-profile ‘negative’ lists.

Can we do this?

Source, We Can!

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