The Future of Procure-to-Pay – eProcurement (Part 2)

Today, part two of our “mini-series” on the Future of P2P – eProcurement (part one is here)  which is part of our larger look at the future of supply management solutions (earlier articles are here and here). Much as procurement departments will continue to evolve and extend within the enterprise and evolve and expand beyond the enterprise, we expect supply management solutions to do the same. In fact, we hope and expect that many of these solutions will be the driving force for the continued advancement of Chief Procurement Officers and their teams.

As we noted last time, eProcurement solutions can deliver a powerful ROI and help procurement departments invest more time and resources in more strategic activities; the problem is that many programs do not. There are two primary culprits: (1) Poor Supplier Enablement which is when the system does not have (a) enough suppliers enabled on the system to perform transactions and/or (b) enough supplier content in the system for users to find and requisition. and (2) Poor User Adoption which is when (a) the number of targeted users in the enterprise is lower than expected and (b) the users of the system use it less frequently than they should.

Self Service

Something funny happened in the US fast food industry in the last few years and I don’t really remember when. Used to be, that you could walk in, place your order, pay, get your meal on a tray, and find a table.  The good old days. Today, you walk in, place your order, pay, get your food on a tray and then the cashier hands you an empty cup or three cups if you’re there with your two kids by yourself (because Mommy gets a girls’ night out to make up for all the nights that Daddy’s busy, except that when Daddy’s busy, he’s not out with the boys, he’s busy working, trying to build something. And, how come he didn’t get to go to that game just because we’d already committed to go to that charity auction we weren’t really excited about going to in the first place? and, and, and – oops……  uh, where was I?)  Oh yeah, 3 cups, 2 little kids, balancing a tray and navigating the self-service soda fountain. Great, there’s no ice; and only the wrong size tops; and there’s no place to push down and tightly seal the tops; and it’s sticky; and it takes two hands; and it looks like this is the very first time the people in front of us have ever seen a soda fountain. It’s the self-service model, fast food-style. We understand the benefits to the restaurant from a cost perspective; we assume it is cheaper, but is it better? Better for whom? How many customers really want to deal with the soda fountain?

Long way to go in an analogy, but the exact same thing happened to the average office worker starting in the late nineties. Used to be, you’d saunter down to the overstocked supply room, find what you were looking for and take three times more than what you needed. If it wasn’t there, you told your administrative assistant what you needed and in a very short time, it was dropped off on your desk – no questions asked. Enter eProcurement. Even with an over-heated economy, enterprises were starting to really focus on efficiency in the 90’s – leaner staffing with fewer admin; tighter restrictions on supplies; increased focus on working capital; and above all else, the need for a well-run procurement department and a Chief Procurement Officer. The timing for eProcurement was brilliant, just what we needed, when we needed it. Except that it wasn’t. eProcurement wasn’t ready to deliver on its promise and just like in fast food, those early customers got into a sticky mess.

User Adoption for eProcurement Today

It took more than a few years, but less than ten, for eProcurement to arrive; and now, it is here to stay. The good news is that, for the most part, eProcurement works and for many users, it works well; still, challenges remain and user adoption is much lower than it should be. If your end-users across the enterprise are bypassing your eProcurement system, there is a cost borne by the enterprise in (a) the generally higher prices of the items purchased off contract (b) the higher invoice, payment & settlement processing costs of the off-contract purchases, and (c) the lost opportunities in aggregating spend.

We’ve previously discussed the challenge in aligning systems and processes as one big hurdle and we’ll surely come back and discuss other people and process issues, but our focus in this series is technology. In our view, there are two big issues within the systems for poor user adoption – what we’ll refer to as “Clicks” and “Content.”

Clicks or Usability – For far too many casual users, eProcurement systems are not intuitive and they are hard to navigate. Whether a user is bogged down in a long and tedious “check-out” process or caught up in a painful trial and error struggle to come up with the right search term or the hunt and peck process that requires a user to drill down and down and down into each search result only to find out it’s not what she needs. It doesn’t take much for people to stop trying.

Content – I look at my stapler every day, I use it most days. I’ve had it forever and it’s never let me down. If I needed a new one, I’d try to buy the same one because I am familiar with it and it performs well. As much as I like my stapler, I could not tell you who makes it (Quick Quiz – who makes your stapler?).

If I am the average employee looking for a stapler in my company’s eProcurement system, there is still a good chance that my search will bring me to a screen with this information and nothing else.

Stapler                                 $23.99                   SKU 494-STB9-01

Without any other product information and description, I’m not sure what this is. So, do I order it? Would you? Maybe I get this one below, which would be perfect?

But it is not unreasonable that my company would also stock this one.

And since I often staple more than 3 pages together at one time, I really wouldn’t want to get this one

And I’m not sure what to make of this one, maybe for the home office, but not the workplace….

I think you get the point – poor product content makes the enterprise requisition process a miserable experience…… I don’t want these file folders for my big presentation; I need those file folders. If it’s too important to take any chances, I’ll just stop at Staples on my way home and pick them up. Easy.

The Future of User Adoption

Simply put, the future of user adoption must solve today’s “clicks” and “content” challenges. This will only happen when today’s eProcurement systems evolve from “automated requisition tools” to full-blown “shopping sites” complete with rich product content, Google-like search, shopping-bot aggregation functionality, robust product comparison and review capabilities, and “smart” system suggestions on accessories and better bargains. To be fair, I am certain that the 11 companies who made inquiries or sent me comments after last week’s article would all claim significant advances in their systems’ clicks and content capabilities. And at some level, they’d all be right – most systems have improved dramatically in recent years. But they fall short when compared to B2C eCommerce tools found at sites like Amazon and Zappos. Remember, the target eProcurement user isn’t the average buyer or the project manager who led the deployment, it is the person who logs in once every month or two to buy something to help him do his job better. He doesn’t want to buy it, he has to buy it and he wants someone else to do it for him. It has to get easier.

To bring Geoffrey Moore back into the discussion, “How can I be so powerful as a consumer and so lame as a [business] customer?”

Postscript: My fast food analogy was an exaggeration – I do try to give my kids juice boxes because it’s better for them and because of this recent study.

RELATED TOPICS