1. Using an Excel bid sheet attached to an event:It can often be tempting to avoid the use of a complex event and to include an Excel bid sheet or question list attached to the event for the supplier to complete and return. Whilst this is easier to setup and for suppliers to respond, it loses out on the benefits of all of the system analysis and validations. This often results in supplier data entry errors, and you will need to spend time building reports after the event so analysis can be performed. Additionally, there is always the risk of errors in building these off line reports.
2. Inviting too many suppliers to a complex sourcing event:It is important to consider the work that you need to put in to train and support each of your suppliers when running a complex event. Running effective rounds of events to qualify suppliers before running the complex event itself ensures only the right subset of suppliers are involved. This can greatly reduce the amount of support you need to provide during the event.
3. Not performing change management to get suppliers onboard:Suppliers may push back on taking part in complex sourcing events due to the effort they must put in to take part. This can be avoided by putting in place a change management strategy that:
- Sets out a strong message that the only way to win your business is to take part
- Keeps the supplier up to date from an early stage with clear communications
- Highlights the training and support they will receive.
4. Not measuring success:If you aren’t measuring the success of your events, you will not know if the time and effort put in by your business and its suppliers provides any value. In order to measure progress and success, we recommend a number of basic KPIs that should be measured from the outset – and on a regular basis – to demonstrate success and help identify any possible areas for improvement:
- Percentage of suppliers that have responded: If suppliers are not responding, then there are issues with supplier management and lost opportunities to obtain greater savings
- Average number of questions asked during the event: To check the quality of your training methods and highlight if changes need to be made
- Average time per event: If your events are running for significant lengths of time it is a sign that suppliers are struggling to enter responses
- Percentage of orders with complex pricing that have issues: To highlight if the transition of data or if the P2P system itself is not correctly supporting the complex pricing you are using
- Actual savings vs. negotiated savings: To ensure the time and effort you put in is not wasted by purchases being made off contract at higher prices
- Percentage of events classified as complex: To identify how your user base is utilizing your sourcing system.
5. Not banking your savings:In addition to measuring success, it is imperative to actually bank your savings. Too many companies don’t follow up on their sourcing event to:
- Track the savings
- Agree them with the business
- Bank the savings
- Track the savings