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So you’ve invested in an e-procurement system. It’s been installed, tested and retested. All the glitches have been addressed, the bugs eliminated. It’s all systems go … or is it? There is one critical factor which will determine whether or not your system will achieve its full potential and deliver the business benefits you expect. One factor which can make or break your investment – your people. Experience has shown that all too often, the best systems in the world fail because the people in the organisation who have to use it don’t, or won’t adopt it as part of their everyday operations. They subtly sabotage the system, complaining that it’s inefficient, difficult to use, makes mistakes and they insist that the old way was better. Why? Because they haven’t bought into the new system, even though a change of mindset will fundamentally make their lives easier and bring improvements to existing processes. E-procurement is one such new process. Using it demands change, change in the way people have done their jobs for years. And most people don’t like change. People feel threatened by it – will it replace them? It’s clear therefore that the soft issues, the people issues in any e-procurement implementation, are often the hardest to manage. How do you show your people that e-procurement is not a threat; that it does offer a better tomorrow and will make them more effective at what they do? Buy-in is the key. And training is a critical component to achieve this buy-in. This training must go beyond merely showing people what to do and how to do it – it must illustrate why they are doing it. They must be able to appreciate the big picture, recognise its value to the company as a whole and understand how their particular function contributes to realising this value. This demands a highly personalised approach to training to reaffirm the value of the individual’s contribution and the value of the system itself. You also need to identify the ‘visionaries’ throughout your organisation – at all levels of the corporate hierarchy. These are the people who adapt to change quickly and are early adopters of the system. Build alliances with them and use them as allies to spread the word. Remember that buy-in doesn’t happen overnight. Training, handholding and retraining needs to follow. It’s an iterative process, reinforcing the message over and over until everyone throughout the organisation knows, understands and accepts the system. But don’t be misled into believing that buy-in is essential only for the lower-echelon users of the system. A critical success factor is getting executive buy-in and having them participate in the change management process. It's necessary for the CEO and FD to roll up their sleeves and take the time to communicate to staff why they have decided to go for this new system; why what they are doing will drive a better future for the company. Finally, even though a sudden change is hard to swallow, there must be a clear switch- on date for the new process and simultaneous switch-off of the old. Your people have been prepared for the change. They know it is coming. So don’t delay the inevitable – be decisive and ensure that the break with the past is clean.
It is a concept used extensively on an international basis. In the United States, for example, five of the major automotive manufacturers – Ford, GM, Chrysler, Nissan and Renault – have joined forces to develop an e-marketplace-based buying consortium - Covisint, which is expected to command some $240-billion per year in purchasing power and effectively reduce the cost of the average vehicle produced by around $3 000. Much of these savings will come as a result from increased efficiencies in the supply chain, driven by the aggregation of buying power. Online buying consortia effectively aggregate buyers looking for the same product or service. At the same time, they offer sellers the potential of a wider audience at a reduced cost of customer acquisition. But buying consortia can only work if the consortia contracts between buyers and suppliers are properly negotiated and administered, and if there is a solid technology platform to administer and report on deals and buying activity. Miraculum Xchange is a sophisticated technological platform and Miraculum offers procurement expertise to set up buying consortia in the MRO (maintenance, repairs and operations) space in South Africa. Miraculum does not intermediate in current buyer-seller relationships, but provides an online, efficient communication platform to enhance that relationship to the benefit of both parties. While membership of the consortium is designed to provide incremental benefits in terms of pricing and rebates, buyers can continue to negotiate line item pricing and commercial terms directly with the supplier, thus ensuring that larger buyers are able to leverage their own spend volumes. So
what’s in it for buyers? Why
join a consortium at all? Because of the potential to share in retrospective
rebates generated by a greater volume of goods and services acquired,
resulting from economies of scale. Joining a buying consortium will also result in a rationalisation of your suppliers, consolidation of your spend; greater leverage of your purchasing power; and an incentive to control and reduce maverick spend. But why should suppliers go along with this? Won’t having to deal with a large buying consortium squeeze already-tight margins further? For suppliers, the value proposition behind buying consortia is that it immediately gives you access to a wider buyer base. You might have negotiated contracts with some of the members of the consortia, but not with all. Now your customer base is extended and you’ll benefit from a larger share of the buyer wallet. Your sales engagement process with buyers is simplified – and, thanks to the reporting power of Miraculum’s technology platform, you’ll have access to data to enhance your demand forecasting and planning. Miraculum’s buying consortia offer a win-win deal for all parties.
Miraculum is proud to welcome new members to the community.
Applebee
Office Supplies “J&J has a vision to build a leading African IT, communications and e-commerce group by investing in existing and start-up enterprises, forging partnerships on a value-adding basis. Miraculum is a clear leader in a a market niche presenting a superb opportunity to add significant value via the delivery of complementary skills to a common client base.”
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