Purchase order management and contract management are the main areas in which companies employ IT solutions for purchasing – shows the survey conducted by Marketplanet among purchasing managers during the Procon/Polzak 2015 Conference. The results have already been analyzed in detail in our previous entry:
Other areas that were also frequently mentioned in the survey were negotiations as well as supplier selection and assessment.
Negotiations – third position in the ranking
Negotiations in the form of electronic auctions ranked in the third place. Fifty-nine percent of respondents admitted that they negotiated with suppliers using electronic auctions. The high result is not a surprise because an auction is one of the most popular tools that support purchasing. However, companies often underestimate its potential by limiting its application only to the sole criterion of price, while configuration options it offers (using the best selection strategy) are in fact infinite – limited only by the corporate requirements and invention of negotiators. Marketplanet experience shows that even the most complex projects may be supported with auctions, one of the examples being an auction conducted by a big investment project that contained over 20 criteria, including time value of money or investment service costs in individual years. Such a configuration enabled the company to receive offers that met the client’s requirements in 100%.
Electronic negotiations cover not only auctions (an element of the negotiation process) – but the entire process (auctions, requests for proposals, electronic negotiations, contracts). Today, we have at our disposal tools that ensure comprehensive support to a negotiator, provide information about suppliers (external reports), define the market risk (requests for information) and the supplier risk (assessment and classification system)
Electronic support in negotiations means a change to the approach towards supplier contacts; however, it is always built base on an appropriate strategy that is adjusted to the market and the supplier.
A combination of tools supporting this area, other than based on electronic auctions, allows companies to manage the process in a structured way, from the conclusion of a contract through negotiations in a broad sense.
Supplier assessment – both when selecting a supplier and after completion of the transaction
Fifty-three percent of respondents said that they supported the supplier selection and assessment with IT solutions. It has to be emphasized that the supplier assessment is not only the evaluation of the offered price but, most of all, a regular monitoring of cooperation and feedback communication with suppliers. Managing suppliers in a conscious way based on the data collected by the tool, consolidated information from multiple resources (including ERP systems or the production directly) offers the advantage that is invaluable for building the value chain with business partners. The combination of the price at the selection stage and the evaluation at the supply stage based on individual criteria enables a company to accurately access the risks and select the most relevant supplier management strategy.
About the survey
The survey was conducted during the Procon/Polzak 2015 Conference held in Warsaw on 22-23 October. Ninety purchasing managers responded to a question about how they support their companies with IT tools in the area of purchasing. The survey took the form of a multicriteria choice questionnaire.