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Insights from the Field: What We’re Hearing from Procurement Teams

September 28, 2021

author:
Keelvar

As Keelvar brings our sourcing optimization and intelligent automation products to market, our solution selling organization is on the “front lines” talking to procurement and supply chain teams every day. Everyone is all-too-aware of the difficulties faced over the past 18 months, but we wanted to ask our own team members how that is changing the nature of their conversations with sourcing decision-makers who are planning for 2022.

Below is how our field organization is characterizing the feedback they are hearing from sourcing professionals seeking to solve real-world problems:

Tobias Hannon, Vice President Sales, based in London/UK 

"Companies are typically contracting with suppliers for terms that are often less than a year"

Our sales team regularly speaks with Strategic Sourcing Directors who have responsibility for a variety of direct and indirect goods and services. They all recognize the absolutely critical nature of their supply chain operations and that without the timely and reliable delivery of raw materials, the company’s production operations are at risk.

“Saving money has, of course, always been high on the agenda of sourcing professionals that we speak with. However, over the past 18 months, sourcing cycle efficiency and ensuring capacity has become an even hotter and more critical topic. 

“A decade ago, a large, network-wide sourcing event may have easily taken 3-4 months or more to complete. Because of the time and effort involved, and the relative stability of rates, contractual commitments often lasted for a period of two years or more. 

“With today’s changing landscape partly driven by the pandemic, companies are typically contracting with suppliers for terms that are often less than a year. In the case of transport, terms are sometimes handled on a monthly or even weekly basis. This, in turn, has led to sourcing professionals looking for sourcing solutions that incorporate powerful automation capabilities. 

“There’s a clear need for procurement teams to absorb this higher volume of tendering but still execute in a high-quality way, one that enables competitive rates while maintaining service and quality with optimization providing that decision support.”

Jim Greenough, Solution Sales Executive, based in Chicago, IL USA 

"Simplistic sourcing tools are not able to successfully source complex categories to the extent they would like"

“What I seem to hear is that among people who use other optimization sourcing tools, they describe the solution as powerful but very technical to use. A few power users can successfully operate the tool, but it is not a solution that can be easily or widely deployed, not user-friendly, simple, or intuitive. Consequently, they are not sourcing as many categories as they would like to or as often as they need to.  

“Also, competitive first-generation sourcing tools that were once best-of-breed have been acquired by P2P suite-focused companies. Customers feel that the new owner is not investing in R&D for their sourcing optimization tool to provide enhancements to the extent those customers would like, because they are focused on P2P, which is their big revenue driver. 

“Another theme is clients using a more simplistic sourcing tool are not able to successfully source complex categories to the extent they would like. For example, clients subscribing to a full P2P suite might get a sourcing module included at little to no charge. When they get around to using that simple sourcing tool, they find that it is not able to successfully manage complex categories that require price and non-price factors in data collection and award scenario analysis.

“One thing I am talking to companies about is that they should be ‘sourcing their sourcing tool’ as they plan for their solution stack in 2022. It may be time to revisit based on updated requirements that have no doubt changed in the past 1-10 years due to all the market drivers.

"Having been in procurement, sourcing, and supply chain for 20 years, I am surprised how sourcing has continued to evolve. Sourcing automation bots are a real game-changer for strategic sourcing that businesses really need to evaluate and consider.  

"The introduction of sourcing automation bots that will run your sourcing operations for a specific spend category alone suggests businesses should consider reviewing their sourcing technology due to the significant increase in process excellence and time savings the bots provide.”


Manuel Ringle, Solution Sales Executive, based in Germany/DACH region

"Many people who have done the job for several years still stick to Excel because they are used to it"

“The challenges I am hearing are diverse, ranging from not enough workforce to cover the workload to not having the appropriate solutions in place that they would like or a budget for procurement digitization. 

My impression is that many people in procurement who have done the job for several years stick to Excel because they are used to it, although they are aware that there are innovative solutions out there that would offer them reduced cycle times and massive cost reductions."


Glenn Gardner, Solution Sales Executive, based in Colorado, USA 

"Today you're not necessarily competing for suppliers’ attention; you're trying to outmaneuver the other buyer with timing"

“As much as we think the logistics market is chaotic, it’s starting to impact other spend categories ranging from packaging to raw materials and services where you used to source once a year, but now you might be sourcing twice a year or even bi-monthly. In some small categories, the annual RFP is dying, overall it's clearly shifting to sourcing being more agile and more frequent.

“Another shift I'm seeing is I've actually seen people not even going to source. They're just calling their suppliers up and saying, ‘What are we going to do?’ and they just say let's adjust the rate. So if you're not sourcing and you're just changing the rates, you need a central repository to be able to do that.

“Every category is becoming volatile. I’ve seen warnings that if you're going to go do your holiday shopping, be sure not to wait until the last minute because there will be nothing left.

In the US, there's a shortage of boats coming in from Asia. The other thing that I'm seeing is the need to source early because if you're going to source for ocean capacity, you better do it now because it might not be available two or three months from now. So, the key point here is if you have a seasonal product, and the product arrives after the season due to delays, you’ve just lost out.

“The current approaches of using Excel and old cumbersome tools are not allowing teams to be agile to keep up with market demands. You might have to source more often or shift to bi-monthly because this market is not going to change soon. Today you're not necessarily competing for suppliers’ attention; you're trying to outmaneuver the other buyer with timing. That's a big significant change.” 

The chaotic logistics market is starting to impact other spend categories, from packaging to raw materials and services

David Siedt, Senior Analyst/ Pre-Sales Engineer, based in Pittsburgh, USA

"They want a powerful sourcing optimization tool that delivers savings not possible with spreadsheets"

"What i'm hearing more and more is "We want a powerful sourcing optimization tool that delivers savings not possible with spreadsheets, but it has to be easy enough to use to deploy broadly throughout our organization". This allows companies to take sourcing optimization into many more categories, and allows them to handle more frequent sourcing event cycles which more common in today's supply chain woes. A simple tool swap like this can yield millions in savings within months.

"Some categories that companies often source with basic e-sourcing tools or Excel instead of sourcing optimization that likely sacrifices millions in savings include: MRO, Chemicals, Ingredients, Packaging, Facility Services, Business Services, and Temporary Labor."


Jennifer Sikora, VP of Marketing, based in North Carolina, USA

"There must be priority placed on making sure you’re appropriately equipped for today’s challenges"

“So much attention in the past 18 months has been on supply chain disruption impacts to business operations, but less discussed -- and arguably, equally if not more important -- is the toll this is having on procurement team members and their ability to scale and respond to these demands. We’ll soon release the results of a new sourcing professionals survey that reveal 56% of these folks are kept up at night by disruptions and fluctuations. That’s not good.

“Hearing from our customers and prospects, there are a few themes that emerge related to the human element. First, they haven’t adapted their solution toolbox fast enough -- there may be more appropriate products out there to help them be more effective, but many say that’s unfortunately taken a backseat to putting out the daily fires. That cycle needs to be broken and there must be priority placed on making sure you’re appropriately equipped for today’s challenges.

“Secondly, they are facing talent shortages, which is true of many functions, but it’s an ongoing joke that people don’t dream about working in procurement. Yet in fact, procurement is more strategic to the business now than ever. We collectively need to do better at showcasing its opportunities. It also means that newer, fresh talent moving into the field will be expecting more modern tools.

"Many sourcing leaders talk about the challenges they have with getting existing staff to change entrenched practices, to adopt new processes and solutions. Newer, younger entrants to the field on the whole will be more tech-savvy in terms of adoption and digitization."

Talk to us today to learn how you can use our sourcing optimization and automation solutions to save time, money, and headaches.

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