This week's Knowledge Nugget is a two-parter on eCatalog management. Below is part one and part two will follow shortly.
At the heart of every procurement system is a catalog. Even in an environment lacking automation, requisitioners consult a hard copy or customer service reps use a catalog at the other end of a phone line. So it stands to reason that getting everyone to use the correct catalog from a preferred vendor at the contracted price will ensure that negotiated savings from sourcing and contracting activities are actually realized.
This Knowledge Nugget will explore benefits and best practices around these core elements:
- Price Compliance
- Supplier Compliance
- Process Compliance
|Suppliers should be guided on the best way to use the standard fields of the catalog template as well as any additional required attributes depending on the commodity area.|
Turn Identified Savings Into Realized Savings — Prevent Spend Leakage
1. Does your company have an eProcurement system?
If not, thoroughly investigate the significant savings that such a system can deliver. Most vendors are happy to provide you with an ROI analysis of your spend free of charge. This should be of particular interest if you have already invested heavily in strategic sourcing so you can capture all of the negotiated savings and avoid leakage.
2. Do you have an eProcurement system where the eCatalogs are time-consuming to enable, resource-intensive to manage, along with being not casual user-friendly? Anyone with SAP SRM, Oracle iProcurement, or other ERP eProcurement routinely faces these challenges.
- Decide whether it continues to make sense to dedicate resources to a function that may be better executed by outsourcing.
- Seriously explore the options around eCatalog management solutions. With a small investment (especially compared to your ERP investment) and in only weeks you can unlock the value of your ERP eProcurement.
3. You have an eProcurement system and you are happy with its capabilities and performance.
- Enable more catalogs work towards at least 80 percent of your spend. (Don’t forget services.)
- Work with suppliers to execute on the suggestions outlined in this paper to improve the quality of the content.
- For large catalogs, encourage suppliers to support Level 2 PunchOut.
Who Should Manage the Catalogs?
There are several criteria to consider when determining whether eCatalogs should be managed internally or by a 3rd party service provider:
- Are there enough resources in house to support an aggressive rollout and support all of the eventually required catalogs?
- Is it worth the cost of developing the skills required?
- Does the organization have or is it willing to invest in tools for catalog cleansing and content enrichment?
- Will an investment be made to develop quality processes and best practices?
The initial rollout of an eCatalog program is resource-intensive due to the amount of coordination required between the technical lead doing the eCatalog enablement, the suppliers, and the supplier managers at the buying organization. The technical lead will also need to take the time to educate suppliers who may be new to providing eCatalogs, while the supplier managers will need to work with suppliers to get agreement on what content should be included and ensuring that the correct pricing is being applied. A successful catalog technical lead will need to have the skills required to understand content requirements, educate suppliers on these requirements, cleanse and manipulate large amounts of catalog data, and troubleshoot technical errors that may occur during the enablement. Also, if supplier-hosted content (punchout catalog) is being used; this person will also need to be strong with HTML, cXML, OCI, or any other communication protocol that is being used by the system.
Tools for catalog cleansing and content enrichment are beneficial to provide a better end user experience, finding and fixing potential errors, adding and/or extracting supplemental attributes, assigning commodity codes, and ensuring correct content. Developing and maintaining these tools can be costly and are not practical for smaller organizations. Off-theshelf software designed specifically for this purpose is not available and will require IT resources to develop in house.
Quality processes and defined procedures for collecting, processing, and refreshing eCatalogs are critical for ensuring a high-quality end user experience and updated accurate data in the system. The method by which a supplier submits their eCatalog data needs to be not only user-friendly, but also secure and reliable. Many times email is seen as the best way of submitting catalog data, however large file sizes, no visibility to the supplier if transmission was successful, and the lack of a systematic way to track the most-current version makes this method undesirable. An FTP site is a somewhat better solution and will allow for the transfer of large files and also give each file its own time and date stamp. Ideally suppliers should submit their eCatalog data through a supplier portal where the supplier can see if the transfer has been successful. A more sophisticated tool should also offer the option of doing some initial data validation on the eCatalog to let the supplier know of potential errors prior to or at the point of submission. This supplier self-service tool can dramatically reduce the hassle and time to update catalogs. It is critical that refreshed data is processed quickly and correctly so that the pricing and items are up to date.
Part 2: Keeping your eCatalog up to date
Beverly Dunn is a Customer Success Manager with Ariba. All customers are invited to join the private Customer Success group on Ariba Exchange, where you can access the Customer Success Spotlights, Lunch 'n Learn Webinar calendar and replays, and the Ariba Knowledge Nuggets.