This week's Knowledge Nuggets topic is eCatalog management. This is again another multi-segment post with this, the second post, being about quantity and types of Online Catalogs. Links to the rest of the segments of this post can be found at the bottom of this page. Enjoy!
Ariba Knowledge Nuggets - eCatalog Management Part 2
How Many and Which Catalogs Should Be Online?
According to the Aberdeen Group, best-in-class performers have enabled 64 percent of their suppliers, which places 80 percent of their spend under management. This is in contrast to the industry average of only 29 percent of suppliers enabled and 15 percent for the bottom 30 percent performers. While catalogs are not the only element of supplier enablement, they are an initial component to connecting supplier information to their systems. The Aberdeen Group has found that best-in-class organizations do at least 74 percent of their buying through an eCatalog.
All purchases that have a “part number” to “price” relationship are candidates for an eCatalog. With the proper set-up and technology, services such as temp labor, consulting, marketing and print can also be ordered from a type of catalog—further increasing the percentage of catalog-based purchasing. A better way to address this question, however, is not necessarily done by setting a number or percentage target, but to ensure that at a minimum the following two conditions are met:
- All contracted items are contained in the eCatalog
- All suppliers who are sent 150 orders or more per year and can provide an eCatalog
By having all contracted items as a catalog item, an organization can ensure that the savings identified during the sourcing process are being realized in the procurement process as outlined earlier. eCatalogs from frequently used suppliers will save the organization time and money by reducing the time needed for the requisitioner to create an order, the time for a buyer to place an order, and the process required for accounts payable to reconcile the invoices (You’re also keeping your suppliers’ costs down by increasing their efficiency). Doing a keyword search to find and select the item is much faster than using a traditional paper catalog or parts list and filling out the required information in a requisition. The risk of ordering an incorrect item is also reduced as information about the item is readily available and displayed to the end user in the catalog.
Part 3 will consider the different types of eCatalogs.
This has been another Knowledge Nugget post brought to you by Beverly Dunn.
For more information or details please feel free to contact me!