In the previous post I discussed the need, when planning a S2P implementation, to createa sound foundation for supplier engagement. Now we move on to the supplier profiling and development of waves for supplier engagement.
Using a ‘big bang’ approach to supplier adoption is unlikely to be effective. It will demand a lot of resources and loses the benefits of lessons being learnt which can be transferred quickly. Most of all it frequently fails to recognise that not all suppliers are starting from the same position and tailored journeys to ownership are necessary.
A phased approach is therefore recommended with suppliers being on-boarded in waves. Of course, that begs the question, ‘What does the wave choreography look like and what sequencing of suppliers should apply?’.
Some advocate the use of spend analytics and detailed mapping. But those approaches fail to recognise that a frequent justifications for the implementation of a S2P solution is that it will provide clarity of spend – in other-words, the reality is that spend analytics are unlikely to be available. Secondly, even if the data were available, is the investment in time required justified, given that the objective is to develop a wave plan which will lead to maximum adoption as opposed to a comprehensive scientific approach to ‘who and when’.
Don’t mistakenly think that the wave approach focuses on just one wave of suppliers before moving on to the next wave. Like waves hitting the shore as one wave hits the shore the next wave is already building up, so all waves are worked on simultaneously albeit with differing emphasis. A simple approach to wave designation is to categorise suppliers as ‘Users’, ‘Coverts’, ‘Willing Novices’ and ‘Late Adopters’.
1. ‘Users’ are existing users of the chosen S2P solution who need to be on-boarded but with will face minimal change to their existing ways of working;
2. ‘Converts’ are existing users of a S2P solution although not existing users of the chosen Solution;
3. ‘Willing Novices’ are businesses which see the merits of using the proposed S2P Solution but as yet have no experience with S2P; and,
4. ‘Late Adopters’ are those who lack enthusiasm to embark on the use of S2P.
It should also be noted that the wave approach advocated is based on an assumption that contracts are not currently in the process of being renewed. If however, contract renewals and re-letting are taking place, those sourcing strategies should be used as a parallel first wave means of ‘winning commitment’ through the award process. Equally, wasting resources on on-boarding suppliers who are unlikely to gain future business will ultimately lead to a perception that the organisation lacks a coherent strategy.
Some ask how many suppliers should comprise each wave and how long should be required? There is no simple answer to those questions as it depends on how large the supplier base is and the supplier state of readiness.
In the next post I shall discuss the need for a communications plan and a training and skills development plan.