Is Procurement Ready to Say Good-Bye to the Spreadsheet?

(Featured Image from Microsoft website.)

Yesterday, June 27th, I ran across an interesting tweet. Jon Hansen (@piblogger1) tweeted the following:

I wholeheartedly agree with Jon. In this age of blockchain and and small app startups disrupting almost every industry you would think that procurement, and supply chain in general, would be ready to part ways with spreadsheets.

But are we?

An article from Robert Half reports that 63% of U.S. companies still rely on excel spreadsheets. And a Small Business Trends reports shows that 84% of Small Businesses rely on excel!

This comes as no surprise for a number of reasons:

  1. Spreadsheets are cheap or free. A small business needing to keep costs down can get Microsoft Office for the low price of $10 or so a month, or just utilize Google Spreadsheets for free. OpenOffice is another free offering that has a program just like excel. The list of free alternatives goes on.
  2. Spreadsheets is easy. I don’t care who you are, spreadsheets is easy to learn. And once learned, spreadsheets can be utilized to do a plethora of things. Organize data, create charts and tables, analyze said data and charts/tables. Even an iota of training can lead an employee to create a generally acceptable presentation of data. Want to learn more about how to do things in spreadsheets? There are a number of excellent free online resources, or you can pay for a book, or even pay for an advanced class at your local community college. Big solutions providers? Not so much.
  3. Current ERP/WMS haven’t done a good job creating a viable replacement for spreadsheets. Despite SAP, Oracle, Coupa and others making great strides, the numbers I cited above speak for themselves. Enterprise Resource Planning (ERP)/Work Management Systems (WMS)/etc. do not provide enough of a solution to effectively unseat the spreadsheet.

I have personal experience in this area.

The company I used to work for had used an industry specific WMS for decades. Spreadsheets were the norm for day-to-day operations. As I left, the company I worked for was beginning the long road to a major upgrade of the WMS. But when asked about spreadsheets and additional functionalities, the WMS supplier replied that the company would still need to utilize spreadsheets.

Two small businesses I’ve worked with in the Greater Omaha Metropolitan area use spreadsheets for 80-100% of their operations. One of the businesses effectively has a WMS at their disposal, but that only covers a small fraction of what they need to track, and the WMS doesn’t connect with the business owner’s bank account. Enter spreadsheets. The other small business is just starting up, and there is zero dollars in the budget for even NetSuite by Oracle. Spreadsheets fill that void.

Conclusion

I think, as do many others within supply chain and procurement, that it’s time to say good-bye to spreadsheets. It’s 2019, after all.

But, then again, we were supposed to have flying cars and cities on Mars by this point…

Maybe someone will come along and create that perfect ERP that finally replaces the spreadsheet.

Day One – When Negotiations Start

A while back I began a project with a department in the company I currently work for. As we discussed the process, one of my colleagues asked me, “When will we start negotiations?”

My answer? “Day one.”

Negotiations start the moment you pick up the phone or type out an email in order to communicate with a supplier.

How?

The moment the sale rep or account manager begins talking to you, they are gauging you.

How do you communicate? Is your presentation strong timid? Are you to the point, or do you like to discuss things before getting to your point? Are you readily forthcoming with information when asked, or do you hold back?

Now you’ve communicated with them, the sales rep is going to do research on your company.

Are your financials strong? What were your sales last year? What does Glassdoor.com say you pay your employees, and what do your employees say about the company?

After that, each interaction, whether informal talking about hunting pheasants, or down to business hashing out rates and terms and conditions, are all negotiations.

In the MEYBEST Procurement Solutions: Strategic Sourcing Training, I outline at least three rounds of negotiations. These are formal rounds, scheduled in response to a sourcing event. It’s the informal, unscheduled interactions before, and even after, the RFx is complete and the agreement awarded and signed.

NOW

Start your negotiations NOW.

Investigate them NOW. Much of this can be done during need identification and gathering of facts and data. You and/or your stakeholders will already have an idea of which supplier or suppliers you want to consider for your sourcing event. Do this before you pick up the phone or send an email.

Craft your negotiations strategy NOW. It’s not going to be complete, and it won’t be the tactics and strategy you use once bids for the RFx come in. But it will set the tone for how you and your stakeholders will and will not interact with suppliers, individuals within your organization, the media (should they ever get involved), and even social media.

How many times in the past two years have negotiations been derailed due to inflammatory Tweets?

Conclusion

Whether it’s defensive (like holding information back), offensive (using information in your favor), or meant to stir up a commotion (like a number of politicians these days), crafting your negotiations strategy now, and then enacting it, will set you and your company up for success during your sourcing event and beyond.