eSourcing software is a secure, centralised online environment that helps procurement departments streamline and expand their buying process. It facilitates faster, better, and more diverse tender opportunities, ultimately helping organisations to generate savings in time and costs and mitigate supply chain risks.
In the realm of procurement, spreadsheets have long been a trusted tool, relied upon for their versatility and familiarity. However, as the demands of modern procurement professionals evolve, it is becoming increasingly apparent that spreadsheets have their limitations.
While they excel in certain areas such as data collation and calculations, they fall short in supporting collaborative efforts, ensuring data accuracy, enabling automation, providing robust reporting capabilities, addressing compliance and security concerns, and accommodating scalability.
This article delves into the reasons why spreadsheets may no longer be the ideal choice for procurement activities, highlighting the need for specialised e-sourcing solutions that can better meet the evolving requirements of procurement professionals in today’s fast-paced business landscape.
We can’t lie, spreadsheets are great… for some things.
They’re quick, low cost, they collate large amounts of data, and can perform complex calculations/functions. Spreadsheets are the de facto for anyone working with finances and if you’ve ever worked in an office, it’s very likely you will have also used one at some point.
But are they the best tool for procurement?
Note: Ready to move away from spreadsheets? Sign up and try Sourcing Dojo for free with our unique ‘sandpit feature’ which offers the full eSourcing experience.
If you’ve worked in procurement for more than 15 years, it’s likely you fell into the role through another route and happily accepted spreadsheets as the standard procurement tool.
However, in much the same way that a spreadsheet is not a database, we would argue that a spreadsheet is not a sourcing solution.
So, why do many procurement professionals still use spreadsheets?
Jon Hansen of Procurement Insights asked his community ‘Why do procurement professionals continue to use spreadsheets?’ with interesting results. The response amongst CPOs cited ease of use/versatility as the top reason, with the other reasons shown below.
You may be thinking of the old adage “If it ain’t broke, don’t fix it”.
Yes, but if it can be so much better, then we would argue that it is broken.
Or as Colin Powell, former United States Secretary of State, said, “‘If it ain’t broke, don’t fix it’ is the slogan of the complacent, the arrogant or the scared. It’s an excuse for inaction, a call to non-arms.”
Spreadsheets are agnostic so, by definition, they don’t provide a tailored solution for your specific business problem. By using spreadsheets, you are missing out on a whole range of features, capabilities and functionality that is designed to make procurement easier and more efficient.
Many people don’t find spreadsheets particularly intuitive and tend to use only the basic features. For those people who have mastered the more advanced functionality, such as vlookup (vertical lookup in case you were wondering), spreadsheets are powerful tools but require formal training and regular use to make complex tasks habitual.
“But spreadsheets (and emails) are so quick” we hear you say!
Yes, to a point. It’s quick to fire out your requirements to a list of suppliers but not so quick when the information starts coming back in different spreadsheets and formats that needs to be collated in a central repository. e-Sourcing and tendering solutions require a bit more thought and planning upfront but save significant time and effort with downstream tasks.
Another advantage of moving away from spreadsheets and using an e-Sourcing solution is that it encourages fair, open, transparent, organised communication with vendors which in turn helps to create stronger supplier relationships. Watch Alun Rafique, CEO and co-founder of Market Dojo explain this benefit in our short video: What are the communication advantages of using eSourcing procurement software?
A challenge impacting many organisations is Baby Boomers retiring and leaving the workforce. According to a study by retirement technology solutions provider Dunstan Thomas, in the UK 1.2 million Baby Boomers left the workforce during Covid. In the US, nearly 29 million Boomers retired in 2020, (three million more than in 2019) and 75 million Boomers are expected to retire by 2030 based on findings by Pew Research Center.
What is becoming known as the Great Retirement is resulting in a loss of tribal knowledge, especially in departments such as Procurement that have been dominated by an older generation.
When processes are managed with spreadsheets and emails (and in some cases in people’s heads) it is very easy for this tribal knowledge to get lost or stuck in the Inbox of departed employees.
This knowledge, and data, is incredibly valuable and needs to be captured in a systematic way to guide and teach the next generation of procurement professionals. And the next generation are digitally savvy, discerning users of technology who have an expectation of slick user experiences, want technology to be efficient so as to not waste their time, and they want to re-enter data as little as possible.
The new breed of procurement professional are digital natives with an expectation of consumerised business technology, actionable insights, and decision-ready data.
In short, a spreadsheet just won’t cut it!
Now let’s focus on six specific ways that spreadsheets limit procurement teams.
1. Limited Collaboration. Spreadsheets are typically designed for individual use and lack real-time enhanced collaboration features which also can be much more than a shared file online. In Procurement, multiple stakeholders such as buyers, suppliers and internal teams need to collaborate regularly and sometimes even simultaneously. Using spreadsheets can result in version control issues, difficulty tracking changes and delays in communication. By using a centralised e-Sourcing platform, teams can ensure that information isn’t missed or lost on people’s computers or Inboxes!
2. Data Integrity and Accuracy. Spreadsheets rely on manual data entry and formulas that are susceptible to human mistakes, especially when handling large amounts of data. This leads to inaccurate information that can impact the decisions being made and ultimately the business. In procurement, where data accuracy is crucial for decision-making, relying solely on spreadsheets may introduce risks and compromise the integrity of data.
3. Lack of Automation. Procurement teams often need to conduct repetitive tasks, such as collecting and analysing supplier information, evaluating proposals, or managing supplier contracts. Using spreadsheets requires manual updates and calculations, which can be time-consuming and prone to errors. Automated e-Sourcing software offers greater efficiency and accuracy in managing these processes.
4. Limited Visibility and Reporting. Sourcing activities can generate vast amounts of data and analysing it effectively is essential for identifying trends, optimising supplier relationships, and making informed decisions. Most spreadsheets provide limited capabilities for data visualisation and reporting whereas specialised e-Sourcing tools offer comprehensive reporting features and customisable dashboards to support the whole sourcing process. This enables powerful visibility into performance, helps to engage better with stakeholders, and when it comes to auditing, all information can conveniently be revisited.
5. Compliance and Security Risks. Procurement teams often deal with sensitive information such as supplier pricing, contract terms or intellectual property. In general, spreadsheets lack robust security measures to protect this confidential data adequately. Specialised e-Sourcing solutions offer enhanced security protocols, access controls and encryption to mitigate the risk of data breaches or unauthorised access.
6. Scalability Challenges. As sourcing initiatives grow in complexity and volume, spreadsheets can quickly become unwieldy and difficult to manage. Adding new data, suppliers or categories can lead to a proliferation of different spreadsheets making it a challenge to maintain consistency, track changes and ensure data accuracy. e-Sourcing platforms provide centralised repositories and scalability to support and future proof expanding sourcing operations.
So, whilst spreadsheets can still be useful for basic data collection or simple calculations, dedicated e-Sourcing software solutions offer substantial advantages for more complex and collaborative procurement activities.
Sourcing Dojo is an on-demand strategic sourcing software solution designed to rapidly evolve procurement from a reactive back office function to a proactive strategic resource.
To see Sourcing Dojo in action either book a demo with our team today or sign up for a free plan to try out our unique sandpit feature which offers the full e-Sourcing experience, from building events as a host, to experiencing them as a supplier.
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